Friday, April 17, 2020
Court of Appeal:
By a MetNews Staff Writer
A plaintiff’s voluntary dismissal of its action, stemming from erroneous advice of its lawyer, is not the equivalent of a default, Div. Three of Fourth District Court of Appeal held yesterday, declaring inapplicable Code of Civil Procedure §473(b)’s provision for mandatory relief upon the filing of an attorney’s affidavit of fault.
Presiding Justice Kathleen E. O’Leary wrote the opinion, which was not certified for publication. It affirms a postjudgment order by Orange Superior Court Judge Richard Y. Lee.
Plaintiff GXP Consultants Alliance Inc. dropped its action against Lacy Construction based on advice from its then-attorney, Edward Beneville of Westminster, that a voluntary dismissal would preclude an award of attorney fees against it. He was wrong; Lee ordered that GXP pay Lacy $107,530.25.
Civil Code §1717
Beneville based his advice on Civil Code §1717 which provides, with respect to an action on a contract:
“Where an action has been voluntarily dismissed or dismissed pursuant to a settlement of the case, there shall be no prevailing party for purposes of this section.”
The only unresolved cause of action at the time of the dismissal was based on a contract. However, the attorney fees were assessed in connection with four non-contract causes of action which had previously been summarily adjudicated in the case in Lacy’s favor.
GXP moved to vacate its dismissal and the attorney fee award, presenting a declaration by Beneville stating:
“I advised my client it would not be liable for attorney fee claims for the entire case if my client dismissed the case without prejudice except for those costs, which were not attorney fees....This mistake was the result of my failure on my part to thoroughly research the case law relative to 1717.”
Lee denied the motion, finding the attorney’s declaration to be ineffective. He also denied relief under the discretionary provision in §473, based on “mistake, inadvertence, surprise, or excusable neglect.”
Supreme Court Decision
On appeal, GXP pointed to the California Supreme Court’s 2002 decision in Zamora v. Clayborn Contracting Group, Inc. There, it was held that a trial court had the discretionary power, under §473(b), to set aside a judgment that was entered pursuant to stipulation.
“[I]n Zamora the Supreme Court only considered whether discretionary relief was available for a voluntary dismissal….GXP’s reliance on this case authority is misplaced. It does not cite to any other cases holding the mandatory relief provision applies to voluntary dismissals.”
The jurist agreed with Lee that the case that should be applied is Jackson v. Kaiser Foundation Hospitals, decided last year by the First District Court of Appeal’s Div. Three. The court there determined “that section 473(b)’s mandatory relief provision is unavailable to undo” the plaintiff’s “voluntary dismissal of her action.”
In her opinion in that case, Justice Carin T. Fujisaki observed that “various Courts of Appeal have concluded the mandatory relief provision is intended to reach only those dismissals that are ‘procedurally equivalent to a default’ and, declaring that a voluntary dismissal is not an equivalent, said:
“[W]e conclude mandatory relief is unavailable to undo [the plaintiff’s] voluntary dismissal of her action, even assuming the dismissal was due to her attorney’s erroneous advice.”
GXP argued that the holding of Zamora should be extended to cases where mandatory relief is sought and that Jackson should not be embraced. O’Leary responded:
“While we recognize we are not required to follow Jackson, we agree with the opinion’s well-reasoned legal analysis. Moreover, we cannot ignore California Supreme Court authority declaring the Legislature, in mandating relief for dismissals caused by inexcusable attorney error, ‘created a narrow exception to the discretionary relief provision for default judgments and dismissals.’…[W]e are bound to follow Zamora, and consequently, we cannot adopt GXP’s theory that the mandatory relief provision should be broadly applied to remedy all dismissals arising from attorney malpractice.”
Discretionary relief was also properly denied, O’Leary said, pointing out:
“It is well settled that attorney conduct falling below the professional standard of care is not excusable.”
“GXP does not offer any rational excuse for counsel’s ignorance of the law other than professional incompetence….As aptly noted by the trial court in this case, section 473(b) was never intended to serve as a catch-all remedy for every case dismissed due to the poor judgment of an attorney.”
O’Leary noted that discretionary relief was permitted by Zamora in a case where the plaintiff/cross-defendant made an offer of compromise which was accepted, with neither party realizing that the offer contained a clerical error; the sum settlement sum named by the plaintiff was intended to be the amount received by it, rather than paid by it.
“Courts have not set aside judgments when the error was not clerical, but rather due to professional mistakes, i.e., inexcusable error,” she said.
The case is GXP Consultants Alliance, Inc. v. Lacy Construction, G057560.
GXP was represented by Steven E. Paganetti of St. Augustine, Florida, who filed a request to argue by telephone. Div. Three issued an order saying:
“The request by counsel for appellant to appear telephonically for oral argument is DENIED. The court does not routinely provide for telephonic oral argument.”
Paganetti came to Santa Ana to argue.
Matthew R. Seifen of the Irvine Firm of Muzi & Associates argued for Lacy.
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