DANIELS v. SACKS

E041543

CLIFFORD R. DANIELS, Plaintiff and Respondent, v. DENNIS MICHAEL SACKS, Defendant and Appellant.

Court of Appeal of California, Fourth Appellate District, Division Two

Not to be Published


Attorney(s) appearing for the Case

Dennis Michael Sacks, in pro. per., for Defendant and Appellant.

McGarrigle, Kenney & Zampiello, Patrick C. McGarrigle and Philip A. Zampiello for Plaintiff and Respondent.


OPINION

GAUT, J.

Defendant Dennis Michael Sacks also known as Michael Sacks (defendant) appeals a default judgment entered on May 31, 2006, in favor of plaintiff Clifford R. Daniels in the amount of $228,896.52. Defendant, an attorney who represented himself in this matter, contends the trial court abused its discretion in denying his motions to set aside the default judgment. He also argues the default judgment is void because plaintiff failed to serve defendant with a statement of damages. Defendant also asserts that there was insufficient evidence to support the default judgment damages award. He claims default was entered due to defendant's and his staff's inadvertence.

We conclude there was no abuse of discretion in denying defendant's motions to set aside default, and plaintiff was not required to provide a statement of damages under Code of Civil Procedure section 425.111 because the action was not a personal injury or wrongful death action. Defendant's sufficiency of evidence contention also lacks merit because it is inappropriate for this court to review the sufficiency of evidence supporting the default judgment. We affirm the judgment.

1. Factual and Procedural Background

On November 16, 2004, plaintiff filed a complaint for damages against defendant. The complaint contained the following causes of actions: (1) negligence — legal malpractice; (2) intentional breach of fiduciary duty; (3) negligent breach of fiduciary duty; and (4) unjust enrichment.

Plaintiff alleged in his complaint that he and defendant entered into an agreement, which was partially oral and partially written, whereby defendant was to provide plaintiff with legal services consisting of recovering proceeds due plaintiff from a foreclosure trustee company, after the foreclosure sale of plaintiff's home. Plaintiff further alleges defendant committed legal malpractice and breached his fiduciary duty owed to plaintiff by not disclosing to plaintiff that the trustee was required to release to plaintiff those funds from the foreclosure sale of plaintiff's home that exceeded the mortgage and liens on plaintiff's home. Defendant charged plaintiff an unconscionable fee for legal services since recovery of the funds was certain and required very little work. By not disclosing this to plaintiff, defendant allegedly tricked plaintiff into executing an unconscionable contingency fee agreement. Defendant was thus unjustly enriched in the amount of at least $40,000 paid for legal fees.

Plaintiff further alleged in his complaint that in a separate matter defendant agreed to defend plaintiff in an unlawful detainer action, arising from plaintiff renting back his foreclosed home from the new owner for 60 days after the foreclosure. Defendant negligently defended plaintiff in the unlawful detainer action by failing to obtain a rental agreement in writing, which resulted in plaintiff being locked out of his home.

Plaintiff alleges in the first cause of action that he "has suffered general and special damages in the sum of at least $500,000.00." Plaintiff incorporates this allegation into his other causes of actions. Plaintiff alleges in the fourth cause of action that defendant "has been unjustly enriched by the sum of at least $40,000 according to proof."

In his complaint prayer, plaintiff requested, as to the first, second, and third causes of action, "at least $500,000.00, plus pre-judgment interest thereon, according to proof." Plaintiff also requested as to the second cause of action punitive damages in an unspecified amount. As to the fourth cause of action, plaintiff requested "[c]ompensatory damages in the sum of at least $40,000.00, plus pre-judgment interest thereon, according to proof." As to all causes of action, plaintiff requested "costs and attorneys' fees as allowable by law and/or contract."

After defendant demurred to the complaint and filed a motion to strike, on March 11, 2005, plaintiff filed a first amended complaint which included the same causes of action alleged in the original complaint. Plaintiff also alleged there was no written agreement between plaintiff and defendant concerning defendant's representation of plaintiff in the unlawful detainer action. In addition, plaintiff alleged defendant did not advise him that the contingency fee agreement concerning the foreclosure matter also applied to defendant's representation in the unlawful detainer matter. Plaintiff further claimed the contingency fee agreement was obtained through fraud. The first amended complaint prayer was identical to the prayer in the original complaint.

Defendant failed to file a timely answer to plaintiff's first amended complaint. Accordingly, plaintiff filed a request for entry of default, which the trial court entered on April 29, 2005.

On May 4, 2005, defendant filed a motion to set aside entry of default. Defendant's notice of motion stated the motion was brought under section 473.1 and was based on surprise, mistake or excusable neglect. Defendant attached his own nonsensical declaration stating, "Counsel for Plaintiff inadvertently missed the deadline to respond to defendant's Cross-Complaint, but has moved quickly to correct the error so that no prejudice should have occurred as to Defendant. [¶] Plaintiff has attached his proposed Answer to Cross-Complaint clearly indicating a probability of successfully defeating t[sic], other than where both Complaint and Cross-Complaint are seeking virtually the same causes and the same results as to the Dissolution of Partnership, Partition of Real Estate, and Accounting."

In support of defendant's motion, defendant also provided points and authorities consisting solely of exhibit A, a single paragraph quoting section 473.1. Plaintiff filed opposition to defendant's motion to set aside default. On June 13, 2005, the trial court denied defendant's first motion without prejudice to defendant refiling his motion, noting the motion was incomprehensible. Defendant acknowledge the motion cited the wrong code section and needed to be redrafted.

In defendant's third attempt to set aside the default, on August 12, 2005, defendant filed an ex parte application for an order shortening time for a hearing on his refiled motion to set aside default pursuant to section 473.2. Defendant asserted he inadvertently missed the deadline to respond to plaintiff's complaint due to his heavy case load. The trial court denied defendant's ex parte application without prejudice to refiling the motion. The court noted there was no section 473.2 statute and the motion therefore needed to be corrected and refiled.

On August 22, 2005, defendant refiled his ex parte application to shorten time for hearing defendant's motion to set aside default pursuant to section 473. Defendant stated in his attached declaration that he was representing himself in the case and inadvertently missed the deadline to respond to plaintiff's complaint due to his heavy case load. Defendant requested shortened notice "due to impending default judgment." Plaintiff filed opposition.

On September 14, 2005, the trial court denied defendant's motion without prejudice. The trial court explained it was denying the motion because merely stating defendant did not timely respond to plaintiff's amended complaint was too general: "The excuse, i.e., heavy case load, is very non specific."

On October 21, 2005, defendant again filed an application for an order shortening time, along with a fourth notice and a motion to set aside default pursuant to section 473. Defendant erroneously stated in his notice of motion that attached to his motion was a proposed demurrer and motion to strike the amended complaint. Rather, defendant attached a proposed "answer to complaint." Defendant asserted he inadvertently missed the deadline to respond to plaintiff's complaint due to failing "to properly calendar the date for the response to the first amended complaint." The court set the motion for a hearing on November 29.

After plaintiff filed opposition, defendant filed additional points and authorities, asserting that the motion was brought under section 473. Defendant argued in his supplemental points and authorities that his secretary erroneously and improperly calendared the hearing date for the demurrer of the original complaint, and therefore failed to notify defendant of the due date for the response. Defendant's secretary, Minerva Soto, provided a declaration attached to the supplemental points and authorities, stating defendant informed her of the due date for filing a response to the amended complaint but Soto inadvertently failed to properly calendar the date, resulting in entry of default against defendant.

Plaintiff filed supplemental opposition. Plaintiff argued in his opposition and supplemental opposition that defendant's motion to set aside default was in effect an improper, untimely motion for reconsideration.

On November 29, 2005, the trial court denied defendant's motion to set aside the default. The court noted that under Le Francois v. Goel (2005) 35 Cal.4th 1094, the trial court had the inherent power to reconsider sua sponte its own ruling denying a motion without prejudice. The court further noted that defendant initially failed to provide in his earlier motion sufficient details explaining why he missed the filing deadline due to a heavy case load. Then, not until his supplemental brief in his fourth motion did he attach his secretary's declaration and blame the failure to file a timely response on his secretary. This contradicted his previous declarations and there was no explanation as to why he did not provide his secretary's declaration sooner.

On December 9, 2005, defendant filed a motion for reconsideration of the November 29 ruling denying his motion to set aside default. Defendant asserted in his motion that the trial court had inherent authority to reconsider its ruling under Le Francois v. Goel, supra, 35 Cal.4th at page 1105. Defendant did not state in his motion any grounds for granting reconsideration.

Defendant, however, attached his own declaration stating that he inadvertently failed to calendar properly the deadline to file a response to the amended complaint. When his office received the amended complaint, his secretary brought it to his attention but defendant was in the middle of another matter. He told his secretary to calendar the response date and bring the amended complaint back to him later. She neglected to do so. Defendant explained in his declaration that, because defendant's office is so busy, he relies on his staff to calendar matters. His calendaring system failed in this instance. Defendant further stated in his declaration the factual basis for his defense in the case.

On January 9, 2005, the trial court continued defendant's motion for reconsideration and because plaintiff claimed he had not been served with defendant's motion.2 The trial court also permitted plaintiff to file opposition. Thereafter, plaintiff filed opposition.

On January 26, 2006, the trial court denied defendant's motion for reconsideration and entered judgment on May 31, 2006. The trial court noted during the hearing on January 26, that defendant had not complied with the requirements of section 1008. There were no new facts or law, including no new facts explaining why defendant did not provide his secretary's supporting declaration earlier.

2. Deficient Record and Failure to Cite Clerk's Transcript

We begin by noting that defendant's appellate brief is in violation of California Rules of Court, rule 8.204(1)(C) in that it contains no citations to the record on appeal. Furthermore, defendant violated California Rules of Court, rules 8.120 and 8.122, by failing to request in his notice to prepare the clerk's transcript the following documents: (1) the underlying complaint, (2) amended complaint, and (3) April 29, 2005, request and entry of default. These are court documents that are critical to defendant's appeal. The exclusion of these documents, as well as the failure to cite to the court record, are sufficient grounds alone to dismiss defendant's appeal or return the appellate brief for corrections. (Cal. Rules of Court, rules 8.276, 8.204(e)(2).)

In addition, defendant's appellate brief violates California Rules of Court, rule 8.204(a)(2), in that it does not: "(A) State the nature of the action, the relief sought in the trial court, and the judgment or order appealed from; (B) State that the judgment appealed from is final, or explain why the order appealed from is appealable; and (C) Provide a summary of the significant facts limited to matters in the record."

Despite these significant deficiencies in defendant's appeal, which impede our ability to review efficiently and decide the matter, we nevertheless will disregard defendant's noncompliance and decide the appeal on the merits. Plaintiff has assisted us in the review of this matter by augmenting the record to include the complaint and amended complaint. In addition, the register of actions contains sufficient additional information upon which to decide this appeal. (Cal. Rules of Court, rule 8.204(e)(2)(C).)

3. Motions to Set Aside Default Judgment

Defendant contends the trial court abused its discretion in denying his motions to set aside default. We disagree.

A. Standard of Review

Section 473 permits the trial court to "relieve a party . . . from a judgment, dismissal, order, or other proceeding taken against him or her through his or her mistake, inadvertence, surprise or excusable neglect." (§ 473, subd. (b).) To support such a claim, "the moving party must show good cause for that relief by proving the existence of `a satisfactory excuse for the occurrence of that mistake.' [Citation.]" (Dill v. Berquist Construction Co. (1994) 24 Cal.App.4th 1426, 1440.)

In this case, where defendant was representing himself and was directly responsible for his own default, as opposed to an attorney representing him, a motion for relief under section 473 is addressed to the sound discretion of the trial court. (§ 473, subd. (b).) Defendant's motions to set aside default were supported by his own declarations, as well as his secretary's declaration, as to defendant's mistake in failing to respond to plaintiff's amended complaint. Defendant acknowledged that he was aware plaintiff had filed an amended complaint and that he needed to respond but then failed to take any further action until after default was entered.

"[A]n `order of a lower court is presumed to be correct on appeal, and all intendments and presumptions are indulged in favor of its correctness.' [Citation.]" (Schnabel v. Superior Court (1993) 5 Cal.4th 704, 718.) "The burden of affirmatively demonstrating error is on the appellant. This is a general principle of appellate practice as well as an ingredient of the constitutional doctrine of reversible error. [Citation.]" (Fundamental Investment etc. Realty Fund v. Gradow (1994) 28 Cal.App.4th 966, 971.) We will not disturb the trial court's factual findings if they are supported by substantial evidence. (Falahati v. Kondo (2005) 127 Cal.App.4th 823, 828.) But whether the default or the default judgment complied with constitutional and statutory requirements are questions of law which we review de novo. (Ibid.)

"With respect to setting aside a default judgment, it is the policy of the law to favor, whenever possible, a hearing on the merits, and appellate courts are much more disposed to affirm an order where the result is to compel a trial on the merits than they are when the judgment by default is allowed to stand and it appears that a substantial defense could be made. [Citation.]" (Orange Empire Nat. Bank v. Kirk (1968) 259 Cal.App.2d 347, 352; see also Martin v. Johnson (1979) 88 Cal.App.3d 595, 604-605.)

B. Discussion

Defendant argues that his supporting declaration attesting to his mistake in not filing a timely response was all that was required for the court to grant his motion to set aside default, particularly since he was diligent in seeking relief and the courts favor trial on the merits, as opposed to default judgments. We conclude the trial court did not abuse its discretion in denying defendant's five motions seeking to set aside default.

First and Second Motions

As to defendant's first and second motions to set aside default, it is quite clear the trial court did not abuse its discretion in denying them. The first motion was incomprehensible. The second motion, while somewhat comprehensible, was based on incorrect statutory authority. For this reason, the trial court denied the motion without prejudice and indicated that defendant could refile his motion.

Third Motion

The trial court's denial of defendant's third motion to set aside default was also not an abuse of discretion. Defendant's excuse was that he failed to file a response to the amended complaint due to his heavy case load. The courts have routinely rejected this as a valid excuse for setting aside a default judgment.

As stated in Martin v. Taylor (1968) 267 Cal.App.2d 112, 117, "The `busy attorney' reason for delay has been almost uniformly rejected by the courts as a ground for failure to seek relief from a default within a reasonable time. For example, in Smith v. Pelton Water Wheel Co. [(1907)] 151 Cal. 394, the delay was only four months — the defendant pleaded that his attorney was ill for over two months and under the pressure of `other business' for some weeks thereafter — yet the court held the reason was insufficient ground for granting relief under section 473. In Schwartz v. Smookler, 202 Cal.App.2d 76, the defendant delayed moving to set aside a default for three and a half months and the attorney alleged `pressure of other business in my office.' The court held this did not constitute legal justification for the delay."

Here, such an excuse is even less persuasive since defendant was representing himself and thus he was directly responsible for failing to file his own response to the amended complaint.

The court in Martin explained that "The reason `press of business` is not usually accepted as a ground for relief under section 473 is found in Willett v. Schmeister Mfg. Co., 80 Cal.App. 337, at page 340: `Nor is unusual press of business a legal excuse. To accept this as a legal justification for the failure to comply with the statute would be to discourage diligence in the prosecution of appeals and establish a precedent that might lead to vexatious delays.' [¶] Moreover, there is some indication here that defendants themselves were inexcusably negligent." (Martin v. Taylor, supra, 267 Cal.App.2d at p. 117.) This is the case here. Defendant, representing himself, had full knowledge that he was required to respond to the amended complaint and failed to do so.

Fourth Motion

Realizing the press of business was not an adequate basis for setting aside the default, defendant filed his fourth motion, claiming he failed to file a timely response because his secretary failed to calendar the due date properly. The trial court did not abuse its discretion in rejecting this excuse as well, since it was completely different from defendant's original press-of-business excuse and defendant failed to provide any justification for failing to mention previously his new excuse.

Fifth Motion

As to defendant's fifth attempt to set aside default, defendant brought a motion for reconsideration of the trial court's November 29, 2005, ruling denying his motion to set aside default. We first note that there is a split of authority over whether orders denying reconsideration (§ 1008) are appealable. (In re Marriage of Burgard (1999) 72 Cal.App.4th 74, 80-81; Alioto Fish Co. v. Alioto (1994) 27 Cal.App.4th 1669, 1679.) Some courts have held that motions for reconsideration are appealable only if the underlying orders are appealable and if the reconsideration motions are based on new or different facts. (In re Marriage of Burgard, supra, 72 Cal.App.4th at p. 81; Alioto Fish Co. v. Alioto, supra, 27 Cal.App.4th at p. 1679; Freeman v. State Farm Mut. Auto. Ins. Co. (1975) 14 Cal.3d 473, 477, fn. 2.)

The trial court's order denying defendant's reconsideration motion is not appealable for the simple reason that the motion was not based on new or different facts. For the same reason, even assuming it is appealable, there was no abuse of discretion in denying the motion for reconsideration. There was no explanation as to why defendant initially said he failed to file a timely response because of the press of business, and then in his supplemental brief filed in connection with his fourth motion he asserted for the first time that his secretary was responsible for the omission. We do not find compelling defendant's explanation that his initial excuse and most recent excuse were compatible and that his most recent explanation merely elaborated on his initial press-of-business excuse.

We conclude there was no abuse of discretion in the trial court denying defendant's four motions to set aside default and motion for reconsideration.

4. Statement of Damages

Defendant argues the default judgment is void under section 425.11 because plaintiff failed to serve him with a statement of damages.

Plaintiff's original and amended complaints contained the following causes of action: (1) negligence — legal malpractice; (2) intentional breach of fiduciary duty; (3) negligent breach of fiduciary duty; and (4) unjust enrichment. Plaintiff requested, as to the first and third causes of action, general and special damages in the sum of at least $500,000, plus prejudgment interest. As to the second cause of action, plaintiff requested compensatory damages of at least $500,000, plus prejudgment interest, and punitive damages. As to the fourth cause of action, plaintiff requested compensatory damages in the sum of at least $40,000, plus prejudgment interest thereon.

A complaint must state the amount of money damages or other relief it seeks. (§ 425.10.) The statutes preserve the defendant's right to contest an action and protect the defendant from unlimited liability. "Section 580, and related sections 585, 586, 425.10 and 425.11, aim to ensure that a defendant who declines to contest an action does not thereby subject himself to open-ended liability." (Greenup v. Rodman (1986) 42 Cal.3d 822, 826.) "The notice requirement of section 580 was designed to insure fundamental fairness." (Becker v. S.P.V. Construction Co. (1980) 27 Cal.3d 489, 494.)

Our Supreme Court has concluded that "due process requires notice to defendants, whether they default by inaction or by wilful obstruction, of the potential consequences of a refusal to pursue their defense. Such notice enables a defendant to exercise his right to choose — at any point before trial, even after discovery has begun — between (1) giving up his right to defend in exchange for the certainty that he cannot be held liable for more than a known amount, and (2) exercising his right to defend at the cost of exposing himself to greater liability." (Greenup v. Rodman, supra, 42 Cal.3d at p. 829.) "It is a fundamental concept of due process that a judgment against a defendant cannot be entered unless he was given proper notice and an opportunity to defend. [Citation.]" (In re Marriage of Lippel (1990) 51 Cal.3d 1160, 1166.) The federal constitutional standard is whether the notice is "`reasonably calculated, under all the circumstances'" to apprise the defendant of the relief sought. (Dusenbery v. U.S. (2002) 534 U.S. 161, 168; see also Mullane v. Central Hanover Bank & Trust Co. (1950) 339 U.S. 306, 313-315.)

In most cases, the complaint provides such notice: "[i]f the recovery of money or damages is demanded [in a complaint], the amount demanded shall be stated." (§ 425.10, subd. (a)(2).) However, section 425.11 carves out an exception for personal injury and wrongful death claims; for these claims, any statement of damages in the complaint is forbidden. (§ 425.10, subd. (b).) Instead, a separate statement of damages is used to give the defendant information about the amount being claimed. (§ 425.11, subd. (b); Candelaria v. Avitia (1990) 219 Cal.App.3d 1436, 1441.) If a personal injury defendant fails to appear and fails to request a statement of damages, a plaintiff is under an affirmative duty to provide notice of the amount of damages: "plaintiff shall serve the statement on the defendant before a default may be taken." (§ 425.11, subd. (c).)

Here, notice under section 425.11 by means of a separate statement of damages is not required because plaintiff's complaint is not "an action to recover damages for personal injury or wrongful death." (§ 425.11, subd. (b).) Notice of damages was thus satisfactory if provided in plaintiff's complaint.

Following entry of default, the trial court awarded plaintiff a total award of $228,896.52, consisting $219,407.27 in damages, $8,881.45 in prejudgment interest, and $607.80 in costs. Since the judgment amount was less than the amount of at least $500,000 requested in plaintiff's amended complaint prayer, we conclude defendant received sufficient notice of damages and the trial court did not exceed its authority by awarding plaintiff a default judgment in the amount of $228,896.52.

5. Sufficiency of Evidence Supporting Damages Award

Defendant contends there was insufficient evidence to support the amount of damages awarded. But a review of the sufficiency of evidence is not available when there is an appeal from a judgment rendered on default. (Heathman v. Vant (1959) 172 Cal.App.2d 639, 644.) "[A]n appeal from a default judgment is limited to jurisdictional considerations and to questions of basic defects in the pleadings. [Citation.]" (Ludka v. Memory Magnetics International (1972) 25 Cal.App.3d 316, 323.)

A judgment by default is a determination on the merits and effectively admits all well-pleaded factual allegations of the complaint. (Fitzgerald v. Herzer (1947) 78 Cal.App.2d 127, 132; see also People v. Sims (1982) 32 Cal.3d 468, 481; Flood v. Simpson (1975) 45 Cal.App.3d 644, 651, fn. 12.) Therefore, "[o]rdinarily, in civil matters the sufficiency of the evidence cannot be reviewed on appeal of a default judgment." (In re Clarissa H. (2003) 105 Cal.App.4th 120, 124.)

Since in the instant case defendant is appealing from a default judgment, it is inappropriate for this court to consider the sufficiency of the evidence supporting the default judgment. (Heathman v. Vant, supra, 172 Cal.App.2d at p. 644.)

6. Disposition

The judgment is affirmed. Plaintiff is awarded his costs on appeal.

We concur:

McKinster, Acting P.J.

Miller, J.

FootNotes


1. Unless otherwise noted, all statutory references are to the Code of Civil Procedure.
2. The January 9, 2006 minute order, as reflected in the court register of actions, appears to have erroneously stated that the trial court granted the motion for reconsideration, whereas the reporter's transcript indicates it was continued due to defendant's failure to serve plaintiff with the motion.

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