Sandoval v. Barajas CA2/1 ( 2024 )

Filed 9/3/24 Sandoval v. Barajas CA2/1
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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION ONE
JAMIE SANDOVAL, B326203
Plaintiff and Appellant, (Los Angeles County
Super. Ct. No. BC691447)
v.
RAMIRO PADILLA BARAJAS,
Defendant and Respondent.
APPEAL from an order of the Superior Court of
Los Angeles County, Upinder S. Kalra, Judge. Reversed.
Law Offices of Farrah Mirabel and Farrah Mirabel for
Plaintiff and Appellant.
Toschi, Collins, Doyle & Houvener and Meredith C. Doyle,
for Defendant and Respondent.
________________________
Plaintiff and appellant Jamie Sandoval appeals from an
order setting aside a default judgment and underlying entry of
default he obtained against defendant and respondent Ramiro
Padilla Barajas in a lawsuit regarding an automobile collision
between the parties. We conclude the trial court abused its
discretion in concluding that Barajas’s reasonable reliance on
his insurer to address the default was sufficient to establish the
diligence case law requires in order to set aside a default on the
grounds of extrinsic mistake. Barajas did not provide any basis
on which the trial court could conclude his insurer had been
diligent in seeking to address the default once discovered—
indeed, the trial court found the insurer had acted unreasonably.
Particularly given the substantial prejudice to Sandoval from
setting aside a years-old judgment, and the resulting heightened
level of diligence Barajas needed to show to justify setting it aside
on equitable grounds, the court abused its discretion in granting
Barajas’s motion to set aside. Accordingly, we reverse.
FACTS AND PROCEEDINGS BELOW
A. Proof of Service of Complaint and Summons
On January 25, 2018, Sandoval filed suit against Barajas
alleging Barajas was at fault in their March 19, 2016 automobile
collision in which Barajas’s vehicle drove into Sandoval’s vehicle.
On March 7, 2018, Sandoval filed a proof of service of
the summons and complaint. A professional process server
declared that he had served Barajas by substituted service.
Specifically, he declared that he had made four unsuccessful
attempts to personally serve Barajas at 15040 Parthenia Street,
Apartment 33 in the city of North Hills, Barajas’s residence
at the time, over the course of a week in February 2018. The
2
declaration described how, having failed in these attempts,
on February 24, 2018 at 10:00 a.m., the process server left the
summons and complaint with “Maria ‘Doe,’ co-occupant (refused
last name)” and mailed copies of the documents to Barajas’s
residence as well. (Capitalization omitted.)
B. Default and Default Judgment
On May 3, 2018, Sandoval filed a request for entry of
default. The request form included a declaration of Sandoval’s
counsel that, on April 30, 2018, “a copy of [the] request . . .
was mailed . . . to . . . [Barajas’s] last known address,” identified
as the Parthenia Street apartment. On May 3, 2018 the court
entered default as requested. On August 16, 2018, Sandoval
filed a request for default judgment, which the trial court granted
and entered on the same day. The court issued an abstract
of judgment on March 4, 2019. Sandoval’s counsel declared
that he mailed it to Barajas at the Parthenia Street apartment,
as well as to Barajas’s then-current insurance carrier.
C. Motion to Set Aside
On July 1, 2022, Barajas filed a motion that, in substance,
sought to set aside the entry of default and default judgment.1
He supported his motion with declarations, including his own.
1 Barajas’s motion to set aside does not expressly seek to
set aside the entry of default. It is instead captioned as a “motion
to set aside default judgment and quash service of summons.”
(Boldface & capitalization omitted.) Both below and on appeal,
however, the parties treat the motion as one that, in substance,
sought to set aside both the entry of default and the default
judgment. For example, although the motion’s prayer for relief
does not expressly request that the default be set aside, it
3
1. Barajas declaration
The Barajas declaration describes the incident as “a motor
vehicle accident on March 19, 2016 on eastbound Van Nuys
Boulevard near the intersection of Canterbury Avenue in the
City of Arleta in which . . . Sandoval . . . negligently made a
U-turn in his 2012 Dodge Caliber in front of my 2013 Dodge
Charger and then veered into a parked vehicle.” Barajas
declared “[o]n information and belief,” that Sandoval “was at
fault for the incident and his insurance carrier accepted liability.”
As to service, Barajas declared that he had not received the
summons or complaint, and that he “was not aware until recently
of any alleged substituted service via [his] wife Maria Perez,
which [he] dispute[d].” Barajas declared that he first learned
includes a request that the court permit Barajas to file an
answer, which would only be possible if the court also set
aside the default. The court appears to have shared this
understanding; its order on the motion grants the “motion to
set aside/vacate default and default judgment . . . and quash
service of summons.” (Capitalization omitted & italics added.)
The court’s tentative ruling, which was ultimately adopted
and incorporated into the order, refers to a “motion to set
aside/vacate default” (capitalization omitted), and the court’s
order also required Barajas to “file a separate answer within
10 days.” (Capitalization omitted.) Because the motion appears
to have been one that, in substance, the court and the parties
understood as seeking to set aside both the default and the
default judgment, we likewise treat it as such. In any event,
the same extrinsic mistake requirements would apply whether
Sandoval is seeking to reverse an order setting aside only the
default judgment or an order setting aside both the default and
default judgment. We shall refer to the motion as simply “the
motion to set aside.”
4
anything about the lawsuit from a March 24, 2020 Department
of Motor Vehicles (DMV) “order of suspension” (capitalization
omitted) that he received “around [that date].” It informed
Barajas that his driver’s license had been suspended because
he had “failed to pay the judgment awarded” in a lawsuit,
which the document identified by full name and case number.
(Capitalization omitted.) He “understood the notice had
something to do with a dispute relating to Jamie Sandoval”
and forwarded it to his insurance company “in an attempt
to determine what [it] meant.” The insurance agent, Joel
Velasquez-Hernandez, told Barajas “he did not have any
information on this claim or any court proceedings.”
(Capitalization omitted.)
Barajas declared he only became aware of the litigation in
April 2022 when his counsel informed him of it. According to the
declaration of Barajas’s counsel, she contacted him at this time
after his insurance carrier contacted her in April 2022 “to assist
in the filing of [the] motion [to set aside] . . . following a period
of settlement negotiations” between the insurance company and
Sandoval/his counsel.
2. Declaration of Barajas’s insurance agent
Velasquez-Hernandez declared that “Maria Perez and . . .
Barajas [had] called and informed [him] in 2020 that . . .
Barajas’[s] license had been suspended [and] that they were
unsure if litigation had been filed relating to . . . Sandoval.”
At that time, Velasquez-Hernandez “tried to investigate what
was going on with the claim” but “was not able to determine any
information regarding the status of this claim, and informed . . .
Perez and . . . Barajas of such.” Velasquez-Hernandez “did not
have access to the policy file [covering Perez and Barajas] or any
5
related documentation prior to 2018 when [he] purchased the
policy.”
3. Declarations of Barajas’s wife and former
neighbor
Both Barajas’s wife (Perez), and his former neighbor at
the Parthenia Street apartment, Alvaro Rojas, declared that
Perez assisted Rojas with his catering business on Saturdays
and Sundays, and that on the morning of Saturday February 24,
2018—the date and time the proof of service stated a process
server had handed Perez the summons and complaint at the
Parthenia Street apartment—Perez was at Rojas’s apartment
next door, assisting him with food preparation. Both Perez and
Rojas further declared that no one came to the door or handed
her any papers that morning, and Perez declared she had never
received them.
Perez further declared that, both at the time of her
declaration and on February 24, 2018, she had “blonde hair,
bluish green eyes, [was] 5 feet, 4 inches to 5 feet, 5 inches tall,
and [weighed] approximately 300 to 325 pounds.”2 The proof
of service of the summons and complaint, by contrast, described
the “Maria ‘Doe’ ” to whom the papers had been provided as being
“5 feet 1 inches [tall and] 160 pounds” with “black hair, brown
eyes.” (Capitalization omitted.)
4. Supplemental briefing and evidence
At the initial hearing, the court requested supplemental
briefing and evidence on specific issues, including “any and all
2 The Velasquez-Hernandez declaration provided a
consistent description of Perez as “hav[ing] fair skin, green
eyes, blonde hair, and [being] heavyset.”
6
communication with the insurance companies in regard
to [the] accident and civil complaint and default judgment”
(capitalization omitted) and how Barajas could reasonably claim
he did not receive case-related documents mailed to what he
acknowledged was his residence at the time, particularly when
he had received the DMV notice in the mail.
a. Supplemental evidence regarding mail
issues
In his supplemental declaration, Barajas stated that
“[e]ach apartment in the [Parthenia apartment] building
had its own mailbox, accessible with a key. [¶] . . . Around the
time the summons and complaint were reportedly mailed . . .
and around the time the request for entry of default was
reportedly mailed . . . [Barajas and Perez] frequently found
[their] mailbox and other mailboxes on the property belonging
to other apartments unlocked and open. [¶] . . . [They] brought
this up to the property manager, . . . [who] would blame the
mail carrier for the issue. [¶] . . . As a result of [his] mailbox
frequently not being secure, [Barajas] believe[d] that others
could access [his] mail around the time that the summons
and complaint and request for entry of default were mailed.”
(Capitalization omitted.)
Barajas further clarified that he had received the DMV
suspension notice at an address other than the Parthenia Street
apartment—namely, a Bradley Avenue address in Sylmar
reflected on the DMV notice as well. Barajas further declared
that, although he “did not call the court after receiving the [DMV
notice,]” he “did call the DMV . . . and [his] insurance agent, Joel
Velasquez-Hernandez. [His] understanding of [his] conversation
with . . . Velasquez-Hernandez was that after 2 years the
7
information regarding this case had been erased, and there was
no further action to take.” (Capitalization omitted.)
b. Supplemental evidence regarding
communications with insurance carriers
Both parties offered supplemental declarations with
information relevant to communications with the parties’
respective insurance carriers: Farmers Insurance (Farmers),
which covered both Perez and Barajas, and AFA Insurance,
which covered Sandoval.
Barajas offered a declaration of Charlene Poon, the
Farmers adjuster handling claims related to the instant matter.
Poon’s declaration describes and attaches several written
communications in 2016 and 2017 that appear to confirm that
the claims related to the collision had been resolved. Namely,
“Farmers wrote a [December 9, 2016] letter to . . . Perez,
indicating that a final settlement had been reached with AFA
Claim Services” and that AFA had “accepted 100 [percent]
liability on [Sandoval’s] behalf.” “On January 10, 2017,
Farmers . . . sent . . . AFA . . . a letter enclosing the property
damage release executed by . . . Perez for the amount of
$7,664.29 to be paid to” Farmers/Perez. “[I]n addition to the
property damage claims paid . . . AFA . . . paid a personal
injury settlement of $12,000.00 to . . . Barajas on April 19,
2017 regarding the subject incident” and “paid . . . Sandoval
$18,676.23 for a property damage claim after the subject
incident.”
A supplemental declaration of Sandoval’s counsel states
AFA refused to cooperate with counsel’s extensive efforts in
2016, 2017, and 2018 to clarify the basis for AFA’s liability
determination and AFA’s apparent lack of investigation
8
preceding it. “AFA had never contacted [Sandoval’s counsel]
to take Sandoval’s statement and there was no witness other
than the drivers, . . . [¶] . . . [t]here was no police report for the
subject accident.” Sandoval’s counsel describes her numerous
efforts to “dispute [AFA’s] accepting liability on behalf of
[Sandoval] without taking any statements or conducting any
investigation,” and AFA’s failure to respond to her inquiries and
requests and refusal to produce the claim file.
One document attached to Sandoval counsel’s declaration
suggests AFA’s acceptance of liability on Sandoval’s behalf
might have been based on some confusion on the insurer’s part.
Namely, a January 9, 2017 letter from AFA to Sandoval’s counsel
declining to reconsider AFA’s liability determination refers to
the claimant as “Catalina Montoya,” although, by all accounts,
no one by that name was involved in the collision. The letter
otherwise appears to be referring to the Sandoval-Barajas
collision, in that it includes the date of that collision, applicable
claim number, and other details of the accident—for example,
the street name and the direction in which Sandoval was
traveling. Also in this letter, AFA states that the collision was
“initially reported to us by Steve Franquez” who “reported that
[Jamie] Sandoval was turning out of [a] parking space on the
street and attempted to make a U-turn[,] causing the collision.”
D. The Challenged Order
After argument the court took the matter under
submission. In a December 8, 2022 order, the court granted
Barajas’s motion to set aside. The court explained its decision
in a written ruling.
9
1. Evidentiary rulings
Two of the court’s rulings on evidentiary objections form
the basis for one of Sandoval’s arguments on appeal. Namely,
the court sustained Sandoval’s objections to Barajas’s declared
description of the accident and his “information and belief ”
statement that Sandoval’s insurance had determined Sandoval
was at fault. Sandoval objected on the bases that (1) the
testimony constitutes an “[i]mproper legal conclusion as
to stating [Sandoval] was driving ‘negligently’ ” and as to stating
Sandoval had been deemed to be “at fault”; (2) it is speculative
and improper “[t]o the extent the testimony is lay opinion”;
(3) it is argumentative; and (4) it misstates the evidence. The
court’s order does not specify why the court sustained Sandoval’s
objections to this testimony.
2. Ruling granting motion to set aside
The court granted Barajas’s motion to set aside on the
equitable ground of extrinsic mistake. The court’s written ruling
explained why the court had rejected several other bases for relief
proffered by Barajas.3 Namely, the court concluded the judgment
was not void on its face, because Sandoval’s proof of service
was valid on its face. Second, the court concluded the judgment
could not be set aside pursuant to Code of Civil Procedure
section 473.54 for lack of actual notice because the two-year
jurisdictional time limit for seeking relief under that section had
3 In so doing, the court made some findings potentially
relevant to the issues raised on appeal. We therefore summarize
the court’s reasoning in rejecting these arguments.
4 All further statutory references are to the Code of Civil
Procedure.
10
passed. Finally, the court rejected Barajas’s argument that
the judgment should be set aside because of extrinsic fraud.
The court found the declaration of the registered process server
to be credible, and that the declaration “establishe[d] more likely
than not that the person identifying herself as ‘Maria’ was a
competent member of the household” in that she was “an adult
over 18 who appear[ed] to be a co-occupant of a residence, [but]
refuse[d] to provide a name.” (See § 415.20.) “In addition, the
court accept[ed] as credible that the documents were mailed
to [Barajas] as noted in the proof of service.” (Capitalization
omitted.) On these bases, the court concluded not only that
Barajas had failed to establish extrinsic fraud regarding the
proof of service, but that none had occurred.
The court, however, did find that Barajas was entitled
to equitable relief based on extrinsic mistake: namely, he had
made out “ ‘a meritorious case,’ ” “ ‘a satisfactory excuse for
not presenting a defense to the original action,’ ” and “ ‘diligence
in seeking to set aside the default once . . . discovered.’ ”
(Capitalization omitted.) As to the first requirement, the court
concluded that Barajas had “declared that [Sandoval] made an
illegal U-turn that caused the accident” and that “[Sandoval’s]
own carrier . . . received corroborating information [to this effect]
from an independent third party, Mr. Franquez.” (Capitalization
omitted.) The court further found that both Barajas’s failure
to respond to the initial complaint and notices of default and
Barajas’s delay in seeking to set aside the default and/or default
judgment were attributable to negligence on the part of Barajas’s
insurance carrier. “In sum, on this record, [the court concluded]
it would be unjust to allow a [default] judgment [and the
underlying default] to stand against [Barajas] because of [his]
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insurance carrier’s repeated breach of its duty to promptly defend
[him].”
Sandoval timely appealed the court’s order.
DISCUSSION
“A motion to set aside a default judgment [and the
underlying default] is addressed to the sound discretion of the
trial court, and, in the absence of a clear showing of abuse of
discretion where the trial court grants the motion, the appellate
court will not disturb the order.” (Weitz v. Yankosky (1966)
63 Cal.2d 849, 854 (Weitz).) “It is the policy of the law to
favor, wherever possible, a hearing on the merits.” (Ibid.)
Nevertheless, “[w]hen a default judgment has been obtained,
equitable relief [therefrom] may be given only in exceptional
circumstances.” (Rappleyea v. Campbell (1994) 8 Cal.4th
975, 981 (Rappleyea), italics omitted.) Such circumstances may
exist as a result of “extrinsic mistake—a term broadly applied
when circumstances extrinsic to the litigation have unfairly
cost a party a hearing on the merits.” (Ibid.) Thus, a “stringent
three-prong test” applies when a defendant seeks relief from
a default and default judgment on this basis. (Id. at p. 982.)
“ ‘First, the defaulted party must demonstrate that it has a
meritorious case. Second[ ], the party seeking to set aside . . .
must articulate a satisfactory excuse for not presenting a defense
to the original action. Last[ ], the . . . party must demonstrate
diligence in seeking to set aside the default once . . . discovered.’
[Citation].” (Ibid.)
Sandoval argues the court’s ruling that Barajas had
satisfied these elements was inconsistent with “ ‘the applicable
principles of law,’ ” and thus the court abused its discretion in
setting aside the default and default judgment. (Horsford v.
12
Board of Trustees of California State University (2005) 132
Cal.App.4th 359, 393; see ibid. [“ ‘[a]ction that transgresses the
confines of the applicable principles of law is outside the scope
of discretion and we call such action an “abuse” of discretion’ ”].)
We disagree and address each requirement below.
A. Meritorious Defense Requirement
Sandoval argues that, in assessing whether Barajas had
a meritorious defense, the court improperly relied on evidence
it had excluded—namely, the Barajas declaration’s description
of Sandoval making “an illegal U-turn,” to which the court
had sustained Sandoval’s objection. (Capitalization omitted.)
But other evidence—including the determination by Sandoval’s
insurer of his liability—also support that Barajas had a
meritorious defense. Thus, even if the court relied in part on
inadmissible evidence in concluding Barajas had established
a meritorious case,5 we cannot say this renders the court’s
conclusion an abuse of discretion, given the other evidence
supporting that same conclusion. (See Montenegro v. Diaz (2001)
26 Cal.4th 249, 255 (Montenegro) [in reviewing for abuse of
discretion, “we must uphold the trial court ‘ruling if it is correct
on any basis, regardless of whether such basis was actually
invoked’ ”].)
Sandoval next argues the claimed other evidence
is insufficient to satisfy the meritorious defense element,
noting, for example, the lack of a declaration from the witness
5 Although it is not clear that the court meant to exclude all
parts of Barajas’s declaration describing the accident, even if we
exclude it all, sufficient other evidence supported the meritorious
defense element, as discussed above.
13
(Franquez) referenced in his insurer’s report. This argument
challenges the adequacy of the evidence to prove fault or liability,
which was not the issue before the court. The court needed only
to determine whether Barajas had a colorable response to the
allegations in the complaint. (See Weitz, supra, 63 Cal.2d at
p. 854 [“appellate courts are much more disposed to affirm an
order where the result is to compel a trial upon the merits than
they are when the judgment by default is allowed to stand and
it appears that a substantial defense could be made”].) For this
reason, courts have accepted far less than evidence proving a
defense to satisfy the meritorious defense element. (See Stiles v.
Wallis (1983) 147 Cal.App.3d 1143, 1148 (Stiles) [“merely
attaching a verification to a proposed answer is sufficient to
demonstrate meritoriousness”]; Rappleyea, supra, 8 Cal.4th at
p. 983 [unverified answer combined with declaration of “lawyer
who informally aided defendants . . . that he believed ‘these
defendants have a very good (and certainly a justiciable) defense
to the plaintiff ’s claim’ ” sufficient], capitalization omitted.) The
court did not abuse its discretion in finding Barajas had satisfied
this element.
B. Excused Failure to Respond in Litigation
Requirement
Sandoval argues that “the superior court made precisely
zero findings [as to] . . . Barajas’[s] diligence prior to the entry
of his default, even after finding that he was duly served with
process” (italics omitted), and that “the trial court’s finding was
solely that . . . Barajas’[s] purported reliance on his insurance
company after the default judgment was entered, was an
excusable mistake.” As a preliminary matter, this is not an
accurate characterization of the court’s ruling. Rather, the
14
court concluded that both “the delay in presenting a satisfactory
defense and in promptly seeking relief [was] attributable to
[Barajas’s] insurance carrier.” (Italics added.)
Moreover, the court did not abuse its discretion in
concluding Barajas had been diligent. First, although the court
failed to make an express finding that Barajas did not receive
the summons and complaint and the request for default, we may
infer from the court’s ruling an implicit finding to this effect. At
the initial motion hearing, the court expressed skepticism that
Barajas did not receive notice of the litigation before entry of
the default and/or default judgment, but then expressed no such
concerns after receiving supplemental evidence regarding the
unreliability of Barajas’s mailbox. From this and the court’s
overall ruling, we may imply the court found Barajas did not
receive these documents. In reviewing for an abuse of discretion,
we “indulge all legitimate and reasonable inferences in favor of
upholding the trial court’s findings” (Bookout v. Nielsen (2007)
155 Cal.App.4th 1131, 1137–1138) and may affirm on any basis
reasonably supported by the evidence. (Montenegro, supra, 26
Cal.4th at p. 255.)
Such an implicit finding is also supported by the evidence.
The court could have deemed credible Barajas’s uncontradicted
declaration that he never received the litigation documents
mailed to him, and the declarations supporting that Perez was
not the “Maria ‘Doe’ ” who accepted service of the summons
and complaint. Such findings are not in tension with the
court’s conclusion that the complaint’s proof of service was not
fraudulent, and that service was proper. This is because, in order
for the substituted service on Barajas via Maria Doe to be proper,
Maria Doe needed only to appear to be a member of Barajas’s
15
household—which could be true, even if she was not a member
of the household. And if one accepts Barajas’s supplemental
declaration that others could and did access his mailbox at
the Parthenia Street apartment, often leaving it open, Barajas
may not have received the litigation documents that the proofs
of service stated were mailed to him, despite, as the court found,
those proofs of service being truthful.
Second, Barajas could reasonably have relied on his
insurer’s representations in 2016 and 2017 that Sandoval’s
insurance carrier had accepted full responsibility for the accident
if, as we conclude the court implicitly found, Barajas was
unaware at the time that Sandoval had sued him in connection
with the accident. As a result, the court could have accepted
that Barajas reasonably believed that any dispute regarding
the collision had been resolved by his insurer’s settlement with
Sandoval’s insurer. Indeed, there is evidence suggesting AFA
(Sandoval’s insurer) made a payment to Barajas as a result of a
settlement. Our state Supreme Court has held that reasonable
reliance on a third party, including an insurer, to protect one’s
interest in a dispute can excuse a failure to respond to litigation
which results in a default and default judgment. (See Weitz,
supra, 63 Cal.2d at pp. 855–856.) That is what the trial court’s
decision impliedly found and what distinguishes the instant
matter from the cases on which Sandoval relies. In the cases
Sandoval cites, the defendants provided either no excuse at all, or
no reasonable excuse. (See, e.g., Sporn v. Home Depot USA, Inc.
(2005) 126 Cal.App.4th 1294, 1301 [“[T]here is no statement that
the papers were lost, stolen, forwarded to the wrong person, or
eaten by the dog. Nothing in the record discloses what caused
defendant to ignore the summons and complaint, [or] the letter
16
from plaintiff ’s lawyer . . . . No excuse, satisfactory or otherwise,
was presented”]; Stiles, supra, 147 Cal.App.3d at p. 1148
[defendant seeking to set aside “flagrantly ignore[d] the
responsibility to present a defense” and failed to “demonstrate
a satisfactory excuse for not responding to the original action
in a timely manner”].)
C. Diligence in Seeking Relief
Whether a defendant was sufficiently diligent in seeking
relief from a default and/or default judgment “ ‘depends upon the
circumstances of that particular case’ ” (Benjamin v. Dalmo Mfg.
Co. (1948) 31 Cal.2d 523, 528 (Benjamin)), and “[w]hether a
party has acted diligently is a factual question for the trial court”
(Huh v. Wang (2007) 158 Cal.App.4th 1406, 1420). “[I]n ‘the
determination of that question, a large discretion is necessarily
confided to [the trial] court’ [citation], [but] there must be some
showing—some evidence—as the basis for the exercise of such
discretion.” (Benjamin, supra, at p. 528.)
Here, the court attributed the delay between Barajas’s
learning of the default/default judgment and the motion to
set aside to the negligence of Barajas’s insurance carrier, not
to any lack of diligence by Barajas. The record supports this
attribution. The court implicitly found the DMV notice was the
first notice Barajas had received referencing a lawsuit. Multiple
declarations established that Barajas promptly reached out
to his insurer upon receiving the DMV notice. Given that
his insurer had previously informed him the matter had been
resolved via an insurance claim—and that the notice was
from the DMV, not a court—the court did not err in finding
that Barajas reasonably relied on his insurer to address the
problem brought to his attention by the notice. (See Weitz,
17
supra, 63 Cal.2d at pp. 857–858 [a defendant’s “reli[ance] upon
another interested party . . . reasonably justified under the
circumstances” is a factor “in determining whether a delay in
moving to set aside a default judgment is excusable”].) Nor does
the record support that, after the DMV mailing, Barajas received
any further communications suggesting that his insurer was
not, in fact, resolving the issue. (See Cruz v. Fagor America,
Inc. (2007) 146 Cal.App.4th 488, 508 (Cruz) [“[i]n cases in which
courts have found that a defendant’s reliance on a third party
was reasonable, the defendant received no further information
about the status of the litigation after submitting the complaint
to the third party”].) Moreover, the court could have deemed
credible and reasonable Barajas’s declared testimony that he
considered the issue resolved after his insurer confirmed—two
years after an apparent insurance settlement—that there was
no record of any litigation about the accident.
But that Barajas acted reasonably in relying on his insurer
to investigate and address the default judgment referenced in
the DMV notice does not end our inquiry as to diligence. At least
two cases have held that, “in order to obtain relief from default,
[such a defendant] must also establish justification for the
inaction of the [insurance] carrier.” (Scognamillo v. Herrick
(2003) 106 Cal.App.4th 1139, 1149 (Scognamillo), citing Don v.
Cruz (1982) 131 Cal.App.3d 695, 702.) This additional
requirement is necessary because, under such circumstances,
the insurer is effectively the real party in interest, and may be
held accountable for its lack of diligence. (See Scognamillo,
supra, at p. 1149; Don, supra, at p. 702.) To do otherwise invites
an insurer to “ ‘shield[ ] itself behind the blamelessness of its
insured’ ” and thereby potentially “make[ ] a shambles of orderly
18
procedure.” (Scognamillo, supra, at p. 1149; see ibid. [“ ‘ “[w]hen
inexcusable neglect is condoned even tacitly by the courts, they
themselves unwittingly become instruments undermining the
orderly process of the law” ’ ”].)
Barajas failed to establish his insurer’s diligence below—
indeed, the court expressly found that Barajas’s insurer
had “repeated[ly] breach[ed] . . . its duty to promptly defend
[Barajas],” a finding neither party challenges on appeal. “The
greater the prejudice to the plaintiff from vacating the default[,]
the greater the burden on the defendant of proving diligence and
vice versa.” (Falahati v. Kondo (2005) 127 Cal.App.4th 823, 833–
834; see Rappleyea, supra, 8 Cal.4th at p. 984.) Here, setting
aside the default would substantially prejudice Sandoval in that
it would force him to try his case over eight years after the
accident took place. Given the substantial showing of diligence
needed to justify the prejudice to Sandoval from setting aside a
years-old default judgment, Barajas, although “a blameless
insured[,] is to be charged with the inexcusable neglect of [his]
insurer[ ]” for the purposes of the diligence element of extrinsic
mistake. (Scognamillo, supra, 106 Cal.App.4th at p. 1149.)
Accordingly, the trial court abused its discretion in concluding
Barajas had established diligence sufficient to permit the court to
set aside the default and default judgment.
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DISPOSITION
The order is reversed. The parties shall bear their own
costs on appeal.
NOT TO BE PUBLISHED.
ROTHSCHILD, P. J.
We concur:
BENDIX, J.
WEINGART, J.
20