City of Perris v. Henry CA4/1 ( 2024 )

Filed 10/28/24 City of Perris v. Henry CA4/1
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
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COURT OF APPEAL, FOURTH APPELLATE DISTRICT
DIVISION ONE
STATE OF CALIFORNIA
CITY OF PERRIS, D084029
Plaintiff and Respondent,
v. (Super. Ct. No. RIC1822624)
RONALD LEE HENRY, JR.,
Defendant and Appellant.
APPEAL from an order of the Superior Court of Riverside County,
Daniel A. Ottolia, Judge. Reversed and remanded with directions.
Law Office of Zulu Ali & Associates, Zulu Ali; Law Office of M. Lance
Kennix and M. Lance Kennix for Defendant and Appellant.
Aleshire & Wynder, Robert Khuu, Priscilla George and Michael Linden
for Plaintiff and Respondent.
Ronald Lee Henry, Jr.,1 appeals from an order denying his motion to
vacate a $1.7 million judgment and discovery orders against him in an action
1 To avoid confusion, we refer to the individuals involved by their first
names. Because Ronald and his father share the same name, we refer to his
father as Ronald Sr.
for nuisance and civil penalties brought by the City of Perris arising out of his
uncle Bishop Morrow’s operation of an unlicensed automotive repair business
at a residential property. Ronald contends he should have been granted
equitable relief from the judgment because he was not aware of the litigation
or his uncle’s violations until after the judgment was entered; his parents
were the true equitable owners of the property even though he was on title;
he did not retain or have any contact with the attorneys who purported to
appear on his behalf in the matter; and those attorneys failed to respond to
discovery or oppose the City’s summary judgment motion, resulting in the
$1.7 million judgment against him without a fair adversary hearing. In these
unusual circumstances, we agree that Ronald is entitled to equitable relief
based on the doctrine of extrinsic mistake. We therefore reverse the order
denying Ronald’s motion to vacate and remand for further proceedings.
FACTUAL AND PROCEDURAL BACKGROUND
A. Proceedings Leading to Judgment
In October 2018, the City initiated this action by filing a complaint for
nuisance abatement, injunctive relief, and civil penalties against Ronald and
Bishop. The City asserted various violations of the City’s municipal code
alleged to have been occurring on a property located on Nina Circle. The
complaint alleged that Ronald was the owner of the Nina Circle property, and
that Bishop was a tenant or subtenant.
According to the complaint, between 2012 and 2017, the City had
received a large number of complaints from various neighboring residents
about illegal parking and the operation of an unlicensed automotive repair
business on the property.
The City had attempted to resolve concerns about activities on the
property through numerous citations issued by code enforcement officers in
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2017. The violations continued. Then, in August 2017, over a year before
initiating the civil action underlying this appeal, the City filed a criminal
complaint against Ronald and Bishop, but the violations still did not abate.
After code enforcement officers made further inspections in 2018 and
found the same public nuisance violations occurring, the City filed this action
against the defendants, seeking an order requiring compliance with the City’s
municipal code, a permanent injunction, and the payment of the City’s costs
of enforcement, including legal fees and costs. The City also sought civil
penalties of up to $2,500 per day for alleged illegal discharge of oil under City
of Perris Municipal Code sections 14.22.070 and 14.22.140(7).2
In December 2018, the City requested to amend the complaint to
correct the name of the defendant originally identified as “RONALD LEE
HENRY, an individual” to “RONALD LEE HENRY, JR., an individual.” The
court permitted the amendment.
A process server made several unsuccessful attempts to serve Ronald
with the summons and complaint in person at the Nina Circle property. On
the third attempt in January 2019, the process server left the documents at
the property with “Corey ‘DOE’ – Co-Occupant” (later identified as Cory
Stuart), then completed substitute service by mailing the documents to
2 City of Perris Municipal Code section 14.22.070 makes a person liable
for any “discharge that would result in or contribute to a violation of NPDES
Permit No. CAS 618033, Order No. R8-2002-0011.” The City’s complaint
alleged that the discharges here violated this order because they “ultimately
seeped into the City’s stormwater drainage system.” Section 14.22.140(7)
provides that a person “may be held liable for a civil penalty not to exceed
$2,500 for each day [that] such a violation exists.” Of all the allegations in
the City’s complaint, only the alleged discharges of oil carried this civil
penalty.
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Ronald at the Nina Circle address by first-class mail.3 Bishop was also
served with the summons and complaint by substitute service at the Nina
Circle property.
In January 2019, attorneys at Legis Law, identifying themselves as
representing both Bishop and Ronald, filed an answer to the complaint on
behalf of both defendants. Once the answer was filed, the parties stipulated
to set aside a default that had already been entered as to Bishop. The trial
court accepted the stipulation and relieved Bishop from default. About a
month after the original answer was filed, Legis Law filed a first amended
answer on behalf of both defendants.
In May 2019, attorneys for the City served counsel for the defendants
with the City’s discovery requests, including requests for the production of
documents, requests for special interrogatories, requests for admissions, and
form interrogatories. The defendants failed to respond. On July 12, the City
moved to compel discovery responses and have the requests for admissions be
deemed admitted. Defense counsel filed no opposition to these discovery
motions.
At the trial setting conference on July 30, 2019, the City and the
defendants were represented by counsel. The court set trial to begin in
December.
On August 29, the City filed a motion for summary judgment. The
City’s supporting evidence showed the following: The City received at least 15
complaints between 2012 and 2017 from various residents in the
neighborhood about illegal parking and operation of an illegal automotive
repair business at the Nina Circle property. In response, the City inspected
3 Ronald has never challenged the validity of service of the summons and
complaint.
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the property 24 times between 2012 and 2017. The inspections revealed
“substantial evidence” of an illegal automative repair business at the
property. Code compliance officers observed inoperable vehicles leaking oil
onto the pavement immediately adjacent to the property. At many of these
inspections, enforcement officers spoke with Morrow who admitted in May
2017 he was running an auto repair business at the property “because he
needed to feed his family and nobody was going to hire a 75-year-old man.”
The City repeatedly notified Bishop that it was illegal to operate the
automotive repair business on the property, ordered him to cease operations,
and issued citations totaling $9,000 in fines. Although Bishop repeatedly
assured the City he would stop running the illegal operation, the violations
did not abate.
The City also submitted a copy of a recorded quitclaim deed conveying
the Nina Circle property from Ronald’s parents to him on October 7, 2009.
On September 25, 2019, less than a month after the City moved for
summary judgment, the court granted the City’s unopposed motions to
compel and for deemed admissions. As to Ronald, the facts the court deemed
to be admitted were that he owned the Nina Circle property, he rented it to
Bishop, he allowed an automotive repair business to be operated on the
property without a business license, and he allowed dismantled vehicles to be
stored on the property in public view. The court also ordered the defendants
and defense counsel to pay sanctions for their discovery violations.
Two days later, Legis Law filed and served a request to be relieved as
defendants’ counsel. In a supporting declaration, an attorney at Legis Law
stated: “Attorneys have lost [contact] with Defendants making continued
effective representation unreasonably difficult . . . . The Defendants have
breach[ed] a material term of the agreement between the Defendants and
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Legis Law relating to the representation, and Legis Law has given reasonable
warning after the breach that Legis Law will withdraw[] unless Defendants
fulfill the agreement.” (Internal citations omitted.) The “Defendants” were
identified as “Ronald Lee Henry, Jr. and Bishop Morrow.” The attesting
attorney stated he had “confirmed within the past 30 days that the address is
current” by telephone, and that the clients had been served by mail at the
Nina Circle address. The attorney did not identify whom he spoke to by
telephone to confirm the address.
Legis Law remained as counsel of record for the defendants when the
November 4, 2019 deadline for their opposition to the City’s summary
judgment motion passed. No opposition was filed and no continuance
requested.
On November 18, 2019, the trial court granted the City’s unopposed
motion for summary judgment. Defense counsel from Legis Law was present
at the summary judgment hearing. They did not request a continuance of the
hearing. In its order granting the City’s motion, the court found that the City
was entitled to judgment on all claims, including its cause of action for illicit
discharge of oil in violation of City of Perris Municipal Code section
14.22.070, but made no finding that there were unlawful discharges of oil
every single day or continuously during the relevant time period.
A couple of weeks later, the court granted Legis Law’s request to be
relieved as counsel.
In early February 2020, the City submitted a proposed judgment for
civil penalties against both defendants jointly in the amount of $1,667,500.
The proposed judgment stated: “Pursuant to PMC [Perris Municipal Code]
§ 14.22.140(7) Defendants are liable for a civil penalty not to exceed $2,500
for each day a violation of PMC chapter 14.22 exists on the Property. From
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June 12, 2017, the first day City discovered a violation of PMC section 14.22
pursuant to the Complaint, to April 10, 2019, the day the City no longer
observed the violation on the Property, is 667 days. Therefore, Defendants
are to pay civil penalties in the amount of $1,667,500 to [the] City, pursuant
to PMC 14.22.140(7).” This sum was the maximum possible civil penalty of
$2,500 per day for 667 days.
Without holding a hearing on the amount of the civil penalty, the court
signed and entered the judgment as proposed by the City. The City then
moved for attorney fees of $61,818.28, and in April 2020, the court granted
that motion in full. On September 10, 2021, almost a year and a half after
the last activity had taken place in the action, the trial court signed and
entered an amended judgment to include the City’s attorney fees. The final
total amount of the amended judgment was $1,729,318.28. The amended
judgment was recorded in the County of Riverside on June 17, 2022.
B. Proceedings After Judgment
The City filed a writ of execution on July 28, 2022. Five months later,
the City filed an application for order for the sale of the Nina Circle property
and set a hearing for February 24, 2023. The trial court issued an order to
show cause on December 21, 2022, ordering the defendants to show cause
why an order for sale of the property should not be made. The documents
were served on the defendants by mail at the Nina Circle address.
Represented by new counsel, Ronald appeared and filed a “Response to
OSC” on February 9, 2023. Ronald requested that the court postpone the sale
of the property to permit him an opportunity to set aside the judgment. The
trial court appears to have delayed the sale of the property.
At the end of March 2023, Ronald moved to vacate the judgment and
prior discovery orders of the court on the ground of extrinsic fraud or
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mistake. His motion cited Code of Civil Procedure4 section 437, subdivision
(d), but also asserted that under Manson, Iver & York v. Black (2009) 176
Cal.App.4th 36, 47–49, and other authorities governing a court’s equitable
power to set aside a judgment, the court had authority to grant relief at any
point in time, regardless of the availability of relief under section 473.
Ronald conceded that “extrinsic fraud or mistake was not perpetrated by the
opposing party,” but argued that he nevertheless had been “denied his right
to proper notice of the court proceedings for reasons entirely extrinsic to his
own knowledge and actions.”
In supporting declarations, Ronald and his father explained that
although Ronald was the legal owner of the Nina Circle property, his parents
had transferred title to him only because his father was being deployed
overseas and his parents wanted to get the property out of their names to free
up credit to support Ronald’s mother while he was away. The property was
occupied by Ronald’s aunt, Renee Henry, and her husband, Bishop, who were
responsible for the upkeep and maintenance. Ronald and his parents
allegedly did not tell anyone about the transfer of title because his parents
intended to continue handling all financial matters concerning the house.
Ronald’s parents were still the actual owners of the property, and Ronald
claimed he had nothing to do with the property other than having it in his
name.
Cory Stuart also submitted a supporting declaration confirming that he
was the person who received the legal papers for Ronald from the process
server in January 2019. He lived at the property with Bishop and Renee.
4 All further undesignated statutory references are to the Code of Civil
Procedure.
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Cory gave the legal papers to Bishop. As far as he knew, nobody but Bishop
knew anything about the legal papers.
According to Ronald and his father, they were not aware of the City’s
enforcement action until December 2022, when Renee told Ronald’s father
about it. Renee submitted a declaration explaining that Bishop had been
suffering from dementia since 2012; he was not in a condition to understand
what was happening when the City’s lawsuit was filed in October 2018; his
diagnosis was terminal; and he was on home hospice care with Renee caring
for his needs. She attached medical records for Bishop supporting these
assertions. Cory lived with Renee and Bishop in exchange for his help caring
for Bishop and the property.
Renee explained that in December 2018, she received a letter from
Legis Law addressed to Bishop about the City’s lawsuit. She called Legis
Law and hired the firm to defend her husband and brother. She was under
the impression that her brother, Ronald Sr., was the person named. She did
not tell her nephew Ronald about the case because she did not know he had
any connection to the house. Renee believed the matter had been taken care
of until she received the City’s notice of levy in December 2022. She then
called her brother and told him about it. He in turn informed Ronald.
According to Ronald, he did not sign any retainer agreement with Legis
Law and never met or had any contact with the firm or any other attorney
about the City’s case. He further asserted that had he known about the
City’s complaint about the condition of the house, he could have done
something about it years earlier.
In opposition, the City did not contest the truth or credibility of the
declarations submitted by Ronald and did not submit any contrary evidence.
The City nevertheless argued that Ronald had “not met his burden of
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producing competent objective evidence of extrinsic fraud, mistake, or
excusable neglect to entitle him to equitable relief . . . .” Specifically, the City
asserted that Ronald’s evidence failed to establish his entitlement to
equitable relief based on extrinsic fraud or mistake because he had “fail[ed]
to present any evidence . . . demonstrating he has a meritorious case”; his
“excuse that he was ‘unaware’ of [his] attorney” was “not satisfactory”
because he “had legal representation in the civil case which provided him the
opportunity to present a claim or defense to the court, and participate in the
proceedings”; his papers were “void of any facts or evidence showing that he
or his attorney were in some way fraudulently prevented from filing an
opposition” to the City’s summary judgment motion; he had “not
demonstrated diligence in seeking relief” and “was guilty of inexcusable
neglect”; and he had “an available alternative method of seeking relief from
the judgement [sic] by a legal malpractice claim against Legis Law if facts
exist to support such a claim.”
The trial court denied Ronald’s motion to vacate the judgment. After
finding that Ronald was not entitled to statutory relief under section 473, the
court rejected his claim for equitable relief as follows: “Further, Defendant
does not set forth any grounds to set aside the judgment based on extrinsic
fraud or mistake. Defendant fails to show that he has a meritorious defense,
fails to present any evidence of extrinsic fraud or mistake, fails to show
excusable neglect of a party, and fails to demonstrate that he was
fraudulently prevented from defending the action. There is no basis for
equitable relief from the judgment. Further, Legis Law has appeared in this
action on behalf of Defendant. While Defendant contends that he never
signed a retainer agreement, he does not dispute that Legis Law represented
him in this case. If Legis Law appeared on his behalf without his consent,
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Defendant is not prevented from pursuing his remedies by way of an action
against Legis Law.”
DISCUSSION
Ronald contends that the trial court erred by denying equitable relief
from the judgment. We review an order denying equitable relief for an abuse
of discretion. (Hudston v. Foster (2021) 68 Cal.App.5th 640, 661.) In doing
so, we determine whether the trial court’s factual findings are supported by
substantial evidence and independently review its statutory interpretations
and legal conclusions. (Ibid.) An abuse of discretion is shown if the court’s
findings are not supported by substantial evidence. (Vargas v. Gallizzi (2023)
96 Cal.App.5th 362, 371.) An abuse of discretion also occurs when, in light of
the applicable law and considering all of the relevant circumstances, the
court’s decision exceeds the bounds of reason and results in a miscarriage of
justice. (Rayii v. Gatica (2013) 218 Cal.App.4th 1402, 1415.)
Even when statutory relief is unavailable, a trial court has inherent
power to vacate a judgment on equitable grounds. (Rappleyea v. Campbell
(1994) 8 Cal.4th 975, 981 (Rappleyea).) “One ground for equitable relief is
extrinsic mistake—a term broadly applied when circumstances extrinsic to
the litigation have unfairly cost a party a hearing on the merits.” (Ibid.) “If
an unsuccessful party to an action has been kept in ignorance thereof
[citations] or has been prevented from fully participating therein [citation],
there has been no true adversary proceeding, and the judgment is open to
attack at any time.” (Westphal v. Westphal (1942) 20 Cal.2d 393, 397.) To
qualify for equitable relief from a judgment based on extrinsic mistake, the
moving party must: (1) demonstrate that it has a meritorious case;
(2) articulate a satisfactory excuse for not presenting a defense to the original
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action; and (3) exercise diligence in seeking to set aside the judgment once
discovered. (Rappleyea, at p. 982.)
We consider each of these requirements in turn. First, to demonstrate
a meritorious case, “only a minimal showing is necessary. [Citation.] The
moving party does not have to guarantee success, or ‘demonstrate with
certainty that a different result would obtain . . . . Rather, [it] must show
facts indicating a sufficiently meritorious claim to entitle [it] to a fair
adversary hearing.’ ” (Mechling v. Asbestos Defendants (2018) 29 Cal.App.5th
1241, 1246 (Mechling), quoting In re Marriage of Park (1980) 27 Cal.3d 337,
346 (Park).) In making this determination, a court does not judge the truth
or credibility of the facts presented. “[A] hearing on a motion to relieve a
defendant from default is not the place or time to ascertain whether
defendant really has a defense.” (First Small Business Inv. Co. v. Sistim, Inc.
(1970) 12 Cal.App.3d 645, 650.) “The court’s inquiry is limited to whether the
affidavit or verified pleading contains a statement of facts sufficient to
constitute a meritorious case, and the truth concerning the meritorious
defense is not at issue.” (Ludka v. Memory Magnetics International (1972) 25
Cal.App.3d 316, 323–324 (Ludka).)
On this record, Ronald made the “minimal showing” necessary to
demonstrate a potentially meritorious defense. (Mechling, supra, 29
Cal.App.5th at p. 1246.) He submitted sworn declarations showing that he
went on title to the Perris property solely to help his parents qualify for credit
to support his mother while his father went on deployment. Otherwise, he
had nothing to do with the property and lived in Nevada. His parents were
still the actual owners and continued to handle all financial matters related
to the property. The underlying violations were committed by Ronald’s uncle
who lived at the house with his wife and was operating an unlicensed vehicle
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repair business on the premises.5 In his declaration, Ronald asserted: “If I
had known about The City’s complaint about the condition of the house, I
could have done something about it years ago.” He also stated: “The
judgment is ridiculously high and way out of proportion to any damage to the
neighbors due to a messy yard.” His points and authorities made the same
contentions and argued that the judgment was “wildly in excess of the harm
done” and “unconscionably large.”
Taking Ronald’s evidence as true (Ludka, supra, 25 Cal.App.3d at
pp. 323–324), his claim of lack of notice of his uncle’s violations was sufficient
to establish a potentially meritorious defense to the civil penalties. The
relevant provision of the City of Perris Municipal Code states that a person
“may be liable for a civil penalty not to exceed $2,500.00 for each day that
such a violation exists.” (City of Perris Mun. Code, § 14.22.140(7), italics
added.) Thus, the trial court had broad discretion to impose penalties
anywhere from zero to $2,500 per day. Without explanation, however, the
trial court signed the City’s proposed judgment imposing the maximum
possible penalty of nearly $1.7 million jointly against Ronald and his uncle
(667 days of violations times $2,500 per day). The court did so without
holding a hearing on the appropriate amount of the penalties. Based on
Ronald’s showing that he held legal title to the property in name only, his
parents were still the equitable owners, and he had no knowledge of the
violations committed by his uncle, he could have argued that no penalties
should be imposed against him.
Alternatively, even assuming Ronald bore some responsibility as the
record owner of the property, he still had a potentially meritorious claim that
5 In the City’s multiple unannounced inspections over five years, Ronald
was never present at the property—the code compliance officer only dealt
with his uncle.
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it was unjust to impose the maximum $1.7 million in penalties against him
for violations he did not personally commit and knew nothing about. A
meritorious defense need not be capable of defeating liability entirely; it may
contest only the amount of the judgment. (See, e.g., McCreadie v. Arques
(1967) 248 Cal.App.2d 39, 45 [meritorious defense shown where it was
“ ‘doubtful that the defendant would be able to escape liability for the claimed
damage, but a serious question exist[ed] as to the’ ” amount of damages]; see
also Park, supra, 27 Cal.3d at p. 346 [meritorious claim shown where wife
demonstrated that division of community property “might well” have been
more favorable to her if she had been properly represented]; Key Bank v.
Tablecloth Textile Co. (1st Cir. 1996) 74 F.3d 349, 354–355 [meritorious
defense “at least as to the amount of damages” required that default
judgment be set aside]; Augusta Fiberglass Coatings, Inc. v. Fodor
Contracting Corp. (4th Cir. 1988) 843 F.2d 808, 812 [evidence contesting the
“amount, rather than the propriety” of plaintiff’s claim was “a sufficient
proffer of a meritorious defense” to set aside judgment].)
Ronald argued that the judgment was excessive in his motion to vacate,
and his supporting evidence, if found to be credible, could arguably persuade
a factfinder that something far less than the maximum $1.7 million penalty
was warranted. Although we acknowledge that the issue was poorly
developed below and understand the trial court’s ruling given Ronald’s
superficial briefing, we nevertheless conclude that Ronald satisfied the
“minimal showing” necessary for a potentially meritorious defense.6
(Mechling, supra, 29 Cal.App.5th at p. 1246.)
6 We do not consider Ronald’s claim that the civil penalties were
unconstitutionally excessive because it was not raised in the trial court and
has therefore been forfeited. Ronald has also forfeited many of the other
legal arguments he asserts for the first time in his supplemental letter brief,
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Second, Ronald provided a satisfactory excuse for not presenting a
defense to the original action. (Rappleyea, supra, 8 Cal.4th at p. 982.) His
excuse was that he did not know about the City’s enforcement action until
long after judgment was entered; he never received the papers; he did not
retain and never communicated with the Legis Law attorneys who purported
to represent him; and those attorneys completely abandoned the defense
before they were relieved by failing to respond to discovery and failing to
oppose the City’s summary judgment motion, resulting in a $1.7 million
judgment against him without any adversarial hearing.
As a matter of law, this showing was sufficient to demonstrate that
“circumstances extrinsic to the litigation . . . unfairly cost [Ronald] a hearing
on the merits.” (Rappleyea, supra, 8 Cal.4th at p. 981.) The circumstances
here are comparable to those in Park, supra, 27 Cal.3d 337, where the
Supreme Court reversed the denial of a motion to vacate a judgment of
marital dissolution for abuse of discretion. (Id. at p. 347.) In Park, the wife
was deported to Korea during the dissolution proceedings, and she was
represented at the final hearing by a new attorney who “had never met” her
and “did nothing on her behalf.” (Id. at p. 341.) In finding that she should
have been granted equitable relief based on extrinsic fraud or mistake, the
including that the civil penalties are disproportionate to other fines within
the municipal code; the $2,500 daily penalty only applies to commercial
properties; the City’s delay contributed to the excessiveness; and the
penalties bore no relationship to Ronald’s ability to pay. We nevertheless
conclude that Ronald did adequately preserve his nonconstitutional claim
that the civil penalties were excessive by asserting that he was not the true
owner of the property, he had no notice of the violations, and the $1.7 million
judgment was “ridiculously high,” “wildly in excess of the harm done,” and
“unconscionably large.” (Cf. Summers v. Superior Court (2018) 24
Cal.App.5th 138, 143 [single sentence in trial court brief “was sufficient to
preserve the argument”].)
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Supreme Court concluded she had been denied a fair adversary hearing
because she “never consented to the new attorney’s representation,” she
“wasn’t even notified of his actions,” and the attorney’s representation at the
hearing was inadequate. (Id. at pp. 343–345.) Similarly, Ronald was denied
a fair adversary hearing because, as he claimed, he never consented to
representation by the Legis Law attorneys, he never communicated with
them, he was not notified of their actions, and their representation was
inadequate in that they failed to respond to discovery or oppose the City’s
discovery or summary judgment motions.
Third, Ronald demonstrated diligence in seeking to set aside the
judgment once discovered. (Rappleyea, supra, 8 Cal.4th at p. 982.) The trial
court did not rule otherwise as to this factor. After learning of the judgment
for the first time in December 2022, Ronald retained counsel who within a
few months prepared and filed (1) a request to postpone the sale of the
property and (2) a motion to vacate the judgment. In evaluating this factor,
moreover, the “court must weigh the reasonableness of the conduct of the
moving party in light of the extent of the prejudice to the responding party.”
(Mechling, supra, 29 Cal.App.5th at pp. 1248–1249.) Notably, the judgment
here is not a compensatory damages award in favor of an injured victim who
would have to start all over again in the trial court. It is an award of civil
penalties in favor of a municipality that sought and received the maximum
penalty of $1.7 million—against an individual who was undefended at the
time—without any showing as to actual harm. Any prejudice to the City in
vacating the judgment so that Ronald can defend himself in a fair adversary
proceeding pales in comparison to the equities in his favor. (See also Park,
supra, 27 Cal.3d at p. 345, fn. 7 [even though relitigation of issues “will be
16
time consuming and cause additional expense, such prejudice does not arise
out of the delay” and therefore “cannot be considered”].)
In sum, Ronald satisfied all three requirements for equitable relief
based on extrinsic mistake. On this unique record, the trial court’s contrary
findings are not supported by substantial evidence. Although equitable relief
is available only in exceptional cases, we conclude Ronald demonstrated that
the circumstances here are exceptional and he is at least entitled to a “fair
adversary hearing” to contest the propriety and amount of the civil penalties.
(Park, supra, 27 Cal.3d at p. 346.) We therefore conclude that the trial
court’s ruling exceeded the bounds of its discretion under the doctrine of
extrinsic mistake.
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DISPOSITION
The order denying Ronald’s motion to vacate the judgment is reversed.
The matter is remanded to the trial court with directions to grant the motion,
vacate the judgment and amended judgment as to Ronald only, and conduct
further proceedings consistent with this opinion, including but not
necessarily limited to determining the propriety and amount of any civil
penalties to be imposed against Ronald. In the interest of justice, each party
shall bear their own costs on appeal. (Cal. Rules of Court, Rule 8.278(a)(5).)
BUCHANAN, J.
WE CONCUR:
HUFFMAN, Acting P. J.
DO, J.
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