Bleau Fox v. Rabadi CA2/7

Filed 9/16/14 Bleau Fox v. Rabadi CA2/7
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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION SEVEN
BLEAU FOX, B249499
Plaintiff and Respondent, (Los Angeles County
Super. Ct. No. BC490047)
v.
AHED RABADI et al.,
Defendants and Appellants.
APPEAL from a judgment of the Superior Court of Los Angeles County, Holly E.
Kendig, Judge. Affirmed.
Law Offices of Kamal A. Bilal and Kamal A. Bilal for Defendants and Appellants.
Bleau Fox, Thomas P. Bleau and Martin Fox for Plaintiff and Respondent.
___________________________
The trial court entered a default judgment pursuant to Code of Civil Procedure
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section 585 for more than $100,000 in unpaid legal fees in favor of Bleau, Fox, a P.L.C.,
against its former client Ahed Rabadi. On appeal Rabadi contends the court erred in
denying his motion to vacate default pursuant to section 473, subdivision (b), and his
motion to reconsider that order pursuant to section 1008. We affirm.
FACTUAL AND PROCEDURAL BACKGROUND
1. The Complaint and Entry of Default
In a Judicial Council form complaint for breach of contract filed August 10, 2012,
Bleau Fox sought $116,434.81 in damages, alleging Rabadi had entered into a retainer
agreement with the law firm and thereafter refused to pay for fees and costs expended on
his behalf. The complaint identified Hootan T. Farahmand of the Law Office of
Hootan T. Farahmand as attorney for Bleau Fox.
The proof of service stated the summons, complaint and related documents were
served by substituted service on August 20, 2012 at Rabadi’s business at 200 North
Glendale Avenue, Glendale, by leaving them with, or in the presence of, the person in
charge, “Rolan ‘Doe’ (refused to give last name)” and by mailing them to Rabadi at the
same address. The attorney service’s declaration of diligence stated efforts to personally
serve Rabadi at the Glendale address on August 17, 18 and 20 had been unsuccessful.
The proof of service, filed with the court on August 23, 2012, identified Thomas P. Bleau
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of Bleau Fox as attorney for the law firm.
No answer was filed. On October 17, 2012 Farahmand on behalf of Bleau Fox
filed a request for entry of default, which the clerk entered the same day. The declaration
of mailing reflected service on Rabadi by first class mail to the Glendale address used for
substituted service, as well as to a residential address in Granada Hills.
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Statutory references are to the Code of Civil Procedure.
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A formal substitution of attorney was filed in the lawsuit on February 5, 2013,
substituting Bleau for Farahmand on February 5, 2013
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2. The Motion for Order Setting Aside Default
On January 11, 2013, approximately three months after the default was entered,
Rabadi through his counsel, Kamal A. Bilal, moved for an order vacating and setting
aside his default on the ground Rabadi’s and his then attorney’s failure to respond to the
complaint was “due to mistake, neglect, surprise and/or inadvertence,” citing section 473,
subdivision (b). The thrust of the motion was that Bleau Fox had deliberately engaged in
tactics designed to thwart Rabadi’s ability to defend himself and to obtain a quick default.
The moving papers, supported by declarations from Rabadi and Sandy Rabadi,
Rabadi’s niece, explained Rabadi owns a number of gas stations and other properties that
he manages from a central office in Woodland Hills—a fact Bleau Fox, which had
represented Rabadi for a number of years, knew. However, rather than personally serve
Rabadi at his office or his current home residence, which was also known to Bleau Fox,
the summons and complaint were left with a cashier at one of Rabadi’s gas stations. The
documents remained in a drawer at the gas station for several weeks before being
forwarded to Rabadi sometime in mid- or late-September. At that point Rabadi spoke
with his niece, an attorney who had assisted him with other legal matters, gave copies of
the summons and complaint to her and asked for her help. Rabadi also declared he did
not receive the request for entry of default until November 2012, explaining he had
moved from the Granada Hills residence where it had been mailed in 2006 and sold the
property in 2010. The current owner of the property eventually gave the document to
Rabadi. He never received the request to enter default mailed to the Glendale gas station.
In her declaration Sandy Rabadi stated she and Farahmand left a number of
voicemail messages for each other and had at least two telephone conversations. Sandy
Rabadi declared she advised Farahmand that she was an attorney calling on behalf of
Rabadi and that Rabadi wanted to resolve the matter. She requested an extension of time
to respond to the complaint pending those discussions; Farahmand responded
affirmatively to the request: “In my communications with Hootan Farahmand, he assured
me, and I believed, that defendant had an open extension to respond to the complaint and
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that plaintiff was desirous of resolution. At no time did he tell me plaintiff would be
filing a Request to Enter Default. I was not served with a copy of the Request to Enter
Default.” Sandy Rabadi explained she specializes in criminal law and recommended in
mid-October that her uncle retain an attorney who was more familiar with contract law
when a settlement appeared unlikely. According to Bilal, Rabadi discussed the lawsuit
with him in November 2012 and retained him in late-November.
Farahmand’s declaration filed with Bleau Fox’s opposition papers told a rather
different story about his interaction with Sandy Rabadi. According to Farahmand, he had
only one telephone message from her, which he received on August 23, 2012 (three days
after substituted service was effected at the Glendale gas station), asking that he call her
back regarding the lawsuit. He returned the call on August 24, 2012; Sandy Rabadi
answered, explained she was a criminal attorney and said she needed to call him back
because she was stepping into court. Nothing more was discussed in that call, and Sandy
Rabadi never called him back. Farahmand left a message for Sandy Rabadi at the
number he had previously called on August 29, 2012. He received no response.
Farahmand stated he had not agreed to extend the time to respond to the complaint in his
conversation with Sandy Rabadi or at any other time. Farahmand also declared he
received a telephone call on December 7, 2012 from an office assistant at Bilal’s office
who asked Farahmand to email her a copy of the complaint, which he did on
December 10, 2012. He subsequently received a letter from Bilal, dated December 7,
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2012, which confirmed the request for a copy of the complaint. Based on Farahmand’s
declaration Bleau Fox argued Rabadi had not demonstrated excusable neglect in failing to
respond to the complaint.
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Farahmand’s declaration stated no one had objected or complained to him
regarding the manner of service of the complaint. In a separate declaration Martin Fox of
Bleau Fox attached documents concerning the Granada Hills residence that reflected the
2010 sale was an intrafamily transfer and as of 2012 Rabadi still received tax bills for
property he owned in Nevada at that address.
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After receiving a reply memorandum and hearing oral argument, the trial court
denied the motion. The court ruled, with respect to the mandatory aspect of section 473,
subdivision (b), Sandy Rabadi’s declaration did not clearly accept fault for the failure to
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file a timely answer and, with respect to the discretionary portion of the statute, she did
not absolve her uncle-client of fault. Moreover, the court found the declaration itself not
credible. As it explained during the hearing, unlike Farahmand’s declaration, which
contained the exact dates of his contacts with Sandy Rabadi, her declaration was vague
about when their conversations supposedly occurred. Finally, the court observed, even
crediting Rabadi’s assertion he did not receive the summons and complaint until mid-
September, rather than late August as asserted in Farahmand’s declaration, that was still a
full month prior to entry of the default; and there was no satisfactory explanation for the
failure to respond during that time.
3. The Motion for Reconsideration
Four court days after the court’s denial of the motion, Rabadi moved for
reconsideration pursuant to section 1008, attaching as new evidence a declaration from
Sandy Rabadi in which she accepted full responsibility for the failure to file a timely
answer to the complaint. In his declaration in support of reconsideration, Bilal explained,
when he had previously discussed the case with Sandy Rabadi, “she would not sign a
declaration admitting fault for the entry of default” and had not told him all the relevant
facts. For her part, Sandy Rabadi again declared she left a number of detailed voice
messages for Farahmand, had at least two telephone conversations with him and
requested an extension of time to respond to the complaint pending settlement
discussions. However, she now added, “It was my mistake to rely solely on
Mr. Farahmand[’s] verbal agreement to grant an extension without a specific deadline to
file a response to the complaint. . . . [¶] . . . [¶] 6. Once our settlement discussions broke
down, I made the mistake of not asking Mr. Farahmand for a short extension so that
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The court also observed it was unclear from Sandy Rabadi’s declaration whether
she had actually represented her uncle in connection with the lawsuit.
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either I could assist defendant in responding to the complaint in pro per or to allow
defendant time to seek other counsel. Unfortunately, I made the mistake of not realizing
that once settlement discussions ceased, so did any extension Mr. Farahmand said he
would grant while we were discussing settlement.”
After receiving an opposition memorandum from Bleau Fox (with no new
declarations) and a reply from Rabadi and hearing oral argument, the trial court denied
the motion for reconsideration, ruling Sandy Rabadi’s second declaration was not new
evidence within the meaning of section 1008 because the information was previously
available: “You know that different declaration could have been submitted the first time.
It doesn’t give me jurisdiction to reconsider.” The court also explained it had previously
found Sandy Rabadi was not credible with respect to the circumstances leading to the
default, in contrast to Farahmand, who the court had found “completely credible,” and
then stated Sandy Rabadi’s “willingness to alter the underlying facts in her most recent
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declaration only underscores that this remains true.”
Following Bleau Fox’s submission of a written declaration to prove damages,
judgment was entered on May 31, 2013 for $110,110.30, including $3,411.72 in
prejudgment interest and $549.50 in costs. Rabadi filed a timely notice of appeal.
DISCUSSION
1. Governing Law; Standard of Review
A motion to vacate a default “‘“is addressed to the sound discretion of the trial
court, and in the absence of a clear showing of abuse . . . the exercise of that discretion
will not be disturbed on appeal.”’ [Citations.] The appropriate test for abuse of
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With respect to the two Sandy Rabadi declarations, the court observed, “[H]er new
story is that she made the mistake of not asking Mr. Farahmand for a short extension after
settlement discussions failed, where she previously claimed that Mr. F[arahmand] had
granted the defendant an open extension to respond to the complaint pending settlement
discussions. So she’s contradicted herself, and I believe that [the] current declaration is
also internally contradictory” “I did not find Sandy Rabadi particularly, even in this
declaration, credible with respect to the default because the fact that she’s willing to alter
the declaration really makes me — raises questions of her credibility.”
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discretion is whether the trial court exceeded the bounds of reason.” (Strathvale
Holdings v. E.B.H. (2005) 126 Cal.App.4th 1241, 1249; accord, Anastos v. Lee (2004)
118 Cal.App.4th 1314, 1318-1319.)
If a ruling turns on a disputed issue of fact, the trial court’s express and implied
factual determinations are not disturbed on appeal if supported by substantial evidence.
(Strathvale Holdings v. E.B.H., supra, 126 Cal.App.4th at p. 1250; see Winograd v.
American Broadcasting Co. (1998) 68 Cal.App.4th 624, 632.) “When a finding of fact is
attacked on the ground that there is no substantial evidence to sustain it, the power of an
appellate court begins and ends with the determination as to whether there is any
substantial evidence, contradicted or uncontradicted, which will support the finding of
fact. [Citations.] [¶] When two or more inferences can reasonably be deduced from the
facts, a reviewing court is without power to substitute its deductions for those of the trial
court.” (Green Trees Enterprises, Inc. v. Palm Springs Alpine Estates, Inc. (1967)
66 Cal.2d 782, 784-785; see Griffith v. San Diego College for Women (1955) 45 Cal.2d
501, 508 [“[w]hen an issue is tried on affidavits, the rule on appeal is that those affidavits
favoring the contention of the prevailing party establish not only the facts stated therein
but also all facts which reasonably may be inferred therefrom, and where there is a
substantial conflict in the facts stated, a determination of the controverted facts by the
trial court will not be disturbed”]; accord, Capo for Better Representation v. Kelley
(2008) 158 Cal.App.4th 1455, 1462.) “Moreover, [under the substantial evidence test]
we defer to the trier of fact on issues of credibility.” (Lenk v. Total-Western, Inc. (2001)
89 Cal.App.4th 959, 968.)
In reviewing the trial court’s ruling on a request for relief from default, “‘It is the
policy of the law to favor, whenever possible, a hearing on the merits. Appellate courts
are much more disposed to affirm an order when the result is to compel a trial on the
merits than when the default judgment is allowed to stand. [Citation.]’ ‘“‘Even in a case
where the showing . . . is not strong, or where there is any doubt as to setting aside of a
default, such doubt should be resolved in favor of the application.’”’” (Ramos v.
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Homeward Residential, Inc. (2014) 223 Cal.App.4th 1434, 1444 [internal citations &
italics omitted]; accord, Rappleyea v. Campbell (1994) 8 Cal.4th 975, 980 [“[b]ecause the
law favors disposing of cases on their merits, ‘any doubts in applying section 473 must be
resolved in favor of the party seeking relief from default’”].)
2. The Trial Court Did Not Abuse Its Discretion in Concluding Rabadi Had
Failed To Show His Default Had Been Entered Based on Mistake or
Excusable Neglect
Section 473, subdivision (b), authorizes the trial court to relieve a party from a
default judgment or dismissal entered as a result of the party’s or his or her attorney’s
mistake, inadvertence, surprise or neglect. It provides for both mandatory and
discretionary relief. Mandatory relief is available “whenever an application for relief is
made no more than six months after entry of judgment, is in proper form, and is
accompanied by an attorney’s sworn affidavit attesting to his or her mistake,
inadvertence, surprise, or neglect . . . unless the court finds that the default or dismissal
was not in fact caused by the attorney’s mistake, inadvertence, surprise, or neglect.”
(§ 473, subd. (b).) If the statutory conditions are satisfied, the court must grant relief.
(Solv-All v. Superior Court (2005) 131 Cal.App.4th 1003, 1008; Metropolitan Service
Corp. v. Casa de Palms, Ltd. (1995) 31 Cal.App.4th 1481, 1487.)
When there is no sufficient attorney affidavit of fault, discretionary relief alone is
available to a party who has defaulted: “The court may, upon any terms as may be just,
relieve a party or his or her legal representative 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).) Neglect is excusable only if a
reasonably prudent person under similar circumstances might have made the same error.
(Bettencourt v. Los Rios Community College Dist. (1986) 42 Cal.3d 270, 276; Huh v.
Wang (2007) 158 Cal.App.4th 1406, 1423; see Solv-All v. Superior Court, supra,
131 Cal.App.4th at p. 1007.) A party seeking relief under section 473, subdivision (b),
bears the burden of proof. (In re Marriage of Kieturakis (2006) 138 Cal.App.4th 56, 80.)
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Without question, Sandy Rabadi’s initial declaration neither accepted fault for her
uncle’s failure to timely respond to Bleau Fox’s complaint nor suggested the default was
entered as a result of her own mistake or neglect. Rather, her declaration, like the
balance of the moving papers, accused Bleau Fox and its counsel of engaging in ethically
questionable conduct intended to impede Rabadi’s ability to defend the case on the merits
and insisted the law firm’s gamesmanship was the cause of the default. Mandatory relief
under section 473, subdivision (b), was not available.
As for discretionary relief, if the trial court had believed the declarations of Rabadi
and Sandy Rabadi, it would have been well within its discretion to vacate the default for
their excusable neglect. But it did not, and, as discussed, we must defer to its credibility
determinations. (See Cowan v. Krayzman (2011) 196 Cal.App.4th 907, 915.) According
to Farahmand’s chronology, which was accepted by the trial court, although the summons
and complaint were not served in the most commendable fashion, Rabadi had the
documents more than six weeks prior to entry of the default in mid-October 2012 and did
nothing in response to the lawsuit, other than speak to his niece, until late November
2012 when he hired Bilal. His newly retained counsel then waited another six weeks to
determine the status of the case and move to vacate the default. For her part, according to
Farahmand, Sandy Rabadi only placed one, nonsubstantive telephone call to counsel for
Bleau Fox and answered another without requesting an extension of time to respond or
otherwise seeking to advance the litigation. The trial court was fully justified in
concluding Rabadi was responsible for the decision (explicit or tacit) to ignore the
complaint and that his conduct in this regard was neither prudent nor reasonable.
“‘It is the duty of every party desiring to resist an action or to participate in a
judicial proceeding to take timely and adequate steps to retain counsel or to act in his own
person to avoid an undesirable judgment. Unless in arranging for his defense he shows
that he has exercised such reasonable diligence as a man of ordinary prudence usually
bestows upon important business his motion for relief under section 473 will be denied.
[Citation.] Courts neither act as guardians for incompetent parties nor for those who are
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grossly careless of their own affairs. . . . The only occasion for the application of section
473 is where a party is unexpectedly placed in a situation to his injury without fault or
negligence of his own and against which ordinary prudence could not have guarded.’”
(Hearn v. Howard (2009) 177 Cal.App.4th 1193, 1206; accord, Hopkins & Carley v.
Gens (2011) 200 Cal.App.4th 1401, 1415 [although reviewing courts favor orders
granting relief under section 473, subdivision (b), to effectuate the policy favoring trial
on the merits, that policy does not invariably prevail over competing interests; “‘“[w]hen
inexcusable neglect is condoned even tacitly by the courts, they themselves unwittingly
become instruments undermining the orderly process of the law”’”].) Based on its
findings, which are supported by substantial evidence, the trial court was well within its
ample discretion in denying the motion to vacate the default.
3. The Trial Court Properly Denied the Motion for Reconsideration
Section 1008 generally requires any motion for reconsideration be based “upon
new or different facts, circumstances, or law.” (§ 1008, subds. (a), (b); see Le Francois v.
Goel (2005) 35 Cal.4th 1094, 1098.) Even if new or different facts are provided with the
renewed motion, however, the moving party must provide the trial court with a
satisfactory explanation as to why he or she failed to produce the evidence at an earlier
time. (People v. Safety National Casualty Corp. (2010) 186 Cal.App.4th 959, 974
[“Facts of which a party seeking reconsideration was aware at the time of the original
ruling are not ‘new or different facts,’ as would support a trial court’s grant of
reconsideration. [Citation.] To merit reconsideration, a party must also provide a
satisfactory reason why it was unable to present its new evidence at the original
hearing.”]; Glade v. Glade (1995) 38 Cal.App.4th 1441, 1457 [“[t]he party seeking
reconsideration must provide not just new evidence or different facts, but a satisfactory
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explanation for the failure to produce it at an earlier time”].)
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We review a trial court’s ruling on a motion for reconsideration under the abuse of
discretion standard. (Glade v. Glade, supra, 38 Cal.App.4th at p. 1457.)
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As the trial court explained, Sandy Rabadi’s belated acknowledgement of fault did
not constitute “new or different facts” within the meaning of section 1008. Sandy
Rabadi’s role in the events leading to the entry of default was at all times within Rabadi’s
knowledge or, at the very least, discoverable with due diligence; and the statement that
Sandy Rabadi was not initially willing to accept responsibility for the entry of default—
instead blaming the litigation tactics of Bleau Fox—does not constitute a satisfactory
explanation for the presentation of what the trial court fairly termed a contradictory and
internally inconsistent revised declaration. The trial court’s denial of the motion for
reconsideration was not an abuse of discretion.
DISPOSITION
The judgment is affirmed. Bleau Fox is to recover its costs on appeal.
PERLUSS, P. J.
We concur:
WOODS, J.
SEGAL, J.*
* Judge of the Los Angeles Superior Court, assigned by the Chief Justice pursuant to
article VI, section 6 of the California Constitution.
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