Navarro v. Chavez CA2/7

Filed 8/27/20 Navarro v. Chavez CA2/7
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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION SEVEN
JOSHUA NAVARRO, B293307
Plaintiff and Respondent, (Los Angeles County
Super. Ct. No. BC642542)
v.
NALINA DESTINY CHAVEZ,
Defendant and Appellant.
APPEAL from a judgment of the Superior Court of
Los Angeles County, Christopher K. Lui, Judge. Affirmed.
Anderson, McPharlin & Conners, Colleen A. Déziel and
Peter B. Rustin for Defendant and Appellant.
Garcia & Phan, Juan D. Garcia and Robert Nicholas Phan
for Plaintiff and Respondent.
_________________________
Nalina Destiny Chavez moved to vacate a default and
default judgment pursuant to Code of Civil Procedure
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section 473.5, claiming she had lacked actual notice of the
lawsuit. On appeal from the superior court’s denial of that
motion, Chavez abandons that argument and contends for the
first time the court erred in failing to vacate the judgment based
on equitable grounds of extrinsic fraud or mistake. We affirm.
FACTUAL AND PROCEDURAL BACKGROUND
1. Navarro’s Complaint and Entry of Default
On December 22, 2014 Chavez rear-ended a truck while
driving on the freeway. Joshua Navarro was a passenger in the
truck and sustained injuries.
On December 2, 2016 Navarro sued Chavez for negligence,
seeking damages in an amount according to proof at trial but in
any event in excess of the jurisdictional amount of $25,000.
On January 30, 2017 Navarro filed a request for entry of
default after Chavez failed to file a responsive pleading. The
clerk of the court entered Chavez’s default the same day.
2. The Default Judgment
On November 2, 2017 Navarro filed a request for entry of a
default judgment in the amount of $1.2 million. Navarro
included in his supporting papers his declaration, medical records
and a statement of damages, claiming $900,000 in general
damages ($800,000 for pain and suffering plus $100,000 for
emotional distress) and more than $300,000 in special damages
($50,000 for past medical expenses, $100,000 for future medical
expenses, $100,000 for loss of future earnings and $60,000 for
loss of earnings to date). Navarro stated he suffered painful and
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Statutory references are to this code.
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long-lasting injuries to his neck and back that interfered with his
ability to return to work or engage in everyday activities with his
young children.
On November 2, 2017 the superior court entered judgment
for Navarro for $430,000.
3. Chavez’s Motion for Order Vacating Default and Default
Judgment
On July 11, 2018 Chavez moved to vacate the default and
default judgment pursuant to section 473.5, claiming she lacked
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actual notice of the lawsuit. In her declaration supporting the
motion, Chavez insisted she had not known about, and had never
been served with, the summons or complaint or any document
relating to the default or default judgment. Chavez stated that
on December 2, 2016, when the lawsuit was filed, and
November 2, 2017, when the request for entry of default
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Section 473.5, subdivision (a), provides, “When service of
summons has not resulted in actual notice to a party in time to
defend the action and a default or default judgment has been
entered against him or her in the action, he or she may serve and
file a notice of motion to set aside the default or default judgment
and for leave to defend the action.” Subdivision (b) requires the
motion to be accompanied by “an affidavit showing under oath
that the party’s lack of actual notice in time to defend the action
was not caused by his or her avoidance of service or inexcusable
neglect.” If the trial court finds the party’s lack of actual notice
was not caused by his or her avoidance of service or inexcusable
neglect, the court “may set aside the default or default judgment
on whatever terms as may be just and allow the party to defend
the action.” (§ 473.5, subd. (c); see Sakaguchi v. Sakaguchi
(2009) 173 Cal.App.4th 852, 861; Anastos v Lee (2004)
118 Cal.App.4th 1314, 1319.)
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judgment was filed, “I resided at 8978 Virginia Ave. South Gate
CA 90280.”
Chavez’s counsel, Jennifer S. Leeper, an employee of
State Farm’s legal department, asserted in a supporting
declaration that Navarro’s counsel, Robert Phan, had been
negotiating a settlement with State Farm and never informed the
company that Navarro had filed the lawsuit, let alone obtained a
default. In fact, according to Leeper, State Farm only became
aware of the lawsuit on June 28, 2018 when Phan sent a copy of
the default judgment to State Farm and demanded State Farm
pay the judgment amount to avoid a lawsuit. Leeper continued,
“This demand and threat[] to sue State Farm comes as a
complete surprise given State Farm’s attempts to settle this
matter.” Leeper included a March 21, 2017 letter from Phan to a
State Farm claims’ specialist asking the company to have Chavez
sign and return an enclosed declaration attesting that she had no
other pertinent insurance policies “in order to settle this case for
the policy amount. Please also include a copy of the policy.”
Chavez signed the declaration as requested on April 4, 2017 and
returned it to State Farm. A June 15, 2017 letter from State
Farm to Phan stated, “Please let me know if the claim for Mr.
Navarro has been settled and if I can forward the draft for
$50,000 to your office.” According to Leeper, Phan’s
correspondence with State Farm abruptly ceased without
explanation. Despite multiple attempts to reach him for nearly a
year, State Farm did not hear further from Phan until he sent
State Farm the demand to pay the default judgment amount.
4. Navarro’s Opposition to Chavez’s Motion
Navarro opposed Chavez’s motion, challenging her claim
she lacked actual notice of the lawsuit. Navarro included the
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sworn declaration of process server Mark Najera attesting that,
on December 12, 2016, he personally served Chavez with the
summons and complaint at her residence at 8978 Virginia
Avenue in South Gate, the same address Chavez identified as her
residence in her motion and supporting declaration. Phan
similarly stated in his accompanying declaration all default-
related documents had been served by mail to the same Virginia
Avenue address.
In addition, emphasizing language in State Farm’s
March 23, 2017 letter to Chavez that Navarro’s counsel had
expressed “interest[] in resolving this matter versus continuing
with litigation,” Navarro claimed State Farm was “fully aware” of
the lawsuit. (In reply Chavez argued the letter referred to
potential, rather than ongoing, litigation.)
As for settlement negotiations, Phan explained he had sent
State Farm a letter on July 20, 2015 with a policy limits demand.
When State Farm refused to disclose the policy limits in its
response to that demand letter, on December 2, 2016 Phan filed a
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lawsuit on behalf of Navarro in superior court.
On December 19, 2016 State Farm offered in writing to
settle Navarro’s claims for $50,000. State Farm did not state
that $50,000 represented the policy limits. In light of an existing
workers’ compensation lien and Navarro’s “extensive injuries,”
Navarro did not accept the settlement offer. When Chavez failed
to respond to Navarro’s complaint, on January 30, 2017 Navarro
requested, and obtained, entry of default against Chavez. Phan
did not address Leeper’s allegations that Phan had continued
3
Navarro had only until December 22, 2016 to file her
personal injury lawsuit absent a tolling agreement (§ 335.1), a
fact Leeper surely must have known.
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negotiating with State Farm up until April 2017, after he
obtained the default, without revealing the lawsuit or default.
5. Chavez’s Reply, Navarro’s Objections and Sur Reply
In her reply Chavez provided a second supporting
declaration, this time claiming “there is one long driveway for
several homes on my street and, therefore, there are several
houses with the address ‘8978 Virginia Ave.’ in South Gate.”
(Italics omitted.) Chavez stated the residents of those homes
included young adult Hispanic women that physically resembled
her. In addition, while she once had lived at “one of the houses”
located at the Virginia Avenue address, she had moved out in
August 2016 to various other residences, including a motel and
her mother’s residence. She explained, “During this period of
economic uncertainty I considered our family to be homeless.”
She continued to receive “some but not all of my mail from
8978 Virginia Ave.” during this time. She, her husband and their
child returned to live at the Virginia Avenue address “earlier this
year.”
Chavez also stated in her second declaration that she had
signed the form State Farm provided to her confirming the lack of
other insurance policies and presumed that Navarro and Phan
“would keep their word and this matter would be settled.” She
did not know of the summons and complaint, entry of default or
the default judgment until her State Farm counsel informed her
in July 2018 that a default judgment had been entered against
her.
Navarro objected to Chavez’s second declaration, insisting
it contradicted her first declaration attesting to her address at
Virginia Avenue during the relevant period. With leave of court
to file a sur reply, Navarro also provided a declaration from
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Najera that the 8978 Virginia Avenue residence was located in a
front-back duplex, the address of the front house was
8976 Virginia Avenue, and the address of the back house was
8978 Virginia Avenue. Najera confirmed he personally served
Chavez at the back house associated with the 8978 address.
Navarro also provided images from Google Maps indicating there
was only one building on Virginia Avenue in South Gate with the
8978 address and it was part of a duplex.
6. The Court’s Order Denying Chavez’s Motion
After hearing argument and taking the matter under
submission, the court denied Chavez’s motion. Citing Najera’s
declaration establishing service of the summons and complaint,
the court ruled Chavez had failed to carry her burden under
section 473.5 to demonstrate she lacked actual notice of the
lawsuit not attributable to inexcusable neglect or avoidance of
service.
Chavez filed a timely notice of appeal.
DISCUSSION
Section 473.5, subdivision (a), authorizes a court to set
aside a default when service of a summons has not resulted in
actual notice to a party in time to defend the action. Chavez does
not contend the court erred in concluding she had failed to carry
her burden to demonstrate a lack of actual notice under
section 473.5. Rather she now argues the court abused its
discretion in failing to vacate the default on the equitable
grounds of extrinsic fraud or mistake. (See Rappleyea v.
Campbell (1994) 8 Cal.4th 975, 980-981, 984 (Rappleyea) [even
when statutory relief from default is unavailable, superior court
enjoys inherent power to vacate a default on equitable grounds
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“in exceptional circumstances,” such as when default was result
of extrinsic mistake or fraud; court’s denial of equitable relief is
reviewed for abuse of discretion]; Pittman v Beck Park
Apartments Ltd. (2018) 20 Cal.App.5th 1009, 1024 [same].)
Because Chavez did not make this argument to the trial court, it
is forfeited. (See Sea Sage Audubon Society, Inc. v. Planning
Com. (1983) 34 Cal.3d 412, 417 [issues not raised in trial court
cannot be raised for first time on appeal]; Nellie Gail Ranch
Owners Assn. v. McMullin (2016) 4 Cal.App.5th 982, 997
4
[same].)
While recognizing that she did not assert the specific
ground of extrinsic fraud or mistake, Chavez argues she plainly
averred that Navarro’s counsel had failed to disclose the lawsuit
to State Farm during their settlement negotiations. Chavez
likens this case to Lasalle v. Vogel (2019) 36 Cal.App.5th 127(Lasalle). There, the plaintiff (Lasalle) sued her former attorney
(Vogel) for legal malpractice and served her complaint on Vogel
on March 3, 2016. On April 7, 2016 Lasalle’s attorney sent Vogel
both an email and letter informing Vogel the time for filing a
responsive pleading was “past due” and threatening to request
entry of Vogel’s default “unless he received a responsive pleading
by the close of business the next day, Friday April 8.” Failing to
receive any response, Lasalle’s counsel filed a request for entry of
default the following Monday, on April 11, 2016 and obtained the
4
A single line in Chavez’s moving papers that “equity and
public policy favor trying this case on the merits” is a far cry from
an argument for equitable relief based on the specific grounds of
extrinsic fraud or mistake. Nowhere in her notice of motion,
motion or supporting memorandum did Chavez identify extrinsic
fraud or mistake as a basis for relief.
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default at 4:05 p.m. that afternoon. At 5:22 p.m. the same day,
Vogel emailed Lasalle’s counsel requesting an extension. When
that overture failed, she retained an attorney by Friday, April 15,
2016 and immediately moved to vacate the default and attached
her answer to the complaint. Vogel explained in her
accompanying declaration that she had received the summons
and complaint and had been in the process of obtaining
representation in Lasalle’s action when the default was taken.
(Id. at pp. 131-132 & fn. 4.) The superior court denied Vogel’s
motion to vacate the default; and Lasalle subsequently obtained a
default judgment in the amount of $1 million. (Id. at p. 132.)
On appeal the court reversed the judgment and the order
denying Lasalle’s motion to vacate the default. Citing Lasalle’s
“unreasonably short” one-day notice to Vogel of her intent to
obtain a default, Vogel’s response within days after receiving
notice, her good faith explanation for the delay and the absence of
any prejudice considering the brief time between the default and
Vogel’s response, the court held the superior court had abused its
discretion in failing to set aside the default. (Lasalle, supra,
36 Cal.App.5th at pp. 140-141.)
Relying on language in Lasalle lamenting the systemic
decline of civility in the legal profession that has led attorneys to
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substitute “scorched-earth” tactics for professional courtesies,
Chavez claims Phan engaged in similar unprofessional tactics,
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The Court of Appeal observed that lawyers have “heard the
mantra so often unthinkingly repeated that, ‘This is a business,’
that they have lost sight of the fact the practice of law is not a
business[,] [i]t is a profession[,] [a]nd those who practice it carry a
concomitantly greater responsibility than businesspeople.”
(Lasalle, supra, 36 Cal.App.5th at p. 134.)
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crossing an ethical line, if not a legal one, to obtain a “stealthy
default.”
The situation in Lasalle was vastly different from the
instant case. In Lasalle the defendant immediately asked
counsel for a few days’ extension, which was refused, and then
promptly sought discretionary relief from default under
Section 473. Under those circumstances, the Lasalle court
recognized, all doubts are to be resolved in favor of relief.
(Lasalle, supra, 36 Cal.App.5th at p. 134, citing Rappleyea, at
p. 980 [because the law favors resolution of cases on their merits,
any doubts about application of section 473 are to be resolved in
favor of relief from default].) Where there is no longer a statutory
basis for relief, the “strong public policy in favor of the finality of
judgments” prevails in all but “exceptional circumstances.”
(Rappleyea, supra, 8 Cal.4th at pp. 981-982 [“‘When relief under
section 473 is available, there is a strong public policy in favor of
granting relief and allowing the requesting party his or her day
in court. Beyond this period there is a strong public policy in
favor of the finality of judgments and only in exceptional
circumstances should relief be granted’”].)
As discussed, Chavez did not assert in the trial court an
equitable basis to set aside the default. But, even if she had, she
failed to show the type of “exceptional circumstances” that would
warrant relief. Because Chavez had notice of the lawsuit and
default-related documents, it cannot be said that the default was
“stealthily” obtained. Whatever failure of communication there
may have been between State Farm and Navarro’s counsel, or
between State Farm and Chavez, for that matter, the court did
not abuse its discretion in denying Chavez’s motion.
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DISPOSITION
The judgment is affirmed. Navarro is to recover his costs
on appeal.
PERLUSS, P. J.
We concur:
FEUER, J.
*
DILLON, J.
*
Judge of the Superior Court of the County of Los Angeles,
appointed by the Chief Justice pursuant to article VI, section 6 of
the California Constitution.
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