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Even Zohar Construction & Remodeling, Inc. v. Bellaire Townhouses, LLC

Supreme Court of California

July 20, 2015

BELLAIRE TOWNHOUSES, LLC, et al., Defendants and Respondents

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Superior Court of Los Angeles County, No. BC458347, Ralph W. Dau, Judge. Court of Appeal, Second Appellate District, Division Four, No. B239928.

Daniel B. Harris; Crowell & Moring, Ethan P. Schulman and J. Daniel Sharp for Plaintiff and Appellant.

James S. Link; Reed Smith, Paul D. Fogel, Dennis Peter Maio; Gibalevich & Associates and Daniel Andrew Gibalevich for Defendants and Respondents.

Opinion by Werdegar, J., with Cantil-Sakauye, C. J., Chin, Corrigan, Liu, Cuéllar, and Kruger, JJ., concurring.


[189 Cal.Rptr.3d 825] [352 P.3d 393] WERDEGAR, J.

Code of Civil Procedure [1] section 1008 imposes special requirements on renewed applications for orders a court has previously refused. A party filing a renewed application must, among other things, submit an affidavit showing what " new or different facts, circumstances, or law are claimed" ( id., subd. (b)) to justify the renewed application, and show diligence with a satisfactory explanation for not presenting the new or different information earlier ( California Correctional Peace Officers Assn. v. Virga (2010) 181 Cal.App.4th 30, 45-46 & fns. 14-15 [103 Cal.Rptr.3d 699]; [189 Cal.Rptr.3d 826] see Garcia v. Hejmadi (1997) 58 Cal.App.4th 674, 688-690 [68 Cal.Rptr.2d 228]). Section 1008 by its terms " applies to all applications ... for the renewal of a previous motion" and " specifies the court's jurisdiction with regard to [such] applications." [2] (§ 1008, subd. (e).) This case raises the question whether section 1008 governs renewed applications under section 473, subdivision (b) (section 473(b)), for relief from default based on an attorney's " sworn affidavit attesting to his or her mistake, inadvertence, surprise, or neglect" ( ibid.). We conclude section 1008 does govern such applications. Because defendants concede their renewed application did not satisfy section 1008, we affirm the Court of Appeal's decision vacating the superior court's order granting relief from default.

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I. Background

Plaintiff Even Zohar Construction & Remodeling, Inc., sued defendants Bellaire Townhouses, LLC, Samuel N. Fersht and the Fersht Family Living Trust for breach of contract and related claims arising out of a project to develop a condominium in North Hollywood. Defendants unsuccessfully petitioned to compel arbitration and then failed to file a responsive pleading to the complaint. Thereafter, the clerk entered defendants' default, and the court entered a default judgment in the amount of $ 1,701,116.70.

Defendants subsequently filed an application under section 473(b) for relief from default. Defendants titled their application one for " mandatory relief," thereby invoking the aspect of section 473(b) that requires a court to grant relief when the application 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 ... was not in fact [so] caused ... ." The same provision authorizes discretionary relief when " a judgment, dismissal, order, or other proceeding" is taken against a party or a party's legal representative " through his or her mistake, inadvertence, surprise, or excusable neglect." ( Ibid. )

Accompanying the application was the affidavit of defendants' attorney, Daniel Gibalevich. In that sworn statement, Attorney Gibalevich attributed the default primarily to errors by his staff. He declared that, at the time defendants' responsive pleading was due, he " had to spend substantial amounts of time away from the office" on personal matters. " I believed," he continued, " that I had sufficient staff to assure competent handling of client files. My associates were instructed to notify me immediately of issues that would require my personal attention. It appears that my staff failed to maintain this file in accordance with this firm's policies and procedures. [¶ ] Due to my frequent absences, I failed to file and serve the responsive pleading. ... It is clear that my mistake and excusable neglect resulted in the entry of defaults and default judgments against the Defendants." Plaintiff opposed the motion with evidence that its attorney had repeatedly informed Gibalevich, by mail, e-mail and [352 P.3d 394] fax, of the impending default. Plaintiff also contended that Gibalevich and defendant Fersht had allowed the default to be taken as part of a practice of avoiding defendants' obligations to contractors by delaying payment and driving up legal fees and costs.

The superior court denied defendants' motion for relief from default, expressly finding Gibalevich's declaration " not credible." At the hearing on the motion, the [189 Cal.Rptr.3d 827] court had criticized the declaration as " too vague and conclusory" and as " fuzz[ing] up the issue" of Gibalevich's own responsibility. The court repeated this criticism in its order, describing the declaration as

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" entirely too general" in light of plaintiff's showing, and as failing to show that " Gibalevich is solely at fault in not filing a timely responsive pleading." " Moreover," the court continued, " attorney Gibalevich tries to have it both ways" by speaking vaguely of his own fault while also claiming excusable neglect. " He has not demonstrated excusable neglect."

Thirty-three days later defendants filed a second " Notice of Motion for Mandatory Relief under [section] 473 to Vacate Defaults and Default [Judgments]." Accompanying the renewed motion was a second affidavit by Gibalevich, in which he offered a different explanation for his failure to file a responsive pleading. That failure, he now asserted, had resulted from preoccupation with efforts to secure the return of other clients' files seized from his office as part of a criminal investigation. " [I]nvestigators with the Los Angeles District Attorney's Office," Gibalevich declared, had served a search warrant at his office as part of an " investigation focused on medical providers and not on me or my practice." " [O]ne of my associates, Mr. Savransky, resigned his position right after the search. That left me and Ms. Gina Akselrud as [the] only attorneys shouldering this heavy load." Gibalevich continued: " In my effort to secure the return of my client files, I engaged Mr. Shkolnikov, a criminal defense attorney. I volunteered to assist him in his research and drafting efforts." " I spent all of my time on efforts to return my client's files. I researched and wrote many drafts of the motions that were filed. This consumed me. I was working on this most of the day, every day. When I wasn't in front of the computer, I thought of nothing else. [ΒΆ ] I began to ...

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