One bite of the apple

Are attorneys entitled to a do-over if the court denies their first request for relief from a default?

Several Courts of Appeal have suggested that the answer is yes - specifically, that Code of Civil Procedure Section 1008's rule that courts cannot grant a motion for reconsideration unless it is based on "new or different facts, circumstances, or law" does not apply to applications for relief from default under Code of Civil Procedure Section 473(b).

But the California Supreme Court recently rejected that view. In Even Zohar Construction & Remodeling Inc. v. Bellaire Townhouses LLC, 2015 DJDAR 8309 (July 20, 2015), it held that Section 1008's limits on reconsideration do apply to Section 473(b). In other words, make your first request for relief as compelling as you can, because you are not likely to get a second chance if the court denies it.

Zohar involved a common scenario: The trial court entered a default judgment after defendants failed to respond to a complaint, and the defendants sought relief from the default under Code of Civil Procedure Section 473(b)'s provision that the court "shall" vacate a default judgment "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."

The defendants' Section 473(b) application asserted that their attorney missed responding to the complaint because he had been away from the office on personal matters, and his staff failed to properly maintain the file. But the trial court rejected that explanation as "not credible" and "entirely too general" in light of evidence that plaintiff had repeatedly alerted defense counsel to the impending default, and denied relief.

Defendants tried again, this time offering a different explanation that defense counsel claimed he had been too embarrassed to disclose the first time around: He failed to respond to the complaint because he was preoccupied with assisting other clients whose files had been seized as part of a criminal investigation. The trial court found this explanation lacking in two ways: It was not credible, and it ran afoul of Code of Civil Procedure Section 1008 because it was based on facts that the attorney knew when he filed the prior Section 473(b) application. But the court nonetheless granted relief, based on an appellate decision suggesting that Section 1008's requirements do not apply to Section 473(b) and that relief is mandatory as long as the default was not the client's fault.

The Court of Appeal reversed and directed the trial court to reinstate the default judgment. The Supreme Court affirmed that ruling. It held that Section 1008's restrictions apply to Section 473(b) requests, and therefore that a renewed request for relief cannot rely on facts that could have been presented in the first request.

Zohar is an important cautionary tale for attorneys. If you make a mistake and need relief under Section 473(b), provide as complete and honest an explanation as possible in the accompanying affidavit. If you provide only a partial or misleading explanation and the court denies the motion, it will be too late to fill in the gaps - unless there are new factual or legal developments after the first motion for relief is denied, Section 1008 will compel denying a renewed request for relief.

But Zohar is also notable for several other reasons.

First, the decision includes a primer on the principles of statutory construction. Zohar rests on two principles: (1) Where possible, a court must harmonize two statutes, giving full effect to both; and (2) there is a presumption against repeals by implication, "including partial repeals that occur when one statute implicitly limits another statute's scope of operation." The court concluded that it is possible to harmonize Sections 473(b) and 1008 because "section 1008 does not restrict initial applications for relief from default under section 473(b) in any way, nor does section 473(b) purport to authorize unlimited repetitions of the same motion."

The court reasoned that because it could harmonize the statutes, there was no need to turn to other rules of statutory interpretation. Among the rules that the court declined to rely on were that a specific statute trumps a general one, and that a newer statute takes precedence over an older one (unless these two rules point in different directions, in which case specificity trumps timing, see State Dept. of Public Health v. Superior Court, 60 Cal. 4th 940, 960 (2015). The court explained that those are merely "tie-breaking rules" to apply where two statutes in fact conflict. If there is a way to give effect to both statutes, a court will do so without looking to the "tie-breaking" considerations.

Second, Zohar highlights the difficulty of reading tea leaves when it comes to Supreme Court grants or denials of review. The same issue presented in Zohar - the interaction of Sections 473(b) and 1008 - had come up in at least three prior published decisions, in 2002, 2009 and 2010. Each of those three opinions suggested that Section 1008 does not apply to Section 473(b) applications for relief from default. There were petitions for review filed in two of the cases, and the court denied both. Only after the Zohar Court of Appeal adopted an opposing view - that Section 1008 limits Section 473(b) applications - did the Supreme Court grant review of the issue. It then affirmed Zohar's position, and disapproved of the three prior cases - including the two in which it had denied review.

The decision to grant review in Zohar but not in the earlier cases could reflect many factors, including changes in the composition of the Supreme Court since the issue was last presented. But regardless of the explanation, the point remains: The denial of a petition for review does not necessarily mean that the court agrees with the decision below, and a grant of review does not necessarily indicate that the court is prepared to reverse. Only time - and the Supreme Court's decision on the merits - will tell.