For more than 100 years, California courts have been empowered to give discretionary relief from defaults, dismissals, and virtually any other order entered in the course of litigation. Obtaining such relief has traditionally required the moving party to act promptly (under a long-recognized diligence and timeliness requirement) and to demonstrate that the challenged order was the excusable result of mistake, inadvertence, surprise, or excusable neglect. If the moving party failed on either the timeliness or the excusability prongs, relief would be denied, and the injured client would be relegated to a malpractice claim against the attorney involved. Extensive case law interpreting and applying the discretionary relief provisions of Section 473 of the Code of Civil Procedure developed over the years, and the relatively narrow boundaries for relief became well known.
All of this changed, beginning in 1988. In that year, with little fanfare and seemingly little notice from the bench and bar, the Legislature amended Section 473 to add provisions for mandatory relief from a default judgment. In subsequent amendments, defaults (prior to default judgment) and dismissals were added to the mandatory relief list. Yet, based on both the relative paucity of appellate cases addressing the mandatory relief provisions and this author’s own informal survey of judges and practitioners, these mandatory provisions appear to be one of the better kept secrets of California litigation practice.
This is surprising, given the power of these new provisions. Gone from them is any concept of excusability; instead, the only requirement is that the attorney of record at the time of the challenged order must submit an “affidavit of fault” acknowledging his or her own blame for the default or dismissal. Provided that a motion based upon an affidavit of fault is filed within the statutory time limit — within six months after entry of judgment — and provided that the Court is satisfied that the attorney’s acts or omissions in fact caused the default or dismissal, then the granting of relief is mandatory. The tradeoff comes from an array of optional and mandatory penalties to be imposed by the court on the attorney who submits such an affidavit of fault.
This article will briefly survey the new mandatory- relief provisions of Section 473. It will then pose a thought- provoking question: In a situation where a California lawyer is eligible to request mandatory relief, can he or she ever seek only discretionary relief?
The basic mandatory-relief language appears in the middle of the third paragraph of Section 473:
Notwithstanding any other requirements of this section, the court shall, 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, vacate any (1) resulting default entered by the clerk against his or her client, and which will result in the entry of a default judgment, or (2) resulting default judgment or dismissal entered against his or her client, unless the court finds that the default or dismissal was not in fact caused by the attorney’s mistake, inadvertence, surprise, or neglect.
The balance of the third paragraph, together with the fourth paragraph, sets out the “quid pro quo” accompanying mandatory relief:
The court shall, whenver relief is granted based on an attorney’s affidavit of fault, direct the attorney to pay reasonable compensatory legal fees and costs to opposing counsel or parties. . . . Whenever the court grants relief from a default, default judgment, or dismissal based on any of the provisions of this section, the court may: (1) impose a penalty of no greater than one thousand dollars ($1,000) upon an offending attorney or party, (2) direct that an offending attorney pay an amount no greater than one thousand dollars ($1,000) to the State Bar Client Security Fund, or (3) grant other relief as appropriate.
Finally, the fifth paragraph of Section 473 makes clear that the mandatory relief is not conditional upon compliance with these sanctions:
However, where the court grants relief from a default or default judgment pursuant to this section based upon the affidavit of the defaulting party’s attorney attesting to the attorney’s mistake, inadvertence, surprise, or neglect, the relief shall not be made conditional upon the attorney’s payment of compensatory legal fees or costs or monetary penalties imposed by the court or upon compliance with other sanctions ordered by the court.
Although only a handful of appellate decisions have considered the mandatory relief provisions of Section 473, a number of fundamental principles have been established. Here are some of the most important:
If the Statutory Requirements Are Met, Relief Is Mandatory. Although the original, discretionary provisions of Section 473 provide that the court “may” relieve a party from a judgment, dismissal, order, or other proceeding taken against him, the mandatory provisions state that the court “shall” grant relief if the conditions are met. Case law affirms the mandatory nature of this relief. E.g., Billings v. Health Plan of America (1990) 225 Cal. App. 3d 250, 256; Beeman v. Burling (1990) 216 Cal. App. 3d 1586, 1605 & n.14. Legislative materials quoted in the above cases reflect a strong view by legislators that (a) courts with crowded calendars were overly reluctant to grant relief from defaults, and (b) the remedy of a malpractice claim by a client against his or her own lawyer was unsatisfactory and only added to the burdensome civil case load.
Only Defaults, Default Judgments, and Dismissals Are Covered. The courts have construed the mandatory relief provisions quite strictly, and have refused to apply them by analogy to anything outside of the enumerated events of defaults, default judgments, and dismissals. Thus, for example, the failure to make a timely request for trial de novo following judicial arbitration was held not to be eligible for mandatory relief under Section 473, even though the result was an unfavorable judgment. Ayala v. Southwest Leasing & Rental, Inc. (1992) 7 Cal. App. 4th 40; see also Tackett v. City of Huntington Beach (1994) 22 Cal. App. 4th 60, 65 (mandatory relief provisions of Section 473 do not carry over to Government Code Section 946.6). Accordingly, an attorney dealing with situations outside the three enumerated grounds for mandatory relief must continue to rely on the traditional discretionary grounds for relief, requiring satisfaction of the timeliness and excusability standards.
Only the Actual Attorney of Record Can Sign the Affidavit of Fault. The statute does not allow a successor attorney to point the finger of blame at his or her predecessor, under oath or otherwise. Rather, only the actual attorney of record at the time of the default or dismissal can invoke the mandatory relief provisions by submitting an affidavit of fault. See Rogalski v. Nabers Cadillac (1992) 11 Cal. App. 4th 816, 821 n.5. When a new attorney comes in to pick up the pieces, therefore, it will often be critically important to track down the previous attorney and use whatever persuasion is necessary to get that attorney to execute the affidavit of fault. Otherwise, in the discretionary relief realm, the prospects for relief are far less certain.
The Court Is Not Concerned With The Reason For The Attorney’s Mistake or Neglect. Because the mandatory provisions do not call for the court to inquire into whether the attorney’s acts or omissions were excusable or not, there is really no occasion to examine the attorney’s conduct, except to satisfy the statutory requirement that the attorney’s conduct actually caused the default, default judgment, or dismissal. Billings, supra, 225 Cal. App. 3d at 256. This causation requirement is said to address the possibility that an attorney might be “covering up” for his or her client, see, e.g., Rogalski, supra, 11 Cal. App. 4th at 821, although no court has yet managed to articulate what such a “cover-up” might actually involve.
There Is Apparently No Diligence Requirement For Mandatory Relief. Assuming the other requirements are met, the statute provides for mandatory relief “whenever an application for relief is made no more than six months after entry of judgment.” This phrase is introduced by the statement, “[n]otwithstanding any other requirements of this section,” which presumably overrides the requirement for discretionary relief that an application “shall be made within a reasonable time.” Thus, so far as anyone can see, there is no diligence requirement for mandatory relief.
The well-known Weil & Brown treatise, Civil Procedure Before Trial, has lamented this apparent legislative oversight for several years, and has hinted that “corrective legislation is likely.” R. Weil & I. Brown, Civil Procedure Before Trial (The Rutter Group 1994) ¶ 5.300.1. The legislature has ignored this hint so far, however, and at the present time, mandatory relief under Section 473 appears to be available on an open-ended basis until six months after entry of judgment. A recent case, Caldwell v. Methodist Hospital (1994) 24 Cal. App. 4th 1521, 1525, seems at first blush to suggest that a diligence requirement might apply to mandatory relief, but a close examination of the case shows that the attorney seeking relief from default apparently based his request on a claim of excusable neglect, not an affidavit of fault. Id. at 1524.
Given the relative certainty of the mandatory relief provisions, why would an eligible attorney (that is, one whose own conduct “caused” the entry of a default, default judgment, or dismissal) hesitate to invoke these provisions? The answers are not hard to figure out. First, when the mandatory relief provisions are invoked, the attorney at fault is subject to a variety of sanctions, including compensatory legal fees to the opponent, penalties payable to the State Bar Client Security Fund, and “other relief as is appropriate.” Second, the attorney’s own reputation may suffer, and his conduct may be referred to the State Bar or other agencies if the judge so chooses. Thus, even though the lifting of a default or the reinstatement of a dismissed plaintiff’s case may protect the attorney at fault from more serious malpractice liability, the cost may nonetheless be significant.
In the face of these considerations, an attorney who believes he or she has good grounds to demonstrate excusability may wish to invoke the discretionary provisions of Section 473 (requiring both timeliness and excusability), rather than invoking the mandatory relief provisions. The problem is, of course, that there can be no assurance that a judge will exercise favorably his or her discretion under Section 473, no matter how strong the facts supporting the application for relief may be. For that matter, there can be no assurance that an appellate court will view the judge’s ruling as an abuse of discretion, and it is certainly cold comfort for a client to wait one or more years for such an appeal to be prosecuted (especially if a supersedeas bond must be posted in the face of a default judgment). Thus, in the view of this author, serious ethical problems would arise whenever an attorney failed to invoke mandatory relief provisions if they were available.
On the other hand, it seems unduly harsh to require an attorney to fall on his own spear in a situation where the likelihood of discretionary relief is high: that is, where the excuse is a good one, the attorney moves promptly to seek relief, and the opposing party will suffer no meaningful detriment from the granting of relief. There are two possible strategies.
Strategy one would involve filing for discretionary relief first and, if such relief was denied, filing a follow-up motion for mandatory relief. Although there appear to be no cases saying this cannot be done, this strategy smacks of gamesmanship, and may run a risk that the second motion will be denied on the grounds that it is based on matters that could have been presented in the first motion. Cf. Wyoming Pacific Oil Co. v. Preston (1959) 171 Cal. App. 2d 735, 742; Civil Procedure Code Section 1008.
Strategy two seems less risky, if more cumbersome, and this author believes it will emerge as more standard procedure in cases of this kind. In this strategy, the attorney would seek discretionary relief in the first instance, but request mandatory relief if the court finds, for whatever reason, that the requirements for discretionary relief have not been met. Thus, an attorney seeking relief would submit an affidavit outlining the factual basis leading up to the default, default judgment, or dismissal, setting forth facts to support the necessary findings of diligence and excusability for purposes of discretionary relief. The affidavit would go on to say, however, that the attorney accepts full responsibility for the default, default judgment, or dismissal, and that if the court finds that discretionary relief is not available, then the attorney requests and is prepared to accept the consequences of mandatory relief. This approach seems to give maximum assurance of a favorable outcome for the client, while reducing the likelihood that an attorney will be unnecessarily penalized.
The mandatory relief provisions of Section 473 represent a profound change in California law, bringing improved protection of client interests along with new dilemmas for lawyers. State court practitioners can expect to deal with these provisions, on one side or the other, from time to time in their practices. Thorough familiarity with these provisions will lead to sound decisions when mandatory relief situations arise.
This article originally appeared in the ABTL Report published by the Association of Business Trial Lawyers in Los Angeles.