Ramsey Trucking Co. v. Mitchell

CONLEY, J.

Plaintiff sued defendant on the claim that in servicing a GMC truck he “added by mistake, with inadvertence and neglect, ten pounds of gear oil instead of 140 weight mineral oil,” and that as a proximate result thereof the vehicle lost its rear end, to the damage of plaintiff in the sum of $2,209.54. The defendant was duly served and no appearance was filed for him within the time limited by law. A default judgment was granted in the sum of $2,209.54 and $8.00 costs on August 2, 1960. Notice of entry of judgment having been served by mail on the defendant on August 3, 1960, he consulted his attorney, who filed a motion to set aside the default and the judgment based thereon. The court granted *864the motion, upon condition that the defendant pay to the attorney for the plaintiff the sum of $200 “to cover time and costs of Plaintiff and Plaintiff’s Attorney in presenting the evidence on Default and Motion opposing the Motion to Set Aside Default.” Within the 10-day period, counsel for defendant mailed a check for $200 to the attorney for the plaintiff; the check was cashed by him and the proceeds retained in his office account. Plaintiff appealed from the order setting aside the default judgment.

At the inception of the hearing, defendant made a motion to dismiss the appeal, “upon the grounds that the Plaintiff and Appellant voluntarily accepted the benefit of the order appealed from and such acceptance is a bar to the prosecution of said appeal.” This court denies the motion to dismiss the appeal. The lower court’s order granting a new trial was conditioned upon the payment of $200 to plaintiff’s counsel; it contemplated payment in cash and not by check. Plaintiff’s counsel did not unconditionally accept the $200; as shown by his declaration in opposition to the motion to dismiss he held a conversation by telephone with defendant’s attorney and “stated to Mr. Boro that he would return the check to him. He stated to me that I should retain the check until such time as the defendant’s purported insurer took action in this matter or until a decision was reached in the present appeal. Upon this statement by Mr. Boro I then deposited said check in my office account and said monies are presently on deposit therein.” Counsel for the plaintiff also tendered back to the defendant in open court the $200 if the order of the lower court setting aside the default should be reversed. The conditional retention in the office account of the $200 by plaintiff’s counsel did not “clearly and unmistakably show acquiescence”; it was not “unconditional, voluntary and absolute.” (Duncan v. Duncan, 175 Cal. 693, 695 [167 P. 141]; Gudelj v. Gudelj, 41 Cal.2d 202, 214 [259 P.2d 656]; Estate of Poisl, 48 Cal.2d 334, 338 [309 P.2d 817].)

In considering the appeal on its merits, the question to be answered by this court is whether the trial court exercised its discretion within legitimate limits in relieving the defendant “from a judgment . . . taken against him through his mistake, inadvertence, surprise or excusable neglect.” (Code Civ. Proc., § 473.) The judges of the appellate department of this court cannot decide the issue by asking themselves whether, if they had been in the trial judge’s place, they would have denied the application to set aside the default. Discretion presupposes the right on the part of the trial judge *865to adopt one of two or more different conclusions on the facts before him, if such conclusion could have been reached by a reasonable man on the evidence.

Unquestionably the defendant was negligent; his reliance on section 473 of the Code of Civil Procedure is an ipso facto admission of his neglect. The question is whether the neglect was excusable. It is elementary that the code section in question is a remedial statute strongly favored by the courts and “liberally applied to carry out the policy of permitting a trial on the merits.” (3 Witkin’s California Procedure, p. 2098; Baratti v. Baratti, 109 Cal.App.2d 917, 921 [242 P.2d 22]; Riskin v. Towers, 24 Cal.2d 274 [148 P.2d 611, 153 A.L.R. 442]; Stub v. Harrison, 35 Cal.App.2d 685 [96 P.2d 979]; Miller v. Lee, 52 Cal.App.2d 10 [125 P.2d 627]; Vartanian v. Croll, 117 Cal.App.2d 639 [256 P.2d 1022].)

The declarations filed on behalf of defendant in support of his motion to set aside the default show that he first learned of the claim of plaintiff on December 18, 1959, on which date he had in full force and effect an Industrial Indemnity insurance policy insuring him and his employees against any claims arising out of workmanship and materials, and presumably fully covering him as to liability, with the usual policy provisions for a defense by the insurer against claims made; that his service station dealt in products of the Richfield Oil Corporation; that one Ben McDowell, an employee of the Richfield Oil Corporation, was informed of the claim and made an investigation of the details thereof and that the said McDowell advised defendant “. . . that he had personally turned over the Richfield Oil Corporation file on this claim to one of the adjusters of the Industrial Indemnity Insurance Co. at 3130 North Fresno Street, Fresno, California, and that they were placing one of their adjusters on the claim immediately; that he had permitted the Industrial Indemnity Co. to photostat the Richfield Oil Corporation file; that some time thereafter, another adjuster from the Industrial Indemnity Ins. Co. contacted the said Ben McDowell and informed him that the Industrial Indemnity Ins. Co. would handle the Ramsey Trucking Co. Inc. claim, and that R. I. Mitchell would not have to give the matter any further attention ; that I relied upon the Industrial Indemnity Company to handle this claim for me, and relied upon them to appear in any law suit that might be filed against me, and relied upon them to furnish an attorney for the purpose of contesting any law suit that might be filed by Ramsey Trucking Co. Inc.”

*866The upper courts of this state have more than once approved as a legitimate excuse for failure to file an appearance the commitment or undertaking of a third person to take care of the claim and defend the suit (Sofuye v. Pieters-Wheeler Seed Co., 62 Cal.App. 198 [216 P. 990] ; Newton v. De Armond, 60 Cal.App. 231 [212 P. 630]); specific instances of relief following neglect of this type are normally accompanied by a showing that summons and complaint were actually forwarded by the defendant to the person who had given him a commitment to defend, and appellant maintains that this is an essential element in order to justify a trial court in setting aside a default. We do not think such a showing need necessarily be made in all eases. Anyone familiar with modern business practices involving the superintendence and tutelage by large corporations of their retailers, and the diversified and careful handling of tort claims by insurance representatives, could well draw the conclusion that it is not fatally unreasonable in all cases for a busy local merchant to rely implicitly upon an undertaking by authorized employees of a large oil company and of an insurance company to take care of a tort claim in all of its incidents. There was unquestionably serious neglect by the defendant, and we do not wish to be understood to be laying down a general rule of excuse applicable to all similar eases. Bach tub must rest on its own bottom, and each case on its own facts. On the basis of the entire record in this case we believe that the trial judge had a sufficient area of discretion to permit him to set aside the default and order a trial on the merits. In Jones v. Title Guaranty & Trust Co., 178 Cal. 375, 376 [173 P. 586], the Supreme Court says: “This court has always looked with favor upon orders excusing defaults and permitting controversies to be heard upon their merits. Such orders are rarely reversed, and never ‘unless it clearly appears that there has been a plain abuse of discretion. ’ ”

And the opinion in Sofuye v. Pieters-Wheeler Seed Co., 62 Cal.App. 198 [216 P. 990], holds: “An application for relief under section 473 of the Code of Civil Procedure from the consequences of a default judgment is addressed to the sound judicial discretion of the court to which such application is made; and, unless it can be said from the face of the record on appeal that, in granting or disallowing such a motion, the wisi prius court has abused the discretion committed to it in disposing of such a proceeding, the order will not be disturbed on appeal.

*867“ It has for many years uniformly been held in this state that the power vested in trial courts by section 473 should be freely and liberally exercised by said courts to the end that they might ‘make and direct their proceedings so as to dispose of cases upon their substantial merits, and without unreasonable delay, regarding mere technicalities as obstacles to be avoided rather than principles to which effect is to be given in derogation of substantial rights.’ ”

Accordingly, the motion to dismiss the appeal is denied and the judgment is affirmed.

Goldstein, J., concurred.