COHEN v. EDDY

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Court of Appeal, Second District, Division 7, California.

Norman H. COHEN and William H. Temkin, Jr., Petitioners, v. SUPERIOR COURT OF THE STATE OF CALIFORNIA FOR THE COUNTY OF LOS ANGELES, Respondent. Richard A. EDDY, Real Party in Interest.

No. B013167.

Decided: May 22, 1985

Howard M. Fields, Encino, for petitioners. Gronemeier & Barker, Dale L. Gronemeier, Van Nuys, and Ira S. Rubin, Los Angeles, for respondent.

OPINION AND ORDER FOR PEREMPTORY WRIT OF MANDATE

THE COURT *:

The court has read and considered the petition for writ of mandate filed April 18, 1985 and the opposition thereto filed by the real party in interest (Eddy) April 29, 1985.

On May 8, 1985 the court notified the parties of its intention to issue a peremptory writ in the first instance in this matter, requested opposition to the petition from the respondent court, and gave the real party in interest leave to serve and file additional opposition to the petition. (Palma v. U.S. Industrial Fasteners, Inc. (1984) 36 Cal.3d 171, 203 Cal.Rptr. 626, 681 P.2d 893.) The court has read and considered the additional opposition filed by Eddy on May 14, 1985. Opposition was not filed by the respondent court.

The issue in this proceeding is whether the respondent court abused its discretion in ordering petitioners to pay to Eddy's counsel the total sum of $71,448.42 as a condition to vacating a default judgment against them and setting aside their default. As will appear, our answer is “yes” and we will grant relief.

Procedural Background

On May 9, 1984 this court filed its opinion in case 2 Civ. no. 68259, entitled Eddy v. Temkin, Jr. and Cohen, wherein petitioners appealed from default judgments against them and in favor of Eddy, and from the denial of their motion to vacate the judgments. (Code Civ.Proc., § 473.) We there held petitioners' motion to vacate the judgments should have been granted in view of the policy disfavoring default judgments (especially those, as here, in which punitive damages are awarded), the “quiet speed” of Eddy's counsel in seeking default judgments before petitioners' motion to vacate their default could be heard, and the absence in the record of any showing of prejudice to Eddy's counsel by petitioners' delay. The final paragraph of the opinion reads as follows1 :

“The cause is remanded to the trial court with directions to set aside the default judgment and to vacate the default, either unconditionally or upon such terms as may be just, and to allow defendants to defend the action. Each party is to bear his own cost on appeal.”

Thereafter, Eddy moved in the respondent court for the imposition of the following two conditions upon petitioners: (1) Payment to Eddy and his counsel (Rubin) of the sum of $96,700, “reflecting the reasonable value of expenses incurred by Eddy and his counsel which are directly related to [petitioners'] inexcusable neglect”; and (2) the posting of a bond by petitioner Cohen with sufficient sureties to satisfy a judgment in the amount of $200,000.

On December 12, 1985 the respondent court issued the following order:

“․ The appellate court has ruled that the denial of defendant's [sic] motions to set aside default was a correct ruling. This amounts to a ruling that the default was properly entered, and that no improper conduct can be imputed to plaintiff. The appellate court nevertheless went on to order that the default be set aside on such terms as are just. In view of the appellate court's ruling that the default was properly entered by plaintiff, justice dictates that defendants reimburse plaintiff for the reasonable expenses of such measures as plaintiff reasonably undertook in proceeding on the basis of default to the extent those measures would otherwise have been unnecessary in the prosecution of this lawsuit or will later have to be duplicated. Such expenses would include those incurred on the default judgment prove-up (to the extent this assembly and presentation of evidence will not later be useful), on attempts to execute against Cohen and on attempts to execute against Temkin. In view of the appellate court ruling that denial of defendants' C.C.P. sec. 473 motion was proper, such expenses will also include expenses incurred on motions to set aside default other than the first one, on related ex parte applications and on appeal. Not included is the initial motion to vacate, an expense plaintiff would have incurred even if the motion had been granted at that point. Deposition of Rubin to proceed on expenses․”

Following the taking of Rubin's deposition Eddy filed a supplemental motion requesting payment of the specific sum of $94,798.42 pursuant to the court's order of December 12, 1985. The request for a bond was renewed.

On March 29, 1985, following a hearing on the supplemental motion, the respondent court issued an order requiring petitioners to “reimburse” Rubin in the total amount of $68,495.552 as a condition to the vacating of the default judgments and setting aside of the defaults. The request for a bond was denied. The following language is included in the respondent court's six page minute order3 :

“This is a case in which, in a prior adversarial judicial proceeding, a finding of fact was made that defendants perpetrated a fraudulent conveyance for the purpose of defrauding plaintiff. Plaintiff had defendants' defaults entered in this case. Defendants moved numerous times before Judge Mills to have those defaults set aside. Judge Mills denied those motions. Following entry of default, default judgment was entered against defendants. There was not ‘quiet speed’ involved inasmuch as defendants in default are not entitled to notice of default prove-up. Mention of the ‘quiet speed’ concept appears to stem from a misinterpretation of the record or the cases. No fault can be ascribed to plaintiff on a ‘quiet speed’ theory. On appeal, the appellate court approved Judge Mills' several rulings refusing to vacate the defaults, finding those rulings to be proper rulings. The appellate court, however, expressed dissatisfaction with the default judgments. Rather than vacating, modifying or correcting the judgments or remanding with instructions for further review of the evidence presented on the prove-up, the appellate court instead ordered that the defaults (which the appellate court found proper) be vacated ‘either unconditionally or upon such terms as may be just, and to allow the defendants to defend the action.’ “

Discussion and Disposition

We have concluded the respondent court's rulings, which misinterpret the intent of this court's opinion in the earlier appeal, constitute abuse of discretion, and accordingly petitioner is entitled to relief. In its order of March 29, 1985 the respondent court manifests its disapproval of this court's findings in the earlier appeal, and expressly charges the court with “misinterpretation of the record or the cases.” It becomes clear the respondent court's view of “just terms” is based not upon the directions contained in this court's opinion, but rather on the respondent court's improper reevaluation of the underlying circumstances.

Upon examination of the record in the relevant proceedings, we further conclude payment by petitioners to Rubin of the sum of $5,000 is an appropriate condition for the vacating of the default judgments against petitioner and the setting aside of their default. (See Nicholson v. Rose (1980) 106 Cal.App.3d 457, 462–463, 165 Cal.Rptr. 156.)

Finally, we conclude issuance of an alternative writ in this matter would add nothing to the full presentation already made, and deem this to be a proper case for the issuance of a peremptory writ of mandate in the first instance. (Code Civ.Proc., § 1088.)

Accordingly, IT IS ORDERED as follows:

Let a peremptory writ of mandate issue, compelling the respondent superior court to vacate its orders of December 12, 1984, March 29, 1985, and April 16, 1985 imposing terms for the setting aside of default judgments against petitioners in Superior Court case no. C400504, and to enter a new and different order vacating the default judgments against petitioners and setting aside their default upon the filing by petitioners of proof of payment of $5,000 to counsel for Eddy within 10 days after this opinion becomes final. If proof of such payment is not so filed, the instant petition is denied.

APPENDIX A

RICHARD A. EDDY, Plaintiff and Respondent,v.WILLIAM H. TEMKIN, JR. and NORMAN H. COHEN, Defendants and Appellants.2D CIV. NO. 68259 (Super.Ct. No. C 400504)IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIASECOND APPELLATE DISTRICTDIVISION SEVEN

Defendants William H. Temkin, Jr. (Temkin) and Norman H. Cohen (Cohen) appeal from a default judgment against them and in favor of Richard A. Eddy (Eddy), and the denial of their motion to vacate the judgment (Code Civ.Proc., § 473).1

Facts and Proceedings Below

In May 1981, Eddy obtained judgment against William Nemour (Nemour) in the amount of $303,740.92 in an action in the San Diego Superior Court.

In order to secure collection of this judgment, on June 16, 1981, Eddy filed a petition in the Los Angeles Superior Court in which William Nemour, William H. Temkin, Jr., William Temkin, Ida Temkin, Sheldon Temkin, and Normandie Towers, Ltd., are named the respondents. The petition sought to charge the alleged partnership interest of Nemour in Normandie Towers, Ltd. (Normandie), with the unsatisfied amount of this judgment.

In his response to this petition, Temkin denied that Nemour had any partnership interest in Normandie, alleged that he had bought out Nemour's interest in Normandie, and proffered a document, entitled “Amended Certificate of Limited Partnership of Normandie, Ltd.,” which had been recorded on June 16, 1981, to show the “withdrawal” of Nemour as a partner in Normandie. This amended certificate was purportedly notarized by Cohen on February 2, 1981.

After a hearing on the petition and the opposition thereto on November 12, 1981, the trial court found that the Amended Certificate was prepared to hide and conceal the continuing interest of Nemour in Normandie, that Nemour was a partner in Normandie, and that his partnership interest should be charged with the unsatisfied amount of the judgment entered in the San Diego action. Thereafter, on February 9, 1982, the trial court issued an order so charging the partnership interest of Nemour in Normandie.

As a result of the conduct to defeat the petition for a charging order, on February 16, 1982, Eddy filed an action for damages from fraudulent conveyance against William Temkin, Jr., Norman H. Cohen and others.2 In the body of the complaint, Eddy alleged damages in an amount not yet determined, but which exceeded $100,000. In the prayer, Eddy sought compensatory damages according to proof and punitive damages in the sum of $500,000 each against each of the defendants.

On February 16, 1982, Cohen was served with a copy of the summons and complaint. Thereafter, on February 17, 1982, Temkin was similarly served.

Following service of the summons and complaint on Temkin and Cohen, they were granted an extension to April 17, 1982, to respond to the complaint. Upon their failure to respond, Eddy's attorneys gave Temkin and Cohen a further extension until November 1, 1982, to respond to the complaint.

When Cohen and Temkin failed to answer the complaint by November 1, 1982, Eddy filed a Request to Enter Default against Cohen on November 2, 1982. Thereafter, on November 5, 1982, Eddy filed a similar Request against Temkin.

On December 15, 1982, Louis Bernstein (Bernstein), attorney for Temkin and Cohen, filed a motion to vacate their default, accompanied by a copy of their proposed answer to the complaint. The motion was set for hearing on January 5, 1983.

In support of their motion, Bernstein filed his declaration in which he stated that on October 28, 1982, while Temkin was in Bernstein's office to retain him to represent Temkin and Cohen, he telephoned and talked to Ira Rubin (Rubin), one of Eddy's attorneys. Bernstein informed Rubin that he would file an answer on behalf of the two defendants as soon as he received a letter from them waiving any potential conflict of interest. (Ibid.) In response, Rubin stated that he would wait for the answer. (Ibid.) Thereafter, after Bernstein obtained the written waiver from defendants on November 3, 1982 (although a copy of the written waiver is dated November 5, 1982), he telephoned Rubin, without success, but left a message that he would file an answer within a few days. On November 4, 1982, Bernstein learned from Eddy's attorney that a default was filed on November 2, 1982.

In opposition to the motion, Eddy filed inter alia the declaration of Rubin in which he denied having an October 28 conversation with Bernstein, but admitted having a November 4 conversation with him. Rubin in his declaration related the November 4 conversation in part as follows: “He [Bernstein] told me that he planned to file an answer on behalf of Temkin and Cohen in that action. He told me that he had been concerned about possible conflicts of interest because of his representation of Sheldon in the same matter and that he was expecting letters from Cohen and Temkin waiving any conflicts of interest. He further told me that he would not be filing anything until he received the waiver letter. [¶] After he was finished talking on this topic, I told him that what he told me was interesting and I informed him that on November 2 we had filed Requests for Default against Temkin and Cohen. I told him that they had been personally served in February and had been given a deadline of November 1 in my letter to them. He acknowledged to me that he had been aware of the November 1 deadline.”

Prior to the hearing on the motion to vacate the default, on December 20, 1982, Eddy took steps to obtain a default judgment against Temkin and Cohen. However, on December 21, 1982, the court ordered that all prove-up on default judgment be deferred until disposition of defendants' motion to vacate the default. On December 22, 1982, Eddy requested priority in the prove-up proceedings. Thereafter, on December 28, 1982, the court, finding potential for prejudice to Eddy if the prove-up against Temkin was deferred, rendered a default judgment against Temkin and in favor of Eddy for $100,000 in general damages and $100,000 in punitive damages. The trial court delayed consideration of a default judgment against Cohen until after the motion to vacate the default was heard on January 5, 1983.

On January 5, 1983, the trial court denied the motion of Temkin and Cohen to vacate their default on the ground of “insufficient showing.” Thereafter, on January 6, 1983, a default judgment against Cohen and in favor of Eddy for $100,000 in general damages and $100,000 in punitive damages was rendered by the trial court.

Following the entry of these default judgments, Cohen and Temkin made several motions in the trial court to vacate these judgments without success. In support of these motions, the declaration of Bernstein was filed in which he declared inter alia: “I received from the two defendants the requested waiver of conflict of interest on Wednesday, November 3, 1982, a copy of which is attached hereto as Exhibit ‘A’. Mr. Temkin brought an unsigned draft to my office on November 3, 1982, which I approved and immediately contacted plaintiff's attorneys' office to inform him that we would be filing an Answer. The final draft, however, was not typed by Mr. Temkin's secretary and signed until November 5, 1982, and that is why Exhibit ‘A’ is dated that day rather than November 3, 1982. Even though I did not have the signed agreement I wanted to give Mr. Rubin notice as soon as possible that I would be filing an Answer on behalf of Mr. Temkin and Mr. Cohen.”

The last denial of their motion was on March 15, 1983. This appeal followed.

On appeal, defendants contend that: (1) the trial court abused its discretion in denying their motion to vacate their default and default judgment; (2) the trial court acted in excess of jurisdiction in entering a judgment for an amount unascertained by the complaint and without a statement for damages being personally served; and (3) the evidence was insufficient to support the judgment, for both the award of general and punitive damages.

Discussion

Defendants contend that the trial court abused its discretion when it denied the motion to vacate their default and to set aside the default judgment against them.

In the situation where the trial court denies relief from a default judgment, we are confronted with a conflict between two basic principles in our determination of whether the trial court abused its discretion. (See 5 Witkin, Cal. Procedure (2d ed.1971) § 164, p. 3737.)

The first principle is that a motion to set aside a default judgment pursuant to section 4733 is addressed to the sound discretion of the trial court, and its ruling thereon will not be reversed on appeal in the absence of a clear showing of an abuse of discretion. (Weitz v. Yankosky (1966) 63 Cal.2d 849, 854 [48 Cal .Rptr. 620, 409 P.2d 700].) That discretion, however, is a legal discretion, not an arbitrary one. (Rosenthal v. Garner (1983) 142 Cal.App.3d 891, 898 [191 Cal.Rptr. 300].) But the burden of showing abuse of discretion rests on the appellant, here the defendants. (Ford v. Herndon (1976) 62 Cal.App.3d 492, 495 [133 Cal.Rptr. 111].)

The other principle is the policy of the law to favor, wherever possible, a hearing on the merits. (Weitz v. Yankosky, supra, 63 Cal.2d at p. 854 [48 Cal.Rptr. 620, 409 P.2d 700].)

As is usual in this type of case, the defendants argue that the law's policy to dispose of litigation on the merits should control in circumstances such as those present here. On the other hand, Eddy, having the advantage of the trial court's discretionary power to deny a section 473 motion, urges us to show reluctance to interfere except for an abuse of discretion.

We believe that the applicable law is well stated in 5 Witkin, supra, section 164, as follows: “In borderline cases the second principle [of trying cases on merits] has the greater weight, and, accordingly, the lower court's order denying relief is often reversed. The opinions in these cases sometimes note that there is no showing that the opening of the default will seriously prejudice the adverse party, and this seems to be an important consideration. Another justification for the reversal is that minor inconvenience or loss resulting from the delay may be alleviated by the court's power to impose terms and conditions. [Citations.]”

In a hearing on a motion to set aside a default judgment under section 473, the moving party has the burden of proving he is entitled to relief. (Luz v. Lopes (1960) 55 Cal.2d 54, 62 [10 Cal.Rptr. 161, 358 P.2d 289].) He must show by a preponderance of the evidence mistake, inadvertence, surprise, or excusable neglect. (Ibid.) In addition, he must show due diligence in seeking relief after discovery of the default. (Benjamin v. Dalmo Mfg. Co. (1948) 31 Cal.2d 523, 529 [190 P.2d 593].)

In the instant case, it is undisputed that defendants' application for relief under section 473 was seasonably made. There was only a delay of 41 days between defendants' discovery of the entry of their default and their application for relief. (See, e.g., Outdoor Imports, Inc. v. Stanoff (1970) 7 Cal.App.3d 518, 524 [86 Cal.Rptr. 593] [delay of two months and seven days]: Hallett v.. Slaughter (1943) 22 Cal.2d 552, 554 [140 P.2d 3] [two months' delay].)

Plaintiff's reliance on A & B Metal Products v. MacArthur Properties, Inc. (1970) 11 Cal.App.3d 642 [89 Cal.Rptr. 873], is misplaced. There, the motion to set aside a default judgment was not filed until four months had elapsed. In affirming the order of the trial court denying defendant's motion to set aside the default judgment, the court stated: “On this record, and in support of the judgment and order of the trial court, it may be concluded that the defendant failed to show that his application was made within a reasonable time.” (Id., at p. 649 [89 Cal.Rptr. 873].)

The issue before us, therefore, is whether the trial court erred in finding the neglect of the defendants inexcusable and, thus, committed an abuse of discretion.

In applying the statutory grounds for relief under section 473, the trial court should resolve any doubt which may exist in favor of the application for relief. (Frank E. Beckett Co. v. Bobbitt (1960) 180 Cal.App.2d Supp. 921, 928 [4 Cal.Rptr. 833].) Moreover, “[w]here there is no showing the party opposing the motion to vacate the judgment ‘ “has suffered any prejudice or that injustice will result from the trial of the case upon its merits, very slight evidence will be required to justify a court in setting aside the default.” ‘ “ (Buckert v. Briggs (1971) 15 Cal.App.3d 296, 302–303 [93 Cal.Rptr. 61], citing Benjamin v. Dalmo Mfg. Co., supra, 31 Cal.2d 523, 531 [190 P.2d 593]; emphasis added.)

In our case the record contains no showing of prejudice to the plaintiff occasioned by defendants' delay, other than that incident to a trial of the issues, which is not cause for denying the relief sought. (Palmer v. Moore (1968) 266 Cal.App.2d 134, 141 [71 Cal.Rptr. 801].) For example, we may assume that it would be disappointing to the plaintiff to have his judgment for $200,000 against each of these defendants set aside. However, such disappointment cannot preclude relief. (Ibid.) Furthermore, there is no indication that an injustice will result from a trial on the merits. Although immediate action to serve the summons and complaint was not required (Ford v. Herndon (1976) 62 Cal.App.3d 492, 496 [133 Cal.Rptr. 111] ), the case was almost ten months old when the defaults were entered. Three of the five named defendants had answered. The action is still pending against them. The record also contains steps taken by plaintiff to prepare the case for trial on the merits.

We must therefore focus on the critical dispute, which centered on whether the conversation of October 28 took place between Bernstein and Ruby. Reliance on opposing counsel that no default or other prejudicial steps will be taken without notice will generally constitute excusable neglect. (5 Witkin, Cal.Procedure, supra, § 140, at pp. 3715–3716.) However, in reviewing the propriety of an order made in response to a motion to vacate a default judgment under section 473, we must assume in support of the order that the trial court resolved the conflicts in the affidavits in favor of the order. (Luz v. Lopes, supra, 55 Cal.2d at p. 62 [10 Cal.Rptr. 161, 358 P.2d 289].) Hence, we assume that the trial court in denying defendants' motion resolved this factual dispute against the defendants, even though the record might have sustained a contrary conclusion. (See, e.g., Border v. Kuznetz (1980) 103 Cal.App.3d Supp. 14, 18 [162 Cal.Rptr. 881].) So, in this case, since the order rests on a factual resolution contrary to the position of defendants, we cannot say there was an abuse of discretion.

However, the circumstances such as those present here compel a consideration of the propriety of the default judgment against these defendants. The law looks with disfavor upon a party who, regardless of the merits of his case, attempts to take advantage of the mistake, surprise, inadvertence, or neglect of his adversary, (Weitz v. Yankosky, supra, 63 Cal.2d at pp. 854–855 [48 Cal.Rptr. 620, 409 P.2d 700].) Here, the “quiet speed” of plaintiff's counsel in seeking a default judgment before defendants' motion to vacate their default could be heard must be frowned upon. (Cf., Robinson v. Varela (1977) 67 Cal.App.3d 611, 616 [136 Cal.Rptr. 783].) Moreover, default judgments, especially those in which punitive damages are awarded, are looked on with disfavor. (Nicholson v. Rose (1980) 106 Cal.App.3d 457, 462–463 [165 Cal.Rptr. 156].)

In Nicholson v. Rose, supra, defendant engaged in dilatory tactics, and failed to appear at pretrial hearings and at trial. The trial court gave plaintiff a default judgment for $32,000 general damages and $10,000 punitive damages, and denied defendants' motion to vacate. On appeal, the court, after finding the trial court had not abused its discretion in denying the motion to vacate, nevertheless reversed the judgment. The judgment was reversed on the grounds that (1) a default judgment for punitive damages is disfavored, and (2) the record was uncertain on whether plaintiff's counsel had attempted to contact defendants' counsel when the latter failed to appear at the trial. (Id., at pp. 462–463 [165 Cal.Rptr. 156].) The reversal was conditioned, however, on defendants' payment to plaintiff of $5,000 as compensation for wasted time, unnecessary expense, an aggravation caused by dilatoriness. (Ibid.)

In our view, the ends of justice required that the motion to vacate be granted, whether with or without conditions. The record contains no showing of prejudice caused by defendants' delay, or an injustice will result upon a trial on the merits. We find it unnecessary to reach the other contentions of defendant.

The cause is remanded to the trial court with directions to set aside the default judgment and to vacate the default, either unconditionally or upon such terms as may be just, and to allow defendants to defend the action. Each party is to bear his own cost on appeal.

APPENDIX B

SUPERIOR COURT OF CALIFORNIA, COUNTY OF LOS ANGELES

ORDER ON SUBMITTED MATTER

This is a case in which, in a prior adversarial judicial proceeding, a finding of fact was made that defendants perpetrated a fraudulent conveyance for the purpose of defrauding plaintiff. Plaintiff had defendants' defaults entered in this case. Defendants moved numerous times before Judge Mills to have those defaults set aside. Judge Mills denied those motions. Following entry of default, default judgment was entered against defendants. There was not “quiet speed” involved inasmuch as defendants in default are not entitled to notice of default prove-up. Mention of the “quiet speed” concept appears to stem from a misinterpretation of the record or the cases. No fault can be ascribed to plaintiff on a “quiet speed” theory. On appeal, the appellate court approved Judge Mills' several rulings refusing to vacate the defaults, finding those rulings to be proper rulings. The appellate court, however, expressed dissatisfaction with the default judgments. Rather than vacating, modifying or correcting the judgments or remanding with instructions for further review of the evidence presented on the prove-up, the appellate court instead ordered that the defaults (which the appellate court found proper) be vacated “either unconditionally or upon such terms as may be just, and to allow the defendants to defend the action.” This court therefore concluded by minute order of 12/12/84 that “just terms” would be reimbursement of plaintiff for “the reasonable expenses of such measures as plaintiff reasonably undertook in proceeding on the basis of default to the extent those measures would otherwise have been unnecessary in the prosecution of this lawsuit or will later have to be duplicated.” Certain claimed expenses were excluded and defense counsel was given an opportunity to depose plaintiff's counsel in order to gather information to challenge plaintiff's claim. Ruling as follows:

Plaintiff's motion for an order that defendant Cohen post a bond to secure payment of eventual judgment is denied.

Defendants have challenged only four components of the expenses (in the form of expended time) claimed by plaintiff's counsel. Wishing to err, if at all, on the side of a moderate rather than excessive reimbursement figure, this court will disallow each of the expense components challenged by defendants (even though plaintiff's counsel raises cogent arguments that they should be allowed). Defendants have not challenged any element of plaintiff's accounting (pursuant to the 12/12/84 minute order) other than the four mentioned, conceding that the efforts involved were reasonably necessary and that the expenses claimed are reasonable for such efforts. While the court itself is somewhat surprised at the magnitude of the expenses claimed, this court will not arrogate to itself the function of additional counsel for the defense. Inasmuch as defense counsel has chosen not to complain about the expense claim beyond the four elements specified in defendants' papers, the remaining expenses will be ordered reimbursed.

Defendants' argument that no reimbursement should be ordered simply because plaintiff's counsel are working on a contingency basis is rejected. A rule of law that counsel on a contingency are not entitled to the same fairness and consideration as counsel being paid an hourly fee would not only allow but also encourage obstructionist and dilatory tactics in any case in which plaintiff has retained counsel on a contingency. This would undermine the ability of plaintiffs of modest means to obtain counsel on a contingency basis, an ability defended by our highest courts as one vital to the achievement of justice. The fact that plaintiff's counsel are working on a contingency has only one significance here: reimbursement should be made to the individuals who have been caused the expense—plaintiff's counsel—rather than plaintiff.

The amount to be reimbursed to plaintiff's counsel calculates as follows:

1) $11,349.30 was disallowed by minute order 12/12/84.

2) Sums claimed as the joint obligation of Temkin and Cohen, when reduced by the $19,931.50 challenged by defendants, leaves $36,789.67 payable as the joint and several obligation of Temkin and Cohen.

3) Sums claimed as the sole obligation of Cohen, when reduced by the $3,418.50 challenged by defendants, leaves $17,460 as the sole obligation of Cohen.

4) $14,245.88 has been claimed as the obligation of Temkin. That amount has not been challenged and is awarded.

IT IS THEREFORE ORDERED that plaintiff's counsel are to be reimbursed as follows:

a) Temkin and Cohen are jointly and severally to reimburse plaintiff's counsel in the amount of $36,789.67;

b) Cohen is to reimburse plaintiff's counsel in the amount of $17,460;

c) Temkin is to reimburse plaintiff's counsel in the amount of $14,245.88.

Payment is to be made within 45 days from the date of this order. Default judgments vacated and default set aside on condition that payments are made. Answer to be deemed filed on date of final payment.

FOOTNOTES

FOOTNOTE.  LILLIE, P.J., and THOMPSON and JOHNSON, JJ.

1.  The opinion is attached hereto as appendix A.

2.  The amount was increased to $71,448.42 by a minute order issued April 6, 1985 amending nunc pro tunc the order of March 29, 1985.

3.  The order is attached hereto as appendix B.

1.  Unless otherwise indicated, all statutory references are to the Code of Civil Procedure.

2.  This action is pending against the other defendants, Robert G. Leff, Sheldon Temkin and William Nemour, who are not parties to this appeal.

3.  Section 473 provides in pertinent part:“The court may, upon such terms as may be just, relieve a party or his or her legal representative from a judgment, order, or other proceeding taken against him or her through his or her mistake, inadvertence, surprise or excusable neglect. Application for such relief must be accompanied by a copy of the answer or other pleading proposed to be filed therein, otherwise the application shall not be granted, and must be made within a reasonable time, in no case exceeding six months, after such judgment, order or proceeding was taken; provided, however, that, in the case of a judgment, order or other proceeding determining the ownership or right to possession of real or personal property, without extending said six months period, when a notice in writing is personally served within the State of California both upon the party against whom the judgment, order or other proceeding has been taken, and upon his or her attorney of record, if any, notifying said party and his or her attorney of record, if any, that such order, judgment or other proceeding was taken against him or her and that any rights said party has to apply for relief under the provisions of Section 473 of the Code of Civil Procedure shall expire 90 days after service of said notice, then such application must be made within 90 days after service of such notice upon the defaulting party or his or her attorney of record, if any, whichever service shall be later. No affidavit or declaration of merits shall be required of the moving party.”

THOMPSON, Acting Presiding Justice.

JOHNSON and PICKARD *, JJ., concur.

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