BARTONE v. Lancer Insurance Company, Intervenor and Respondent. (1993)

Plaintiff Stella Bartone appeals from an order granting intervenor Lancer Insurance Company (Lancer) leave to intervene, and setting aside the default and vacating the default judgment against defendants SFO Airporter and Edwin Tiangco (defendants).   We reverse those parts of the order setting aside the default and vacating the default judgment.

FACTS AND PROCEDURE

In September 1991, Bartone filed a personal injury action against defendants, alleging they negligently transported her to San Francisco International Airport.   Defendants failed to answer, and on January 17, 1992, the clerk entered a default.   Eight months later, on September 9, 1992, a default judgment in the amount of $250,000 was taken against defendants.

Lancer did not learn of the lawsuit until September 1992, when defendants notified it of the default judgment.   Sometime between September and December (when the motion was heard), Lancer retained counsel to file a motion to set aside default and default judgment on behalf of defendants, which the trial court denied.¹  In addition, on December 11, 1992, Lancer filed motions on its own behalf to intervene and to set aside the default and vacate the default judgment.   The trial court granted the motions.   This appeal followed.

DISCUSSION

A. Code of Civil Procedure Section 473 2

 Section 473 provides:  “․ The court may, upon any terms as may be just, relieve a party or his or her legal representative from a judgment, dismissal, order, or other proceeding taken against him or her through his or her mistake, inadvertence, surprise, or excusable neglect.   Application for this relief ․ shall be made within a reasonable time, in no case exceeding six months, after the judgment, dismissal, order, or proceeding was taken.”   (Emphasis added.)   In applying section 473, “The general rule is that the six-month period within which to bring a motion to vacate ․ runs from the date of the default and not from the judgment taken thereafter.  [Citations.]  The reason for the rule is that vacation of the judgment alone ordinarily would constitute an idle act;  if the judgment were vacated the default would remain intact and permit immediate entry of another judgment giving the plaintiff the relief to which his complaint entitles him.  [Citations.]”  (Rutan v. Summit Sports, Inc. (1985) 173 Cal.App.3d 965, 970, 219 Cal.Rptr. 381, emphasis added.)

The six-month limitation is jurisdictional.   Once that period has expired, the court lacks power “to grant any relief, regardless of any question either as to the merits of the application, or as to whether or not the application was made within what might be held to be a reasonable time under the circumstances.”  (Smith v. Pelton Water Wheel Co. (1907) 151 Cal. 394, 397, 90 P. 934.)

In granting Lancer's motion to vacate, the trial court relied on Jade K. v. Viguri (1989) 210 Cal.App.3d 1459, 258 Cal.Rptr. 907.   In Jade K., the Court of Appeal, applying section 473, reversed the trial court's order denying intervenor Truck Insurance Exchange's (Truck) motion to vacate a default judgment against its insured, Viguri.   The court determined that once Truck had notice of the lawsuit, it “acted within a reasonable time to assume control and management of the lawsuit by tendering defense to Viguri and bringing its motion to vacate.  [Citation.]”  (Id. at p. 1470, 258 Cal.Rptr. 907.)

Bartone argues that unlike Lancer's motion, the motion in Jade K. was within the six-month jurisdictional period of section 473.   She is correct.   Because the Jade K. opinion is notably fact specific, and the parties have evidenced some confusion over its holding, we think it useful to discuss the case in some detail.

In Jade K., the plaintiffs sought damages from defendant Viguri resulting from an alleged sexual molestation.   A default was taken, Viguri's motion to set it aside was denied, and judgment was entered.   Truck filed motions to intervene and to vacate the default judgment entered against Viguri.   The court allowed Truck to intervene, but denied the motion to vacate.   Truck appealed, arguing the trial court abused its discretion in denying its motion to vacate.

The appellate court agreed.   The court held the trial court properly allowed Truck to intervene, given its broad discretion to permit or deny intervention under section 387.  (Jade K. v. Viguri, supra, 210 Cal.App.3d at p. 1468, 258 Cal.Rptr. 907.)   The court further held the trial court should also have granted Truck's motion to vacate the judgment.  “Viguri did not notify Truck of [plaintiffs'] lawsuit or request defense under the Truck policy until after entry of default.   Once it had notice of [plaintiffs'] action, Truck acted within a reasonable time to assume control and management of the lawsuit by tendering defense to Viguri and bringing its motion to vacate.  [Citation.]  On this record the court should have granted Truck relief under section 473.”   (Id. at p. 1470, 258 Cal.Rptr. 907, emphasis added.)

The record the court in Jade K. referred to showed Viguri's default was entered on September 4, 1987, but Truck did not learn until September 15 that Viguri claimed coverage under its policy, and not until October 29 that default had been entered on the complaint.   Truck tendered defense to Viguri on November 19;  the trial court granted default judgment on December 1, 1987, which the clerk entered on December 2.   Also on December 2 (and within three months of the entry of default), Truck moved to intervene and, as intervenor, to vacate the default judgment.  (210 Cal.App.3d at pp. 1464, 1473–1474, 258 Cal.Rptr. 907.)

As the appellate court's comments indicate, in concluding the trial court should have granted Truck's motion to vacate default judgment, the court found determinative that Truck had acted within a reasonable time once it had notice of the lawsuit:  Truck filed its motion to vacate the judgment little more than a month after learning of the default and the day after the court signed and filed the default judgment.   The court again emphasized that “[t]he evidence necessitates a finding Truck made a case compelling relief and filed its motion under section 473 within a reasonable time.  [Citation.]”  (Jade K. v. Viguri, supra, 210 Cal.App.3d at p. 1474, 258 Cal.Rptr. 907, emphasis added.)

Contrary, therefore, to Lancer's suggestion, Jade K. does not hold that an insurance company can intervene and set aside a default at any time.   At issue in Jade K. was simply whether a motion made within the jurisdictional six-month period of section 473 met the additional statutory requirement of timeliness, i.e., was it made within a “reasonable time,” as required by section 473.

 In the instant case, the evidence does not support a finding of compliance with the time limits of section 473.   Although, as Lancer argues, its motion to set aside and vacate the default may have been made within a reasonable time once it learned of the lawsuit, the motion nevertheless was not made within the jurisdictional six-month period.   Rather, Lancer's motion to set aside and vacate was filed 11 months after entry of default.   Consequently, because the motion was not filed within six months of the entry of default, we conclude it was not timely under section 473.   (See Rutan v. Summit Sports, Inc., supra, 173 Cal.App.3d at p. 970, 219 Cal.Rptr. 381.) ³

B. & C.**

CONCLUSION AND DISPOSITION

Consistent with the foregoing, we conclude the trial court erred in setting aside the default and vacating the default judgment against defendants.⁴  Accordingly, those parts of the trial court's order setting aside the default and vacating the default judgment are reversed.   Costs are awarded to Bartone.

FOOTNOTES

1.   Defendants did not appeal from this order, and they are not part of this appeal.

2.   All further statutory references are to the Code of Civil Procedure.

3.   In its petition for rehearing, Lancer points out the entry of default and default judgment are separate proceedings, citing Rutan v. Summit Sports, Inc., supra, 173 Cal.App.3d at page 970, 219 Cal.Rptr. 381.   Lancer urges that since it is now a party, the setting aside of the default judgment alone would not be an idle act.   Unlike in Rutan, however, where the particular facts justified such a conclusion, Lancer fails to explain why in this case setting aside the judgment (but not the default) would not constitute an idle act.

FOOTNOTE.   See footnote *, ante.

4.   In light of this conclusion, we need not determine whether the trial court's initial decision to allow Lancer to intervene was proper, or whether the court erred in failing to order Lancer, as a condition to relief from default, to pay Bartone's reasonable costs and attorneys fees.

WERDEGAR, Associate Justice.

WHITE, P.J., and MERRILL, J., concur.