MILLER v. EVERETT GLADMAN MEMORIAL HOSPITAL (1986)

In AO25135, defendant Everett A. Gladman Memorial Hospital (“Gladman”) appeals from a $1,725,000 judgment entered on a default in favor of plaintiff Selena Miller arising out of the death of her 17-year old daughter Lynette Miller.   In AO26801, Gladman purports to appeal from an order commanding it to pay plaintiff $1,100 as her costs of responding to Gladman's motion to set aside the default.   We reverse the default judgment, holding that it was improperly entered because Gladman had a motion to strike portions of plaintiff's complaint pending at the time the default was entered.   We dismiss Gladman's purported appeal from the order requiring it to pay plaintiff's expenses in opposing the motion to set aside the default because Gladman's notice of appeal was filed late.

In AO25135, plaintiff Miller also appeals from the judgment, asserting, among other things, that the trial court erred when it vacated a prior judgment and entered the present modified judgment.   Because we reverse the entire judgment, plaintiff's appeal is moot.

I. THE FACTS AND PROCEDURE

Plaintiff's daughter was treated for mental problems by various public and private physicians and institutions in the Bay Area before she died of encephalitis at Napa State Hospital in December, 1975.   In October, 1976, plaintiff filed a wrongful death action in Alameda County Superior Court against three hospitals and seven doctors and hospital administrators.   The initial complaint attempted to state claims on behalf of plaintiff and her deceased daughter.   Among other things, plaintiff alleged that defendant Gladman and Lynette's attending physician were liable in damages based on treatment (including electro-shock therapy) given to Lynette Miller at Gladman approximately one year before her death.   In the remainder of the complaint plaintiff alleged a veritable cornucopia of claims against the remaining defendants including false imprisonment, conspiracy to deprive Lynette of her civil rights, improper administration of drugs, failure to inform plaintiff that drugs were being administered to Lynette and wrongful death resulting from forcible administration of drugs to Lynette at Napa State Hospital.

During the next five years, defendants filed a succession of demurrers and motions to strike aimed at plaintiff's pleadings.   In addition, based on allegations against Napa State Hospital (the State of California), venue was transferred to Napa County in February, 1978.

In November, 1980, plaintiff filed what was to be her final complaint—her fifth amended complaint.   It contained two causes of action as to which the court had previously sustained demurrers, the third cause of action and the eighteenth cause of action.   Gladman's counsel contacted plaintiff's attorney concerning the error;  when nothing was done to correct the error, Gladman filed a motion to strike and set it for hearing on January 23, 1981.   Plaintiff's attorney then contacted Gladman's counsel and entered into an oral stipulation to the effect that the motion to strike would be taken off calendar, the fifth amended complaint would be modified as if the motion to strike had been granted and Gladman's answer to the fourth amended complaint would be deemed to be its answer to the Fifth amended complaint as modified.   It was also agreed that the oral stipulation would be reduced to writing and filed with the court.   Plaintiff's attorney did not submit the written stipulation to Gladman's counsel until August 14, 1981, almost seven months later, despite a written request by Gladman's counsel in June, 1981, that the stipulation be prepared as previously agreed.

In March, 1981, defendant Napa State Hospital successfully demurred to the fifth amended complaint and judgment was entered in its favor.   Thereafter in July, 1981, plaintiff successfully moved to transfer venue back to Alameda County.   On August 11, 1981, plaintiff moved to specially set the case for trial and plaintiff's counsel filed an at-issue memorandum, attesting that no further pleadings were due to be filed in the case.   This was less than three months before the five-year time period to bring the case to trial was to expire.  (Code Civ.Proc., § 583.)

In response, Gladman's counsel prepared a motion to strike the at-issue memo and a notice of motion resetting the January, 1981, motion to strike the two defective causes of action in the fifth amended complaint.   On August 13, 1981, Gladman's counsel spoke with one of plaintiff's attorneys, Deborah Hinkel Halvonik, in order to determine if plaintiff would agree that Gladman's motion to strike plaintiff's at-issue memo could be heard at the same time as plaintiff's motion to specially set.   During the call, he also informed her that a notice resetting the January motion to strike was being prepared for filing.   The notices of motion and motion papers were mailed to the Alameda County Superior Court for filing on the same day.

The legal secretary who sent Gladman's motions to the Alameda County Superior Court for filing on August 13 failed to enclose the two required hearing fees with the motion papers.   The next day she spoke with a deputy in the court clerk's office regarding that problem and thereafter mailed one $12 check to the clerk's office along with a transmittal letter instructing that it was the hearing fee for Gladman's motion to strike the defective causes of action.   The check was received by the clerk's office on Monday, August 17, 1981.   Notwithstanding the instructions in the transmittal letter, the clerk's office credited the fee to the motion to strike plaintiff's at-issue memo and filed that motion as of August 17.

On August 17, a deputy court clerk informed the secretary who had sent the motion papers and first hearing fee check that a second $12 hearing fee was necessary.   The second hearing fee check was sent by mail that day;  when it was received on August 18 it was credited to the notice resetting the January, 1981, motion to strike plaintiff's defective causes of action which was then stamped as filed on August 18.

On Friday, August 14, the day that the first $12 hearing fee was mailed to the clerk's office, Gladman's counsel was in Sacramento at a deposition in the case.   He was presented with a written stipulation by plaintiff's counsel, Brent Barnett, which did not accurately reflect the oral stipulation between the parties in January, 1981, because it failed to address one of the two defective causes of action.   Gladman's counsel refused to execute it and also informed plaintiff's counsel that Gladman's January, 1981, motion to strike had been renoticed on August 13 or 14.

While Gladman's counsel was in Sacramento on August 14 another of plaintiff's attorneys, Deborah Hinkel Halvonik, was meanwhile back in Berkeley preparing two documents for the purpose of taking the default of Gladman:  (1) a response to Gladman's November 6, 1979, request for statement of damages (Code Civ.Proc., § 425.11) which had to be filed before a default could be taken, and (2) a request for entry of default (Code Civ.Proc., § 585.5).   Although the request for entry of default states under penalty of perjury that copies of the request had been served on opposing counsel by mail on August 14, the proof of service attached to the request when it was filed with the court on Monday, August 17, states that the request was not served by mail until August 17.   By contrast, the statement of damages was served on opposing counsel by mail and filed with the court on Friday, August 14.

When plaintiff's request for entry of default against Gladman was presented on Monday, August 17, a deputy clerk concluded that Gladman had no responsive pleading to the fifth amended pleading on file and entered the default.   This occurred because the clerk did not consider the January, 1981, motion to strike to be a pending response and because Gladman's motion to strike plaintiff's at-issue memo rather than the notice of motion to strike the pleading had erroneously been filed when the first hearing fee check was received on August 17.

On August 17, plaintiff's counsel mailed a copy of the entry of default to Gladman's counsel with a terse transmittal letter stating that the default had been taken because of the refusal to execute the written stipulation presented on the previous Friday.   The August 17 letter and copy of the entry of default were received by Gladman's counsel the next day, August 18.

Upon being informed that plaintiff had been able to take Gladman's default after Gladman had vigorously opposed plaintiff's action for almost five years, Gladman's counsel filed a motion to set aside the default.   The motion was denied when plaintiff asserted that Gladman's counsel had engaged in an intentional effort to mislead the court regarding the circumstances of the filing of the notice of motion resetting the January, 1981, motion to strike the defective causes of action.   In sum, plaintiff's counsel accused Gladman's counsel of perjury because the motion to set aside the default and a supporting declaration stated that Gladman had filed a motion to strike plaintiff's defective causes of action on August 13, 1981.

Gladman unsuccessfully sought to have the default set aside on four subsequent occasions.   Gladman's grounds for setting aside the default generally fell into two categories.   First, it asserted that the default was void when entered on August 17, 1981, because it had a valid response on file at the time and because plaintiff's filing of its statement of damages reopened any arguable default, thereby granting Gladman time to respond to that pleading.   Second, Gladman asserted that the default should be set aside because the default was taken through excusable error.

At the time of the second attempt to set aside the default, plaintiff requested that the court award her sanctions based on the actions of Gladman's counsel.   Rather than imposing sanctions based upon any intentional misrepresentation in Gladman's initial motion papers the court ordered Gladman to pay plaintiff $1,100 as expenses reasonably incurred in responding to Gladman's initial motion to set aside the default, later specifically indicating it had not intended the payment as punishment.   Gladman waited until January 26, 1982, and then filed a notice of appeal from a January 12, 1982, order reconfirming the September 25, 1981, order that it pay plaintiff $1,100 as reasonable attorney's fees for having had to oppose Gladman's motion to have the default set aside.

Due to Gladman's default status, an ex parte proceeding with an advisory jury was held over Gladman's objection in order to determine the amount of plaintiff's damages.   After several days, the court declared a mistrial and dismissed the jury, questioning the ex parte nature of the proceedings and the lack of candor on the part of plaintiff's witnesses.   Plaintiff later waived a jury and a second ex parte proceeding was held over Gladman's objection based on a reporter's transcript of the testimony from the previous proceeding and on affidavits of several of the witnesses who had already testified.

The court entered a $3,580,363.29 judgment on October 28, 1983.   The judgment included $500,000 in punitive damages, $300,000 in attorney's fees and $30,363.69 in costs.   On January 4, 1984, the court denied Gladman's motion for a new trial, granted its motion to take judicial notice of certain matters, vacated the previous judgment and entered a $1,725,000 judgment.²  The modified judgment eliminated punitive damages and reduced the amount of attorney's fees and costs awarded to plaintiff.   Gladman and plaintiff both appealed from that judgment.

II. ANALYSIS

A. The Default was Void when it was Entered.

 Although Gladman has presented a great number of arguments to show that the default should have been set aside, we simply conclude that the default should not have been entered on August 17, 1981, because by that time Gladman had properly renoticed its January, 1981, motion to strike the defective causes of action in plaintiff's fifth amended complaint.   In its second motion to set aside the default, Gladman demonstrated that by Monday, August 17, 1981, the clerk's office had received the necessary $12 hearing fee for the notice of motion to strike portions of plaintiff's pleading.   Contrary to the clear and unambiguous instructions in the transmittal letter sent with that check, on August 17 the clerk's office erroneously credited it to Gladman's motion to strike plaintiff's at-issue memo and failed to file the notice of motion resetting the motion to strike the pleading until August 18.   Then, to compound this error and to defendant's further prejudice the clerk on the same day, August 17, entered Gladman's default.   To permit this type of procedural error to stand as the foundation for a default judgment would be unconscionable.   Accordingly, the judgment must be reversed.

 Because we have determined that the default was void from its entry, we need not resolve the remaining issues raised by Gladman.   However, because we find this case to have involved a gross miscarriage of justice, irrespective of how the merits are ultimately resolved, we feel compelled to comment upon what we can only characterize as the questionable conduct of plaintiff's counsel in seeking and obtaining Gladman's default.

First, plaintiff has never disputed that after defendants were required to bring numerous demurrers to plaintiff's poorly drafted pleadings over the course of four years, plaintiff's counsel inexcusably included two defective causes of action in plaintiff's fifth amended complaint.   When the pleading deficiency was brought to the attention of plaintiff's counsel, nothing was done to correct the error until after Gladman incurred the expense of bringing a motion to strike.   Only then did plaintiff's counsel agree to the stipulation which ultimately led to the taking of Gladman's default.   Despite promising to reduce the stipulation to writing and despite a letter request from Gladman's counsel in June, 1981, plaintiff's counsel did not even attempt to prepare the stipulation until mid-August, 1981.

When plaintiff's counsel finally prepared the written stipulation, he did not accurately reflect the terms of the oral stipulation.   Whether his omission of any reference to the third cause of action in the stipulation was intentional or simply further neglect cannot be determined on the record before us.   Whatever the motivation, it is clear that once the relatively minor dispute over the form of the stipulation arose, plaintiff's counsel used that occurrence as an opportunity to seek Gladman's default without any actual notice to Gladman or its counsel.

Plaintiff's counsel takes refuge in the fact that the Code of Civil Procedure does not presently require any notice to be given to opposing counsel before taking a default, other than mailing a copy of the request for entry of default before it is actually taken.   Needless to say, that circumstance leads, as it did in this case, to abuse by counsel who feels that common courtesy has no place in today's practice of law.   But more importantly, in this case the only reason that Gladman had not filed an answer to plaintiff's fifth amended complaint was the conduct of plaintiff's counsel in preparing a pleading with causes of action the court had already ruled defective.   In such a situation, it cannot be and is not the law that counsel who grants opposing counsel the opportunity to amend an obviously defective pleading (after having already incurred the expense of preparing a motion to strike) can have his client's default taken when plaintiff's counsel breaches his agreement to timely prepare an accurate written memorialization of the stipulation.

We note that plaintiff's counsel has repeatedly accused defendant's counsel of perjury because of a minor error in drafting a declaration which error was later incorporated into other documents filed with the court.   However, the declaration about which plaintiff's counsel complains was accurate at least in spirit if not literally accurate:  on August 13, 1981, Gladman had a motion to strike portions of plaintiff's pleading on file—the motion it filed in January, 1981—even if it was not calendared for hearing by that date.   Yet, plaintiff's counsel had filed what appears to be an equally erroneous statement with the court.   In the request for entry of default, executed by plaintiff's counsel on Friday, August 14, it was stated under penalty of perjury that a copy of the request was served by mail on that date.   However, when the request was filed with the court on Monday, August 17, the attached proof of service stated that it had been served on that day, rather than the previous Friday.   This circumstance is even more disturbing in view of two facts:  (1) plaintiff's counsel was informed as early as August 13 that Gladman was in the process of renoticing its motion to strike the defective portions of plaintiff's fifth amended complaint;  and (2) the proof of service attached to the request for entry of judgment bears a typewritten date of August 14 which was later stricken by hand to reflect the service date of August 17.   This raises a question of whether an intentional decision was made to hold service of the request for entry of default while mailing the statement of damages which would obviously lull Gladman into a sense of false security and deter it from taking any action to prevent a default from being entered.   Bluntly stated, this appearance of gamesmanship brings disrespect upon the profession.

In sum, we are seriously disturbed by both the actions of plaintiff's counsel and the fact that such actions were rewarded with a substantial default judgment, resulting in a total miscarriage of the legal process for the litigants involved and the useless expenditure of what must be tens of thousands of dollars in attorney and court time.

B. Gladman's Notice of Appeal in AO26801 not Appealable.

 Gladman contends that the trial court's January 12, 1982, order reconfirming the September, 1981, sanctions award of $1,100 was void because the court was without jurisdiction to award sanctions in the circumstances before it.³  Plaintiff responds that Gladman has attempted to appeal a confirmatory order and was required to file any notice of appeal from the September 25, 1981, order by mid-November, 1981, making Gladman's January 26, 1982, notice of appeal untimely.   Gladman argues that its appeal was timely filed because it was entitled to appeal from the court's January 12, 1983, order reconfirming the September award of sanctions.⁴

 The initial order directing Gladman to pay plaintiff $1,100 in attorney's fees was entered September 25, 1981.   A second hearing on the sanctions issue was held on December 14, 1981, and an order confirming the earlier order was entered by the court on January 12, 1982.   Gladman waited until January 26, 1982, to appeal from the sanctions award and then filed a notice of appeal from the January 12 order.   However, Gladman was not entitled to appeal from the January 12 order reconfirming the September 25 sanctions order because a confirmatory order is not appealable.  (In re Fredrick E.H. (1985) 169 Cal.App.3d 344, 347, 215 Cal.Rptr. 171.)   Gladman's notice of appeal was, therefore, filed late and we are without jurisdiction to consider the appeal.   It follows, therefore, that the appeal in AO26801 must be dismissed.

C. Conclusion

Because we reverse the judgment, holding that the default was improperly taken, we need not address the issues raised by plaintiff with respect to modification of the original judgment.   The judgment in AO25135 is reversed.   The trial court is directed to set aside the default entered against Gladman and to permit Gladman to recalendar its motion to strike the defective portions of plaintiff's fifth amended complaint.   The appeal in AO26801 is dismissed for lack of jurisdiction.   Gladman shall recover its costs on appeal in A025135.   The parties shall bear their own costs in AO26801.

FOOTNOTES

2.   Gladman changed attorneys and retained its present counsel of record after the default was entered, after the various motions to set the default aside were denied, and after the initial default judgment was entered.

3.   See Baugess v. Paine (1978) 22 Cal.3d 626, 150 Cal.Rptr. 461, 586 P.2d 942.   The trial court did not rely upon Code of Civil Procedure section 128.5 which was enacted by Stats., 1981, chapter 762, in order to provide the authority to award sanctions the supreme court found lacking in Baugess.

4.   An order imposing non-discovery sanctions is a collateral order which is directly appealable.  (O'Brien v. Cseh (1983) 148 Cal.App.3d 957, 960, 196 Cal.Rptr. 409;  Wisniewski v. Clary (1975) 46 Cal.App.3d 499, 502, 120 Cal.Rptr. 176;  see Baugess v. Paine, supra, 22 Cal.3d 626, 634, fn. 3, 150 Cal.Rptr. 461, 586 P.2d 942;  compare Kibrej v. Fisher (1983) 148 Cal.App.3d 1113, 1115–1116, 196 Cal.Rptr. 454 [discovery sanctions are appealable only from a judgment] ).

SABRAW, Associate Justice.

ANDERSON, P.J., and CHANNELL, J., concur.