Second District, Division 3 So Holds in Unpublished Decision on a Novel Issue.
This next decision, although unpublished, maybe should be. It is the first decision that we have seen establishing that defendants have the deadlines available for purposes of striking or taxing costs to challenge attorney’s fees and costs awarded as a condition of vacating and setting aside a default judgment.
Baek v. A-Team Construction, Inc., Case No. B199437 (2d Dist., Div. 3 Apr. 24, 2009) (unpublished) involved a plaintiff owner-defendant general contractor dispute in which a hefty $1,337,407 default judgment was entered against general contractor.
[For the A-Team Intro., click here.] Defendant moved to set aside the default judgment under Code of Civil Procedure section 473. After a hearing on the motion, the trial court allowed plaintiff another week to file a supplemental declaration on the fees expended for pursuing the default judgment and other litigation matters. However, nothing was said about any defense opposition to the fees to be claimed. Plaintiff requested fees and costs totaling $31,738.88, and the court—one week after plaintiff filed the supplemental declaration and with no time given to the defense to contest—set aside the default judgment and awarded plaintiffs $20,097.88 in attorney’s fees and costs, to be paid by defense counsel (an amount subsequently reduced to $18,897.88 after the trial court denied a defense motion for reconsideration and a motion to tax plaintiff’s supplemental declaration fee/costs requests). The parties settled the case, with defendant paying $7,500 to plaintiff (yes, you read it right, $7,500) but with the $18,897.88 fee award remaining in place. (BLOG OBSERVATION—Yet, again, the fee award became the primary point of contention.) Defense counsel appealed both the original fee award and reconsideration denial.
Justice Kitching, writing for a 3-0 panel of the Second District, Division 3, reversed the fee award and remanded for a merits determination of the defense motion to strike/tax costs.
For the purposes of this blog, the appellate panel determined that the trial court’s entry of a fee award in setting aside the default judgment deprived the defense of an opportunity to file a motion to strike/tax costs within the 15-day time limit specified in California Rules of Court, rule 3.1700. Because the trial court ruled one week after the supplemental fee declaration was submitted by plaintiff, defendant was effectively denied the benefit of the rule 3.1700 timing procedures. Beyond that, the trial court should have considered the reconsideration motion based on new factual challenges by defendant to the supplemental declaration and legal points raised by plaintiff.
BLOG BONUS COVERAGE—The decision also contains an interesting discussion on the split in appellate thinking on whether orders denying reconsideration are appealable orders in and of themselves. Baek lined up with the reasoning of Passavanti v. Williams, 225 Cal.App.3d 1602, 1606 (1990), which held that a trial court lacks power to rule on a reconsideration motion made after entry of a final judgment but can rule on a reconsideration motion challenging an order that is appealable as long as the order is not tantamount to a final judgment.