Court of Appeal Observes that $1,000 Monetary “Cap” in CCP section 473 Only Applies to 473 Awardable Sanctions.
Code of Civil Procedure section 473(b) authorizes a trial court to relieve a party from judgment taken against him/her through mistake, inadvertence, surprise, or excusable neglect. The court has discretion to allow relief “upon any terms as may be just.” (Code Civ. Proc., sec. 473(b).) Under section 473(c)(1)(A), the court may impose a “penalty of no greater than $1,000 upon an offending attorney or party.” In interpreting these provisions, one court summarized the impact as follows: “Such conditions [of allowing relief under section 473] might include the attorney fees and costs incurred by the plaintiff in obtaining the default judgment and a maximum of $1,000 in sanctions.” (Rogalski v. Nabers Cadillac, 11 Cal.App.4th 816, 822 (1992).) The next case involves a defendant given 473 relief, but conditioned on his payment of $8,000 in fees and costs to plaintiff out of a requested $20,000 expended to obtain the pertinent default judgment against defendant. Not content to pay and thank the lower court for its graciousness, defendant appealed, primarily arguing that the court could award fees and costs of no more than the $1,000 “cap” contained in section 473(c)(1)(A).
The Second District, Division 1 rejected the “cap” argument in Karish v. Gallagher, Case No. B202051 (2d Dist., Div. 1 Oct. 1, 2008) (unpublished). Defendant confused the statute’s upper limit on the amount of a penalty the court can impose with the court’s authority to impose uncapped payment of attorney’s fees as a condition to the grant of relief under section 473. “There is no set limit on the amount of attorney fees that may be imposed as a condition, other than the requirement that the amount be ‘just.’” (Slip Opn., at p. 4.)
The Court of Appeal sustained the $8,000 payment order as “just.” The trial court ordered less than 50% of plaintiff’s requested fees/costs, which defendant did not challenge as being an amount that was more than the fees and costs expended in obtaining the default. (Rogalski v. Nabers Cadillac, supra, 11 Cal.App.4th at 822-823 [473 condition limited to attorney’s fees and costs “incurred in obtaining the defaults only”].)