Relief From Default: Attorney’s Fees Must Be Awarded As A Condition Of Discretionary Relief Where Attorney’s Conduct Was Egregious

First District, Division 4 Requires Attorney To Pay Opposition’s Fees In Order to Obtain Relief From Attorney’s Gross Neglect.

     Most of us are familiar with Code of Civil Procedure section 473, California’s relief statute that allows trial courts considerable discretion in granting relief from attorney’s neglect—including an award of fees for granting relief under the appropriate circumstances. The next case demonstrates that, even under the discretionary prong of the relief statute, fees will likely be mandatory as a condition of relief where an attorney’s neglect was gross in nature.

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     Marasovic v. Yuen (DeSmet), Case No. A119901 (1^st Dist., Div. 4 Dec. 31, 2008) (unpublished) involved an attorney whose neglect was characterized as “egregious” by the appellate court when his neglect in responding to discovery resulted in the trial court imposing evidentiary sanctions barring his clients from presenting evidence at trial. At trial, the clients learned of the sanctions, retained new counsel, and moved for relief from the discovery sanctions based on the former attorney’s declaration attesting to his neglect. (A jurisdictional issue also lurked throughout this matter, because of a stipulation indicating the dispute would be determined by a small claims court action rather than the superior court action where the sanctions order developed.) The trial court granted neglectful attorney’s clients relief from the discovery sanctions, but refused to award attorney’s fees to plaintiff as against neglectful attorney based on a determination that the whole matter should have been litigated in small claims court. Plaintiff appealed the fee denial, obtaining a reversal upon review.

     After liberally construing a notice of appeal (the normal rule) and deciding the relief motion was for discretionary relief (based on clients claiming surprise and excusable neglect), the appellate panel determined that the trial court was not required to award fees to plaintiffs. However, that did not end the matter.

     The decision to base a fee denial on a jurisdictional matter did not sit well with the Court of Appeal even under the discretionary prong of section 473. Because the neglectful attorney never moved to transfer the case to small claims court, plaintiff should not have to incur costs for prosecuting the superior court action due to neglectful acts of the opposition attorney who did not move to transfer and who made plaintiff ring up costs in the superior court as a result of his conduct. “The neglectful attorney, not an opposing party like appellant, should pay for that neglect.” (Slip Opn., at p. 9.)

     The appellate court reversed the fee denial, allowing plaintiff to file a motion for fees and submit a costs memorandum by which she can recoup expenses from the neglectful attorney.