# Carroll v. Abbott Laboratories, Inc.

> California Supreme Court · December 10, 1982 · 32 Cal. 3d 892

URL: https://www.frixlaw.com/law-library/cases/9604957

## Case

- **Full name:** JAMES DOUGLAS CARROLL, a Minor, Etc., Plaintiff and Respondent, v. ABBOTT LABORATORIES, INC., Defendant and Appellant
- **Court:** California Supreme Court
- **Decided:** December 10, 1982
- **Citations:** 32 Cal. 3d 892; 187 Cal. Rptr. 592; 654 P.2d 775; 1982 Cal. LEXIS 253
- **Precedential status:** Published
- **Opinion:** Dissent by Bird
- **Judges:** Kaus, Bird
- **Cited by:** 98 later opinions in the Frix Law Library

## Citator (automated)

- **Red flag:** Superseded by statute, as recognized in Beeman v. Burling.
- Negative treatments: 1
- Distinguished by: 0
- Full citator and citing cases: https://www.frixlaw.com/law-library/cases/9604957

## Opinion text

BIRD, C. J.
I respectfully dissent.
In the name of the “ ‘orderly process of the law,’ ” the majority today hold that a trial court may not grant relief to a plaintiff whose lawsuit was dismissed because of the “ ‘grossly negligent’ ” conduct of his attorney. (Maj. opn., ante at pp. 897-900.) In reaching that conclusion, the majority overlook an important source of judicial power, disregard the public policy which favors the determination of all causes on their merits, and fail to give deference to the trial court’s decision. The end result cannot fairly be said to serve the interests of “substantial justice.” (Daley v. County of Butte (1964) 227 Cal.App.2d 380, 390 [ 38 Cal.Rptr. 693 ].)
As the majority note, the discretion of a trial court to grant relief from dismissals is not “ ‘ “a mental discretion, to be exercised ex gratia, but a legal discretion, to be exercised in conformity with the spirit of the law . . . (Maj. opn., ante at p. 898.) But the majority err in assuming that section 473 of the Code of Civil Procedure is the only “law” which gives trial courts authority to grant such relief. 1
California courts have an “inherent equity power under which, aside from [their] statutory authority, [they may] grant relief from a . . . judgment .... *902 [Citation.]” (Weitz v. Yankosky (1966) 63 Cal.2d 849, 855 [ 48 Cal.Rptr. 620 , 409 P.2d 700 ].) “Equity’s jurisdiction to interfere with final judgments is based upon the absence of a fair, adversary trial in the original action. ‘It [is] a settled doctrine of the equitable jurisdiction . . . that where [a] legal judgment was obtained or entered through fraud, mistake, or accident ... a court of equity [may] interfere . . . and restrain proceedings on the judgment which cannot be conscientiously enforced. . . . The ground for the exercise of this jurisdiction is that there has been no fair adversary trial at law.’ (5 Pomeroy, Equity Jurisprudence (Equitable Remedies [2d ed.]), pp. 4671, 4672.)” (Olivera v. Grace (1942) 19 Cal.2d 570, 575 [ 122 P.2d 564 , 140 A.L.R. 1328 ].)
As this court recently noted, “A final judgment may be set aside by a court if it has been established that extrinsic factors have prevented one party to the litigation from presenting his or her case. [Citation.] The grounds for such equitable relief are commonly stated as being extrinsic fraud or mistake. However, those terms are given a broad meaning and tend to encompass almost any set of extrinsic circumstances which deprive a party of a fair adversary hearing. It does not seem to matter if the particular circumstances qualify as fraudulent or mistaken in the strict sense. [Citations.]” (In re Marriage of Park (1980) 27 Cal.3d 337, 342 [ 165 Cal.Rptr. 792 , 612 P.2d 882 ], italics added; In re Marriage of Coffin (1976) 63 Cal.App.3d 139, 149 [ 133 Cal.Rptr. 583 ]; Munoz v. Lopez (1969) 275 Cal.App.2d 178, 181 [ 79 Cal.Rptr. 563 ].)
Thus, apart from its discretion under section 473, a court has considerable and broad discretion in equity to grant relief from a judgment on a showing of extrinsic fraud or mistake. Under its equitable jurisdiction, then, a court may provide relief in many situations other than those set forth in the statute. 2 For *903 example, courts have long interpreted a party’s reliance on a negligent attorney as one kind of “extrinsic mistake” which warrants relief. 3 (Hallett v. Slaughter (1943) 22 Cal.2d 552, 556-557 [ 140 P.2d 3 ]; Higley v. Bank of Downey (1968) 260 Cal.App.2d 640, 644 [ 67 Cal.Rptr. 365 ]; Orange Empire Nat. Bank v. Kirk, supra, 259 Cal.App.2d at pp. 352-354.) Against this background, the trial court’s authority to grant equitable relief on the basis of “extrinsic mistake” in this case is clear.
“Although the law ordinarily charges the client with the inexcusable neglect of his attorney, . . . there are exceptional cases in which the client who is relatively free from personal neglect will be relieved from a default or dismissal attributable to the inaction or procrastination of his counsel. [Citations.] This is particularly true where the attorney’s failure to represent the client amounts to positive misconduct. [Citation.] An attorney’s authority to bind his client does not permit him to impair or destroy the client’s cause of action or defense. [Citation.]” (Orange Empire Nat. Bank v. Kirk, supra, 259 Cal.App.2d at p. 353, italics added.)
If the attorney’s negligence is clear and inexcusable, the focus of inquiry in deciding whether to grant relief shifts to the client. (Orange Empire Nat. Bank v. Kirk, supra, 259 Cal.App.2d at p. 353; see Conway v. Municipal Court (1980) 107 Cal.App.3d 1009 , 1018-1019 [ 166 Cal.Rptr. 246 ].) “Where the mistake is not that of the [party] but of his attorney, it appears that greater tolerance in granting relief has been extended. It is stated in Stub v. Harrison [1939] 35 Cal.App.2d 685 , at pages 689, 690 [ 96 P.2d 979 ]: [¶] ' . . The *904 courts ... are somewhat loath to penalize a litigant on account of some omission on the part of his attorney, particularly where the litigant has acted promptly and has relied . . . upon the attorney to protect his rights.’ ” (Dingwall v. Vangas, Inc. (1963) 218 Cal.App.2d 108, 113 [ 32 Cal.Rptr. 351 ] [decided under § 473].)
The majority attempt to distinguish the case at hand from Orange Empire and other cases granting relief in similar circumstances, but that attempt is not convincing. The distinction between one attorney’s “positive misconduct” and another’s “gross negligence” is, at best, elusive; the factual circumstances of the two cases are simply not as dissimilar as the majority claim. In Orange Empire, the court concluded that a plaintiff had been “unknowingly deprived of effective representation by counsel’s failure to serve process, to appear at the pretrial conference, [or] to communicate with the court, client, and other counsel . . . .” (Orange Empire Nat. Bank v. Kirk, supra, 259 Cal.App.2d at p. 353.) Like Orange Empire, the record in this case indicates that, aside from an initial flurry of activity, plaintiff’s counsel took virtually no action with respect to this case. Beginning in November 1979, counsel failed to appear at a hearing on a motion to compel production of documents, failed to comply with the court order granting that motion, failed again to appear at a hearing when the motion was renewed, and failed again to comply when the motion was granted. When counsel did not appear at a hearing on defendant’s motion to dismiss, the court dismissed the action. At no time during this period was counsel in contact with his client. Can it be reasonably doubted that in the chain of events leading to dismissal the plaintiff was “unknowingly deprived of effective representation”? (Ibid.) It was only when counsel was confronted with the dismissal of plaintiff’s lawsuit and, no doubt, began to contemplate the unpleasant possibility of a malpractice action against himself that he resumed even a minimal interest in the case. The resumption of activity after the case had been dismissed cannot change the fact that plaintiff was essentially left without counsel at critical times during the course of this litigation.
What is more, finely drawn distinctions between the facts of this case and others are not appropriate here. The rule of Orange Empire is not, as the majority contend, a judically created exception to a statute which must, therefore, be “narrowly applied.” (See maj. opn., ante at p. 900.) Rather, the rule is grounded in the court’s broad and “inherent equity power” (Weitz v. Yankosky, supra, 63 Cal.2d at p. 855 ) and provides ample support for the trial court’s judgment here. 4
*905 In their haste to condemn this erring attorney, the majority not only overlook the court’s equitable power but also give no more than lip service to the general rule that an order granting relief from dismissal or default will ordinarily be upheld under two well established principles. (5 Witkin, Cal. Procedure (2d ed. 1971) Attack on Judgement in Trial Court, § 162, p. 3735.) First, “[a] motion to set aside a default judgment is addressed to the sound discretion of the trial court, and, in the absence of a clear showing of abuse of discretion where the trial court grants the motion, the appellate court will not disturb the order. ” (Weitz v. Yankosky, supra, 63 Cal.2d at p. 854 .) Second, “[i]t is the policy of tihe law to favor, wherever possible, a hearing on the merits, and appellate courts are much more disposed to affirm an order where the result is to compel a trial upon the merits than they are when the judgment ... is allowed to stand . . . .” (Ibid.) It is in close cases like this one that deference to the trial court’s judgment is most appropriate.
The majority override these usually controlling principles, and declare the trial court’s order an abuse of discretion, in the interest of the “ ‘orderly process of the law.’ ” (Maj. opn., ante at p. 900.) Certainly courts have an interest in ensuring the prompt and orderly disposition of lawsuits. Although the “ [defendant is entitled to the weight of the policy underlying the dismissal statute, which seeks to prevent unreasonable delays in litigation [, that] policy ... is less powerful than that which seeks to dispose of litigation on the merits rather than on procedural grounds.” (Daley v. County of Butte, supra, 227 Cal.App.2d at p. 390 , italics added.)
Moreover, it is not necessary to so drastically limit the trial court’s discretion in order to preserve the orderly process of the law. The interests of other parties and of justice are more than adequately protected by existing safeguards. (See generally 5 Witkin, Cal. Procedure, supra, Attack on Judgment in Trial Court, §§ 192, 194, pp. 3763, 3765-3766.) A motion addressed to a court’s equity power is, of course, vulnerable to equitable defenses such as laches. (Olivera v. Grace, supra, 19 Cal.2d at p. 575 ; In re Marriage of Coffin, supra, 63 Cal.App.3d at p. 155 .) Also, relief in equity is not available if the other party can show prejudice. (Ibid.) In addition, the trial court may, where appropriate, impose costs upon the moving party. (See Weitz v. Yankosky, supra, 63 Cal.2d at p. 859 .) Furthermore, the aggrieved party must seek relief within “ ‘a reasonable time’” (id., at pp. 856-857; Orange Empire Nat. Bank v. Kirk, supra, 259 Cal.App.2d at p. 355; Davis v. Davis (1960) 185 Cal.App.2d 788, 792 [ 8 Cal.Rptr. 874 ]), and must plead “facts from which it can be ascertained that the plaintiff has a sufficiently meritorious claim to entitle him to a trial of the issue . . . .” (Olivera v. Grace, supra, 19 Cal.2d at p. 579 ; see Turner v. Allen (1961) 189 Cal.App.2d 753, 758-759 [ 11 Cal.Rptr. 630 ].)
*906 Rather than rely on these existing safeguards to prevent abuse by irresponsible or incompetent attorneys, the majority conclude that relief must be withheld from a concededly blameless plaintiff. As a result, plaintiff is left with only a malpractice action against his attorney. The adequacy of such a remedy, however, has been questioned by a number of commentators, and for good reason. (See generally Mazor, Power and Responsibility in the Attorney-Client Relation (1968) 20 Stan.L.Rev. 1120, 1134-1135, and cases cited therein.)
To recover in a malpractice action, “a client must show that but for his attorney’s negligence he would have been successful in the original litigation . . . .” (Note, Attorney Malpractice (1963) 63 Colum.L.Rev. 1292, 1307, fn. omitted.) “Few malpractice litigants seem able to survive this ‘trial within a trial.’” (Mazor, supra, 20 Stan.L.Rev. at p. 1135, fn. omitted.) Obviously, this burden is “especially difficult to meet when the attorney’s conduct prevented the client from bringing his original cause of action .... Moreover, a client whose original claim was dismissed must, in order to establish the extent of his damages, prove the amount of the judgment that he would have recovered had his attorney not been negligent.” (Note, Attorney Malpractice, supra, 63 Colum.L.Rev. at pp. 1307-1308, fns. omitted.) These difficulties make the outcome of malpractice actions in cases like this far from certain. They are a poor substitute for equitable relief.
Certainly, courts have an interest in preventing attorneys from rising to “ever greater heights of incompetence and professional irresponsibility” (maj. opn., ante, at p. 900), but that interest cannot be allowed to override the court’s fundamental responsibility to do justice. Existing law is more than sufficient to protect the interests asserted by the majority. Thus, their disregard of the general principles favoring affirmance in this case is not justified. The trial court’s broad equitable discretion and the deference it is entitled to from appellate courts make the majority’s reversal of its judgment inappropriate. I would affirm the judgment.
Unless otherwise noted, all statutory references are to the Code of Civil Procedure.
The majority err in asserting that, as a general matter, a court’s equity power is “narrower” than its statutory power. (See maj. opn., ante at p. 901, fn. 8.) The majority’s position, that relief in equity may not be granted if relief could not have been granted under section 473, is not supported by logic or law.
First, the power of the equity court to set aside a judgment based on the lack of a “fair adversary hearing” is “inherent” in that court. (Weitz v. Yankosky, supra, 63 Cal.2d at p. 855 .) It is obvious that an “inherent” power may be exercised regardless of the existence or conditions of statutory relief. (See the discussion in Olivera v. Grace, supra, 19 Cal.2d at pp. 573-575.)
Moreover, the basis for relief in equity differs substantially from the basis for relief under the statute. Under section 473, the party seeking relief must show “mistake, inadvertence, surprise, or excusable neglect” in order to succeed. By contrast, to obtain relief in equity, a party must show “extrinsic circumstances which deprive[d] [that] party of a fair adversary hearing.” (In re Marriage of Park, supra, 27 Cal.3d at p. 342 .) Nothing in these formulations suggest that the availability of relief in equity is contingent on the availability of relief under the statute. To the contrary, courts have always treated these two bases for relief as wholly distinct from each other. (See, e.g., Olivera v. Grace, supra, 19 Cal.2d at pp. 573-575.)
What is more, the authority cited by the majority simply does not support their position. In Weitz v. Yankosky, supra, 63 Cal.2d 849 , this court considered and rejected the claim that, in the absence of prejudice to the opposing party, a motion for equitable relief need not be made within a “reasonable time.” The court explained, “[G]n a motion made under section 473, the movant must show that relief was sought within a ‘reasonable time,’ whether or not the other *903 party suffered any prejudice from the delay .... If lack of prejudice will not automatically enable one to succeed when making a motion under section 473, it should not automatically enable one who fails to make his motion within [the statutory time limit] to set aside the judgment by appealing to the equity powers of the court. To hold otherwise would encourage litigants to wait until the [statutory time limit] elapses before moving to set a default judgment aside. To the extent that the court’s equity power to grant relief differs from its power under section 473, the equity power must be considered narrower, not wider.” (Id., at p. 857.)
When read in its proper context, it is apparent that this last sentence—cited by the majority as a general limitation on the equity power of the court—refers only to the applicability of the “reasonable time” requirement to an action for equitable relief.
Nor does the Weitz court’s citation of Wattson v. Dillon (1936) 6 Cal.2d 33, 42 [ 56 P.2d 220 ] lend support to the majority’s position. On the page cited, the Wattson court, suggesting that the party’s delay in discovering his own error might have been justified as “reasonable” if the action for relief had been brought under section 473, found that the delay constituted laches sufficient to foreclose relief in equity. “ ‘The breadth of the provisions of the statute may not . . . properly be construed as an attempt to broaden the powers of a court of equity.’ ” (Ibid.) Wattson therefore stands for the unremarkable proposition that one seeking relief in equity must establish a basis for that relief under equitable, not statutory, principles. The Wattson court noted that the moving party there had made no claims of collusion or fraud, but that the default was caused by his own neglect. (Ibid.) By contast, as discussed infra, the justification for relief in this case is not the neglect of the party, but “extrinsic fraud or mistake.”
In fact, one of the three cases cited by the majority as an exception to section 473 was actually decided under the court’s equitable power. (See Orange Empire Nat. Bank v. Kirk (1968) 259 Cal.App.2d 347, 352-353 [ 66 Cal.Rptr. 240 ].)
The motion and affidavit filed by the plaintiff, although phrased in terms of section 473, also state a claim for equitable relief. Consistent with that claim, the trial court found that plaintiffs counsel had been “grossly negligent” and that “plaintiff-was not contacted at relevant times.” The court did not specifically refer to its equitable power when it announced its decision to grant relief. However, since that decision was clearly within the equitable power of the court to make *905 under the facts of this case, the judgment must be affirmed regardless of the grounds actually relied upon. (See Munoz v. Lopez, supra, 275 Cal.App.2d at pp. 180-182; 6 Witkin, Cal. Procedure (2d ed. 1971) Appeal, §§ 226, 228, pp. 4215-4216, 4217.)

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Source: Frix Law Library, https://www.frixlaw.com/law-library/cases/9604957. Public record. Not legal advice.