Zamora v. Clayborn Contracting Group, Inc.
2002 Daily Journal DAR 6766, 121 Cal. Rptr. 2d 187, 28 cal. 4th 249 (2002)
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Rule of Law:
A court may grant discretionary relief under California Code of Civil Procedure § 473(b) from a judgment entered pursuant to a voluntary settlement agreement, such as a section 998 offer, if the judgment was the result of a party's mistake, inadvertence, or excusable neglect, such as a clerical error.
Facts:
- Pablo Zamora sued Clayborn Contracting Group, Inc. for breach of contract, seeking approximately $143,000 for unpaid road signs.
- Clayborn filed a cross-complaint against Zamora, having previously invoiced him for approximately $157,000.
- Zamora's attorney instructed his legal assistant to prepare a settlement offer under section 998 for a judgment in Zamora's favor in the amount of $149,999.
- The legal assistant made a typographical error, drafting the offer to have judgment taken against Zamora for $149,999.
- Because the attorney was out of town and time was of the essence, the offer was sent with his stamped signature without his final review.
- Approximately three days after receiving the erroneous offer, Clayborn filed a notice of acceptance.
Procedural Posture:
- Pablo Zamora sued Clayborn Contracting Group, Inc. in a California trial court, and Clayborn filed a cross-complaint.
- After Clayborn accepted a section 998 offer from Zamora, Zamora filed a motion in the trial court to set aside the resulting judgment based on mistake.
- The trial court granted Zamora's motion to set aside the judgment.
- Clayborn, as appellant, appealed the trial court's order to the California Court of Appeal.
- The Court of Appeal affirmed the trial court's ruling.
- The California Supreme Court granted review of the Court of Appeal's decision.
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Issue:
Does California Code of Civil Procedure § 473(b) permit a court to grant discretionary relief from a judgment entered pursuant to a section 998 settlement offer that contained a clerical error resulting from mistake, inadvertence, or excusable neglect?
Opinions:
Majority - Brown, J.
Yes. A court may grant discretionary relief from a judgment entered pursuant to a section 998 settlement offer under California Code of Civil Procedure § 473(b) for mistake, inadvertence, or excusable neglect. The plain language of § 473(b), which applies to 'any judgment, dismissal, order, or other proceeding,' is not limited to involuntary actions. For over a century, California courts have consistently applied this provision to relieve parties from voluntary judgments and dismissals entered pursuant to settlement agreements. The legislative history of § 473(b) shows no intent to alter this long-standing interpretation, and the policy of liberally construing the statute to permit adjudication on the merits supports its application here. The trial court did not abuse its discretion in this case because the attorney's error—a clerical mistake of substituting 'against' for 'in favor of'—was an excusable one that a reasonably prudent person could make under the circumstances. Zamora was diligent in seeking relief, and Clayborn suffered no prejudice, particularly since the circumstances strongly suggest Clayborn was aware of the mistake and sought to take unfair advantage of it.
Analysis:
This decision solidifies the principle that California's statutory mechanism for relief from judgment (§ 473(b)) applies broadly to both voluntary and involuntary judgments, including those stemming from section 998 settlement offers. It affirms a trial court's discretion to prioritize substance over form, preventing a party from capitalizing on an obvious clerical error to achieve a windfall. The ruling distinguishes simple, excusable clerical mistakes from more substantive errors of professional judgment, thereby preserving the concept of attorney malpractice for inexcusable conduct while allowing for equitable relief from minor but significant administrative blunders. This reinforces the public policy of resolving cases on their merits rather than through procedural gamesmanship.
