Fasuyi v. Permatex, Inc.

*685 Opinion

The law favors resolution of cases on their merits, and because it does, any doubts about whether Code of Civil Procedure section 473 1 relief should be granted “ ‘must be resolved in favor of the party seeking relief from default [citations]. Therefore, a trial court order denying relief is scrutinized more carefully than an order permitting trial on the merits.’ [Citations.]” (Rappleyea v. Campbell (1994) 8 Cal.4th 975, 980 [35 Cal.Rptr.2d 669, 884 P.2d 126] (Rappleyea).) Justice Mosk began Rappleyea with a succinct statement of the question before the Supreme Court and its answer: “The question is whether a default must be set aside and a default judgment reversed on the ground of abuse of discretion. We conclude that they must be . . . .” (8 Cal.4th at p. 978.) The question before us is the same. And so is our answer.

In August 2004, Omotayo Fasuyi was working at his place of employment when a brake-cleaning product manufactured by Permatex, Inc., dripped on him. In August 2006, some three weeks before the statute of limitations would expire, Fasuyi filed a complaint for personal injuries against Permatex. Fasuyi’s counsel was having difficulty effecting service, and made contact with the legal department at Illinois Tool Works, Inc. (ITW), the parent company óf Permatex, which advised him how to serve the complaint, including providing the address of its agent for service. Service was finally effected on December 4, 2006—beyond the time set forth in the California Rules of Court and the case management order issued by the superior court.

A paralegal at ITW promptly forwarded the summons and complaint to ITW’s insurance broker, which promptly forwarded it to the appropriate insurers, which acknowledged receipt. Despite that, no response to the complaint was filed. Shortly after a response was due, Fasuyi’s counsel filed a request for default, filed without any communication with anyone at ITW or anyone else. Thirteen days later, Fasuyi obtained a default judgment for $236,500, against a background that can only be described as unusual. When Permatex learned of the default judgment, it quickly retained counsel, who requested Fasuyi’s counsel to voluntarily set it aside. He refused. On March 23, 2007, 15 days after it learned of the judgment, Permatex filed a motion for relief from default. The motion was denied without explanation, in a four-word order.

*686 As we explain, the default judgment should probably never have been granted in the first place, which is bad enough. Worse, the trial court denied Permatex’s motion for relief, this in the face of a record demonstrating that Permatex was not derelict. Such denial was a manifest abuse of discretion— and prejudicial to Permatex. We thus reverse.

BACKGROUND

The Facts

Permatex, which manufactures a “Brake & Parts Cleaner,” is a wholly owned subsidiary of ITW, a diversified manufacturer of advanced industrial technology. ITW is an international business corporation with 825 decentralized business units located in 52 countries, and employs approximately 60,000 people, (<http://www.itw.com> [as of Oct. 15, 2008].) Fasuyi’s counsel described it at oral argument as number “175 in the Fortune 500.”

On or about August 25, 2004, while employed as a mechanic in Oakland, Fasuyi was underneath a vehicle performing repairs when the brake cleaner dripped onto his forehead and left hand. Fasuyi, an African-American, claimed that this caused him to develop patches of hypopigmentation, a whitening of his skin, requiring medical treatment and subjecting him to ridicule. On August 1, 2006, Fasuyi filed a complaint in Alameda County Superior Court against Permatex, seeking damages for his physical and emotional injuries, under theories of strict products liability, failure to warn, breach of warranty, and negligence.

Counsel for Fasuyi was having difficulty serving the complaint. As he explained it: “Before defendant was served in December, I had multiple contacts with the legal department at [ITW] about plaintiff’s case. My process server had attempted to serve plaintiff’s complaint and related materials on CT Corporation Systems (CT Corp.), which refused to accept them. During one of my calls and after I explained who I was and the purpose of my call (to arrange for service of plaintiff’s complaint), a representative of [ITW] confirmed that CT Corp. was the defendant’s agent and confirmed the agent’s address.” 2

As set forth in the original “Affidavit of Service” executed by Christine Foran, on December 4, 2006, Ms. Foran served a copy of “the Summons and Complaint for Damages,” “c/o CT Corporation, One Commercial Plaza, Harford, CT.” The affidavit of service did not indicate that a statement of damages was also served.

*687 Elizabeth Ahlman, a paralegal at ITW, testified that CT Corporation “forwarded the Summons and Complaint to [ITW]”; and that “on or about December 12, 2006, [ITW] forwarded the summons and complaint to Permatex’s insurance broker, Marsh USA,” requesting it to in turn forward the documents to Permatex’s insurance carriers with instructions to provide a defense to the lawsuit on behalf of Permatex. Ms. Ahlman “believed that Permatex’s insurance carriers would retain counsel to respond to the Complaint in a timely fashion.”

Jacqueline Sbarbono, as associate consultant for Marsh, confirmed that “on December 12, 2006, Marsh received the summons and complaint . . . from [ITW] with instructions for Marsh to forward the complaint” to the insurers. The next day, December 13, Sbarbono “forwarded the . . . Summons and Complaint to the claims managers at Ohio Casualty Insurance and Crum & Forster, insurers for Permatex, via Overnight Mail.” And along with forwarding the summons and complaint, Sbarbono “provided said claims managers with the insured contact information and requested written confirmation of receipt of the Summons and Complaint by noting the insurers’ file numbers. [Sbarbono] also instructed the claims managers to contact Permatex directly confirming the same. [][] [Sbarbono] received said written confirmation and was under the mistaken belief that Permatex’s insurers would contact Permatex directly, file an answer to the complaint on Permatex’s behalf and undertake Permatex’s representation in this matter.”

No responsive pleading was filed.

As indicated ante, Fasuyi’s counsel had been in contact with the legal department at ITW, which had assisted him in effecting service. Despite that, counsel did not contact anyone there—or anyone else—and instead on February 14, 2007, filed a request for entry of default, followed shortly thereafter by a default judgment. It was hardly a model of default judgment procedure, as the detailed description post makes clear.

The Default Proceedings

On February 14, 2007, counsel for Fasuyi filed a request for entry of default against Permatex, along with a request for court judgment, and mailed a copy of the request to Permatex’s agent for service of process. The Alameda County Clerk entered the default that day.

The leading practice treatise sets out the documentation required for such default: “Documentation required: The application for entry of default normally consists of the following documents: [f] Request to Enter Default form, including a declaration of mailing copies to defendant and *688 defendant’s counsel if known ...;[!] Proof of service of summons (if the original summons has not already been returned with proof of service) or of notice of order fixing time for further response (e.g., after demurrer overruled); HO In superior court injury or death actions, where the damage amount is not alleged in the complaint, a CCP §425.11 statement of damages and proof of service thereof . . . .” (Weil & Brown, Cal. Practice Guide: Civil Procedure Before Trial (The Rutter Group 2008) f 5:73, p. 5-19 (rev. # 1, 2008).) 3

Fasuyi’s request for default was on the required mandatory form (Judicial Council form CIV-100), though the section labeled “[jjudgment to be entered” was blank. There is no indication in the record that the request was accompanied by any statement of damages, let alone on the mandatory form adopted by the Judicial Council. (See Judicial Council form CIV-050 [Statement of Damages (Personal Injury or Wrongful Death)].) And as will be seen, the statement of damages Fasuyi’s counsel would later claim was in fact served was not on the mandatory form.

On February 28, 2007, the matter came on for what the minutes say was a “court trial.” The minute order provides in its entirety as follows:

“Cause called for Court Trial on February 28, 2007.

“Plaintiff Omotayo Fasuyi appearing represented by Hooy, Robert J.

“Defendant Permatex, Inc. not appearing.

“9:35 AM—Omotayo Fasuyi sworn for Plaintiff as a witness and under Direct Examination.

“This cause came on for hearing this day at the request of plaintiff.

“The defendant(s) hereinafter named having been personally served with summons and copy of complaint, having failed to appear and answer the complaint within the time allowed by law and in said summons specified, and *689 the default of said defendant(s) having been entered: Judgment was entered on 2/28/07 as: Judgment for Plaintiff.

“Plaintiff submitted proposed Judgment for signature of Court.”

Of course, the proceeding was not a court trial. It was default prove-up hearing. (See Merrifield v. Edmonds (1983) 146 Cal.App.3d 336, 341 [194 Cal.Rptr. 104] [explaining distinction between default judgment and “uncontested” § 594 proceeding in that case].) But more to the point involved here, there is no indication anywhere in the record that the court had before it at that time any statement of damages. Certainly the minute order does not refer to one.

That same day a “Judgment” was signed, and also a “Default Judgment (Court)” which concluded as follows: “It is hereby ordered, adjudged and decreed that: [f] 1. Plaintiff Omotayo recover $236,500.00 against defendant Permatex, Inc., together with costs of suit of $505.00, with interest at the rate of ten percent (10%) per annum until paid.”

As noted, there is no indication that on February 28 the court had before it any statement of damages. And absolutely clear in the record is that there was no proof of service on Permatex of such statement of damages, a statutory prerequisite before any default judgment can be entered. As to this, the declaration of Fasuyi’s counsel later filed in opposition to Permatex’s motion represented that the “judgment was entered subject to plaintiff later submitting an amended proof of service of plaintiff’s statement of damages on or about December 4, 2006. Plaintiff has obtained this amended proof of service and filed the same and plaintiff’s statement of damages with the court along with this opposition.” This second proof of service will be discussed post.

The Motion to Set Aside

According to paralegal Ahlman, ITW learned of the default judgment on March 7, 2007. That same day Ahlman contacted the firm of Poole & Shaffery, LLP, and retained it to represent Permatex. On March 8, 2007, Rey Yang at that firm called Fasuyi’s counsel requesting that he voluntarily lift the default. Counsel refused, and Mr. Yang followed up that same day with a letter, pointing out that the judgment was invalid due to the statement of damages issue and again requesting voluntary relief from the judgment. The record reflects no response from Fasuyi’s counsel.

On March 23, 2007, Poole & Shaffery filed its motion to set aside and “for leave to defend itself’ in the action. The motion was supported by the declaration of paralegal Ahlman, setting forth the history of the tender of *690 defense discussed ante, and the declaration of Attorney John Shaffery; it was also accompanied by the required proposed answer. The motion made two arguments: (1) the default judgment violated due process as protected by section 425.11, as Fasuyi failed to properly serve Permatex with a statement of damages prior to the entry of the default judgment; and (2) Permatex’s failure to respond constituted inadvertence or excusable neglect entitling Permatex to relief under section 473, subdivision (b).

On April 12, 2007, Fasuyi filed his opposition. It consisted of a memorandum, objections to evidence, 4 and the declaration of Fasuyi’s counsel. As to the statement of damages issue, Fasuyi’s opposition asserts this: “In this case, plaintiff served his two-page Statement of Damages on defendant on December 4, 2006, by serving a copy of the same on CT Corp., defendant’s agent for service of process. The proof of service, executed under penalty of perjury, is ■ on file herein. Further defendant acknowledges receipt of a statement of damages, just not a ‘complete’ one. Interestingly, defendant never produced a copy of the less than ‘complete statement of damages’ it received, and there is no evidence defendant sought to discover the ‘complete’ contents of plaintiff’s Statement of Damages until defendant’s counsel became involved in the matter.”

On April 18, Permatex filed its reply memorandum, along with the declarations of Sbarbono and Marla Almazan, an attorney at Poole & Shaffery.

The motion was set for hearing on April 25, 2007, and was apparently argued that day. There is no indication the hearing was reported, and Fasuyi’s brief asserts that “no transcript of the hearing was made,” a fact confirmed by a call to the Alameda County Clerk. 5

*691 On April 27, a minute order was entered which reads in its entirety as follows: “The Motion to Vacate/Set Aside Default and Default Judgment filed for Permatex, Inc. was set for hearing on 4/25/2007 at 9:00 AM in Department 136 before the Honorable Winton McKibben. HQ The matter was argued and submitted, and good cause appearing therefore, [f] It is hereby ordered that: ffi The motion is denied.”

On May 9, 2007, Permatex filed a notice of appeal from the February 28, 2007 judgment and the April 27, 2007 order.

DISCUSSION

The Role of the Court in Default Judgments

It is, of course, the case that there is no opposing party in a default judgment situation. Thus, cases properly recognize that in such situation “it is the duty of the court to act as gatekeeper, ensuring that only the appropriate claims get through.” (Heidary v. Yadollahi (2002) 99 Cal.App.4th 857, 868 [121 Cal.Rptr.2d 695]; see Electronic Funds Solutions, LLC v. Murphy (2005) 134 Cal.App.4th 1161, 1179 [36 Cal.Rptr.3d 663].)

California Judges Benchbook: Civil Proceedings Before Trial (CJER 2d ed. 2008) (Benchbook) is a treatise that “focuses on the judge’s role.” (Benchbook, supra, preface, p. v.) It provides “practical working tools to enable a judge to conduct proceedings fairly, correctly, and efficiently. [It is] written from the judge’s point of view, giving the judge concrete advice on what to look for and how to respond.” (Ibid.)

Chapter 16 of the Benchbook deals with defaults and default judgments, and in its second section of advice states that “[a] judge may enter a default judgment against a defendant only if the plaintiff has precisely followed certain procedures that ensure that the defendant received sufficient notice of the pending action to make an informed choice as to whether to defend or ignore the plaintiff’s claims. [Citations.] When the plaintiff fails to comply with these procedures, the defendant need not suffer the consequences of a default judgment. [Citation.]” (Benchbook, supra, § 16.2, p. 371.) As the Court of Appeal put it in Lopez v. Fancelli (1990) 221 Cal.App.3d 1305, 1312 [271 Cal.Rptr. 87], the first case cited in the Benchbook: “The rules pertaining to defaults and default judgments must be precisely followed to ensure that a defaulting defendant is aware of plaintiff’s claims.” Those rules were not “precisely followed” here. And there apparently was no gatekeeper.

*692 The Default Judgment Was Highly Irregular

Section 425.11 requires that before any default judgment can be entered in a personal injury case, the plaintiff must serve the defendant with a statement of damages. (§425.11, subds. (b), (c).) “Such notice enables a defendant to exercise his right to choose . . . between (1) giving up his right to defend in exchange for the certainty that he cannot be held liable for more than a known amount, and (2) exercising his right to defend at the cost of exposing himself to greater liability.” (Greenup v. Rodman (1986) 42 Cal.3d 822, 829 [231 Cal.Rptr. 220, 726 P.2d 1295].)

As noted ante, there is no indication in the record that on February 28 the court had before it any statement of damages. And absolutely clear in the record—indeed, admitted by Fasuyi—is that there was no proof of service on Permatex of such statement of damages, a statutory prerequisite before any default judgment can be entered. Nevertheless the declaration of Fasuyi’s counsel represented that the “judgment was entered subject to plaintiff later submitting an amended proof of service of plaintiff’s statement of damages . . . [and] Plaintiff has obtained this amended proof of service and filed the same and plaintiff’s statement of damages with the court along with this opposition.”

Permatex first argues that the trial court failed to properly apply section 425.11 to the facts of this case, asserting that Fasuyi failed to serve it with the complete statement of damages in advance of the default judgment and therefore the court lacked jurisdiction under section 425.11 to enter the judgment. 6 Permatex presented the trial court with evidence that the statement of damages had not been properly served, including an affidavit from Ms. Almazan at Poole & Shaffery stating that the case file she received from Permatex in early March (after entry of the default judgment) did not include the complete statement of damages but only “a single page of an incomplete document entitled ‘Statement of Nature and Amount of Damages,’ ” and that she was “informed that Permatex does not have a complete copy of plaintiff’s statement of damages.”

On the other hand, in his opposition to Permatex’s motion Fasuyi argued that the default judgment was “subject to” .a later proof of service, and filed what his counsel called an “amended proof of service,” though the word “amended” nowhere appears on it. This second proof of service stated that *693 Ms. Foran served “Permatex on December 4, 2006 with Statement of Damages” along with the “Summons and Complaint, Civil Case Cover Sheet, a Notice of Case Management Conference and Order.” 7 What we have, therefore, is a default judgment entered “subject to” later proof, which later proof, it would develop, was a “statement of damages” not on the mandatory form, but on a pleading prepared by Fasuyi’s counsel. If all that is evidence of “rules . . . [being] precisely followed” (Lopez v. Fancelli, supra, 221 Cal.App.3d at p. 1312), it comes in a novel guise.

So, we have a conflict in the “evidence” as to what was in fact served by way of a statement of damages. Permatex says it received only the first page, a page which listed the damages at $31,500. Fasuyi says there was service of the complete statement of damages as claimed in the second proof of service though, Fasuyi would be forced to admit, not on the mandatory form—which, it bears noting, has all the damages claimed on the first page. That is the record before us. What do we do with it?

Permatex asserts that the trial court exceeded its authority when it allowed Fasuyi to later file an amended proof of service showing that the statement of damages had been served along with the original summons and complaint. Perhaps we should agree, and call the default judgment void. This would preclude any “subject to” default judgments to exist, assuring that all the “i’s” are dotted and the “t’s” are crossed, as the Benchbook dictates, and thus assuring that all rules are “precisely followed.” Or perhaps we should only call the judgment irregular, as some courts have done in analogous circumstances. (See National Diversified Services, Inc. v. Bernstein (1985) 168 Cal.App.3d 410, 416 [214 Cal.Rptr. 113] [judgment based on late return of proof of service of complaint]; Connelly v. Castillo (1987) 190 Cal.App.3d 1583, 1589 [236 Cal.Rptr. 112] [same].) We conclude we need not decide the question, as we hold that the motion to set aside had to be granted. And that not to grant it was an abuse of discretion.

*694 The Trial Court Abused Its Discretion in Denying Relief Under Section 473, Subdivision (b)

Section 473, subdivision (b) states that a court “may, upon any terms as may be just, relieve a party or his or her legal representative from a judgment, dismissal, order, or other proceeding taken against him or her through his or her mistake, inadvertence, surprise, or excusable neglect.” This part of section 473 is recognized as invoking the trial court’s discretion, and the judgment of the trial court “ ‘shall not be disturbed on appeal absent a clear showing of abuse.’ ” (Zamora v. Clayborn Contracting Group, Inc. (2002) 28 Cal.4th 249, 254, 257 [121 Cal.Rptr.2d 187, 47 P.3d 1056].)

To obtain discretionary relief under section 473, the moving party must show the requisite mistake, inadvertence, or excusable neglect. (Bonzer v. City of Huntington Park (1993) 20 Cal.App.4th 1474, 1478 [25 Cal.Rptr.2d 278], quoting Iott v. Franklin (1988) 206 Cal.App.3d 521, 526-528 [253 Cal.Rptr. 635].) Section 473 also requires that the party diligently seek relief “within a reasonable time, in no case exceeding six months, after the judgment, dismissal, order, or proceeding was taken.” (§ 473, subd. (b).)

Permatex argues that it is entitled to relief under the discretionary provision because its failure to file a response to the complaint was the result of mistake, inadvertence, or excusable neglect. Permatex demonstrated that paralegal Ahlman promptly forwarded the legal documents to the insurance broker. Permatex also demonstrated that its broker did what it was supposed to do, promptly forwarding the process to the insurers and instructing the claims managers to contact Permatex directly; and that the broker received written confirmation of that, and was under the expectation that the insurer would retain counsel and appear on Permatex’s behalf. As Pennatex distills it: “[Permatex] knew nothing of the default or default judgment until after receiving service of the latter in the amount of $236,500, plus $505 in costs. Something went awry after transmittal of the complaint to the insurance carrier, but precisely what is not known. This was a classic instance of mistake and inadvertence—but not on the part of [Permatex], which did what all corporations do when served with a complaint: send it to the carrier for handling. Thus ... there are abundant grounds for reversal under [section 473, subdivision (b)] because of mistake, inadvertence and excusable neglect.” We could not agree more.

Twenty years ago we set out the governing principles, in McCormick v. Board of Supervisors (1988) 198 Cal.App.3d 352 [243 Cal.Rptr. 617], a case involving a dismissal of a CEQA (California Environmental Quality Act; Pub. Resources Code, § 21000 et seq.) petition for failure to timely request a *695 hearing. The trial court denied relief sought under section 473. We reversed. After first holding that section 473 relief was available in the CEQA-notice context, we went on:

“The next question is whether the trial court erred in refusing to grant section 473 relief under the facts herein. Our standard of review is well articulated by the California Supreme Court in Elston v. City of Turlock (1985) 38 Cal.3d 227, 233 [211 Cal.Rptr. 416, 695 P.2d 713]: ‘A motion seeking such relief lies within the sound discretion of the trial court, and the trial court’s decision will not be overturned absent an abuse of discretion. [Citations.] However, the trial court’s discretion is not unlimited and must be “ ‘exercised in conformity with the spirit of the law and in a manner to subserve and not to impede or defeat the ends of substantial justice.’ ” [Citations.] [f] Section 473 is often applied liberally where the party in default moves promptly to seek relief, and the party opposing the motion will not suffer prejudice if relief is granted. [Citations.] In such situations “very slight evidence will be required to justify a court in setting aside the default.” [Citations.] [ft] Moreover, because the law strongly favors trial and disposition on the merits, any doubts in applying section 473 must be resolved in favor of the party seeking relief from default [citations]. Therefore, a trial court order denying relief is scrutinized more carefully than an order permitting trial on the merits. [Citations.]’ ” (McCormick v. Board of Supervisors, supra, 198 Cal.App.3d at pp. 359-360.)

Last year we elaborated on the concept of abuse of discretion, in People v. Jacobs (2007) 156 Cal.App.4th 728 [67 Cal.Rptr.3d 615], Holding that there was an abuse of discretion in denying a continuance, we ended our discussion with this observation: “In Concord Communities v. City of Concord (2001) 91 Cal.App.4th 1407, 1417 [111 Cal.Rptr.2d 511] our colleagues in Division Four of this court observed that ‘Abuse of discretion has at least two components: a factual component. . . and a legal component. [Citation.] This legal component of discretion was best explained long ago in Bailey v. Taaffe (1866) 29 Cal. 422, 424: “The discretion intended, however, is not a capricious or arbitrary discretion, but an impartial discretion, guided and controlled in its exercise by fixed legal principles. It 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 and in a manner to subserve and not to impede or defeat the ends of substantial justice.

“All this is well described in Witkin where, likewise citing the still vital Bailey v. Taaffe, supra, 29 Cal. 422, 424, the author distills the principle as follows: ‘Limits of Legal Discretion, [ft] The discretion of a trial judge is not a whimsical, uncontrolled power, but a legal discretion, which is subject to the limitations of legal principles governing the subject of its action, and to *696 reversal on appeal where no reasonable basis for the action is shown. (See 5 Am.Jur.2d, Appellate Review § 695.) . . .’ (9 Witkin, Cal. Procedure (4th ed. 1997) Appeal, § 358, pp. 406-407.)” (People v. Jacobs, supra, 156 Cal.4th at pp. 737-738.)

Applying that law here leads inescapably to the conclusion that the trial court abused its discretion here—all legal principles favored Permatex.

The most fundamental of those principles is that affirmed in Au-Yang v. Barton (1999) 21 Cal.4th 958, 963 [90 Cal.Rptr.2d 227, 987 P.2d 697]: “ ‘[T]he policy of the law is to have every litigated case tried upon its merits, and it looks with disfavor upon a party, who, regardless of the merits of the case, attempts to take advantage of the mistake, surprise, inadvertence, or neglect of his adversary.’ ” (Ibid., citing among other cases, Weitz v. Yankosky (1966) 63 Cal.2d 849, 855 [48 Cal.Rptr. 620, 409 P.2d 700] (Weitz).)

“Because the law favors disposing of cases on their merits, ‘any doubts in applying section 473 must be resolved in favor of the party seeking relief from default [citations]. Therefore, a trial court order denying relief is scrutinized more carefully than an order permitting trial on the merits.’ ” (Rappleyea, supra, 8 Cal.4th at p. 980, quoting Elston v. City of Turlock, supra, 38 Cal.3d at p. 233 (Elston).) In Witkin’s typically succinct statement of the rule, the remedial relief offered by section 473 is “highly favored and is liberally applied.” (8 Witkin, Cal. Procedure, Attack on Judgment in Trial Court, supra, § 152, pp. 653-654 and numerous cases there collected.)

As a result of those principles, the Supreme Court has recognized that if a defendant promptly seeks relief (as Permatex did here) and there is no showing of prejudice to Fasuyi (as is the case here), “ ‘very slight evidence will be required to justify a court in setting aside the default.’ ” (Elston, supra, 38 Cal.3d at p. 233.) Or as Elston put it two pages later, “[u]nless inexcusable neglect is clear, the policy favoring trial on the merits prevails.” (Id. at p. 235.) There was more than slight evidence here. And no inexcusable neglect.

Though admittedly arising in a setting where the trial court set aside the dismissal, Weitz, supra, 63 Cal.2d 849, is particularly persuasive. Weitz arose out of a car accident in April 1961, which occurred when the defendant, Yankosky, was hit by Weitz’s car as the defendant was backing out of his driveway. The defendant reported the accident to his insurance agent, and also filed an SR-1 form with the Department of Motor Vehicles, stating he had automobile liability insurance with Trinity Universal (Trinity). In May 1961, the defendant settled a claim with Weitz’s insurance carrier (Allstate) and believed the matter was resolved. It was not.

*697 The next month, June, the plaintiff filed suit against the defendant and served it on him. The defendant immediately mailed the summons and complaint to Trinity at its home office in Dallas. After the defendant mailed the summons and complaint, “he made no inquiry of Trinity as to the status of the case because T had thought I had settled with the insurance company [Allstate] and I. . . continued to believe that the insurance carrier had either disposed of the matter or was handling it without contacting [me].’ ” (Weitz, supra, 63 Cal.2d at p. 852.) The defendant’s correspondence was never received by Trinity. And no answer was filed. (Ibid.)

A request for default was filed in November 1961, and in May 1962, a default judgment obtained. (Weitz, supra, 63 Cal.2d at p. 852.) The defendant did not learn of the default judgment until March 1963 (id. at p. 853), well beyond the six-month time to seek relief under section 473, subdivision (b). A motion was finally made in August 1963, necessarily directed to the “court’s inherent equity power ... to grant relief . . . where there has been ‘extrinsic’ fraud or mistake.” (63 Cal.2d at p. 855.) The trial court granted the motion. The Supreme Court affirmed, in a unanimous opinion by Justice Peters setting forth the law controlling here:

“Where a default is entered because defendant has relied upon a codefendant or other interested party to defend, the question is whether the defendant was reasonably justified under the circumstances in his reliance or whether his neglect to attend to the matter was inexcusable. [Citations.] This rule has been held applicable where an insured relied upon his insurer to defend. (Pelegrinelli v. McCloud River [etc.] Co. [(1905)] 1 Cal.App. 593, 594 et seq. [82 P. 695].) [f] With regard to whether the circumstances warranted reliance by the defendant on a third party, the efforts made by the defendant to obtain a defense by the third party are, of course, relevant. ...[][] In the present case defendant acted reasonably in assuming that Trinity would defend and in following the instructions in his insurance policy to mail any summons and complaint to Trinity at Dallas, and the trial court could properly conclude that the failure of these documents to arrive was neither defendant’s nor Trinity’s fault. There is no showing that plaintiff was in any way prejudiced by defendant’s failure to answer on time. Even if the mistake were caused by some negligence on defendant’s part, this negligence might be excused if it in no way prejudiced the opposing party. [Citations.]” (Weitz, supra, 63 Cal.2d at pp. 855-856.)

Pelegrinelli v. McCloud River etc. Co., supra, 1 Cal.App. 593, cited in Weitz, is likewise persuasive. In June 1900 the defendant lumber mill was threatened with a possible lawsuit for a wrongful death occurring in May, though no lawsuit had yet been filed. The defendant nevertheless went about marshalling evidence, obtaining statements and photographs which it forwarded to its insurer. (Id. at p. 595.) In February 1902, a lawsuit was in fact *698 filed, and the president of the defendant company learned of it on February 7, by reading of it in a newspaper. The lawsuit had not been served. The president “immediately sent for the agent of the insurance company and informed him thereof, and with him went over the case and the matters and facts connected with it and with the defense thereto; and the said agent then and there agreed with the president that the insurance company would appear . . . through its regular attorneys on behalf of the defendant and defend the same .... Nothing was said between them with reference to the summons or complaint in the action, or with reference to the service of the same . . .”—which, as noted, had not yet been served. Service was in fact effected on February 10, on the secretary of the defendant company, who immediately delivered the papers to the president, who put them in his drawer, never forwarding them to the insurer. (Id. at pp. 595-596.) Default and default judgment were thereafter entered.

The trial court granted relief, and the First Appellate District affirmed, in language strongly supporting Permatex here: “It may be conceded that it would have been an act of prudence on [the president’s] part, when he received the copy of the summons and complaint, to have delivered them to the insurance company; but if he had the right to believe and did believe that the insurance company would enter its appearance and defend the action irrespective of any service of the summons, his failure to give the copies to it cannot be held to have been attributable to any carelessness or inattention. Whatever omission there was must be regarded as an excusable neglect. ‘Section 473 of the Code of Civil Procedure is a remedial provision, and is to be liberally construed so as to dispose of all cases upon their substantial merits and to give to the party claiming in good faith to have a substantial defense to the action an opportunity to present it.’ [Citation.]” (Pelegrinelli v. McCloud River etc. Co., supra, 1 Cal.App. at pp. 596-597, italics added.)

Rogalski v. Nabers Cadillac (1992) 11 Cal.App.4th 816 [