Filing a motion to vacate a default judgment in California on the equitable grounds of extrinsic fraud or mistake is the topic of this blog post. Equitable grounds means that the motion is made under the inherent equity power of the Court, not any statutory authority. The motion may be made even after any time limitation specified in any statute or statutes has expired.
“A trial court has an inherent equity power under which, apart from statutory authority, it may grant relief from a default judgment obtained through extrinsic fraud or mistake. While the grounds for an equitable action to set aside a default judgment are commonly stated as being those of extrinsic fraud or mistake, the terms are given a very broad meaning which tends to encompass all circumstances that deprive an adversary of fair notice of hearing whether or not those circumstances would qualify as fraudulent or mistaken in the strict sense. Thus a false recital of service although not deliberate is treated as extrinsic fraud or mistake in the context of an equitable action to set aside a default judgment. Bennett v. Hibernia Bank, (1956) 47 Cal.2d 540, 558, See also Carroll v. Abbott Laboratories (1982) 32 Cal. 3d 892, 901-902,.
The United States Supreme Court has also ruled that in a case where there has not been a real contest in the trial or hearing of the case the Court should vacate any judgment entered, and open the case for a new hearing.
“Where the unsuccessful party has been prevented from exhibiting fully his case, by fraud or deception practiced on him by his opponent, as by keeping him away from court, a false promise of a compromise; or where the defendant never had knowledge of the suit, being kept in ignorance by the acts of the plaintiff; or where an attorney fraudulently or without authority assumes to represent a party and connives at his defeat; or where the attorney regularly employed corruptly sells out his client’s interest to the other side,– these, and similar cases which show that there has never been a real contest in the trial or hearing of the case, are reasons for which a new suit may be sustained to set aside and annul the former judgment or decree, and open the case for a new and a fair hearing.” United States v. Throckmorton (1878) 98 U.S. 61, 65-66.
The right to relief has also been extended to cases involving extrinsic mistake which has been found in many cases.
Relief is denied, however, if a party has been given notice of an action and has not been prevented from participating therein. In those cases he has had an opportunity to present his case to the court and to protect himself from mistake or from any fraud attempted by his adversary.
Courts deny relief, when the fraud or mistake is “intrinsic”; that is, when it “goes to the merits of the prior proceedings, which should have been guarded against by the plaintiff at that time.”
Relief is also denied when the complaining party has contributed to the fraud or mistake giving rise to the judgment thus obtained.
“If the complainant was guilty of negligence in permitting the fraud to be practiced or the mistake to occur equity will deny relief.” Wilson v. Wilson (1942) 55 Cal.App.2d 421, 427.
It is settled that a wilful misstatement of the defendant’s address in an affidavit for publication of summons is extrinsic fraud and justifies setting aside the judgment resulting from proceedings of which defendant did not have notice. Rivieccio v. Bothan (1946) 27 Cal 2d 621, 624-625. (Internal citations omitted.)
“Extrinsic fraud usually arises when a party is denied a fair adversary hearing because he has been ‘deliberately kept in ignorance of the action or proceeding, or in some other way fraudulently prevented from presenting his claim or defense.’” It occurs when “‘the unsuccessful party has been prevented from exhibiting fully his case, by fraud or deception practiced on him by his opponent, as by keeping him away from court, a false promise of a compromise; or where the defendant never had knowledge of the suit, being kept in ignorance by the acts of the plaintiff.’ ” In those situations, there has not been “a real contest in the trial or hearing of the case,” and the judgment may be set aside to open the case for a fair hearing. Kulchar v. Kulchar (1969) 1 Cal.3d 467, 471.
It should also be noted that in order to obtain relief on the grounds of extrinsic fraud or mistake, the party seeking relief must also show diligence in seeking relief once they have personal knowledge that a default or judgment has been entered against them. And they must also show a meritorious defense to the action filed against them, in other words that if the default or judgment entered against them is vacated, that a different result is likely at any new hearing or trial.
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The author of this article, Stan Burman, is a freelance paralegal who has worked in California and Federal litigation since 1995.
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