Interior MAINTENANCE

Advanced Building Maintenance

[No. B091617. Second Dist., Div. Two. Oct 2, 1996.]

ADVANCED BUILDING MAINTENANCE, Plaintiff and Respondent, v. STATE COMPENSATION INSURANCE FUND, Defendant and Appellant.

(Superior Court of Los Angeles County, No. GC010904, Madeline Flier, Judge.)

(Opinion by Nott, J., with Boren, P. J., and Zebrowski, J., concurring.)

COUNSEL

Sheppard, Mullin, Richter & Hampton, Pierce T. Selwood, Andre J. Cronthall and James M. Burgess for Defendant and Appellant.

Roxborough, Pomerance & Gallegos, Nicholas P. Roxborough, Esteban G. Gallegos and Joshua N. Willis for Plaintiff and Respondent.

OPINION

NOTT, J.

Appellant State Compensation Insurance Fund appeals from an order entered after the trial court granted respondent Advanced Building Maintenance's motion to vacate a judgment. We reverse.

Contentions

Appellant urges that (1) respondent's motion to vacate the judgment was untimely and the trial court lacked jurisdiction to extend the statutory deadline, (2) the trial court's order granting the motion to vacate the judgment was void because it failed to enter a different judgment, and (3) respondent did not provide the trial court with any other basis for vacating the judgment.

Facts and Procedural Background

Appellant is a public enterprise fund organized for the purpose of "transacting workers' compensation insurance, and insurance against the expense of defending any suit for serious and willful misconduct, against an employer or his or her agent, and insurance to employees ." (Ins. Code, §§ 11770, 11775.)

On October 25, 1993, respondent, which had procured workers' compensation insurance coverage from appellant from January 1, 1986, through January 1, 1991, filed a complaint against appellant for (1) breach of implied covenant of good faith and fair dealing; (2) negligence; (3) accounting; (4) [49 Cal. App. 4th 1391] breach of contract; (5) declaratory relief; and (6) unlawful, unfair and fraudulent/business practices. Among other things, respondent alleged that appellant's estimate of future costs, known as reserves, caused respondent to pay higher premiums, and would make it more difficult for respondent to obtain workers' compensation insurance elsewhere in the future. Respondent also alleged that appellant's practices permitted it to deny respondent a premium refund, and that appellant committed various breaches of the policy.

On December 10, 1993, appellant demurred to the complaint and made a motion to strike on the ground that respondent had failed to exhaust its administrative remedies. On April 7, 1994, the instant matter was deemed related to a number of other cases brought against appellant by insureds and was reassigned. On August 25, 1994, appellant sought to dismiss all related cases, and that motion was set for hearing on the same day as the demurrer and motion to strike.

The trial court sustained the demurrer without leave to amend on October 7, 1994, relying on P. W. Stephens, Inc. v. State Compensation Ins. Fund (1994) 21 Cal. App. 4th 1833 [27 Cal. Rptr. 2d 107].

A judgment of dismissal was entered on October 28, 1994, and a notice of entry of judgment was served by appellant on November 2, 1994.

However, on October 31, 1994, prior to receiving notice of entry of judgment, respondent filed a motion for reconsideration pursuant to Code of Civil Procedure section 1008, fn. 1 under the primary jurisdiction doctrine as set forth in Farmers Ins. Exchange v. Superior Court (1992) 2 Cal. 4th 377 [6 Cal. Rptr. 2d 487, 826 P.2d 730].

The trial court denied the motion on November 17, 1994, but the minute order reflects that the trial court invited counsel to file a motion to vacate the judgment under section 663. Respondent filed a motion to vacate under section 663 and for relief pursuant to section 473 on December 1, 1994, and incorporated into its motion a case filed on November 21, 1994, Tricor California, Inc. v. State Compensation Ins. Fund (1994) 30 Cal. App. 4th 230 [35 Cal. Rptr. 2d 550], review denied. On January 10, 1995, the matter was continued to March 14, 1995. On March 14, 1995, the trial court granted the motion, vacated the judgment of dismissal, and set the case for trial.

This appeal followed. [49 Cal. App. 4th 1392]

Discussion

1. The Motion for Reconsideration.

Among the grounds upon which a motion for reconsideration under section 1008 can be made are the existence of new or different facts, circumstances, or law. fn. 2 The motion for reconsideration must be made within 10 days after service of written notice of entry of the order. (§ 1008.)

Respondent's motion for reconsideration was based on two grounds: (1) that subsequent to the trial court's ruling that respondent had failed to exhaust its administrative remedies, respondent submitted formal complaints to the Workers' Compensation Insurance Rating Bureau and Department of Insurance, but each agency stated that neither had authority to issue a "right to sue" letter; or alternatively, (2) under Farmers Ins. Exchange v. Superior Court, supra, 2 Cal. 4th 377, 390-391, the matter must be stayed rather than dismissed.

[1] Here, a judgment of dismissal was entered on October 28, 1994, and the notice of entry of judgment was served by appellant on November 2, 1994. Respondent's motion for reconsideration was filed on October 31, 1994, but the minute order, without explanation, states that it was denied as untimely. We assume that the trial court adopted appellant's arguments enunciated in its opposition to the motion for reconsideration which stated that the motion was untimely because the amended notice of ruling on demurrer and motion to strike was served on October 12, 1994. Hence, the motion for reconsideration should have been filed by October 22, 1994, "10 days after service of written notice of entry of the order." Therefore, the trial court's denial of the motion for reconsideration was correct.

2. Section 473 Cannot Be Used to Extendthe Filing Date of a Section 663 Motion.

Following its denial of the motion for reconsideration, the trial court invited respondent to file a timely motion pursuant to section 663. According [49 Cal. App. 4th 1393] to section 663, a judgment may be set aside and vacated by the court if there exists an incorrect or erroneous legal basis for the decision. fn. 3 Section 663a provides, in pertinent part, that the motion must be filed within 15 days of service of written notice of the entry of judgment. fn. 4 The notice of entry of judgment was served by appellant on November 2, 1994; therefore, the motion to vacate the judgment should have been filed on November 17, 1994, 15 days after service of written notice of entry of judgment. Instead, it was filed on December 1, 1994. The trial court granted relief from late filing under section 473.

Source: law.justia.com
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