Shapell Socal Rental Properties, LLC v. Chico’s FAS, Inc.

Summary

The California Court of Appeal held that the trial court abused its discretion by denying Chico’s FAS, Inc.’s motion to set aside an unlawful detainer default and default judgment. The court emphasized counsel’s ethical and statutory obligations to notify known opposing counsel before seeking a default, and concluded that the appeal was not moot because restitutionary relief could remain available. The judgment was reversed and the matter remanded.

Holdings

1. The appeal was not moot because the Court of Appeal could grant effective relief, including restitution under Code of Civil Procedure section 908, monetary compensation for property rights not restored, or potentially restoration of possession.
2. When opposing counsel’s identity is known, an attorney has an ethical obligation and a statutory-policy obligation under Code of Civil Procedure section 583.130 to warn opposing counsel of the intent to seek entry of default and default judgment and provide a reasonable opportunity to respond.
3. The trial court abused its discretion by denying Chico’s motion to set aside the default and default judgment.
4. The case was required to be assigned to a different superior court judge on remand.

Questions Presented

1. Whether the appeal was moot after Chico’s relinquished possession of the leased premises and Shapell allegedly relet the property.
2. Whether the trial court abused its discretion by denying Chico’s motion to set aside the default and default judgment under Code of Civil Procedure sections 473(b) and 473.5.
3. Whether Shapell’s counsel’s failure to warn known opposing counsel of the intent to seek default and default judgment, together with the manner of service and other circumstances, supported relief from default.
4. Whether the case should be reassigned to a different superior court judge on remand.

Disposition

reversed_and_remanded