## Facts

- Corsair, LLC developed a California real estate project known as Gran Plaza Outlets.
- In December 2011, Corsair hired Martin Potts & Associates, Inc. (MPA) to provide project management services.
- Corsair allegedly stopped paying MPA in August 2013.
- In February 2014, MPA sued Corsair for unpaid amounts, alleging account stated, open book account, and breach of contract.
- Corsair’s managing member received the complaint and other filings and directed an assistant to forward them to Corsair’s long-time attorney, Nicholas Klein.
- Klein received the pleadings but took no action to respond to the lawsuit.
- The court entered default on March 25, 2014, and default judgment on August 15, 2014, awarding MPA $101,760.
- Corsair moved on October 1, 2014, to set aside the default and default judgment under Cal. Civ. Proc. Code § 473(b), relying on Klein’s sworn affidavits admitting fault and asserting his failures caused the default.
- Klein’s affidavits accepted responsibility for the default but did not disclose why he failed to act.

## Issues

1. Under the mandatory attorney-fault provision of Cal. Civ. Proc. Code § 473(b), must an attorney’s affidavit explain the reasons for the mistake, inadvertence, surprise, or neglect, or is an admission of fault and causation sufficient?

## Decision

- The Court of Appeal affirmed the order vacating the default and default judgment.
- The court held that § 473(b)’s mandatory provision does not require an attorney affidavit to state the reasons for the attorney’s error.
- The court concluded Klein’s sworn admission of neglect and causation provided sufficient evidentiary support for mandatory relief.
- The court upheld the trial court’s factual finding that attorney fault, rather than client conduct, caused the default.

## Legal Principles

- Cal. Civ. Proc. Code § 473(b) contains a discretionary relief provision and a mandatory relief provision for defaults, default judgments, and dismissals caused “in fact” by attorney mistake, inadvertence, surprise, or neglect.
- For mandatory relief, an attorney’s sworn affidavit must attest to (1) counsel’s mistake, inadvertence, surprise, or neglect and (2) causation of the default or default judgment; it need not explain why counsel erred.
- “Neglect” includes failing to give proper attention to litigation papers received by counsel, including doing nothing after receipt of a complaint.
- Under the mandatory attorney-fault provision, whether counsel’s neglect was excusable is not determinative; the key statutory inquiry is factual causation.
- Causation is a fact question for the trial court, and an appellate court will not disturb that finding if supported by substantial evidence.

## Conclusion

The court held that mandatory relief from default under § 473(b) turns on an attorney’s sworn admission of fault and proof that the attorney’s conduct caused the default; the statute does not impose an additional requirement that counsel disclose the reasons for the failure to act.


Martin Potts & Assocs., Inc. v. Corsair, LLC, 244 Cal. App. 4th 432 (Ct. App. 2d Dist. 2016)