Juan Salazar-Merino pled guilty to “using a false document to conceal his . . . true citizenship or resident alien status” in violation of Penal Code section 114, and was sentenced to five years in state prison, with probation denied.[1]  Appellant contends on appeal that:  (1) his trial counsel rendered ineffective assistance by recommending a guilty plea without advising him of a possible defense to the charge; (2) section 114 is unconstitutional as applied to appellant because it failed to give adequate notice that the conduct in which he engaged violated the statute; (3) the area of conduct covered by section 114 is preempted by federal law; (4) section 114 is unconstitutional because it is not severable from the other provisions of Proposition 187, which were ruled unconstitutional; (5) section 114 violates substantive due process because it is not reasonably related to a proper legislative goal; (6) appellant’s sentence to five years in state prison constitutes cruel and unusual punishment; and (7) in denying appellant probation, the trial court failed to exercise its discretion, abused that discretion and/or violated appellant’s rights to due process and/or equal protection.[2]  In his consolidated petition for writ of habeas corpus, appellant reiterates his first, second and fourth arguments from his direct appeal. 

            We grant appellant’s petition for writ of habeas corpus on the ground that his counsel rendered ineffective assistance by failing to advise him of a potentially meritorious defense in the case.  We also address appellant’s second, third, fourth and fifth arguments on direct appeal and uphold the constitutionality of section 114 in guidance to the trial court on remand.  We do not address the sixth and seventh issues raised on direct appeal, as they are unnecessary to our disposition of the case.

 A jury found that Motor Sound Corporation (Motor Sound) committed fraud in inducing Zaxis Wireless Communications, Inc. (Zaxis) to remain as its subagent in selling wireless services.  Zaxis was awarded $190,000 in compensatory damages.  In a bifurcated proceeding the jury awarded Zaxis $300,000 in punitive damages.

     Motor Sound does not contest the finding of fraud, the magnitude of harm to the plaintiff or the amount of compensatory damages.  Its sole claim is the punitive damages award was excessive as a matter of law because it lacked the ability to pay by reason of a negative net worth of $6.3 million.  The net worth was calculated inter alia by deducting a $6 million note to the sole owner of the corporation and $4.9 million of accumulated depreciation.

     Motor Sound operates a substantial business.  It had average annual revenues for 1997, 1998 and 1999 in excess of a quarter billion dollars but suffered a net loss, after allowing for depreciation and amortization, of $2.5 million in 1998 and $800,000 in 1999.  During this period it had a $50 million line of credit with Wells Fargo Bank.

     We conclude that Motor Sound had the ability to pay the $300,000 punitive damage award.

     We will affirm the judgment.

http://www.courtinfo.ca.gov

 The demurrers of defendants and respondents Health Industries of America, Inc., et al.[1] (defendants) to the third amended complaint of plaintiffs and appellants William Leader and Leader Psychiatric Medical Group (plaintiffs) were sustained with leave to amend.  Plaintiffs did not file a fourth amended complaint within the time specified by the court.  More than a month later plaintiffs’ counsel arrived at a status conference with a proposed fourth amended complaint.  The trial court advised counsel plaintiffs would be required to make a motion for leave before the amended complaint would be accepted for filing.

            Plaintiffs moved for leave to file the amended pleading, relying on the provision of Code of Civil Procedure section 473, subdivision (b)[2] that mandates relief for dismissals entered as a result of an attorney’s “mistake, inadvertence, surprise or neglect.”  (§ 473, subd. (b).)  Counsel declared the amended complaint had not been timely filed because he had misplaced client documents containing information necessary to remedy the pleading deficiencies which led to the sustaining of the demurrers.  Counsel considered it “futile” to ask for more time to plead if he could not be sure he would find those materials.

            Defendants opposed the motion and simultaneously moved to strike the proposed pleading and dismiss the action for failure to amend within the time allowed after the sustaining of a demurrer.  (§ 581, subd. (f)(2).)  The trial court granted defendants’ motions and ordered the action dismissed.

            On appeal, plaintiffs contend section 473’s mandatory relief provision required that they be allowed to file an amended complaint, and precluded dismissal of the action.  We disagree.  The mandatory relief provision is not applicable under these circumstances.  Accordingly, the judgment will be affirmed.

http://www.courtinfo.ca.gov