Set Aside License Discipline Defaults

The Administrative Procedure Act (APA), which governs license discipline for almost all California licensing agencies, requires that the Licensee-Respondent file a Notice of Defense, which is equivalent to an answer, within 15 days after service of the Accusation. (Please note that Code of Civil Procedure section 1013 more than likely applies to the Accusation in an APA proceeding. This would permit an extra 5 days for the filing of a Notice of Defense if the accusation was served by mail. (Pesce v. Department of Alcoholic Beverage Control (1958) 51 Cal.2d 310; Gov. Code § 11505(c) provides that service of APA pleadings shall be proved in the same manner authorized in civil proceedings.)

Default License Discipline

The failure to file a Notice of Defense in the above-referenced time period waives the Licensee-Respondent's right to a hearing. (Gov. Code §§ 11505(a), 11506(c). The agency then may proceed on the matter. (Gov. Code § 11520.) More often than not, this means requesting a default order of discipline against the Respondent-Licensee. Specifically, when the burden of proof is on the Respondent-Licensee to establish that he or she is entitled to the agency action sought, the agency may act without taking evidence.  This is most often the case in license application denials and statement of issues cases. In a proceeding in which the burden of proof is on the agency, such as a disciplinary action, it is contemplated that the agency must base its action on some type of evidence, such as the Licensee-Respondent's admissions or other evidence. Hearsay is sufficient to sustain a decision after a default, and no hearing is required. However, since a default decision must be based on evidence, it can be presumed that findings of fact are required.

Even if the Notice of Defense is filed late – but before the entry of default – the agency will likely disregard the request for a default order, and let the matter be heard on its merits. In fact, the agency or Administrative Law Judge hearing the matter has the discretion to allow a hearing even in the face of default. From the agency's standpoint, the advantage of allowing a notice to be filed, though late, is that it eliminates the possibility of holding a second hearing if the Licensee-Respondent can persuasively demonstrate that he or she failed to file through inadvertence. Yet, in the event the agency wants to move forward with the default, and it contradicts with the wishes of the ALJ, the agency's position prevails.

All of the above does not provide a lot of time for the Licensee-Respondent and/or his counsel to act.  So, they should immediately (1) call the agency or the agency's counsel and ask for permission to file a late Notice of Defense, and (2) file the Notice of Defense regardless of whether permissions is granted.

Motion to Set Aside Default

In event default license discipline is entered, Licensee-Respondents or their attorney should prepare and file a Motion to Set Aside Default immediately, but no later than 7 days after the service of the disciplinary decision based on the default. (Gov. Code § 11520(c).) The motion should be accompanied by a Declaration from the Licensee-Respondent stating the facts resulting in the failure to file a Notice of Defense that establishes "Good Cause" for relief. Good Cause would include, but is not limited to, the following:

  • Failure of respondent to receive notice served under Government Code section 11505
  • Mistake, inadvertence, surprise, or excusable neglect.

The Notice of Defense should also be attached. The agency, again, has discretion to deny the relief from default, especially when the request is not accompanied by affidavits or declarations establishing lack of notice, mistake, or another ground for relief. (See Evans v. DMV (1994) 21 Cal.App.4th 958, 973.)

If the agency refuses to grant the respondent's request or motion to set aside the default, the Licensee-Respondent's next step is to either petition for reconsideration or rehearing, or to seek protection from the courts by filing a writ of mandate, alleging an abuse of discretion under Code of Civil Procedure § 1094.5.