Generale Bank Nederland, N v. v. Eyes of Beholder Ltd.

— Plaintiffs Generale Bank Nederland, N.V. and EBD (Rotterdam) Finance B.V. (hereinafter referred to collectively as Bank) appeal from a May 7, 1997, order denying Bank’s motion pursuant to Code of Civil Procedure section 473 (hereinafter section 473) to set aside judgment denying its third party claim of a superior interest or lien in the assets of debtor Vision International, Inc. The principal appellate issues are whether the trial court erred in failing to grant relief to Bank under the mandatory “attorney affidavit of fault” provision of section 473, or under the discretionary provisions of that statute.

Factual and Procedural Background

In an underlying action filed in October 1995, David Henderson and Eyes of the Beholder Ltd. (the latter referred to herein as Henderson) sued Vision International, Inc. (VI) for breach of a production/distribution agreement, claiming VI refused to pay to Henderson the investment and profit participation in a motion picture entitled “Eyes of the Beholder.” Under the agreement, Henderson had produced the motion picture and delivered it to VI for distribution; according to Henderson, Vi’s own documentation indicated that as of June…