Rogalski

Nabers Cadillac and Richard Nabers (collectively Nabers unless otherwise indicated) appeal a default judgment entered against them in favor of Robert Rogalski for $500,000 in compensatory damages and $58,299.90 in attorney fees and costs. Nabers contends the trial court abused its discretion when it refused to set aside their defaults. (Code Civ. Proc., § 473.) We agree and reverse.

Rogalski filed a complaint against Nabers and its employee Sam Snead, alleging age discrimination in violation of Government Code section 12941, breach of contract, breach of implied covenant of good faith and fair dealing and wrongful termination. The gravamen of Rogalski’s complaint was that he had been continuously employed by Nabers since 1967 and was fired in 1990 solely because of his age, 55 years at the time. He sought damages in excess of $500,000, punitive damages, attorney fees and costs.

Rogalski’s complaint was served on all defendants on May 20, 1991. Stanley Mashita, Nabers’s chief financial officer, contacted Nabers’s insurance broker, Terry Cressman, who indicated the complaint was covered by Nabers’s insurance policy with Golden Eagle Insurance Company. Cressman sent the…