DEFAULT DENIED IN GUNFIGHT SUIT; CITY CRITICIZED FOR MISSED DEADLINE.

Byline: Patrick McGreevy Daily News Staff Writer

A federal judge refused Monday to declare the city in default for failing to meet a deadline in a lawsuit brought by the family of a bank robber killed during February's North Hollywood shootout.

In issuing her ruling, U.S. District Court Judge Kim Wardlaw criticized the Los Angeles City Attorney's Office and said she might even consider sanctions.

But Wardlaw said ruling against the city on a technicality would be inappropriate because the facts of the lawsuit are too much in dispute and the potential damages of $2.7 million are too great.

``This case is very hotly contested,'' Wardlaw said. ``The amount of money is very large, which weighs against granting the motion.''

Wardlaw's ruling clears the way for a trial on the lawsuit brought on behalf of two children of gunman Emil Matasareanu. The suit contends that police allowed Matasareanu to bleed to death after a shootout during a botched bank robbery in February.

Matasareanu was one of two robbers who held police at bay with automatic weapons, injuring 11 officers and six civilians before he and his accomplice died in a violent shootout in a residential neighborhood.

``We believe that when we get to the merits of the case, the city will prevail,'' Senior Assistant City Attorney Don Vincent said after the judge's decision.

Steven Yagman, an attorney representing Matasareanu's children, said a trial date in October 1998 has been set, but he is ready to go to trial now.

Yagman was disappointed with Wardlaw's ruling.

The decision was a sticky one for Wardlaw. Mayor Richard Riordan is the godfather to Wardlaw's children. Wardlaw's husband, Bill, is Riordan's closest political adviser.

``If Judge Wardlaw hadn't assured us she would be impartial, her ruling would lead me to believe that her relationship with Mayor Riordan is more than platonic,'' Yagman said in an interview after the court session.

At one point in the hearing, Yagman accused Wardlaw of wanting the case ``swept away'' quickly.

``Don't make erroneous assumptions,'' Wardlaw responded.

However, her harshest words were for representatives of the City Attorney's Office, citing ``excusable neglect and mistake'' in asking the judge to set aside a court clerk's ``entry of default'' in the case.

A default would have prevented the city from arguing its case and would have set the stage for the awarding of large damages against the city.

Wardlaw was sharply critical of Deputy City Attorney Suzanne Tom, who said in a declaration that she forgot to calendar a date for submitting the city's answer.

``I must say this is the most pathetic grounds for an excuse for failing to comply,'' Wardlaw said.

However, she also refused to approve a motion for summary judgment that would have declared that the police denied Matasareanu medical treatment.

The police contend they did not allow an ambulance crew to examine Matasareanu for a couple of hours to ensure no other armed suspects were in the area and that Matasareanu was not booby-trapped with a bomb.

The judge also allowed the city to file a cross complaint seeking reimbursement for the damages done to North Hollywood by the two gunmen.