Navarro v. Arriaza

Filed 9/19/07 Navarro v. Arriaza CA4/2

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FOURTH APPELLATE DISTRICT

DIVISION TWO

APPEAL from the Superior Court of San Bernardino County. Paul M. Bryant, Jr., Judge. Reversed with directions.

Law Offices of Fernando D. Vargas, Fernando D. Vargas and Lawrence M. Lebowsky for Plaintiffs and Appellants.

Wood, Smith, Henning & Berman, Kevin D. Smith and Nicholas M. Gedo for Defendants and Respondents Eugene John Ruggiero and Top West End, Inc.

Bonnie R. Moss & Associates and Bradley R. Blamires for Defendant and Respondent, Susan Otero.

Gates, ODoherty, Gonter & Guy, Peter J. Gates and Thomas A. Scutti for Defendant and Respondent Mark S. Arriaza.

Plaintiffs and appellants Diana Sanchez Navarro, Fernando Torres, Josefina Torres-Martinez, and Maria Aldana (plaintiffs) appeal an order of dismissal of their complaint against defendants and respondents Mark Arriaza, Susan Otero, Eugene John Ruggiero, and Top West End, Inc. (defendants). Plaintiffs action arises from a serious, multi-vehicle automobile accident in which three vehicles collided and plaintiffs sustained severe injuries.

Plaintiffs contend the trial court erred in dismissing their complaint and denying their motions to vacate or set aside the dismissal. Plaintiffs argue the trial court did not have authority to dismiss their action under Code of Civil Procedure section 583.420^[1]for delay in prosecution because the action had not been pending for at least two years when it was dismissed. Also, under section 575.2, plaintiffs complaint could not be dismissed due to their attorney failing to attend court proceedings. In addition, plaintiffs argue the trial court erred in denying their section 473 motions based on the six-month limitation period since their motion was timely filed.

We conclude that under section 583.420, subdivision (a)(1)(B) and 575.2, subdivision (b), the trial court did not have authority to dismiss plaintiffs complaint. In light of this determination, we need not address the trial courts ruling on plaintiffs section 473 motions. The order of dismissal is reversed.

1. Factual and Procedural Background

On September 18, 2001, plaintiffs filed a personal injury complaint against defendants. Other lawsuits and cross-complaints relating to the underlying vehicle accident were also filed by the parties to the instant action and others. The actions were consolidated. There were 11 parties and at least 10 law firms involved.

On April 11, 2003, plaintiffs attorney, Fernando D. Vargas, failed to appear at a case management conference (CMC). As a consequence, the trial court issued an order to show cause (OSC) re dismissal, with a hearing date set on July 18, 2003. Notice was served on plaintiffs through Vargas.

Vargas failed to appear at the OSC re dismissal hearing on July 18, 2003. The trial court dismissed plaintiffs action without stating any specific grounds or legal authority for doing so. The trial courts minute order dated July 18, 2003, stated the court dismissed plaintiffs action on the courts own motion for failure to prosecute. Notice was served on plaintiffs through Vargas.

On February 2, 2004, Vargas filed on plaintiffs behalf a motion to vacate or set aside the July 18, 2003, order of dismissal under section 473, subdivision (b). Plaintiffs asserted that their case was dismissed due to their attorneys excusable neglect. Vargass supporting declaration stated that he failed to attend the CMC and OSC hearing due to (1) relying on an archaic, ineffective calendaring system, (2) one of his assistants being out on pregnancy leave, (3) suffering a serious fall, resulting in Vargas undergoing emergency surgery and not being able to work until November 25, 2003. Vargas claimed he did not discover plaintiffs case had been dismissed until January 30, 2004, when defense counsel called and told him that plaintiffs case had been dismissed.

On February 17, 2004, Vargas filed a supplemental declaration stating that he discovered, after auditing his litigation files on February 10, 2004, that his senior litigation secretary had been sabotaging his business by hiding and destroying client documents, falsely telling Vargas depositions were cancelled, destroying copies of opposing motions, and scheduling court hearings and then deleting the hearing dates from the calendar. As a consequence, over 30 of Vargass cases had been dismissed.

At the initial hearing on plaintiffs section 473 motion on April 5, 2004, the trial court judge noted that, under Garcia v. McCutchen (1997) 16 Cal.4th 469 (Garcia),and section 575.2, the court should not have dismissed plaintiffs action but rather should have imposed sanctions on Vargas for failing to appear at the CMC and OSC dismissal hearing. Defense counsel requested an opportunity to file supplemental briefing on the matter since the parties had not addressed the issue. The trial court continued the hearing to June 1, 2004.

On June 1, 2004, after hearing oral argument and considering supplemental briefing on Garcia and section 575.2, the trial court denied plaintiffs motion to vacate dismissal of their complaint. At the hearing, defense counsel argued plaintiffs complaint was appropriately dismissed for failure to prosecute. Vargas disagreed, arguing the action had not been pending long enough to dismiss based on a failure to prosecute. Vargas argued the action was dismissed due to his nonappearance at the CMC and OSC hearing and therefore plaintiffs motion to vacate should be granted.

On July 16, 2004, plaintiffs filed a notice of appeal of the June 1, 2004, order. This court dismissed the appeal on the ground the appeal was premature since a judgment of dismissal of the action had not been filed. ( 581d.) This court noted in its order dismissing the appeal that The [July 18, 2003] order of dismissal is not void, but merely preliminary to a final order.

After the matter was remanded to the trial court, plaintiffs filed a second motion to set aside and vacate the July 18, 2003, order of dismissal under section 473, subdivision (d). Plaintiffs argued the July 18, 2003, order of dismissal was void because the case was dismissed for failure to prosecute under section 583.420 whereas the case had been pending for less than two years.

On October 6, 2005, the trial court denied plaintiffs second motion to vacate the dismissal on the ground the motion was in essence an improper motion for reconsideration of the plaintiffs previous motion to vacate and the courts ruling on June 1, 2004.

On February 1, 2006, the trial court entered an order of dismissal, dismissing plaintiffs action on the grounds stated in the July 18, 2003, minute order. The July 18, 2003, minute order stated the trial court dismissed plaintiffs complaint on the trial courts own motion for failure to prosecute.

In March 2006, plaintiffs filed a notice of appeal from the February 1, 2006, order of dismissal.

2. Dismissal

Plaintiffs contend the trial court abused its discretion in dismissing his complaint for delay in prosecution under section 583.420 because the trial court dismissed it less than two years after it was filed. Plaintiffs also argue the trial court was precluded under section 575.2, subdivision (b) from dismissing their complaint based on their attorneys failure to appear at the CMC and OSC dismissal hearing. The grounds for dismissal of plaintiffs complaint are unclear since the trial court did not cite any legal authority in its OSC hearing notice or in its other minute orders on the matter. Such ambiguity is inconsequential, however, since the trial court did not have authority to dismiss plaintiffs complaint for either lack of prosecution or noncompliance with local rules.

Section 583.420, subdivision (a)(2)(B) provides that a complaint cannot be dismissed for delay in prosecution unless the action has been pending for at least two years. Section 583.420 provides in relevant part: (a) The court may not dismiss an action pursuant to this article for delay in prosecution except after one of the following conditions has occurred: [] . . . [] (2) The action is not brought to trial within the following times: [] . . . [] (B) Two years after the action is commenced against the defendant if the Judicial Council by rule adopted pursuant to Section 583.410 so prescribes for the court because of the condition of the court calendar or for other reasons affecting the conduct of litigation or the administration of justice.

We agree the trial court did not have authority to dismiss plaintiffs complaint for lack of prosecution under sections 583.410 and 583.420 since the case had not been pending for at least two years when the court dismissed the case. (Roman v. Usary Tire & Service Center (1994) 29 Cal.App.4th 1422, 1431.) Plaintiffs filed their complaint on September 18, 2001, and the court dismissed it on July 18, 2003, less than two years after plaintiffs filed their complaint.

Plaintiffs also argue the trial court was barred from dismissing plaintiffs action under section 575.2, subdivision (b). Section 575.2, subdivision (a) authorizes the trial court to impose sanctions, including dismissal, for violating local rules designed to expedite and facilitate the business of the court. Subdivision (b) of section 575.2, however, provides an exception to dismissal under subdivision (a) of section 575.2. Subdivision (b) provides: It is the intent of the Legislature that if a failure to comply with these rules is the responsibility of counsel and not of the party, any penalty shall be imposed on counsel and shall not adversely affect the partys cause of action or defense thereto.

According to Vargass declaration supporting plaintiffs motion to vacate the dismissal, Vargas was responsible for the court dismissing plaintiffs complaint. Vargas claimed he was at fault for not appearing at the CMC and at the OSC dismissal hearing.

Defendants Ruggiero and Top West End, Inc. acknowledge in the respondents brief that the dismissal was entered pursuant to section 575.2 but argue that plaintiffs were, in part, personally responsible for the dismissal because they sat on their hands for practically two years without seeing to it that any affirmative steps were taken on their behalf to advance their case.

This is not a sufficient basis for holding plaintiffs responsible for dismissal of their action. (Daley v. County of Butte (1964) 227 Cal.App.2d 380, 392.) There is no evidence that plaintiffs were responsible in any way for plaintiffs or their attorney not appearing at the CMC and OSC hearing. Defendants have not provided any evidence the plaintiffs had actual notice of the proceedings or of their attorneys failure to appear. Under section 575.2, subdivision (b), the trial court thus did not have authority to dismiss plaintiffs complaint based on Vargass failure to attend the CMC and OSC hearing.

In Garcia, supra, 16 Cal.4th 469, the California Supreme Court addressed the issue of whether the trial court had the power to dismiss an action for noncompliance with local court rules implementing the Trial Court Delay Reduction Act. In Garcia, the trial court set sua sponte a motion to dismiss the plaintiffs complaint due to plaintiffs attorneys failure to attend a status hearing, serve and file a status hearing declaration, and file an at-issue memorandum. The plaintiff did not appear at the hearing on the courts motion to dismiss. As a consequence, the court dismissed the plaintiffs complaint. The Court of Appeal reversed the dismissal under section 575.2, subdivision (b). The California Supreme Court in Garcia held that a court may not dismiss an action for noncompliance with local court rules implementing the Trial Court Delay Reduction Act if noncompliance is the responsibility of counsel, not of the litigant. (Garcia, supra, 16 Cal.4th at p. 471.)

In reaching this holding, the court in Garcia explained that, in establishing delay reduction programs, the Legislature recognized competing public policy considerations and attempt[ed] to balance the need for expeditious processing of civil matters with the rights of individual litigants. (Garcia, supra, 16 Cal.4th at p. 480.) The Garcia court further noted section 575.2, subdivision (b) would not leave the trial courts without the power to control their calendars since there are numerous other provisions promoting calendar control. (Garcia, supra, at p. 481.) In addition, preclusion of lawsuits under section 575.2, subdivision (b) avoided a proliferation of malpractice suits. (Garcia, supra, at p. 481.)

The Garcia court concluded that, Nothing in either the statutory language or the legislative history of the [Trial Court Delay Reduction] Act reflects a legislative intent to override section 575.2(b)s limits on a courts sanctioning powers or to give courts expanded dismissal powers with respect to fast track rules. Instead, the words the Legislature chose reflect a contrary intent, i.e., to give courts only those sanctioning powers authorized by law. (Gov. Code, 68608(b).) We are not persuaded the Legislature would have silently, or at best obscurely, decided so important . . . a public policy matter and created a significant departure from the existing law. [Citation.] (Garcia, supra, 16 Cal.4th at pp. 481-482.)

In a footnote, the court in Garcia responded to the plaintiffs argument that the trial court had inherent authority to dismiss cases for violating trial court orders: Obvious reasons of fairness militate against our considering this poorly developed and untimely argument. [Citations.] This is especially true here, given the statutes we have discussed that specify the courts sanctioning options. (See Tide Water Assoc. Oil Co. v. Superior Court (1955) 43 Cal.2d 815, 825 [courts inherent power may be reasonably limited by statute].) (Garcia, supra, 16 Cal.4th at p. 482, fn. 10.)

Defendants contention that section 583.150 provided the trial court with inherent authority to dismiss plaintiffs action fails for the same reasons stated in Garcia. Allowing such a dismissal based on a finding of inherent power would conflict with section 575.2, subdivision (b), which expressly states the trial court cannot dismiss an action based solely on attorney violations of local rules. Such a dismissal based on failure to prosecute would also conflict with sections 583.410 and 583.420.

The section 583.150 Law Revision Commission Comments state that, Section 583.150 makes clear that although this chapter is by its terms limited in scope, it does not affect other law or authority relating to delay in prosecution. . . . Inherent authority of the court may not be exercised contrary to statute . . . . ( 583.150 Cal. Law Revision Com. com.; 17 Cal.L.Rev.Comm. Reports 905 (1984).)

Defendants have failed to cite any legal authority authorizing the trial court to dismiss plaintiffs complaint in the face of statutes expressly prohibiting dismissal under the circumstances in the instant case. Furthermore, as noted in Lyons v. Wickhorst (1986) 42 Cal.3d 911, 916, The courts have long recognized a policy favoring a trial on the merits. [Citation.] As the courts of this state have stressed, [a]lthough a defendant is entitled to the weight of the policy underlying the dismissal statute, which seeks to prevent unreasonable delays in litigation, the policy is less powerful than that which seeks to dispose of litigation on the merits rather than on procedural grounds. [Citations.] In sum, although the discretionary power to dismiss with prejudice has been upheld in this state, its use has been tightly circumscribed.

Here, statutory restrictions circumscribed the trial courts inherent discretionary power to dismiss. ( 575.1, 575.2, 583.410, 583.420.) Since the trial court did not have authority to dismiss plaintiffs complaint under sections 575.1, 575.2, 583.410, and 583.420, the trial courts ruling on July 18, 2003, and order of dismissal entered on February 1, 2006, are void as a matter of law.

Tliche v. Van Quathem (1998)66 Cal.App.4th 1054 (Tliche), a decision which none of the parties in the instant case address, is directly on point. In Tliche, the trial court issued an OSC for failure to comply with local fast track rules requiring service of the complaint within 60 days of its filing and for failing to prosecute the case under section 583.420. The plaintiffs attorney failed to appear at the OSC hearing. The trial court dismissed the plaintiffs action, without stating in the minute order any local rule or statute as authority for the dismissal.

Approximately five months after the dismissal, the plaintiffs attorney filed a section 473 motion to vacate the dismissal on the ground the plaintiffs attorney was unable to attend the OSC hearing due to attending a conflicting appearance in another court. The trial court denied the motion without prejudice on the ground the action was not dismissed due to plaintiffs attorneys failure to appear. The case was dismissed due to noncompliance with the local rule requiring service of the complaint within 60 days. The plaintiffs attorney filed a second section 473 motion seeking to set aside the dismissal, which the trial court denied on the ground the motion was not filed within six months of the date of dismissal.

The plaintiff appealed, arguing the dismissal for violation of a local rule was improper since violation was the plaintiffs attorneys fault; the court was required to grant the plaintiffs section 473 motion and vacate the dismissal based on the plaintiffs attorneys supporting declaration of fault; and the trial court could not dismiss the case for delay in prosecution because the case had been pending for less than two years.

In holding the trial court erred in dismissing the plaintiffs case, the Tliche court explained that in Garcia, a court may not dismiss an action for noncompliance with local court rules implementing the [Trial Court Delay Reduction] Act, if the noncompliance is the responsibility of counsel, not the litigant. (Tliche, supra, 66 Cal.App.4th at p. 1061.) Because there was no evidence in the record that the client was in any way responsible for the delay in service of the complaint, the Tliche court held the order of dismissal must be reversed as unauthorized under section 575.2. (Tliche, supra, at p. 1062.)

The Tliche court further noted that the complaint could not be dismissed for failure to prosecute under section 583.420 because the complaint was dismissed for a local fast track rule violation. Therefore the dismissal limitations set forth in section 575.2 took precedence over other statutory authority, such as section 583.420, as well as any inherent authority to dismiss, and thus precluded dismissal since the local rule violation was the fault of the attorney, not the client. (Tliche, supra, 66 Cal.App.4th at p. 1063.)

As to the plaintiffs contention in Tliche that the trial court erred in denying his section 473 motions, the Tliche court stated: In light of our finding that the initial order of dismissal was invalid, the propriety of the trial courts rulings on Tliches subsequent motions to vacate the order of dismissal is no longer pertinent. . . . Tliche, the client, should not lose his action through the trial courts error in ordering dismissal, which error was compounded by Tliches own counsels failure to challenge the order effectively. (Tliche, supra, 66 Cal.App.4that pp. 1063-1064.)

In the instant case, although it is unclear as to whether the trial court dismissed plaintiffs action on July 18, 2003, based on noncompliance with a local rule or due to failure to prosecute under section 583.420, or based on both grounds, dismissal based on any of these reasons was improper and requires reversal of the dismissal. Also, as in Tliche, [i]n light of our finding that the initial order of dismissal was invalid, the propriety of the trial courts rulings on [plaintiffs] subsequent motions to vacate the order of dismissal is no longer pertinent. (Tliche, supra, 66 Cal.App.4th at p. 1063.) The July 18, 2003, order of dismissal and subsequent order of dismissal executed on February 1, 2006, were improper. Accordingly, we reverse the judgment of dismissal.

Although we reverse the dismissal of this action, we cannot help but observe that counsel apparently paid little attention to the activities of his own office. He admits that his calendaring system was archaic and ineffective. He also apparently paid so little attention to the operation of his office that a secretary could not only sabotage his business but could be responsible for the dismissal of over 30 cases. As a result of the apparent failure to properly oversee the work of his employees, not only was this action dismissed but the failure had significant ramifications for decisions made by other parties named in the lawsuit. We assume counsel will take all action necessary to prevent such conduct in the future.

3. Disposition

The February 1, 2006, order of dismissal and underlying July 18, 2003, ruling dismissing the plaintiffs action are reversed. The case is remanded to the trial court with directions to vacate the orders of dismissal on July 18, 2003, and February 1, 2006. Due to the reprehensible nature of Vargass conduct, which likely will result in disrupting settlement of this case and prolonging litigation, thereby causing the parties to incur additional expenses and emotional turmoil, we direct the trial court to order Vargas to pay reasonable compensatory legal fees and costs to opposing counsel and/or the parties pursuant to section 473, subdivision (b). The trial court is also urged to exercise its discretion in imposing sanctions and/or other relief under subdivision (c) of section 473. Plaintiffs counsel is to bear all parties costs of appeal.

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

s/Gaut

J.

We concur:

s/Hollenhorst

Acting P. J.

s/Richli

J.

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^[1] Unless otherwise noted, all statutory references are to the Code of Civil Procedure.