Barth v. >Amer.> >River> HealthPro
Credit Union















Filed 3/14/13 Barth v. Amer. River HealthPro Credit Union CA3













NOT TO BE PUBLISHED









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opinion has not been certified for publication or ordered published for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

THIRD APPELLATE
DISTRICT

(Sacramento)

----






>

ROBERTA L. BARTH, Plaintiff and Appellant, v. AMERICAN RIVER HEALTHPRO CREDIT UNION, Defendant and Respondent.

C067717 (Super. Ct. No. 07AS04796)

name="_BA_ScanRange">Plaintiff Roberta L. Barth appeals from a judgment dismissing
with prejudice her action against defendant American River HealthPro Credit
Union and unnamed “Doe” defendants based on Barth’s delay in prosecuting the
action (
ADDIN BA xc <@st> xl 34 s ZOKPBC000001 xpl 1 l "Code Civ. Proc., § 583.410 et seq." Code Civ. Proc., § 583.410 et seq.).href="#_ftn1" name="_ftnref1" title="">[1] On
appeal, Barth contends the trial court lacked authority to dismiss the action
with prejudice, and abused its discretion in granting the href="http://www.fearnotlaw.com/">motion
to dismiss because she made a credible showing of
excuse for failing to serve the complaint until nearly three years had passed,
because American River HealthPro Credit Union was not prejudiced. The first contention has merit: under these circumstances, the applicable
statutes only allow a dismissal “without prejudice.” ( ADDIN BA xc <@osdv> xl 29 s
ZOKPBC000020 xpl 1 l "§§ 581, subd. (b)(4),
583.410" §§ 581, subd. (b)(4), 583.410.) We reverse the judgment and modify the order
of dismissal.

BACKGROUND

On October 22,
2007, Barth (in pro se) filed a complaint alleging causes of action (among
others) for fraud and deceit, breach of contract,
misrepresentation, unfair business practice, abuse of process, constructive
trust, and negligence. All
of Barth’s claims arise from American River HealthPro Credit Union’s alleged
wrongful foreclosure of her Fair Oaks home.


In April 2008, the trial court sent
Barth a notice of case management conference and order to appear. Barth responded by letter that, until
recently, she lacked funds necessary to proceed with the litigation, but now “I
will serve the defendants and determine what I need to file with the court to
get this case on track . . . .”

In October 2008, attorney Ronald L.
Melluish filed a case management statement on Barth’s behalf. Melluish reported that the defendant had not
been served because “pro per plaintiff unable to serve” and he had “just subbed
in. The complaint needs to be
amended. I took the case because this
plaintiff does make out a case for a very wrongful foreclosure. [¶] I
would ask the court’s indulgence in setting the matter over at least 60 days to
another [case management conference], during which time I might complete the
amended comp[laint] and send it out for service.”

American River HealthPro Credit
Union merged into SAFE Credit Union (SAFE) on July 1, 2009; as a result,
American River HealthPro Credit Union ceased to exist.

The complaint was never
amended. Barth served American River HealthPro
Credit Union with the original complaint and an amended summons on October 20,
2010.

SAFE moved to dismiss the complaint
with prejudice, on the ground Barth failed to serve defendant within two years
after the action was commenced ( ADDIN BA xc <@osdv> xl 23 s
ZOKPBC000021 xpl 1 l "§ 583.420, subd. (a)(1)"
§ 583.420, subd. (a)(1)), and failed to
bring the case to trial within two years of filing it ( ADDIN BA xc <@osdv> xl 26 s
ZOKPBC000022 xpl 1 l "§ 583.420, subd.
(a)(2)(B)" § 583.420, subd. (a)(2)(B)). It argued that Barth had done nothing to
prosecute her action, in that she has propounded no discovery, noticed no
depositions, and filed “no papers of any kind” for the past 36 months. Barth has no reasonable excuse for her delay,
SAFE argued, and it would be unduly burdensome now for SAFE to locate employees
of American River Health Pro Credit Union and, in any event, memories will have
faded in the interim.

Barth filed a memorandum in
opposition to the motion to dismiss, arguing she had a reasonable excuse for
delay in prosecuting her action in 2009 and 2010: she could not afford to pay counsel. SAFE will suffer no prejudice from the delay
or the ensuing merger, Barth responded, because this case is “document heavy,”
not “overly dependent on witnesses,” and, in any event, some former American
River HealthPro Credit Union employees are still employed by SAFE.

In support of her opposition, Barth
submitted a belated declaration in which she averred defendant was aware of the
action before service because she made many attempts at settlement before
filing. Barth also suggested she had
reasonable excuses for her failure to prosecute: “throughout the last year and prior” she was
occupied with caring for two ill brothers; between April and December 2009 she
was unemployed; and in December 2009 she suffered an injury and began receiving
disability benefits.

Following a hearing at which both
parties appeared by counsel, the trial court granted the motion. ADDIN
BA xc <@rec> xl 32 s ZOKPBC000024 xpl 1 l "(RT 18, Respondent’s Appendix 1)" It found “nothing” had happened in the case
between October 2007 and October 2010 and there was no excuse for the delay as
Barth never claimed she attempted to serve American River HealthPro Credit
Union or experienced difficulty doing so, and her family difficulties occurred
while she was represented, when counsel could undertake service. Weighing the equities, the court also
concluded defendant would be prejudiced by allowing the case to proceed after
Barth’s delay because witnesses’ memories will have faded.

DISCUSSION

I

General
Legal Principles and Standard of Review

As relevant
here, a trial court has discretion to dismiss an action for “delay in
prosecution” (
ADDIN BA xc <@osdv> xl 20 s ZOKPBC000025 xpl 1 l "§ 583.410, subd. (a)" § 583.410, subd. (a))href="#_ftn2" name="_ftnref2" title="">[2] when service is not made within two years
after the action is commenced against the defendant ( ADDIN BA xc <@$osdv> xl 23 s
ZOKPBC000021 xpl 1 § 583.420, subd. (a)(1)), or the action is
not brought to trial within two years after it is commenced. ( ADDIN BA xc <@$osdv> xl 26 s
ZOKPBC000022 xpl 1 § 583.420, subd. (a)(2)(B).)href="#_ftn3" name="_ftnref3" title="">[3]

ADDIN
BA xc <@$osdv> xl 15 s ZOKPBC000026 Section 583.420 and other dismissal-for-delay
statutes serve a dual purpose. First,
they are statutes of repose, enacted to discourage stale claims and promote
justice by preventing the revival of claims that have been allowed to slumber
until evidence has been lost, memories have faded, and witnesses have
disappeared. Second, they are designed
to compel reasonable diligence in the prosecution of actions, thereby
expediting the administration of justice.
Balanced against these considerations is the strong public policy in
favor of disposing of litigation on the merits rather than on procedural
grounds. Although that policy is
generally viewed as more compelling than the one seeking to promote prompt
prosecution, it will not prevail unless the plaintiff meets his burden of
establishing excusable delay. ( ADDIN BA xc <@cs> xl 52 s
ZOKPBC000002 xhfl Rep xpl 1 l ">Roach v. Lewis(1993)
14 Cal.App.4th 1179" Roach v. Lewis (1993)
14 Cal.App.4th 1179, 1182-1183 and cases cited therein; ADDIN
BA xc <@cs> xl 74 s ZOKPBC000003 xhfl Rep xpl 1 l "Van Keulen v. Cathay Pacific
Airways, Ltd.(2008) 162 Cal.App.4th 122"
Van
Keulen v. Cathay Pacific Airways, Ltd. (2008) 162 Cal.App.4th 122, 130 ( ADDIN BA xc <@$cs> xl 10 s
ZOKPBC000003 xpl 2 Van
Keulen).)

Dismissal pursuant to ADDIN
BA xc <@$osdv> xl 15 s ZOKPBC000027 section 583.410 must be made in accordance
with the criteria prescribed in ADDIN
BA xc <@ru> xl 42 s ZOKPBC000004 l "California Rules of Court, rule 3.1342 (e)" California Rules of Court, rule 3.1342(e).href="#_ftn4" name="_ftnref4" title="">[4] ( ADDIN BA xc <@osdv> xl 20 s
ZOKPBC000028 xpl 1 l "§ 583.410, subd. (b)"
§ 583.410, subd. (b).) That rule requires the trial court to
consider: (1) The court’s file in the
case and the declarations and supporting data submitted by the parties and,
where applicable, the availability of the moving party and other essential
parties for service of process; (2) The diligence in seeking to effect service
of process; (3) The extent to which the parties engaged in settlement
negotiations or discussions; (4) The diligence of the parties in pursuing
discovery or other pretrial proceedings, including extraordinary relief; (5)
The nature and complexity of the case; (6) The law applicable to the case,
including the pendency of other litigation under a common set of facts or
determinative of the legal or factual issues in the case; (7) The nature of any
extensions of time or other delay attributable to either party; (8) The
condition of the court’s calendar and the availability of an earlier trial date
if the matter was ready for trial; (9) Whether the interests of justice are
best served by dismissal or trial of the case; and (10) Any other fact or
circumstance relevant to a fair determination of the issues. (See ADDIN
BA xc <@cs> xl 49 s ZOKPBC000005 xhfl Rep xpl 1 l "Wagner v. Rios(1992) 4 Cal.App.4th 608" Wagner
v. Rios (1992) 4 Cal.App.4th 608, 611 [citing former ADDIN
BA xc <@ru> xl 8 s ZOKPBC000006 xqt xpl 2 l "rule 373" rule 373].)

The trial court’s decision on a discretionary
dismissal motion such as this is not subject to reversal on appeal absent a
showing of manifest abuse resulting in a miscarriage of justice. ( ADDIN BA xc <@cs> xl 69 s
ZOKPBC000007 xhfl Rep xpl 1 l ">Landry v. Berryessa Union School Dist.(1995) 39 Cal.App.4th 691" Landry
v. Berryessa Union School Dist. (1995) 39 Cal.App.4th 691, 698 ( ADDIN BA xc <@$cs> xl 6 s
ZOKPBC000007 xpl 2 Landry);
ADDIN BA xc <@$cs> xl 44 s
ZOKPBC000003 xhfl Rep xpl 1 Van Keulen, supra, 162
Cal.App.4th at p. 131.) “Such abuse of
discretion is generally considered to be demonstrated when the trial court has
exceeded the bounds of reason.
[Citation.] We must presume the
trial court’s order was correct, and it is the [appellant’s] burden to overcome
that presumption and establish a clear abuse of discretion. [Citations.]”
(
ADDIN BA xc <@$cs> xl 39 s ZOKPBC000007 xhfl Rep xpl 1 Landry,
supra, 39 Cal.App.4th at p. 698.)
When, as here, the trial court makes factual findings, “ ‘an appellate
court should defer to the factual determinations made by the trial court when
the evidence is in conflict. This is
true whether the trial court’s ruling is based on oral testimony or
declarations. [Citation.]’ ” ( ADDIN BA xc <@$cs> xl 48 s ZOKPBC000002
xhfl Rep xpl 1 Roach
v. Lewis, supra, 14 Cal.App.4th at p. 1185.)

II

Barth
Has Shown No Abuse of Discretion in Granting the Dismissal

Applying the rule announced by the
Fifth District Court of Appeal in ADDIN
BA xc <@cs> xl 41 s ZOKPBC000008 xhfl Rep l "Putnam v.
Clague(1992) 3 Cal.App.4th 542"
Putnam
v. Clague (1992) 3 Cal.App.4th 542 ( ADDIN BA xc <@$cs> xl 6 s
ZOKPBC000008 xpl 1 Putnam),
Barth contends she established an adequate excuse for the delay because “she
was and had been destitute for some time and specifically during the time she
might have served this matter earlier, . . . and for that reason was
not able to prosecute the action.”

ADDIN
BA xc <@$cs> xl 6 s ZOKPBC000008 Putnam
held that when a plaintiff’s excuse reflects a conscious decision not to serve
the summons and complaint on defendant, and the plaintiff’s explanation for the
delay is credible and reasonable, the burden shifts to defendant to show that
other factors support dismissal. ( ADDIN BA xc <@$cs> xl 43 s
ZOKPBC000008 xhfl Rep xpl 1 Putnam, supra, 3
Cal.App.4th at pp. 557-558.) Many courts
have declined to follow ADDIN
BA xc <@$cs> xl 6 s ZOKPBC000008 Putnam,
instead applying the factors in ADDIN
BA xc <@ru> xl 15 s ZOKPBC000009 l "rule 3.1342 (e)" rule 3.1342(e) and its predecessor. ( ADDIN BA xc <@$cs> xl 48 s
ZOKPBC000002 xhfl Rep xpl 1 Roach v. Lewis, supra, 14
Cal.App.4th at p. 1184; see also ADDIN
BA xc <@cs> xl 73 s ZOKPBC000010 xhfl Rep xpl 1 l "Williams v. Los Angeles
Unified School Dist.(1994) 23
Cal.App.4th 84" Williams
v. Los Angeles Unified School Dist. (1994) 23 Cal.App.4th 84, 98
[distinguishing ADDIN BA xc <@$cs> xl 6 s
ZOKPBC000008 xpl 2 Putnam
and following ADDIN BA xc <@$cs> xl 5 s
ZOKPBC000002 xpl 2 Roach].)

We need not decide whether ADDIN
BA xc <@$cs> xl 6 s ZOKPBC000008 Putnam
states the correct test because, as the trial court concluded, Barth did
not establish an excuse for the delay that was credible or reasonable. Rather, as the trial court found, for “all
those two years and 363 days, no effort was made to actually serve the entity
defendant. Don’t know why. Can’t explain it. It’s not explained in the paperwork.”

We agree with the trial court that
Barth’s delay was not reasonable. Barth
does not claim she could not accomplish service on the single corporate
defendant from October 2007 to October 2008 while she represented herself. Moreover, she was represented by counsel from
October 2008 until relatively recently, and she does not explain why no service
efforts were made between October 2008 and October 2010.

Because Barth failed to serve the
summons and complaint within two years of the filing of the complaint, the
trial court had discretion to dismiss the action pursuant to ADDIN
BA xc <@osdv> xl 28 s ZOKPBC000029 l "sections 583.410 and 583.420" sections 583.410 and 583.420. In exercising that discretion, the trial
court properly considered the criteria set forth in ADDIN
BA xc <@ru> xl 11 s ZOKPBC000011 l "rule 3.1342" rule 3.1342 and gave a detailed explanation of its reasons at
the hearing. There was no abuse of
discretion.

Barth also contends there was no
showing of prejudice to defendant.
Although prejudice to the defendant is not specifically listed in ADDIN
BA xc <@$ru> xl 11 s ZOKPBC000011 rule 3.1342, it is a relevant factor to be
taken into consideration. ( ADDIN BA xc <@cs> xl 81 s
ZOKPBC000012 xhfl Rep xpl 1 l ">Rim Forest Lumber Co. v. Woodside Construction Co.(1987) 190 Cal.App.3d 454" Rim
Forest Lumber Co. v. Woodside Construction Co. (1987) 190 Cal.App.3d 454,
464.) However, a showing of actual
prejudice is not required before dismissal can be ordered. ( ADDIN BA xc <@cs> xl 52 s
ZOKPBC000013 xhfl Rep xpl 1 l ">Scarzella v. DeMers(1993) 17 Cal.App.4th 1762" Scarzella
v. DeMers (1993) 17 Cal.App.4th 1762, 1769.) “Prejudice to a defendant is inherent when
actions are dilatorily prosecuted.
[Citations.]” ( ADDIN BA xc <@cs> xl 65 s
ZOKPBC000014 xhfl Rep xpl 1 l ">Martin v. K & K Properties, Inc.(1987) 188 Cal.App.3d 1559" Martin
v. K & K Properties, Inc. (1987) 188 Cal.App.3d 1559, 1565.) Thus, the policy favoring litigation on the
merits only comes into play if the plaintiff makes a showing of excusable
delay. ( ADDIN BA xc <@$cs> xl 28 s
ZOKPBC000003 xhfl XRef xpl 1 Van Keulen, supra, 162
Cal.App.4th at p. 131.)

Here, Barth failed to establish any
excuse for failing to serve the summons and complaint within two years of the
filing of the complaint, precluding the need for the court to evaluate
prejudice. However, the trial court
expressly found defendant would likely be prejudiced by the delay because
“memories have faded. Passage of time
has occurred. If indeed the case is
document heavy, I don’t know where the people are who might support or remember
things that address these documents.” We
defer to those factual findings. (See ADDIN
BA xc <@$cs> xl 48 s ZOKPBC000002 xhfl Rep xpl 1 Roach
v. Lewis, supra, 14 Cal.App.4th at p. 1185.)

III

The
Court Erred in Dismissing the Action With Prejudice

Finally, Barth contends the trial
court erred in dismissing her action with prejudice, rather than without
prejudice.

Barth is correct. ADDIN
BA xc <@$osdv> xl 15 s ZOKPBC000027 Section 583.410 authorizes a trial court to
dismiss a case for dilatory prosecution “without prejudice.” ( ADDIN BA xc <@osdv> xl 19 s
ZOKPBC000030 xpl 1 l "§ 581, subd. (b)(4)"
§ 581, subd. (b)(4); cf. ADDIN
BA xc <@cs> xl 64 s ZOKPBC000015 xhfl Rep xpl 1 l "Franklin Capital Corp. v.
Wilson(2007) 148 Cal.App.4th 187"
Franklin
Capital Corp. v. Wilson (2007) 148 Cal.App.4th 187, 215 [recognizing courts
lack authority to dismiss with prejudice for lack of prosecution]; See 3 ADDIN
BA xc <@trt> xl 106 s ZOKPBC000016 xpl 1 l "Weil & Brown, Cal. Practice Guide: Civil Procedure Before Trial
(The Rutter Group 2012) ¶ 11:112" Weil & Brown, Cal. Practice Guide: Civil Procedure Before Trial (The Rutter
Group 2012) ¶ 11:112, p. 11-50.) Here,
the trial court’s signature on an order indicating that the dismissal was “with
prejudice” was not authorized by statute; consequently, the court abused its
discretion by ordering the dismissal with prejudice. ( ADDIN BA xc <@$cs> xl 39 s
ZOKPBC000007 xhfl Rep xpl 1 Landry, supra, 39
Cal.App.4th at p. 698.) Because the
court acted beyond what it was permitted by statute to do, Barth did not
forfeit her claim of error by failing to raise it in the trial court, as SAFE
contends.

We likewise decline SAFE’s
invitation to find the error harmless, because Barth’s claims would be barred
by the applicable statutes of limitation.
To do so would require us to speculate here on whether Barth could
adequately plead delayed discovery on any of the claims raised by her
complaint; we decline to do so.





DISPOSITION

The trial court’s judgment is
reversed and its order of dismissal is modified to a dismissal without
prejudice. The parties are to bear their
own costs on appeal. ( ADDIN BA xc <@ru> xl 42 s
ZOKPBC000017 xpl 1 l "Cal. Rules of Court, rule
8.278 (a)(3),(5)" Cal. Rules of Court, rule 8.278(a)(3), (5).)







NICHOLSON , Acting P. J.







We concur:







ROBIE , J.







BUTZ , J.