Key v. Mason-McDuffie Real Estate

 

 

 

 

 

 

 

 

Filed 8/7/13  Key v. Mason-McDuffie Real Estate CA1/5

 

 

 

 

 

 

NOT TO BE
PUBLISHED IN OFFICIAL REPORTS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  This opinion has not been certified for
publication or ordered published for purposes of rule 8.1115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

FIRST APPELLATE
DISTRICT

DIVISION FIVE

 

 

 

 

LEONARD KEY et al.,

 

            Plaintiffs and
Appellants,                                                  A133684

 

            v.                                                                                             (Alameda
County

                                                                                                            Super.
Ct. No.

MASON-McDUFFIE REAL ESTATE                                         RG05208993)

INC. et al.,

 

            Defendants and
Respondents.

__________________________________________/

 

            Plaintiffs
Leonard and Sandra Key (collectively plaintiffs) appeal from an order
dismissing their action against defendants Mason-McDuffie Real Estate, Inc.,
and Mona Koussa (collectively defendants) for failure to prosecute (Code Civ.
Proc., §§ 583.410, 583.420, subd. (a)(2)).href="#_ftn1" name="_ftnref1" title="">[1]  Plaintiffs argue the href="http://www.fearnotlaw.com/">trial court abused its discretion by
dismissing the action. 

We affirm. 

FACTUAL AND
PROCEDURAL BACKGROUND

We provide only the factual and
procedural details that are germane to plaintiffs’ claim that the court erred
by dismissing their action for failure to prosecute.

In 2003, plaintiffs entered a
“written real estate purchase and sale agreement” (agreement) with RH Bedford
Developers, Inc., and Richard H. Bedford (collectively Bedford) to purchase a
home to be built by Bedford in Castro Valley. 
Koussa — then a real estate broker at Mason-McDuffie Real Estate, Inc. —
represented plaintiffs and Bedford in the transaction.  Bedford did not complete the home by the
scheduled date and allegedly threatened to sell the property to a third party
unless plaintiffs agreed to various conditions. 


In April 2005, plaintiffs sued
Bedford and defendants.  Among other
things, the complaint alleged Bedford and defendants breached the agreement and
that defendants breached their fiduciary duty to plaintiffs and defrauded
them.  Bedford moved to compel
arbitration.  In June 2005, the court denied
Bedford’s petition to compel arbitration but stayed the action on its own
motion to allow plaintiffs and Bedford to mediate pursuant to the agreement’s
dispute resolution requirement.  In March
2006, plaintiffs reached a tentative settlement with all parties except
defendants and few months later, in July 2006, plaintiffs closed escrow and
took possession of the house.  In
November 2006, the court lifted the stay. 


In April 2007, plaintiffs filed the
operative third amended complaint
alleging seven claims against defendants. 
Among other things, the complaint alleged defendants breached their
fiduciary duty to plaintiffs and breached the agreement by: (1) “acting solely
in the interests of [Bedford][;]” (2) failing “to disclose the missing and
inadequate square footage after the foundation was built[;]” and (3) failing to
inform them that Bedford’s intention was to “induce [them] to spend their own
money to construct the home and then sell the home to a third party after the
home was completed.”  Plaintiffs also
alleged defendants defrauded them and negligently failed to disclose
information about the property.

In early 2007,
defendants propounded discovery.  They
served requests for production and later subpoenaed information from third
parties, including a title company. 
Plaintiffs and defendants litigated discovery disputes throughout 2008.href="#_ftn2" name="_ftnref2" title="">[2]

Trial Setting and
Discovery Abuses

            The court
set an initial trial date of July 20, 2009. 
In May 2009, defendants served plaintiffs with a third set of requests
for production of documents seeking documents relating to work performed on the
house, communications between plaintiffs and Bedford, and documents supporting
plaintiffs’ damages claims.  Plaintiffs’
responses were untimely and unverified and did not provide substantive
information.  For several months, counsel
for defendants tried — repeatedly and unsuccessfully — to obtain responsive
information from plaintiffs. 

In late June 2009, defendants moved
to continue trial, claiming there were “a number of unresolved discovery issues
due in large part to plaintiffs’ numerous cancellations and failures to appear
for their depositions, as well as their failure to respond to meet and confer
letters” or assist defense counsel in determining what discovery was exchanged
“while prior counsel for Defendants was in the case.”href="#_ftn3" name="_ftnref3" title="">[3]  Defendants explained they had noticed
plaintiffs’ depositions five times and each time plaintiffs “cancelled on short
notice” and failed to provide information to resolve defense counsel’s
“questions regarding the status of document production and written
discovery.”  The court vacated the trial
date and set an August 5, 2009 trial date. 
Later, the court continued trial a second time, to March 5, 2010. 

In January 2010, plaintiffs served
further responses to defendants’ written discovery, but the responses were
unverified, failed to provide all responsive information, and “still contained
a variety of improper objections.”  At a
January 2010 mandatory settlement conference, the court vacated the March 2010
trial date, finding “that discovery [was] incomplete[.]”  In late March 2010, defendants moved to
compel responses to form interrogatories propounded in 2009 and moved to compel
plaintiffs to appear for their depositions. 
Defendants claimed plaintiffs’ responses to the form interrogatories
were deficient; they also argued they had noticed or scheduled plaintiffs’
depositions seven times and each time, plaintiffs “cancelled on short notice or
outright failed to appear.”  The court
granted the motions, ordered plaintiffs to provide supplemental responses and
to appear for their depositions, and sanctioned plaintiffs. 

            Plaintiffs
finally appeared for their depositions in August 2010.  They did not, however, bring documents
supporting their damages claims, such as Sandra Key’s medical records, nor did
they bring documents reflecting work done on the property.  After their depositions, plaintiffs produced
750 photographs of the property in various stages of construction. 

Defendants’ First
Motion to Dismiss

            In October
2010, the court set a March 4, 2011 trial date. 
In January 2011, defendants moved to dismiss, claiming plaintiffs had
“misused the discovery process and failed to timely bring their action to
trial.”  Plaintiffs opposed the
motion.  They argued they had “not unduly
delayed” the action and claimed “the discovery issues [did] not warrant
dismissal.”  Plaintiffs described the
difficulty scheduling their depositions and claimed “[a]ny delay or failure to
respond to discovery” was caused by their “acute depression, which they
suffered after being swindled out of their life savings . . . by
Defendants.” 

The court denied the motion.  The court declined to the dismiss the action
under section 583.310, the mandatory dismissal statute, finding the case was “4
years and 4 months old” — not five years old — after removing “the time that
the ‘stay’ was in place from the overall age of this case. . . .”  The court also declined to exercise its
discretion to dismiss the case under 583.410, the discretionary dismissal
statute.  It, however, noted that in the
four years and three months since the court lifted the stay, “Plaintiffs have
been sanctioned for failure to provide discovery and . . . have failed, yet
again, to provide timely responses to outstanding discovery requests. . . .
[W]hen Plaintiffs eventually responded to discovery, their responses were,
conditional and lacking in completeness or candor.”  The court explained that though it was
“inclined to dismiss this case as an exercise of discretion because of the
delay caused by Plaintiffs and their conduct in frustrating discovery, . . .
the Court shall not do so, at this time. 
The Court is sympathetic to Plaintiff’s claims of distress.  Nevertheless, the Court’s policy of resolving
disputed issues ‘on the merits’ is just about at its reasonable limit.”

Defendants’ Renewed
Motion to Dismiss

            On March
11, 2011 — and a month after discovery closed — plaintiffs produced 1,076 pages
of additional documents responsive to defendants’ 2007 and 2009 document
requests.  The new documents included
plaintiffs’ notes detailing their communications with defendants and other
documents prepared by plaintiffs describing work done to the property.  Shortly after plaintiffs produced the
documents, defendants moved to continue the trial date.  They explained plaintiffs had failed to
depose defendants before discovery closed and “[a]s a result, expert
depositions have had to be postponed and will not be completed before”
trial.  The court continued trial to April
15, 2011. 

In late March 2011, defendants
filed a renewed motion to dismiss.  They urged the court to dismiss the case under
sections 583.410 and 583.420 because plaintiffs had “abused the rules of
discovery and persistently failed to diligently pursue their case.”  Defendants claimed plaintiffs deprived them
of their right to present a “fair defense” by withholding “vast amounts of
material evidence for four years[.]” 
They also argued they would be forced to retake depositions and
supplement their expert disclosures based on the newly disclosed
information.  In addition, defendants
claimed plaintiffs refused to make their expert appraiser available in a timely
fashion and had refused to produce their expert witnesses for deposition. 

            In opposition,
plaintiffs argued the March 2011 document production was “not dilatory, the
documents were produced as soon as they were discovered” and the documents were
duplicative of other previously produced documents.  Plaintiffs claimed defendants were not prejudiced
by the “late production” because the documents did not “contain evidence of
different facts and or new claims not already disclosed[.]”  In addition, plaintiffs blamed their
inability to “fully cooperate” in the litigation on their depression and Leonard
Key’s knee injury.  According to
plaintiffs, Sandra Key had suffered a “mental breakdown . . . and fell into an
acute depression” during the pendency of the litigation and had “only recently
begun to recover.”  Additionally, Leonard
Key “suffered a knee injury,” which was operated on in early January 2010 and
“fell into an acute depression” for several months in 2005 and again in 2009
and 2010. 

Plaintiffs claimed dismissing the
case would be “devastating” to them because they “have been wary of trusting
professionals given the conduct of defendants. 
Mrs. Key sought treatment for her depression and anxiety on February 1,
2011.  Thereafter, [she] also began to
experience spiritual renewal.  Her
constant migraine headaches . . . abated and she has been able to sleep through
the night. [¶] This allowed her to more readily cooperate and search for
documents and recall where documents were kept. 
When she located the documents, [plaintiffs’] counsel advised that she
needed to produce the documents immediately and she allowed the
production.”  Plaintiffs’ opposition
contained a spreadsheet indexing the March 2011 production. 

            In reply,
defendants argued the documents produced in March 2011 were relevant, were
responsive to their 2007 and 2009 discovery requests, and contained “vast
amounts of material information either entirely unknown to Defendants before
now or that help to explicate previous information.”  Defendants also argued plaintiffs had misused
the discovery process and “delayed the litigation process” numerous times. 

            Following a
hearing, the court granted the motion to
dismiss.  It concluded the trial date
had been continued several times “at least in part as a result of Plaintiffs’
failure to comply with discovery[,]” specifically because plaintiffs failed to
appear for their properly-noticed depositions and failed to provide complete
responses to defendants’ discovery requests. 
The court also noted plaintiffs produced over 1,000 pages of documents
after the close of discovery and “some four years after Defendants first
requested relevant documents” despite having had the documents in their
possession.  The court determined the
late production of these documents prejudiced defendants because the documents
contained new information that defendants could have utilized “in identifying
and deposing witnesses, conducting further investigations, and crafting defense
strategies.”  As the court explained,
“[t]o process and utilize the additional material and information contained in
the withheld documents . . . Defendants would essentially have to start over in
deposing Plaintiffs” which was impossible “before expiration of the five-year
statute for bringing the case to trial.” 


            The court
exercised its discretion pursuant to sections 583.410 and 583.420, subdivision
(a)(2)(A) and dismissed the case because plaintiffs had “repeatedly abused the
discovery process, lacked diligence, and failed to timely bring their action to
trial, all resulting in prejudice to Defendants.” 

DISCUSSION

            The court
has inherent power to dismiss a case “for delay in prosecution.”  (6 Witkin, Cal. Procedure (5th ed. 2008)
Proceedings Without Trial, § 438, p. 890.) 
Section 583.410, subdivision (a) provides: “The court may in its discretion
dismiss an action for delay in prosecution . . . if to do so appears to the
court appropriate under the circumstances of the case.”  Under section 583.420(a)(2)(A), however, a
court may not dismiss an action for delay in prosecution unless one of certain
conditions has occurred, including failing to bring the action “to trial within
. . . [t]hree years after the action is commenced against the defendant” or
within two years under California Rules of Court, rule 3.1340.  (See Roman
v. Usary Tire & Service Center (1994) 29 Cal.App.4th 1422, 1430-1431;
Witkin, supra, § 441, p. 893.)

The moving party must show
discretionary dismissal is warranted based on the following six factors set
forth in California Rules of Court, rule 3.1342(e), including: (1) “The court’s
file in the case and the declarations and supporting data submitted by the
parties . . . ;” (2) “The diligence of the parties in pursuing discovery or
other pretrial proceedings, including any extraordinary relief sought by either
party;” (3) “The nature and complexity of the case;” (4) “The nature of any
extensions of time or other delay attributable to either party;” (5) “Whether
the interests of justice are best served by dismissal or trial of the case; and
(6) “Any other fact or circumstance relevant to a fair determination of the
issue.”  (Cal. Rules of Court, rule
3.1342(e); see Van Keulen v. Cathay
Pacific Airways, Ltd. (2008) 162 Cal.App.4th 122, 130-131 (>Van Keulen).)  The “burden [then] shifts to the plaintiff to
show excusable delay.”  (>San Ramon Valley Unified School Dist. v.
Wheatley-Jacobsen, Inc. (1985)
175 Cal.App.3d 1050, 1057; Wagner v. Rios
(1992) 4 Cal.App.4th 608, 611-612.)

“‘A reviewing court may not reverse
a trial court’s order granting dismissal for dilatory prosecution unless the
plaintiff meets the burden of establishing manifest abuse of discretion
resulting in a miscarriage of justice.  [Citations.] 
An appellate court may not substitute its own discretion for that of the
trial court and must uphold the dismissal order if the trial court has not
abused its discretion.’ 
[Citation.]”  (>Van Keulen, supra, 162 Cal.App.4th at p.
131.) 

Plaintiffs contend the court “erred
in granting dismissal” because the documents they produced in March 2011 were
“not material to the disputed issues.” 
They also claim the court should have excused their delay in responding
to discovery because they “suffered from depression caused by” defendants.  Alternatively, plaintiffs contend the trial
court should have imposed a lesser sanction to minimize any prejudice to
defendants, such as “precluding the additional documents” from being used at
trial. 

Plaintiffs have not demonstrated
the court abused its discretion by dismissing the action pursuant to sections
583.410 and 583.420.  The case was filed
in 2005, over six years before the court dismissed it, and over four years
after the court lifted the stay.  Ample
evidence supports the court’s conclusion that plaintiffs “repeatedly abused the
discovery process, lacked diligence, and failed to timely bring their action to
trial, all resulting in prejudice to Defendants.”  The record demonstrates the court continued
trial several times because plaintiffs repeatedly failed to appear for their
properly-noticed depositions and because plaintiffs failed to provide complete
responses to defendants’ discovery requests. 
In addition, plaintiffs produced over 1,000 pages of documents after the
close of discovery and “some four years after Defendants first requested
relevant documents” despite having had the documents in their possession.  Finally, the record also supports the court’s
finding of prejudice to the defendants from the delay and the untimely March
2011 document production. 

We are sympathetic about the physical
and emotional difficulties plaintiffs experienced as a result of their dispute
with Bedford and defendants, but we cannot — as plaintiffs urge — conclude the
court abused its discretion by declining to excuse plaintiffs’ delays and
discovery abuses on this ground.  A trial
court has broad discretion in determining the reasonableness of an excuse for
delay.  Even “[d]elay attributable to
sickness or death of . . . the parties is not necessarily excusable.  Each case must be decided on its own peculiar
features and facts.”  (>White v. Mortgage Finance Corp. (1983)
142 Cal.App.3d 770, 775.)  Plaintiffs
have not demonstrated an abuse of discretion in this regard, particularly where
they relied on the hearsay assertions of their attorney rather than offering a
declaration or submitting medical records supporting their claimed health
problems.  (See Longshore v. Pine (1986) 176 Cal.App.3d 731, 737 [specificity
required to justify delay].) 

Plaintiffs devote much of their
opening and reply briefs urging us to take a contrary view of the evidence, but
we cannot.  We must defer to the court’s factual determinations when the evidence
is in conflict even if we might have reached a contrary result.  (Shamblin
v. Brattain (1988) 44 Cal.3d 474, 478-479.) 
We conclude the court did not abuse its discretion by dismissing the
case for failure to prosecute under sections 583.410 and 583.420.  The court considered all of the relevant
factors and properly determined plaintiffs’ delay in prosecuting the action was
not reasonable or excusable.  (>Landry v. Berryessa Union School Dist.
(1995) 39 Cal.App.4th 691, 698.) 



DISPOSITION

The judgment is affirmed.  Defendants are entitled to costs on appeal.

 

 

 

 

                                                                                                _________________________

                                                                                                Jones,
P.J.

 

 

We concur:

 

_________________________

Simons, J.

 

_________________________

Bruiniers, J.