JCCP Coordination Submission Tolls Three- and Five-Year Rules

Fid. Nat’l Home Warranty Co. Cases, No. D074161 (D4d1 Mar. 20, 2020)

This is an appeal of a pair of cases that were dismissed under the five- and three-year rules in Code of Civil Procedure §§ 583.310 and 583.320. 

There’s a threshold issue regarding the timeliness of the notice of appeal. The trial court entered an order dismissing the cases on December 15, 2017. But it did not enter judgments until March 7 and April 2, 2018. Plaintiffs filed a consolidated notice of appeal on May 1. There’s no question that the appeal is timely if the March 7 and April 2 judgments are the only final appealable judgments in the case. See Cal. R. Ct. 8.104(a)(1)(can file notice of appeal, at minimum, 60 days from entry of judgment). But if the December 15 dismissal order is itself a judgment, then the appeals are too late.

It all comes down to the interplay between Code of Civil Procedure §§ 581d and 581(k). Section 581d says an order dismissing a case needs to be signed by the court and filed in the action. When the order takes that form, it constitutes a final judgment. But § 581(k) says a certified class action can’t be dismissed unless and until notice approved by the court has been given to the class and the court orders a dismissal. Here, that issue wasn’t raised until after the entry of the December 15 order. The Court ultimately approved the form of notice in one case and found that notice was unnecessary in the second case because no class had been certified. 

Until the notice issues were resolved, § 581(k) prohibited the cases from being dismissed. Thus, the Court of Appeal holds that the December 15 order cannot be treated as a final judgment under the authority of § 581d. Only an order issued after the § 581(k) prerequisite had been satisfied, and which conformed to formalities in § 581d could count as a final judgment. That being the case, the judgments entered on March 7 and April 2 were the real judgments in the cases, and thus the appeals were timely taken.

On the merits, the cases were put on ice for 135 days while a coordination judge decided whether cases should be rolled into a coordinated JCCP action. A plaintiff is entitled to tolling of the 3 and 5 year limits when it is impossible, impracticable, or futile” to bring a case to trial. § 583.340(c). And the Rules of Court pertaining to JCCP proceedings specifically say that a trial can’t be commenced with the coordination motion is pending. Cal. R. Ct. 3.515(i). Thus, notwithstanding a split of authority on the question, the court finds that plaintiffs were entitled to another 135 days of tolling and that the trial court abused its discretion in failing to count it. 

That helps one case but not the other. One case was subject § 583.310’s five-year rule. The 135 days of tolling was enough to take that case out of the statute. So that’s reversed. 

But in the other case, there had been a prior reversal on appeal. So that case was subject to § 583.320’s three-years post remand rule. The 135 days of tolling was not enough to get that case within the three years. And the trial court didn’t abuse its discretion in declining to permit tolling based on other impracticalities in getting to trial claimed by plaintiffs, such as budgetary constraints, plaintiff’s claims of diligent prosecution, or defendant’s purported delays in complying with discovery. So that’s affirmed.

Reversed in part.

Fraudster Runs Into Bad Standard of Review

In re Alpha Media Resort Inv. Cases, No. A150541 (D1d3 Sept. 16, 2019)

This case arises out of a $170 million fraud scheme for which the Defendant was criminally convicted. Defendant participated sporadically in the case, and failed to show at his deposition or at trial. In coordinated litigation, Plaintiffs here won about $10.5 in total judgments. Defendant argues (1) that his case should have been dismissed under Code of Civil Procedure § 583.310’s five-year rule, and (2) somewhat orthogonally, that his case should have been stayed pending the criminal case against him.

There’s no doubt that the case took a long time to get to trial. But the case was complicated and the Defendant recalcitrant. The trial court found that, for a significant portion of time, it was “impracticable” to bring the case to trial under § 583.340(c), and thus the 5-year limit had not lapsed. Given that such a determination is within the sound discretion of the superior court, the Court of Appeal won’t disturb it, so long as it has some basis in fact and reason. It did so here.

So far as staying the case due to the criminal charges, that too is a matter on which the trial court has a lot of discretion. The trial court didn’t abuse its discretion in denying a stay here. Among other things, Defendant had plead guilty before trial in a deal that the government wouldn’t bring additional charges. So Defendant’s Fifth Amendment concerns about giving testimony in the civil trial were speculative at the least.

Affirmed.

Hollywood Accounting Runs Out the Clock

Warner Bros. Entm’t Inc. v. Superior Court, No. B289109 (D2d8 Nov. 20, 2018)

Actors and other talent sometimes get an interest in the “profits” to movies and TV shows. Unless you've got huge juice, however, “profit” does not mean actual profit, like how the IRS or Scrooge McDuck would calculate it. “Profit,” instead, is contractually a defined term that permits a studio to deduct all sorts of “costs.” Under this Hollywood accounting, projects that made large amounts of money wind up being in the red forever, at least so far as the accounting for the participation interests of the talent go.

Tolling Accrues to the Diligent

Martinez v. Landry’s Restaurants, No. B278513 (D2d7 Aug. 28, 2018)

This wage and hour class action, filed in 2007, got dismissed under the five-year rule in Code of Civil Procedure § 583.310. Plaintiffs don’t argue that five years haven’t passed. But there’s potential tolling for four different periods. 

Too Many Hits on the American Pipe

Fierro v. Landry’s Restaurant Inc., No. D071904 (D4d1 May 14, 2018)

Plaintiff brings a wage an hour class action against his employer. But a prior class action with identical claims had apparently been previously dismissed for failure to bring the case timely to trial under the five-year rule in Code of Civil Procedure §§ 583.310 and 583.360. The trial court granted a demurrer to the class claims on that basis. It did, however, permit plaintiff’s individual claims to proceed because statute of limitations issues raised by Defendant weren’t evident from the face of the complaint. Plaintiff took an appeal under the death knell doctrine.

Can’t Wait for the Perfect When the 5-Year Rule Looms

Tanguilig v. Nieman Marcus Grp., No. A141383 (D1d4 Apr. 16, 2018)

Under Code of Civil Procedure § 583.310, a case must be dismissed with prejudice if it has not been brought to trial within five years of filing. The five years is subject to various kinds of tolling. Plaintiff in this case—a wage-and-hour class action combined with some PAGA claims that was filed in 2007—needs three different kinds of tolling to get within the five year window. 

Her key tolling argument here comes under § 583.340(c), which stops the clock during periods where it is “impossible, impracticable, or futile” to bring the case to trial. That section permits tolling due to circumstances, beyond the plaintiff’s control, that prevent her from expeditiously bringing her case to trial. 

Unlike most of Defendant’s employees, Plaintiff quit instead of signing an employment contract containing an arbitration clause with a class action waiver. That caused some typicality issues for her class action. So several years into the case, Plaintiff added an additional class rep who had signed the agreement. But that solution led to bigger problems. It resulted in the trial court compelling a significant part the new rep's case to mandatory non-class arbitration. Notably, almost a year later, the trial court reconsidered its stay and ultimately lifted it. (The reconsideration was ultimately affirmed on appeal almost three years ago.)

Now, Plaintiff seeks tolling under § 583.340(c) for the period in which the stay was in effect. But none of the stuff with the new rep prevented Plaintiff from proceeding to trial on her own (smaller) part of the class, which wasn’t stayed. The fact that Plaintiff preferred to go to trial with a bigger, better class didn’t mean that going to trial was “impossible, impracticable, or futile” under § 538.340(c).

Affirmed.

Five-Year Rule Stops on Swearing of Venire

Stueve v. Buchaleter Nemer, No. G052779 (D4d3 Jan. 18, 2017)

Absent grounds for tolling, a California case needs to be “brought to trial” within five years of filing. See Code Civ. Proc. §§ 583.310, 583.340, 583.360. In a jury trial situation, “brought to trial” means “when the jury is impaneled and sworn.” In this case, the venire was assembled and prospective jurors were sworn for voir dire three days before the five years was up. Five days later (including an intervening weekend) voir dire was ongoing. Defendant moved for dismissal under the five-year rule, which the trial court granted, holding that no jury had been “impaneled and sworn” when the clock ran out.

The Court of Appeal reverses. It holds that a jury is “impaneled and sworn” when the venire is assembled in the courtroom and given their initial oath to answer voir dire questions truthfully. The standard does not require the actual impaneling of the twelve-member jury who will be deciding the case or the swearing of that jury to their duties in deciding the case. Both the provisions of the Code of Civil Procedure that set out how jury service works and the relevant case law bear that out.

Reversed.

To Stop the Clock, It Better Be a Full Stay

Gaines v. Fidelity Nat’l Ins. Co., No. S215990 (Cal. Feb. 25, 2016)

This is the Supreme Court’s review of the Gaines case I wrote about back in the tail-end of 2013. The interesting and fundamental point about the nature of the abuse of discretion standard raised by Justice Rubin’s dissent gets shrugged away in footnote 8. But distilled, the issue comes down to the circumstances when Code of Civil Procedure § 583.310’s rule requiring dismissal of any case not brought to trial within five years should be tolled.

(Re) Clearing the Decks

So I just moved, we are expecting a second daughter in May, and I have spent the last month pulling all-nighters in expedited preliminary injunction proceedings. Which is all a way to say that I’ve fallen really behind on posts here. 

Stipulation Beats Five-Year Rule

Munoz v. City of Tracy, C075955 (Jun. 30, 2015)

This case got dismissed under Code of Civil Procedure §§ 583.310 and 583.630 for plaintiff’s failure to bring it to trial within five years. But two months before the five years had run, with a scheduled trial date only a month away, the parties jointly stipulated to continue the trial for six months, so that plaintiff’s newly hired trial attorney could get up to speed. The stip didn’t mention the five-year rule. Soon after the five years had run—and during the continuance to which Defendant had stipulated—Defendant moved to dismiss under §§ 583.310 and 583.360(a). The trial court held that the stip didn’t prevent dismissal, because it did not contain an express waiver of the five-year rule. It dismissed the case with prejudice.

If it seems unfair that a defendant can rock a plaintiff to sleep by stipulating to extend the trial date past the five-year window, and then jack him up with a motion to dismiss as soon as the five years run, that’s because it is. So the court of appeal reverses. Section 583.330 says that the five-year period can be extended by stipulation. It mentions no formalities. That is bolstered by § 583.130, which adopts a policy that the parties stipulations and agreements about the progress of a case are generally preferred over the statutory policy requiring trial within five years. The court finds further support in Miller & Lux. Inc. v. Superior Court, 192 Cal. 333, 337–38 (1923), a ninety-two year old California Supreme Court opinion. There, interpreting a prior version of the statute, the court noted that the five year window could be tolled by a stipulation that either expressly stopped the clock or extended the trial date beyond the five year window. Since the defendant took the second option, the dismissal was improper.

Reversed.

A Few Choice Words on the Standard of Review

Gaines v. Fidelity National Title Insurance Company, No. B244961 (D2d8 Dec. 12, 2013)

A divided panel upholds a trial court’s dismissal of most of the defendants in an action for failing to bring the case to trial within five years, but reverses as to one defendant who was added later in the case.