Thomas M. SAMMON, et al., Plaintiffs and Appellants, v. STATE FARM FIRE & CASUALTY COMPANY, Defendant and Respondent.*
Plaintiffs Thomas and Beverly Sammon appeal the discretionary dismissal of their action against defendant State Farm Fire and Casualty Company based on their failure to serve the complaint within two years. (See Code Civ.Proc., § 583.420, subd. (a)(1).1 ) The trial court concluded that the excuse for the delay proffered by the Sammons' counsel was unreasonable and the prejudice to State Farm would be presumed.
We agree with the trial court that the Sammons' decision to wait almost three years to serve the complaint was unreasonable. While the court would have been justified in dismissing the complaint without any inquiry into the question of prejudice, it is not authorized to presume prejudice to the defendant. Here, the trial judge admitted that the decision to dismiss was a difficult one. Moreover, the fact that State Farm received a copy of the complaint two and one-half years before formal service strongly suggests it suffered no prejudice as a result of the delay. Because under applicable Supreme Court precedent a trial court may decline to order dismissal notwithstanding the plaintiff's lack of a reasonable excuse, we reverse the judgment of dismissal to allow the trial court to exercise its discretion free from any presumption of prejudice.
FACTUAL AND PROCEDURAL BACKGROUND
The Sammons owned two pieces of property in Santee, California, insured by State Farm, one located on Swanton Drive and the other on Bellagio Road. This lawsuit involves a dispute between the Sammons and State Farm concerning claims for subsidence damage to both the Swanton and Bellagio properties.
The Sammons submitted a claim to State Farm concerning the Swanton property on February 20, 1985. After substantial investigation, State Farm denied the claim on April 4, 1986, citing policy exclusions and its conclusion that the damage to the property had been manifested more than one year before the claim was filed. The Sammons' request for reconsideration of the claim was rejected on September 9, 1986.
The Sammons notified State Farm of problems with the Bellagio Road property in July 1986.2 While that claim was pending on December 11, 1986, the Sammons filed a complaint against State Farm alleging breach of contract and bad faith breach of the implied covenant of good faith and fair dealing based on both the Swanton and Bellagio claims. A copy of the complaint appears in the State Farm Bellagio claim file and was apparently given to the adjuster by the Sammons' lawyer during the claim investigation process. State Farm continued to process the Bellagio claim, ultimately denying it on June 30, 1987.
The Sammons formally served the complaint on December 8, 1989, nearly three years after it was filed. Six months later, State Farm moved for a discretionary dismissal pursuant to sections 583.410 and 583.420.3 Opposing the motion, the Sammons pointed out that the complaint had been filed nearly seven months before the Bellagio claim had been denied in order to avoid any problems with the contractual one-year limitations period provided for in the insurance contract. The additional delay, they asserted, was based on counsel's decision to await the California Supreme Court's pending decision in Garvey v. State Farm Fire & Casualty Co. (1989) 48 Cal.3d 395, 257 Cal.Rptr. 292, 770 P.2d 704. The Sammons also relied on this court's decision in Hurtado v. Statewide Home Loan Co. (1985) 167 Cal.App.3d 1019, 213 Cal.Rptr. 712, arguing that State Farm was obligated to establish it had been prejudiced by the delay. In this regard, the Sammons emphasized that State Farm received a copy of the complaint before the claim was denied in June 1987.
The trial court rejected the Sammons' arguments, concluding that the delay in serving the complaint was unreasonable. Although viewing the case as a “tough one,” the court stated that “prejudice to the defendants is presumed” and granted State Farm's motion.
To be assured success in opposing a motion to dismiss under sections 583.410 and 583.420, a plaintiff must make some showing of excusable delay. If such a showing is made, the plaintiff is entitled to rely on the legislatively adopted policy favoring trial on the merits (see § 583.130; Salas v. Sears, Roebuck & Co. (1986) 42 Cal.3d 342, 347, 228 Cal.Rptr. 504, 721 P.2d 590) and a showing of actual prejudice is required to justify a dismissal. (Cubit v. Ridgecrest Community Hospital (1987) 194 Cal.App.3d 1552, 1572–1573, 240 Cal.Rptr. 346.) If not, the trial court will be justified in dismissing the case without considering whether the defendant was prejudiced by the delay.4 (See Cordova v. Vons Grocery Co. (1987) 196 Cal.App.3d 1526, 1533, 242 Cal.Rptr. 605; Hilliard v. Lobley (1989) 216 Cal.App.3d 638, 642, 265 Cal.Rptr. 5.)
As one court noted recently, however, Supreme Court opinions in this area offer little guidance as to what is necessary to constitute a viable “excuse,” and the court of appeal decisions are at best inconsistent in their analysis of the issue. (Putnam v. Clague (1992) 3 Cal.App.4th 542, 552–553, 5 Cal.Rptr.2d 25.) In a thoughtful discussion of the subject, Putnam suggests that the trial court is called upon to make two determinations in deciding whether the delay is excusable:
“[First, i]s the explanation credible under all the circumstances? If the facts are disputed and the trial court finds on substantial evidence that the explanation is merely an afterthought or pretext designed to cover up neglect, dismissal may be warranted. If the explanation is credible, however, the court should consider whether the reasons given for the decision are clearly unreasonable. That is, could a reasonably competent attorney conclude that delay was justified under the circumstances? ․ In considering this question, however, courts should be careful not to engage in second-guessing attorneys' litigation decisions. If the decision is one which a reasonably competent attorney might have made under the circumstances, the burden should shift to the defendant to show that other factors, such as prejudice, support dismissal.” (Id. at pp. 557–558, 5 Cal.Rptr.2d 25.)
As the Putnam court recognized, the question of whether the plaintiff's proffered excuse is a post hoc rationalization for what was in reality neglect or inattention is largely a question of fact based on inferences drawn from the circumstances of the case. Particularly where the trial judge has had some continuing contact with the case—and thus possesses familiarity with the lawyers' litigation styles—an appellate court should defer to a determination that the expressed reason for the delay is not the real reason. As to the second question, however, the issue of what a reasonably competent attorney could have decided under the circumstances is essentially a question of law, assuming the underlying “circumstances” are not in dispute. (See Sheldon–Appel Co. v. Albert & Oliker (1989) 47 Cal.3d 863, 875, 886, 254 Cal.Rptr. 336, 765 P.2d 498; see generally Hurtado v. Statewide Home Loan Co., supra, 167 Cal.App.3d at pp. 1024–1025, 1026, 213 Cal.Rptr. 712.) 5
This is not to say that the two questions are unrelated. Obviously an objectively unreasonable excuse for delay may cause one to suspect it is less than sincere. Because of this interrelationship, we suggest trial courts would be advised to consider the question of objective reasonableness first, as did the court in this case. If the proffered excuse is unreasonable, dismissal is justified without considering what was the lawyer's subjective state of mind. It is only if the judge concludes the excuse was reasonable that he or she need consider whether it was in fact the reason for the delay. Such an approach will also assist in appellate review since it will avoid the uncertainty of whether the trial court's decision on the subjective question was based on an inference drawn from circumstances observed by the judge (questions of fact) or from the court's conclusion that the excuse was objectively unreasonable (generally a question of law).
Turning to the facts of this case, there are three periods of delay which the Sammons seek to justify on different bases. The complaint was filed in December 1986. The Sammons point out that the Bellagio claim was not even formally denied by State Farm until June 1987. Even State Farm does not contend that the Sammons acted unreasonably in waiting until at least July to serve the complaint.
Between July 1987 and April 1989, the Sammons assert the delay in serving the complaint was reasonable because they were waiting for the Supreme Court's decision in Garvey v. State Farm Fire & Casualty Co., supra, 48 Cal.3d 395, 257 Cal.Rptr. 292, 770 P.2d 704, ultimately filed on March 30, 1989.6 Stressing the importance of Garvey in the context of insurance disputes involving construction defects, the Sammons assert “it would not have been prudent for the plaintiffs to incur litigation expenses for themselves and defendants, and to expose themselves to possible judgment for costs until it was determined whether or not their claims would be barred by the Garvey decision.”
The principal issue in Garvey concerned subsidence damage to a residence concurrently caused by earth movement (an exclusion in the policy) and negligent construction (a covered risk). The circumstances of the present case are certainly similar. Recognizing that the precise impact of an appellate decision can rarely if ever be assessed before the opinion is filed, we can readily understand how a reasonable attorney could believe that Garvey would likely have a significant effect on the law relevant to the Sammons' action against State Farm. There is a separate question, however, as to whether the Sammons were justified in not serving the complaint despite the probable relevance of Garvey. We recognize that they had already provided State Farm with a copy of the complaint, thus deflecting a claim of substantial prejudice. Nonetheless, they arguably should have sought a stipulation from State Farm that they could await the filing of Garvey before deciding whether to serve the complaint. This would have advised State Farm that the Sammons still intended to prosecute the action if the governing law would allow.
Even if we assume the Sammons acted reasonably in waiting for the Garvey decision before serving the complaint, there remains the period between April and December 1989 during which the complaint remained unserved. The Sammons argue that uncertainty remained as to the application of Garvey to the facts of their case. Taking this assertion as true, it still does not explain the delay. No other Supreme Court case was pending which promised to resolve the uncertainty. The Sammons had no reason to assume that the issues would be any clearer in December, when service of the complaint was mandated (see § 583.210), than they were in April. Particularly where there has already been a protracted delay in prosecution (see, e.g., Danielson v. ITT Industrial Credit Co. (1988) 199 Cal.App.3d 645, 245 Cal.Rptr. 126), we believe that nebulous assertions of “uncertainty” in the law are an objectively unreasonable basis to further delay action on the case.
A plaintiff “must show that he acted with reasonable diligence throughout the entire period of time his case has been pending.” (Danielson, supra, 199 Cal.App.3d at p. 659, 245 Cal.Rptr. 126.) Because the Sammons did not demonstrate a reasonable excuse for the delay of almost three years in the service of the complaint, the trial court would have been justified in dismissing the complaint without inquiring into whether State Farm suffered any prejudice as a result of the delay.
To say the court would have been justified in dismissing the complaint, unfortunately, does not end our inquiry. It has been established beyond dispute for more than 20 years that a trial judge may properly deny a motion under section 583.410 (or former section 583, subdivision (a)) despite the plaintiff's failure to demonstrate a reasonable excuse for the delay in prosecuting the case. As the Supreme Court explained in Denham v. Superior Court (1970) 2 Cal.3d 557, 86 Cal.Rptr. 65, 468 P.2d 193, disapproving a series of earlier court of appeal decisions, “[I]n particular there is no requirement that the motion to dismiss ‘must’ be granted unless opposed by an adequate showing of diligence or excuse for delay.” (Id. at p. 563, 86 Cal.Rptr. 65, 468 P.2d 193.) This principle has been frequently repeated in the intervening years. (See, e.g., San Ramon Valley Unified School Dist. v. Wheatley–Jacobsen, Inc. (1985) 175 Cal.App.3d 1050, 1056, 221 Cal.Rptr. 342; Tannatt v. Joblin (1982) 130 Cal.App.3d 1063, 1067, 182 Cal.Rptr. 112.)
In Ladd v. Dart Equipment Corp. (1991) 230 Cal.App.3d 1088, 281 Cal.Rptr. 813, the court recently discussed this aspect of the Denham holding in the context of a case in which the trial court properly concluded there was no justifiable excuse for the delay but then supported its decision to dismiss by explaining it had no discretion to deny the motion where there was no showing of reasonable excuse. The trial court had relied on an earlier court of appeal decision which suggested that prejudice to the defendant is inferred from the unjustified delay. (See Trailmobile, Inc. v. Superior Court (1989) 210 Cal.App.3d 1451, 1457, 259 Cal.Rptr. 100.) The Ladd court reversed the dismissal order and remanded the case to the trial court for reconsideration of the motion without any mandatory inference of prejudice. It first reiterated the Denham principle that a trial court is not obligated to dismiss a case simply because the plaintiff has failed to demonstrate excusable delay. (230 Cal.App.3d at pp. 1105–1106, 281 Cal.Rptr. 813.) The decision goes on to reject the idea of inferred prejudice, suggesting that a demonstrated lack of prejudice is a principle factor a trial court could consider in deciding to deny a dismissal motion despite the lack of a reasonable excuse. (Id. at pp. 1106–1107, 281 Cal.Rptr. 813.)
Decisions holding that prejudice is “presumed” or “inferred” are based on the erroneous assumption that a showing of prejudice is required before a motion to dismiss under section 583.410 can be granted. Presumptions and inferences are evidentiary devices designed to lessen the burden on a party seeking to establish a fact by allowing that fact to be presumed or inferred from some lesser showing. Were the rule as this court held in Hurtado v. Statewide Home Loan Co., supra, 167 Cal.App.3d 1019, 213 Cal.Rptr. 712, a presumption of prejudice from unexcused delay would make sense because it would shift the burden to the plaintiff to show a lack of prejudice. In the absence of evidence demonstrating no prejudice, prejudice would be presumed and the motion would be granted. As we have explained, however (ante, fn. 4), it has been clear since the Supreme Court's decision in Blank v. Kirwan, supra, 39 Cal.3d 311, 332, 216 Cal.Rptr. 718, 703 P.2d 58 that a motion to dismiss may properly be granted even in the absence of a determination that the defendant was prejudiced. Where the trial court need not find prejudice, a “presumption” of prejudice is simply unnecessary.
Moreover, application of an unnecessary presumption can distract the trial court from the proper analysis of the issues before it. Here, for instance, the trial court presumed prejudice to State Farm apparently to the exclusion of the substantial evidence indicating no prejudice was suffered.7 While the trial court would have been justified in granting the motion to dismiss without considering the issue of prejudice, a case such as this where the defendant received a copy of the complaint two and one-half years before formal service would seem to be the prototypical case in which the trial court might wish to exercise its discretion under Denham to deny the motion. The court itself indicated it viewed this as a “tough case.” Yet by presuming prejudice, it was unable to consider whether the absence of prejudice justified the continued prosecution of the action.
Accordingly, we must reverse the judgment of dismissal and remand the case to the trial court to reconsider State Farm's motion without any mandatory presumption of prejudice. The court should consider the evidence indicating an absence of prejudice in deciding whether to exercise its discretion to deny the motion consistent with Denham v. Superior Court, supra, 2 Cal.3d 557, 563, 86 Cal.Rptr. 65, 468 P.2d 193.8
Judgment reversed. Each party shall bear its own costs for this appeal.
I agree with the holding of the majority which requires remand in order to eliminate any mandatory presumption of prejudice utilized by the trial court. (See Ladd v. Dart Equipment Corp. (1991) 230 Cal.App.3d 1088, 281 Cal.Rptr. 813.)
I write separately because in going beyond what is required by the record in this case the majority has endorsed questionable dismissal standards espoused in Putnam v. Clague (1992) 3 Cal.App.4th 542, 558, 5 Cal.Rptr.2d 25 (Putnam ). More importantly, my colleagues have taken the Putnam standards an additional, unnecessary, step further. As I shall explain more completely below, in embracing Putnam, the majority has managed to give new life to the plenary review approach adopted by this court in Hurtado v. Statewide Home Loan Co. (1985) 167 Cal.App.3d 1019, 1024–1026, 213 Cal.Rptr. 712 (Hurtado ), and rejected in Shamblin v. Brattain (1988) 44 Cal.3d 474, 478–479, 243 Cal.Rptr. 902, 749 P.2d 339 (Shamblin ). Although the expansive view of our powers—and wisdom—which underlies Hurtado is certainly attractive, with due respect, the attraction is one in which the Supreme Court has suggested we should not indulge.
I begin by explaining my disagreement with Putnam.
That disagreement in turn begins with the law which governs our review of discretionary dismissals. “ ‘The legislative policy underlying section 583 is not grounded solely in prejudice caused by delay to a defendant. Its purpose, too, is to expedite the administration of justice by compelling every person who files an action to prosecute it with promptness and diligence.’ [Citations.]” (Blank v. Kirwan (1985) 39 Cal.3d 311, 332, 216 Cal.Rptr. 718, 703 P.2d 58.) Thus “although the interests of justice weigh heavily against disposing of litigation on procedural grounds—a policy we affirm—that policy will necessarily prevail only if a plaintiff makes some showing of excusable delay.” (Salas v. Sears (1986) 42 Cal.3d 342, 347, 228 Cal.Rptr. 504, 721 P.2d 590; see also Wilson v. Sunshine Meat & Liquor Co. (1983) 34 Cal.3d 554, 562, 194 Cal.Rptr. 773, 669 P.2d 9.) Where there is no reasonable justification for the period of delay, the trial court may dismiss the complaint without any demonstration of prejudice suffered by a defendant. (Blank v. Kirwan, supra, 39 Cal.3d at p. 332, 216 Cal.Rptr. 718, 703 P.2d 58; Ladd v. Dart Equipment Corp., supra, 230 Cal.App.3d at pp. 1102–1103, 281 Cal.Rptr. 813; Wong v. Davidian (1988) 206 Cal.App.3d 264, 269, 253 Cal.Rptr. 675; Schumpert v. Tishman Co. (1988) 198 Cal.App.3d 598, 605–606, 243 Cal.Rptr. 810; Longshore v. Pine (1986) 176 Cal.App.3d 731, 735–736, 222 Cal.Rptr. 364.)
When the trial court has exercised its discretion on a motion to dismiss a reviewing court will not disturb the trial court's ruling absent a clear showing the trial court abused its discretion. (Blank v. Kirwan, supra, 39 Cal.3d at p. 331, 216 Cal.Rptr. 718, 703 P.2d 58.) “The appropriate test for abuse of discretion is whether the trial court exceeded the bounds of reason. When two or more inferences can reasonably be deduced from the facts, the reviewing court has no authority to substitute its decision for that of the trial court. [Citations.]” (Shamblin v. Brattain, supra, 44 Cal.3d at pp. 478–479, 243 Cal.Rptr. 902, 749 P.2d 339.)
Despite the clarity with which the Supreme Court has addressed these issues, in Putnam another district of the Court of Appeal recently articulated somewhat contrary standards by which excuses for delay might be measured. “When the plaintiff offers some explanation or excuse reflecting a conscious decision not to serve or otherwise prosecute the action, we believe there are two essential questions the court must initially address. Is the explanation credible under all the circumstances? If the facts are disputed and the trial court finds on substantial evidence that the explanation is merely an afterthought or pretext designed to cover up neglect, dismissal may be warranted. If the explanation is credible, however, the court should consider whether the reasons given for the decision are clearly unreasonable. That is, could a reasonably competent attorney conclude that delay was justified under the circumstances? If, as in State Compensation Ins. Fund, Inc. v. Selma Trailer & Manufacturing, Inc., supra, [ (1989) 210 Cal.App.3d 740, 258 Cal.Rptr. 545] the stated reason simply makes no sense, the plaintiff has not met his burden. In considering this question, however, courts should be careful not to engage in second-guessing attorneys' litigation decisions. If the decision is one which a reasonably competent attorney might have made under the circumstances, the burden should shift to the defendant to show that other factors, such as prejudice, support dismissal.” (Putnam v. Clague, supra, 3 Cal.App.4th at pp. 557–558, 5 Cal.Rptr.2d 25.) With due respect, unlike the majority, I am unwilling to embrace these standards in their entirety.
At the outset I would point out I agree with the first portion of the Putnam formulation: where the trial court concludes the explanations offered on behalf of a plaintiff are not bona fide the trial court has the power to order dismissal. However in determining whether a bona fide excuse is nonetheless unreasonable, I believe the Putnam opinion affords unwarranted deference to counsel's litigation decisions. My disagreement with this latter portion of the Putnam analysis is both substantive and procedural.
On a substantive level I do not believe deference to counsel's litigation choices is consistent with the notion the discretionary dismissal statute is designed to compel plaintiffs to act with promptness and diligence. (See Blank v. Kirwan, supra, 39 Cal.3d at p. 332, 216 Cal.Rptr. 718, 703 P.2d 58; Dunsmuir Masonic Temple v. Superior Court (1970) 12 Cal.App.3d 17, 23, 90 Cal.Rptr. 405; Code Civ.Proc., § 583.130.) The deferential standard adopted in Putnam provides little, if any, incentive for prompt prosecution of civil actions. Rather the breadth and flexibility of the standard suggests the duty to expedite the administration of justice is subordinate not only to the preference for trial on the merits, but to the convenience of the plaintiff and his counsel.
On a procedural level I believe the Putnam standard is inconsistent with the distinct factfinding role of the superior court. Appellate courts are required to give deference to factual findings of the trial court even when those findings are based solely on written declarations. (Shamblin v. Brattain, supra, 44 Cal.3d at p. 479, 243 Cal.Rptr. 902, 749 P.2d 339.) However with respect to the reasonableness of plaintiff's conduct, Putnam largely eliminates independent decision making by the trial court. In place of the deference Shamblin suggests we accord the decisions of the trial court, Putnam requires deference to the decisions of plaintiff's counsel. I do not believe the trial court's factfinding role is so circumscribed.
In particular I note that under Code of Civil Procedure section 583.410, subdivision (b), in ruling on a motion for discretionary dismissal, the trial court must consider criteria adopted by the Judicial Council. Those criteria are set forth in California Rules of Court 1 rule 373(e), and include, among other matters, the availability of the moving party for service, plaintiff's diligence in seeking to effect service of process, the nature and complexity of the case and the conditions of the court's calendar.2 These criteria in no sense suggest deference to an attorney's litigation decisions. Rather they suggest independent review by the trial court of the parties' conduct of the litigation. Indeed it is difficult to comprehend how a trial court may itself determine the diligence of plaintiff's efforts to effect service, as required by rule 373(e), yet nonetheless be bound by plaintiff's counsel's litigation strategy as suggested by Putnam.
I believe the criteria set forth in rule 373(e) provides ample guidance to the trial court in determining whether the plaintiff has offered a reasonable excuse for delay. Significantly the rule provides the guidance which the Legislature has expressly directed the trial court to consider in exercising the discretion provided by section 583.410.
My disagreement with the majority, however, goes beyond my disagreement with Putnam. Relying on Sheldon Appel Co. v. Albert & Oliker (1989) 47 Cal.3d 863, 875, 886, 254 Cal.Rptr. 336, 765 P.2d 498 (Sheldon Appel ), and this court's opinion in Hurtado, the majority finds “the issue of what a reasonably competent attorney could have decided under the circumstances is essentially a question of law, assuming the underlying ‘circumstances' are not in dispute.” (Maj. opn., p. 378.) Putnam itself of course does not go this far in expanding our review of orders of dismissal. With due respect, Sheldon Appel and Hurtado do not provide any valid basis for doing so.
I agree with the majority the liberal standard employed in Putnam is almost indistinguishable from the standard used in Sheldon Appel to determine liability for malicious prosecution, i.e., “whether any reasonable attorney would have thought the claim tenable.” (Sheldon Appel Co. v. Albert & Oliker, supra, 47 Cal.3d at p. 886, 254 Cal.Rptr. 336, 765 P.2d 498.) However the conclusion I draw from the similarity is markedly different from the one drawn by my colleagues. In Sheldon Appel the Supreme Court found the deferential standard it adopted “reflects the important public policy of avoiding the chilling of novel or debatable legal claims.” (47 Cal.3d at p. 885, 254 Cal.Rptr. 336, 765 P.2d 498.) Here of course we are not concerned with discouraging the initiation of novel legal theories; rather we are confronted with the separate problem of encouraging plaintiffs to promptly resolve claims—both novel and routine—once the claims have been initiated. There is no authority or reason which suggests the generosity which protects unsuccessful litigants from later tort liability is also needed to protect claims which have not been diligently prosecuted. Thus, for me the similarity between the standards set forth in Putnam and Sheldon Appel only undermines Putnam. Where my colleagues see a green light which permits them to expand our powers of review, I see a yellow caution signal.
That signal turns bright red when I turn to Hurtado. In the portion of Hurtado the majority now relies upon, this court stated: “The deference accorded a trial court's factual findings is only one manifestation of the principle that greater deference is warranted whenever the trial judge's ‘nether position’ in the judicial pyramid makes him a presumptively more capable decisionmaker [citation] because of ‘his observation of the witnesses, [and] his superior opportunity to get “the feel of the case.” ’ [Citation.] ․ It necessarily follows, however, that where the trial court's ‘nether position’ does not make it the better decisionmaker, appellate court deference is inappropriate.” (Hurtado, supra, 167 Cal.App.3d at pp. 1024–1025, 213 Cal.Rptr. 712, fn. omitted.) Having reached this predicate, the Hurtado opinion concluded “the trial court is in no better position than the appellate court to resolve the issues normally presented by a section 583(a) motion.” (Id. at p. 1026, 213 Cal.Rptr. 712.)
Our unwillingness in Hurtado to accord deference to trial court decisions on motions to dismiss was supported by thorough and, in many respects, persuasive scholarship. In the end, however, the conclusions we reached were squarely rejected by the Supreme Court. In Shamblin v. Brattain the Supreme Court stated: “The trial court, with declarations and supporting affidavits, was able to assess credibility and resolve any conflicts in the evidence․ Even though contrary findings could have been made, 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. [Fn.].” (44 Cal.3d at p. 479, 243 Cal.Rptr. 902, 749 P.2d 339.) In its footnote, the court went on to state: “Any contrary implication in Hurtado v. Statewide Home Loan Co. (1985) 167 Cal.App.3d 1019, 213 Cal.Rptr. 712 is hereby disapproved.” (Ibid.)
In short, on the issue of deference to trial court rulings Hurtado is simply no longer good law. Thus I think the majority is in error in relying upon Hurtado for the proposition a lawyer's diligence in a given case is subject to de novo review in this court.
Rather than using a substantive standard from an unrelated area of law as a means of reclaiming some of the powers we asserted in Hurtado, in reviewing motions to dismiss I think we should follow the admonition of the Supreme Court: “When the trial court has ruled on such a motion, ‘ “unless a clear case of abuse is shown and unless there has been a miscarriage of justice a reviewing court will not substitute its opinion and thereby divest the trial court of its discretionary power.” ’ [Citations.]” (Blank v. Kirwan, supra, 39 Cal.3d at p. 331, 216 Cal.Rptr. 718, 703 P.2d 58.)
I would remand this case based solely on Ladd. In an appropriate case in place of the substantive standard adopted in Putnam and the majority's plenary standard of review, I would follow the clear standards to which we have been directed by this state's highest court and the rules governing dismissals. Accordingly I concur only in the result reached by the majority.
1. All statutory references are to the Code of Civil Procedure unless otherwise indicated.
2. The record reflects some confusion as to exactly when State Farm was notified. The Sammons' first amended complaint alleges they submitted a claim on or about July 8, 1986. The State Farm claims file, which the record has been augmented to include, contains inconsistent references. A document entitled “Preliminary and Final Checklist” lists “1st Notice to Agt.” as “6/27/86.” The following document in the file, a “Claim Transmittal Summary,” contains a notation indicating that State Farm was never “advised of cracks in house until atty put us on notice with her letter dated 12/12/86 suit was filed 12/11/86.” In view of the conflicting evidence, we have assumed the facts as alleged in the complaint for the purpose of this appeal.
3. Subdivision (a) of section 583.410 provides: “The court may in its discretion dismiss an action for delay in prosecution pursuant to this article on its own motion or on motion of the defendant if to do so appears to the court appropriate under the circumstances of the case.”Subdivision (a) of section 583.420 provides in relevant part: “The court may not dismiss an action pursuant to this article for delay in prosecution except after one of the following conditions has occurred:“(1) Service is not made within two years after the action is commenced against the defendant.“(2) The action is not brought to trial within the following times:“(A) Three years after the action is commenced against the defendant․”
4. The Sammons err in placing reliance on the portion of this court's Hurtado opinion which held that a showing of prejudice was required even if the plaintiff failed to demonstrate some excuse for the delay. (See Hurtado v. Statewide Home Loan Co., supra, 167 Cal.App.3d at pp. 1028–1030, 213 Cal.Rptr. 712.) While much of the conceptual discussion in Hurtado remains good law, the Supreme Court's opinion in Blank v. Kirwan (1985) 39 Cal.3d 311, 216 Cal.Rptr. 718, 703 P.2d 58 (filed less than three months later) makes clear that prejudice is not an indispensable predicate to granting a motion to dismiss. (Id. at p. 332, 216 Cal.Rptr. 718, 703 P.2d 58; see generally, e.g., Wong v. Davidian (1988) 206 Cal.App.3d 264, 270, 253 Cal.Rptr. 675.)
5. We believe our dissenting colleague's real disagreement is with Putnam and not with our discussion here, a conclusion which can be inferred even from the dissenting opinion itself. (See conc. and dis. opn. post, p. 8.) (We note in this regard that the Supreme Court denied a petition for review in Putnam on April 23, 1992.) If the discretionary decision to dismiss incorporates a “reasonably competent attorney” standard in evaluating a proffered excuse (Putnam ), and the facts are not in dispute, the issue of “reasonable excuse” must be a question of law on which the appellate courts do not defer to trial courts (Sheldon–Appel and Hurtado ).We do disagree with the dissent's assertion that Shamblin v. Brattain (1988) 44 Cal.3d 474, 243 Cal.Rptr. 902, 749 P.2d 339 has completely overruled Hurtado 's discussion of appellate deference. Shamblin 's disagreement with Hurtado is a limited one. In discussing factual findings made by a trial court on disputed evidence, Shamblin states: “Even though contrary findings could have been made, 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.” (44 Cal.3d at p. 479, 243 Cal.Rptr. 902, 749 P.2d 339.) A footnote at that point adds: “Any contrary implication in Hurtado v. Statewide Home Loan Co. (1985) 167 Cal.App.3d 1019, 213 Cal.Rptr. 712 is hereby disapproved.”This footnote is clearly directed at the suggestion in Hurtado, relying on United Farm Workers National Union v. International Brotherhood of Teamsters (1978) 87 Cal.App.3d 225, 233, 150 Cal.Rptr. 761, that “where the factual record consists of affidavits and declarations rather than live testimony, the trial court is in no better position than the appellate court to resolve disputed facts.” (167 Cal.App.3d at p. 1026, fn. 5, 213 Cal.Rptr. 712.) Shamblin certainly cannot be read to question Hurtado 's discussion of appellate deference in circumstances where the evidence is not in conflict.
6. Review was granted in Garvey in September 1986.
7. Even were a presumption appropriately applied, it does not eliminate the trial court's obligation to consider evidence indicating the defendant suffered no prejudice. Such a presumption would most likely be construed as affecting the burden of producing evidence, in which case its effect evaporates where, as here, the opposing party introduces sufficient evidence to support a contrary finding. (See Evid.Code, § 604.) Even assuming the presumption could be construed as one affecting the burden of proof, its remaining effect would simply be to shift the burden to the Sammons to disprove prejudice where the facts were evenly balanced. Here, it would appear, the trial court never considered the issue of prejudice apart from the presumption.
8. The transcript indicates that in ruling on the motion to dismiss, the trial court may also have been influenced by a pending motion for judgment on the pleadings which it viewed as meritorious. The Sammons argue that the basis for the latter motion has been eliminated by the Supreme Court's recent decision in Prudential–LMI Com. Insurance v. Superior Court (1990) 51 Cal.3d 674, 274 Cal.Rptr. 387, 798 P.2d 1230. Whatever the merits of this argument, needless to say the substance of the motion to dismiss must be considered separately from any other pending motion.
FN1. All rule references are to the California Rules of Court unless otherwise specified.. FN1. All rule references are to the California Rules of Court unless otherwise specified.
2. Rule 373(e) states: “In ruling of the motion the court shall consider all matters relevant to a proper determination of the motion, including the court's file in the case and the affidavits and 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; the diligence in seeking to effect service of process; the extent to which the parties engaged in any settlement negotiations or discussions; the diligence of the parties in pursuing discovery or other pretrial proceedings, including any extraordinary relief sought by either party; the nature and complexity of the case; 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; the nature of any extensions of time or other delay attributable to either party; the condition of the court's calendar and the availability of an earlier trial date if the matter was ready for trial; whether the interests of justice are best served by dismissal or trial of the case; and any other fact or circumstance relevant to a fair determination of the issue. The court shall be guided by the policies set forth in section 583.130 of the Code of Civil Procedure.”
WIENER, Acting Presiding Justice.
WORK, J., concurs.