GRANITE STATE INSURANCE COMPANY v. NEVADA GEM HOME HEALTH (2011)

NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

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We affirm the trial court's dismissal of a lawsuit after the court struck appellant's second amended complaint with leave to amend, and appellant filed another second amended complaint identical to the one stricken.

FACTUAL AND PROCEDURAL BACKGROUND

1. Complaint and First Amended Complaint

On September 24, 2009, appellant Granite State Insurance Company (Granite) sued respondent Nevada Gem Home Health (Nevada) alleging causes of action for breach of contract, open book, and account stated.   On October 28, 2009, Nevada demurred to the complaint.   On January 22, 2010, Granite filed a first amended complaint alleging the same causes of action.   Paragraph 4 of the first amended complaint alleged that Granite “assigned” its rights against defendants to “plaintiff,” whose identity was not clarified (Paragraph 4).   Six days later, Nevada demurred to the first amended complaint.   Among other things, Nevada argued that Paragraph 4 was deficient because it indicated Granite had assigned its rights to the lawsuit.   Granite did not oppose Nevada's demurrer to the first amended complaint.

2. March 29 Complaint and Hearing

Before the March 29, 2010 hearing on Granite's first amended complaint, Granite filed a second amended complaint (March Complaint), which contained the identical Paragraph 4 as in the first amended complaint.   The proof of service attached to the March Complaint showed it was served on March 25, 2010, and the court found that the March Complaint had been filed prior to the March 29 hearing.   At the March 29 hearing, without objection, the court struck the March Complaint and ordered Granite to amend Paragraph 4 to clarify its standing to pursue the litigation.   After counsel for Granite agreed to amend the pleading to revise Paragraph 4, the court granted Granite 10 days to amend its pleading.

Nevada served by mail notice of ruling on March 29, 2010.   The notice of ruling stated that “[a]ny second amended complaint filed, or submitted to the court for filing, by the plaintiff prior to the hearing on defendant's demurrer on March 29, 2010, is stricken from the record.”   Notice of ruling also stated that Granite had 10 days to amend its complaint.

3. April 12 Complaint

On April 12, 2010, Granite attempted to file a second amended complaint (April Complaint).   Paragraph 4 of the April Complaint was identical to Paragraph 4 in the first amended complaint and Paragraph 4 in the March Complaint.   Indeed, the only difference between the March Complaint and the April Complaint was the date the complaints were signed.   The court struck the April Complaint.

4. Nevada's Motion to Dismiss

On April 13, 2010, Nevada filed an application for an order dismissing the action and awarding judgment in favor of Nevada.   Nevada argued that Granite had failed to timely file a second amended complaint, which Nevada determined was due April 8, 2010.

5. Granite's Application to File Second Amended Complaint

After Nevada filed its motion to dismiss, Granite sought leave to file its April Complaint.   It argued that under Code of Civil Procedure section 473, its conduct in failing to file a second amended complaint “by April 8, 2010 as ordered at the hearing granting Defendant's Demurrer to Plaintiff's First Amended Complaint” constituted mistake, inadvertence, or excusable neglect.

6. Court Findings

The court found that the March Complaint was the pleading the court had ordered stricken.   It further found that the April Complaint still contained the same Paragraph 4 “and therefore remains deficient.   Obviously if plaintiff could correct this fatal problem it would have by now therefore the court concludes it cannot and therefore has no standing to proceed in this matter.”   Finding good cause, the court dismissed the case.

DISCUSSION

Granite argues (1) the court erred in striking the March Complaint;  (2) the April Complaint was timely filed;  and (3) the court should not have dismissed the lawsuit.   We discuss the arguments seriatim.

1. March Complaint

Granite demonstrates no error in striking the March Complaint.   Granite's sole argument that it was filed after the March 29 hearing is contrary to the trial court's finding of fact.   The trial court expressly found it was filed prior to the hearing.   The trial court's finding is supported by evidence that the pleading was served March 25, and therefore could not have been amended after a March 29 hearing.   Moreover, Granite agreed the court should strike the March Complaint to afford Granite an opportunity to amend its pleading.

2. April Complaint

The April Complaint was filed within the time permitted to amend the pleading.   Notice of ruling was served by mail, which extended the response time by five days, giving Granite until April 13, 2010, to file the amended pleading.  (Code Civ. Proc., § 1013;  People v. $20,000 U.S. Currency (1991) 235 Cal.App.3d 682, 687 [extension of time for service by mail applies to “ ‘any prescribed time period following service by mail’ ”].)   In addition, the time to amend a pleading when a demurrer is sustained runs from the service of notice unless “notice is waived in open court, and the waiver entered in the minutes.” (§ 472b.)   Although Granite initially indicated it would waive notice, no waiver was entered in the minutes.   Therefore, the time to amend ran from the giving of notice, which was extended by service of mail.¹  (People v. $20,000 U.S. Currency, supra, at p. 691.)

3. Dismissal

The remaining and most important issue is whether the trial court erred in dismissing the lawsuit.   It is the appellant's burden to show the trial court abused its discretion in dismissing the lawsuit.  (Gitmed v. General Motors Corp. (1994) 26 Cal.App.4th 824, 827.)   Whether a party has standing to sue may be raised by demurrer.  (Chiatello v. City and County of San Francisco (2010) 189 Cal.App.4th 472, 481.)   As we explain, dismissal was proper for three independent reasons.

First, dismissal is appropriate when a plaintiff stipulates that a demurrer should be sustained with leave to amend and the plaintiff fails to amend the complaint.  (Wilson v. City of Los Angeles (1958) 156 Cal.App.2d 776, 778.)   Here, Granite did not oppose the demurrer to the first amended complaint, challenging Paragraph 4. Granite consented to striking the March Complaint and to amending Paragraph 4. Nevertheless, Granite failed to amend Paragraph 4 in its April Complaint.   Although Granite filed another document entitled “second amended complaint,” the so-called amended pleading was the same as the stricken pleading.

Second, dismissal is appropriate when a demurrer is sustained with leave to amend, the plaintiff fails to amend within the time specified by the court, and either party moves for dismissal.  (Leader v. Health Industries of America, Inc. (2001) 89 Cal.App.4th 603, 613–614, citing Code Civ. Proc., § 581, subd. (f)(2).)   Applying this rule, the court properly dismissed the action for Granite's failure to timely amend its complaint.   Granite simply refiled the same pleading without any amendment.   Because Granite never amended the March Complaint, it necessarily failed to timely amend the pleading.

Finally, even if Granite could overcome the foregoing procedural obstacles, Granite failed to identify any error on the merits.²  When a plaintiff is given an opportunity to amend and chooses not to amend a complaint, “ ‘strict construction of the complaint is required and it must be presumed that the plaintiff has stated as strong a case as he can.’  [Citations.]”  (Reynolds v. Bement (2005) 36 Cal.4th 1075, 1091;  see also Stonehouse Homes LLC v. City of Sierra Madre (2008) 167 Cal.App.4th 531, 538–539 & Caliber Bodyworks, Inc. v. Superior Court (2005) 134 Cal.App.4th 365, 373.) ³  On appeal, Granite does not challenge the trial court's finding that it lacked standing to file the complaint or that absent standing, it could not proceed.   Granite does not challenge the trial court's finding that its numerous failures to revise Paragraph 4 indicated it could not cure the defect.   Granite offered no proposed amendment to cure the pleading.   In short, Granite failed to carry its burden on appeal to show that the court abused its discretion in dismissing the lawsuit after finding that Granite did not have standing to pursue it.

DISPOSITION

The judgment is affirmed.   Nevada shall have its costs on appeal.

We concur:

FOOTNOTES

FN1. In the trial court, Granite incorrectly conceded its filing was untimely.   Therefore, whether the April Complaint was timely filed arguably was forfeited.   Nevertheless, we need not determine whether forfeiture is applicable in this context because as explained in part 3 of the discussion, Granite failed to show that the court abused its discretion in dismissing the lawsuit.In the trial court, Granite argued its delay in filing the complaint should have been excused under Code of Civil Procedure section 473.   Granite has abandoned that issue on appeal by failing to make any argument concerning section 473.  (Durell v. Sharp Healthcare (2010) 183 Cal.App.4th 1350, 1361, fn. 5.).  FN1. In the trial court, Granite incorrectly conceded its filing was untimely.   Therefore, whether the April Complaint was timely filed arguably was forfeited.   Nevertheless, we need not determine whether forfeiture is applicable in this context because as explained in part 3 of the discussion, Granite failed to show that the court abused its discretion in dismissing the lawsuit.In the trial court, Granite argued its delay in filing the complaint should have been excused under Code of Civil Procedure section 473.   Granite has abandoned that issue on appeal by failing to make any argument concerning section 473.  (Durell v. Sharp Healthcare (2010) 183 Cal.App.4th 1350, 1361, fn. 5.)

FN2. Granite's sole argument is that the court erred in striking the April Complaint and dismissing the lawsuit because it had timely filed that pleading..  FN2. Granite's sole argument is that the court erred in striking the April Complaint and dismissing the lawsuit because it had timely filed that pleading.

FN3. Reynolds v. Bement,supra, 36 Cal.4th 1075 was abrogated on other grounds in Martinez v. Combs (2010) 49 Cal.4th 35, 66..  FN3. Reynolds v. Bement,supra, 36 Cal.4th 1075 was abrogated on other grounds in Martinez v. Combs (2010) 49 Cal.4th 35, 66.

BIGELOW, P. J. RUBIN, J.