Hills v. J.B. Hunt Transport CA1/2 ( 2014 )

Filed 8/14/14 Hills v. J.B. Hunt Transport CA1/2
NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication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 TWO
FREDRICK HILLS,
Plaintiff and Appellant,
A139237
v.
J.B. HUNT TRANSPORT, INC. et al., (Alameda County
Super. Ct. No. HG08401796)
Defendants and Respondents.
In September 2006, appellant Frederick Hills was injured while working as a
temporary employee at a Mervyn’s distribution center. In August 2007, he retained
counsel who submitted a claim to Mervyn’s, and who heard nothing in reply. In August
2008, counsel filed a personal injury complaint, naming as defendants Mervyn’s LLC
(Mervyn’s) and Does 1 to 20. Mervyn’s had declared bankruptcy days before, a
bankruptcy that was quickly brought to the attention of Hills’s counsel who, despite many
representations to the trial court, did nothing to seek relief from the bankruptcy court. In
September 2012, counsel learned the names of the trucking companies at the scene at the
time of the accident, and amended the complaint to name J.B. Hunt Transport, Inc. (J.B.
Hunt), and Werner Enterprises, Inc. and C.L. Werner, Inc. (usually collectively, Werner)
as Doe defendants.
In April 2013, J.B. Hunt and Werner separately moved to dismiss for failure to
serve the complaint within three years. The trial court granted both motions and
dismissed defendants from the case. Hills appeals, contending that the three-year-service
requirement was tolled. We disagree, and we affirm.
1
BACKGROUND
The Accident
On September 8, 2006, Hills was loading and unloading merchandise at the
Mervyn’s distribution center in Fremont, working there as an employee of Benchmark
Staffing, an agency that supplied temporary workers. A truck pulled away from the dock,
injuring Hills. Hills received worker’s compensation from Benchmark, and, in fact, the
worker’s compensation insurer would later intervene in Hills’s lawsuit.
In August 2007, Hills retained the Dunnion Law Firm (Dunnion firm or Hills’s
attorneys) to represent him. According to the declaration of Glenda de Guzman of that
firm, they were retained “expressly to pursue [Hills’s] claim against Mervyn’s, who he
believed was the only party responsible for his injury.”
The Proceedings Below
On August 1, 2008, a year after its retention and almost two years after the
accident, the Dunnion firm filed a complaint against Mervyn’s and Does 1 to 20.1 It
developed that Mervyn’s had filed for bankruptcy days before the complaint was filed,
and the case against Mervyn’s was automatically stayed. By November 3, 2008, the
Dunnion firm had obtained the notice of bankruptcy.
On December 1, 2008, the Dunnion firm filed its first case management statement
on behalf of Hills, representing that he “anticipates filing for relief from stay to the
trustee of the Bankruptcy Court in order to proceed with discovery and trial of the case.”
This was followed by a March 26, 2009 case management statement, in which Hills’s
attorneys made the following statements: “Plaintiff anticipates filing for relief from stay
to the trustee in the Bankruptcy Court in order to proceed with discovery and trial of case.
1
The record is not clear what, if anything, the Dunnion firm did between
August 2007 and August 2008, other than notifying the “Mervyn’s . . . claims department
of the claim.” All de Guzman’s declaration says is this: “After the undersigned notified
Mervyn’s third party claims department of the claim, and later, of the filing of the
lawsuit, the third party claims department did not contact the undersigned ever again.
Other than advising that the claim was opened, the third party claims department never
advised that liability was denied on any grounds.”
2
[¶] . . . [¶] Plaintiff requests a continuance of 120 days for further CMC so that Plaintiff
may continue in efforts to lift stay with the US Bankruptcy Trustee in Delaware.” And
case management statements filed on behalf of Hills over the next 25 months—on
May 21, 2010, November 19, 2010, and May 2, 2011—contained essentially identical
language.2 In fact, the Dunnion firm never sought any such relief.
As to what in fact did occur, the record is sparse indeed. All we have besides the
register of actions is the de Guzman declaration, which states in pertinent part as follows:
“4. . . . I informed Judge Winifred Smith of this court at the case management
conference on December 16, 2008, that Mervyn’s had filed chapter 11 prior to the
complaint filing. She would set the matter out multiple times by 6-month compliance
periods, in case Mervyn’s made a special appearance, stayed the action, or changed it’s
[sic] bankruptcy status, including coming out of bankruptcy.
“5. On January 6, 2009, February 6, 2009, and March 17, 2009, I spoke with
Christopher Samis, one of Mervyn’s bankruptcy attorneys in Delaware. During those
conversations Mr. Samis refused to stipulate for relief from the stay, refused to provide
any limited discovery about the incident, and confirmed that Mervyn’s was self-insured
up to $250,000, which would constitute assets protected in the bankruptcy. He offered to
provide me with the insurance policy supporting the self-insured retention; the policy was
received by email dated March 17, 2009. . . .
“6. Thereafter, Mervyn’s never made a special appearance or filed a stay prior to
the November 30, 2009, case management conference. Consistent with Rule 3.650(a), on
November 19, 2009, I filed the “Notice of Stay of Proceedings;’ . . . . On December 22,
2010, attorneys for Mervyn’s filed their ‘Notice of Suggestion of Pendency of
Bankruptcy and Automatic Stay of Proceedings.’ . . . .
2
The May 2, 2011 statement read: “Plaintiff anticipates filing for relief from stay
to the chapter 7 bankruptcy trustee of the Bankruptcy Court when that Trustee has been
appointed, in order to proceed with discovery and trial of case. [¶] . . . [¶] Plaintiff
requests a continuance of 180 days for further CMC so that Plaintiff may continue in
efforts to lift stay with the US Bankruptcy Chapter 7 [sic] if/when that Trustee has been
appointed. Chapter 7 has not yet been ordered. . . .”
3
“7. On May 17, 2011, Mervyn’s attorney, Christina Sein, specially appeared at the
compliance hearing on May 17, 2011. The judge’s clerk informed us the hearing was
continued by tentative ruling to December 6, 2011. After the hearing, I spoke with
Christina Sein regarding a proposal to obtain limited discovery from Mervyn’s. She
advised she would have senior counsel from Delaware contact me. From August 23,
2011 to May 7, 2012, I had several telephone conversations with Christopher Samis,
Mervyn’s counsel in Delaware, who ultimately informed me that his client would agree
to provide information confirming that Mervyn’s never owned or operated any truck in
the subject warehouse on the day of the accident, and would provide information and
certain documents showing three trucking companies that may have provided such
services, in exchange for a dismissal without prejudice of Mervyn’s. A declaration to
be signed by a Mervyn’s officer, comprising this agreement, was drafted and reviewed
multiple times over several months. I finally received from Mr. Samis, the agreed
declaration signed and dated on May 18, 2012 . . . . This declaration, however, did not
identify the trucking companies. That information would not be received until
September 4, 2012.”
On August 17, 2012, the Dunnion firm filed a case management statement
advising that it had dismissed Mervyn’s, which was going to provide information
regarding certain trucking companies operating in its warehouse. The firm also requested
a continuance of 90 days for a further case management conference, “so that Plaintiff
may obtain from Mervyn’s the names of truck companies operating in their warehouse on
the date of the accident. These truck companies will replace the Doe defendants . . . .”
On September 7, 2012, the trial court granted the Dunnion firm’s request to amend
the complaint to substitute the names of Doe defendants: J.B. Hunt for Doe 1, J.B. Hunt
Logistics, Inc. for Doe 2, Werner Enterprises, Inc. for Doe 3, and C.L. Werner, Inc. for
Doe 4. J.B. Hunt was served with the summons and complaint on September 18, 2012,
and Werner on September 21, 2012.
It was now over six years since the accident and more than four years since the
complaint.
4
The Motions to Dismiss
Werner answered the complaint on October 30, 2012, and J.B. Hunt on
November 5, 2012, both representing that they never stipulated to extend the time for
service of the summons and complaint.
In April 2013, Werner and J.B. Hunt separately moved to dismiss Hills’s action
for failure to serve the complaint within three years pursuant to Code of Civil Procedure
section 583.210.3 The motions were set for hearing in June, but were later advanced to
May 24.
On May 3, 2013, the Dunnion firm filed what it called a “Motion by Plaintiff to
Exclude Time That Case Was Under A Bankruptcy Stay From The 5-Year Period Per
C.C.P. Section 583.340(b); Request To Vacate Trial Date, And Request To Set Trial For
Trial Setting Conference.” The motion requested a ruling from the trial court that the
five-year period for bringing Hills’s action to trial under section 583.360 would not
expire on August 1, 2013, and to vacate the trial date of June 28, 2013 because, among
other reasons, Hills was in prison and was not scheduled to be released until August 15.4
On May 13, 2013, Hills filed his opposition to the motions to dismiss. Both
Werner and JB Hunt filed replies.
As noted, the motions had been set for hearing on May 24, prior to which the court
had issued a tentative ruling. It was contested, and the matters came on for hearing,
3
All statutory references are to the Code of Civil Procedure except where
otherwise noted.
4
The motion was brought against the background that trial had been set for
June 28. At that time, however, Hills was incarcerated and was not scheduled to be
released until August 15. Hearing on Hills’s motion was set for May 24, the same date as
the hearings on the motions to dismiss. On May 14, Michael V.W. Crain, as attorney for
the Intervenor (The Insurance Company of the State of Pennsylvania, a Division of
American International Group), filed a declaration in support of Hills’s motion. On
May 20, Werner filed evidentiary objections to the intervenor’s declaration, and on
May 22, J.B. Hunt filed a joinder to Werner’s objections. Because the motions to dismiss
were granted, Hills’s motion was dropped and the trial court did not rule on the
objections to the intervenor’s declaration.
5
following which the trial court granted both motions to dismiss, in substantially identical
orders. The order as to J.B. Hunt is illustrative:
“This action was filed on August 1, 2008, and the J.B. Hunt Transport LLC was
not served with the summons and complaint until September 18, 2012, more than four
years later. That is untimely pursuant to Code of Civil Procedure section 583.210, and
Plaintiff fails to demonstrate that any basis for tolling under section 583.240 applies here.
The three year period in which defendants must be served begins to run from the date the
complaint is filed, not from the date the Doe amendment was filed. (See Highlanders v.
Olsan (1978) 77 Cal. App. 3d 690, 695.)
“Although former Defendant Mervyn[’]s LLC filed for bankruptcy, such that this
action was stayed as to Mervyns, this action was NOT stayed as to entities that had not
filed for bankruptcy, like J.B. Hunt Transport LLC. (See Barnett v. Lewis ([1985])
170 Cal. App. 3d 1079, 1089.) The stay of action discussed in Code of Civil Procedure
section 583.240(b) governs only complete stays of an action, not partial stays or stays as
to a single defendant. (See, e.g., Bruns v. E-Commerce Exchange Inc. (2011) 51 Cal. 4th
717, 730 analyzing analogous section 583.340(b).) Unlike in Highland Stucco & Lime
Inc. v. Superior Court (1990) 222 Cal. App. 3d 637, 640, cited by Plaintiff, this Court
never entered any order staying this entire case.
“Furthermore, Plaintiff’s argument that service on J.B. Hunt Transport LLC was
‘impossible, impractical, or futile due to causes beyond plaintiff’s control’, pursuant to
section 583.240(d), lacks merit. That section expressly provides that ‘failure to discover
relevant facts or evidence’ is NOT a cause beyond Plaintiff’s control for the purpose of
that section. The Court also observes that Plaintiff makes no showing of any attempt to
discover the identity of the Doe defendants apart from seeking discovery or other
information directly from Mervyn’s (which was not required to provide any such
discovery due to its bankruptcy stay.).”
Following notice of entry of the orders, Hills filed a timely appeal.
6
DISCUSSION
The Statutes, Their Application, and Some General Principles
Section 583.210, subdivision (a) provides in pertinent part that “The summons and
complaint shall be served upon a defendant within three years after the action is
commenced against the defendant.” (§ 583.210, subd. (a).)
Section 583.250 provides:
“(a) If service is not made in an action within the time prescribed in this article:
“(1) The action shall not be further prosecuted and no further proceedings shall be
held in the action.
“(2) The action shall be dismissed by the court on its own motion or on motion of
any person interested in the action, whether named as a party or not, after notice to the
parties.
“(b) The requirements of this article are mandatory and are not subject to
extension, excuse, or exception except as expressly provided by statute.”
Section 583.240 provides, however, that “[i]n computing the time within which
service must be made pursuant to this article, there shall be excluded the time during
which any of the following conditions existed,” going on to list four conditions. Hills
contends two of the four conditions were present here: that in subdivision (b), which
excludes the time during which the “prosecution of the action or proceedings in the action
was stayed and the stay affected service”; and that in subdivision (d), which excludes the
time during which “service, for any other reason, was impossible, impracticable, or futile
due to causes beyond the plaintiff’s control.”
The statutes are in chapter 1.5, entitled “Dismissal For Delay in Prosecution.”
More specifically, the statutes are in Article 2, entitled “Mandatory Time for Service of
Summons.” The statutes are not in article 3, entitled “Mandatory Time for Bringing
Action to Trial or New Trial,” which is significant for several reasons, the most
fundamental of which is that the articles are to be applied differently, with the service of
process rules applied strictly against the plaintiff, and the bringing to trial rules applied
liberally in favor of the plaintiff. Specifically:
7
As quoted, section 583.210, subdivision (a) requires the plaintiff to serve the
summons and complaint within three years of the filing of the complaint. And section
583.250, subdivision (a)(2) directs that where plaintiff has failed to do so, “the action
shall be dismissed.” Dismissal is mandatory. (Watts v. Crawford (1995) 10 Cal. 4th 743,
748.) Our colleagues in Division Three explained the significance of this, and how the
policy underlying the service statutes is different than the policy underlying the statutes
pertaining to bringing a case to trial. It was in Shipley v. Sugita (1996) 50 Cal. App. 4th
320, 326, as follows: “Section 583.210 is designed to give defendants timely notice of an
action so they can make efforts to preserve evidence. By contrast, section 583.310
concerns the timeliness of bringing the action to trial. (Damjanovic v. Ambrose (1992)
3 Cal. App. 4th 503, 510.) The sections are implemented differently based ‘on the
recognition that ordinarily a plaintiff exercising due diligence is in control of the time of
service of summons, while a plaintiff is not ordinarily in control of bringing a case to
trial.’ (Ibid.) Consequently, the exceptions codified in section 583.240, subdivision (d)
must be construed strictly against the plaintiff. (Williams v. Los Angeles Unified School
Dist. (1994) 23 Cal. App. 4th 84, 102; 17 Cal. Law Revision Com. Rep. [(1984) 905,
933].) Again, by contrast, the similar exception to section 583.310 contained in
section 583.340, subdivision (c) is construed liberally, consistent with the policy favoring
resolution on the merits. (17 Cal. Law Revision Com. Rep., supra, at p. 936.)”
As the Court of Appeal summed up in Scarzella v. DeMers (1993) 17 Cal. App. 4th
1762, 1770–1771, the “legal principles governing the failure to timely bring a matter to
trial do not control the failure to timely serve a summons,” and the policy favoring a trial
on the merits “does not compel denial of the motion for dismissal for delay in service.”
Those are some general principles regarding the statutes. One other general
principle applies to the setting here: the three year service requirement applies to
defendants named in the complaint as Does. (See Warren v. Atchinson, T & S.F. Ry. Co.
(1971) 19 Cal. App. 3d 24, 38.) In other words, the three year rule applies where the
defendant seeking dismissal was served as one of the Doe defendants named in the
original complaint, later amended to show his true name. (Lesko v. Superior Court
8
(Lopez) (1982) 127 Cal. App. 3d 476, 484–485.) In short, a plaintiff has three years from
the date of filing the complaint to identify and serve Doe defendants. (Jolly v. Eli Lilly &
Co. (1988) 44 Cal. 3d 1103, 1118.)
The Stay Against Mervyn’s Did Not Affect Service on J.B. Hunt and Werner
Hills first contends that section 583.240, subdivision (b) applied here because
there was an automatic bankruptcy stay against the only known defendant, which affected
service to the unknown Doe defendants. Hills asserted below that the stay against
Mervyn’s was a “stay of proceedings” to which section 583.240, subdivision (b) applied.
As noted, the trial court disagreed. Citing Bruns v. E-Commerce Exchange, Inc. (2011)
51 Cal. 4th 717, 730 (Bruns), the trial court held that subdivision (b) only applies to
“complete stays of an action, not partial stays or stays as to a single defendant.” Because
the bankruptcy court never ordered a complete stay of proceedings as a result of
Mervyn’s bankruptcy, the court reasoned, subdivision (b) did not apply.
On appeal, Hills argues that the trial court erred in two respects when interpreting
section 583.240, subdivision (b). First, he contends the court incorrectly concluded that
the statute applied only to complete stays. Second, he contends that the court erred by
failing to give effect to the second phrase in the statute, that “the stay affected service.”
We agree with Hills on the first point.5 But not the second.
5
As indicated, the trial court noted, and correctly, that the California Supreme
Court already resolved this issue in Bruns. But the trial court misconstrued the holding.
The defendants in Bruns moved to dismiss the complaint under section 583.340,
subdivision (b) because the five-year period to bring the action to trial had elapsed, even
though there was a partial stay in effect during that period. (Bruns, supra, 51 Cal.4th at
p. 723.) Section 583.340, subdivision (b) is an exception to section 583.310, which tolls
the required five year period while “[p]rosecution or trial of the action was stayed or
enjoined.” (§ 583.340, subd. (b).) At issue in Bruns was whether a stay of the
“prosecution” of an action under section 583.340, subdivision (b) included partial stays or
applied only to complete stays of action. (Bruns, supra, 51 Cal.4th at p. 721.)
To resolve the issue, the court compared the language used in section 583.340,
subdivision (b), with the language used in section 583.240, subdivision (b), what the
court called the “different but related statute” at issue on this appeal. (Bruns, supra, 51
Cal.4th at pp. 726-727.) The difference between subdivisions (b) in sections 583.340 and
9
Hills argues that the partial stay against Mervyn’s “affected service” to J.B. Hunt
and Werner because he neither knew, nor had reason to believe, that J.B. Hunt and
Werner were involved in the matter, since Mervyn’s had “complete control of the
information about other potential tortfeasors” and was not required to disclose that
information. In other words, although the proceedings were not stayed against J.B. Hunt
and Werner,6 two unknown Doe defendants at the time the original complaint was filed,
the proceedings against Mervyn’s, the only known defendant, nonetheless affected
service to them, and therefore the exception should apply. We disagree.
“ ‘Our fundamental task in interpreting a statute is to determine the Legislature’s
intent so as to effectuate the law’s purpose. We first examine the statutory language,
giving it a plain and commonsense meaning. We do not examine that language in
isolation, but in the context of the statutory framework as a whole in order to determine
its scope and purpose and to harmonize the various parts of the enactment. If the
language is clear, courts must generally follow its plain meaning unless a literal
interpretation would result in absurd consequences the Legislature did not intend. If the
statutory language permits more than one reasonable interpretation, courts may consider
other aids, such as the statute’s purpose, legislative history, and public policy.’
[Citation.]” (Bruns, supra, 51 Cal.4th at p. 724.)
583.240 is that the former tolls time when the prosecution of the action was stayed or
enjoined, while the latter tolls time when the prosecution or proceedings in the action was
stayed and the stay affected service. (Id. at p. 727.) Emphasizing the significance of this
distinction, the Bruns court reasoned that “[w]hen one provision in a bill refers to the stay
of prosecution or proceedings in the action, and another provision refers only to a stay of
the prosecution, the inference is compelling that the latter reference is only to a complete
stay and does not encompass a limited stay.” (Ibid.) Put otherwise, Bruns found that the
term “proceedings” in section 583.240, subdivision (b) referred to partial stays, while the
term “prosecution” in both statutes referred to a complete stay. (Ibid.)
6
Hills concedes that “Mervyn’s bankruptcy stay would not necessarily stay
proceedings against non-bankrupt defendants.” (See In re Bell & Beckwith (1984)
39 B.R. 914, 917-918 [‘It is well established that the automatic stay does not enjoin
actions against entities that have not filed a petition under the Bankruptcy Code.’].”)
Therefore, it is undisputed that the partial stay applied only to Mervyn’s.
10
Hills claims that the language section 583.240, subdivision (b) pertaining to
“affected service” is clear, and that we should follow what he claims is its plain meaning.
According to Hills, “affect” is a “broad term, and its ordinary meaning is to ‘make a
difference to’ (Oxford Online Dictionary) or ‘influence, sway, modify of alter’
(Webster’s Encyclopedia Unabridged Dictionary).” Hills also contends that nothing in
the statute suggests that the word should be circumscribed in any way, or that it has some
other specialized meaning. In sum, Hills contends that “affect” should be given its
plain—and in Hills’s view, broad—meaning. And so applying his claimed plain meaning
of the word “affect,” Hills argues that the partial stay against Mervyn’s “made a
difference” to service of the unknown defendants. It supposedly “altered” his ability to
pursue Mervyn’s, to obtain information about other entities that might be liable for his
injuries, and to then serve those entities.
Hills’s argument ignores the fact that the stay does not even apply to the
defendants at issue—and certainly could not have affected service on them.
Citing Damjanovic v. Ambrose, supra, 3 Cal.App.4th at p. 510 (Damjanovic),
J.B. Hunt argues that the stay must “affect service” condition cannot apply, since there
was no stay against J.B. Hunt and Werner, both of whom were available for service.
Damjanovic dealt with Government Code section 945.3, a statute that “prevent[s] a
criminal defendant from suing a peace officer, or his or her employer, for conduct of the
peace officer relating to the criminal offense while charges were pending against the
defendant.” (Damjanovic, supra, 3 Cal.App.4th at pp. 507–508.) Damjanovic had been
charged with resisting arrest. On March 9, 1987, during the pendency of his prosecution,
he filed a complaint against the arresting officers and several civilian and Doe
defendants. (Id. at p. 507.) On October 21, 1988, the criminal proceeding was dismissed.
(Id. at p. 506). Despite this, Damjanovic did not serve the civilian defendants, and also
did not substitute the true name for a Doe defendant, until more than three years after the
date he filed his civil action. (Id. at p. 507.) The trial court dismissed the civilian and
Doe defendants pursuant to section 583.210. (Ibid.)
11
On appeal, Damjanovic argued that Government Code section 945.3 prohibited
him from instituting a civil action against the police officers during the pendency of his
criminal proceedings and that, because the statute tolled the statute of limitations, its
operation made service of summons to the defendants impractical and futile under
section 583.240, the exception to section 583.210. (Damjanovic, supra, 3 Cal.App.4th at
pp. 508-509.) The court disagreed, drawing attention to the policy distinction between
statutes of limitations (to which Government Code section 945.3 pertains) and time
limitations contained in section 583.210. (Id. at p. 509.) “The statute of limitations is
concerned only with the timeliness of instituting an action, while [section 583.210] is
concerned with the speedy prosecution of an action after such action has already been
commenced. [Citation.]” (Ibid.) Importantly, the court also found that Government Code
section 945.3 applied only to peace officers and not civilian defendants, which meant that
the plaintiff was “required to serve the civilian defendants” despite the stay as to the
peace officers, “so that [the civilian defendants could] take adequate steps to preserve
evidence.” (Id. at p. 510.)
J.B. Hunt argues that Damjanovic holds that a statute that stays a prosecution as to
a specific class of defendants in an action does not operate to stay service of the summons
and complaint on the other defendants in the action. Thus, and as applied here, the partial
stay against Mervyn’s did not operate to stay service on J.B. Hunt and Werner, and
therefore section 583.240, subdivision (b) did not toll the three-year service period as to
them. Put otherwise, the excuse in subdivision (b) can only be applied to the service on
Mervyn’s, not to the service on J.B. Hunt and Werner.
We recognize that while Damjanovic involved a Doe defendant, it did not address
the issue of a how a stay against the only known defendant may affect service and
summons on unknown defendants. But while Damjanovic may be distinguishable in that
regard, we nonetheless find it instructive in assessing whether a partial stay against the
known defendant may be considered to have “affected service” to other defendants,
known or unknown, to which the stay does not apply. Based on Damjanovic’s reasoning,
and the need to preserve evidence, we conclude it cannot.
12
Our conclusion is supported by the fact that section 583.240 provides three other
conditions available to toll the time required for service, most significantly, section
583.240, subdivision (d), which tolls time when “[s]ervice, for any other reason, was
impossible, impracticable, or futile due to causes beyond the plaintiff’s control.”
(§ 583.240, subd. (d).) Subdivision (d) therefore operates as a catch-all to toll time “for
any other reason,” and could, if factually applicable, apply to a situation where a stay
against the only known defendant might affect service to unknown defendants.
The Trial Court Did Not Abuse Its Discretion In Concluding That Service
Was Not Impossible, Impracticable, or Futile Due to Causes Beyond Hills’s
Control
In computing the time within which service of summons must be made,
section 583.240, subdivision (d) excludes time during which “[s]ervice, for any other
reason, was impossible, impracticable, or futile due to causes beyond the plaintiff’s
control.” The second sentence of the provision provides, however, that “[f]ailure to
discover relevant facts or evidence is not a cause beyond the plaintiff’s control for the
purpose of this subdivision.”
Hills contends that section 583.240, subdivision (d) applied, since the stay as to
Mervyn’s made it impossible, impracticable, or futile to serve the Doe defendants within
the required three-year period. Thus, Hills argues, the period in which J.B. Hunt and
Werner were unknown and unidentified should be tolled, and that the trial court erred in
not doing so. Again, we disagree.
The trial court found that service to J.B. Hunt and Werner was not “impossible,
impracticable, or futile” due to causes beyond Hills’s control. The court arrived at this
conclusion by first noting that the second sentence in subdivision (d) “expressly provides
that ‘failure to discover relevant facts or evidence’ is NOT a cause beyond [Hills’s]
control for purposes of that section.” The court then observed that Hills made “no
showing of any attempt to discover the identity of the Doe defendants apart from seeking
discovery or other information directly from Mervyn[’]s (which was not required to
provide any such discovery due to its bankruptcy stay.)[.]”
13
Hills contends that the trial court misinterpreted and misapplied section 583.240,
subdivision (d), claiming the court ignored the first sentence and went straight to the
second sentence, thereby violating important rules of statutory construction. According
to Hills, by “[c]ompletely bypassing the threshold question—was service impossible due
to causes beyond Hills’[s] control—the trial court then applied the second sentence too
expansively, in a manner that eclipsed the first sentence.” Without citing to any
authority, Hills claims that when read correctly, subdivision (d) actually provides that
“the facts required to effect service must be capable of discovery by some means within
plaintiff’s control and which can be discovered by reasonable diligence. When an
attorney acts with diligence, and the delay is not due to his or her error or misconduct,
then compliance with the three-year service requirement is excused.” We are not
persuaded.
We begin by reiterating that the excuse of impossibility, impracticability, or
futility must be strictly construed against the plaintiff, in light of the need to give a
defendant adequate notice of the action so that the defendant can take necessary steps to
preserve evidence. (Shipley v. Sugita, supra, 50 Cal.App.4th at p. 326; Williams v. Los
Angeles Unified School Dist., supra, 23 Cal.App.4th at p. 102.)
The Law Revision Commission comments to section 583.240 specifically state
that subdivision (d) “makes clear that there is only an excuse for causes beyond the
plaintiff’s control and that failure to discover relevant facts or evidence does not excuse
compliance.” (17 Cal.L.Rev.Comm. Rep., supra, 905.) Importantly, failure to discover
relevant facts includes the plaintiff’s failure to discover the true identity of Doe
defendants within the statutory time. (See Lopa v. Superior Court (1975) 46 Cal. App. 3d
382, 387 [Doe defendants must ordinarily be indentified and served within three years
from the commencement of the action]; see also Republic Corp. v. Superior Court (1984)
160 Cal. App. 3d 1253, 1258.)
The Supreme Court had occasion to address the “impossible, impracticable, or
futile” language in Bruns, supra, 51 Cal. 4th 717, albeit in the more-liberal-to-the-plaintiff
14
context of a failure to bring the case to trial setting. Even so, the court held that plaintiff
did not make the requisite showing:
“Under 583.340(c), the trial court must determine what is impossible,
impracticable, or futile ‘in light of all the circumstances in the individual case, including
the acts and conduct of the parties and the nature of the proceedings themselves.
[Citations.] The critical factor in applying these exceptions to a given factual situation is
whether the plaintiff exercised reasonable diligence in prosecuting his or her case.’
[Citations.] . . . Determining whether the subdivision (c) exception applies requires a
fact-sensitive inquiry and depends ‘on the obstacles faced by the plaintiff in prosecuting
the action and the plaintiff’s exercise of reasonable diligence in overcoming those
obstacles.’ [Citation.] ‘ “[I]mpracticability and futility” involve a determination of
“ ‘excessive and unreasonable difficulty or expense,’ ” in light of all the circumstances of
the particular case.’ [Citation.]
“The question of impossibility, impracticability, or futility is best resolved by the
trial court, which ‘is in the most advantageous position to evaluate these diverse factual
matters in the first instance.’ [Citation.] The plaintiff bears the burden of proving that
the circumstances warrant application of the section 583.340(c) exception. [Citation.]
‘ “ The ‘reasonable diligence’ standard is an appropriate guideline for evaluating whether
it was impossible, impracticable, or futile for the plaintiff to comply with [the statutory
five-year constraint] due to causes beyond his or her control.” ’ [Citation.] The trial
court has discretion to determine whether that exception applies, and its decision will be
upheld unless the plaintiff has proved that the trial court abused its discretion.” (Bruns,
supra, 51 Cal.4th at pp. 730–731.)
In sum, the determination of whether service was impossible, impracticable, or
futile due to causes beyond the plaintiff’s control is a matter within the trial court’s
discretion, and will not be disturbed on appeal unless an abuse of discretion is shown.
(See De Santiago v. D and G Plumbing, Inc. (2007) 155 Cal. App. 4th 365, 371 [failure to
bring case to trial].) “Where a trial court has discretionary power to decide an issue, we
are not authorized to substitute our judgment for that of the trial court. [Citation.]
15
Reversible abuse exists only if there is no reasonable basis for the trial court’s action, so
that the trial court’s decision exceeds the bounds of reason. [Citations.]” (Sanchez v.
City of Los Angeles (2003) 109 Cal. App. 4th 1262, 1271.) Hills hardly demonstrates such
abuse here.
Hills argues that the time for service should be tolled under section 583.240,
subdivision (d) because the trial court “acknowledged this impossible situation when it
conceded that Mervyn’s was not required to provide Hills with any information.” Hills
asserts that he demonstrated the utmost diligence in pursuing his claim and that, contrary
to the trial court’s suggestion he should have done something more to pursue the
unidentified defendants, doing anything more would have been like “searching for a
needle in a haystack.” Furthering this argument, Hills claims that no one involved had
any reason to suspect other tortfeasors existed; that even if he had reason to suspect other
tortfeasors, there was nothing he could have done to identify them or require them to
cooperate; and that he cannot be accused of any misconduct or error that would justify
the dismissal for failure to serve J.B. Hunt and Werner sooner. We reject the arguments,
for several reasons.
As a general rule, a bankruptcy stay against one defendant does not make it
impossible to serve other nonbankrupt defendants. (See In re Chugach Forest Products,
Inc. (9th Cir. 1994) 23 F.3d 241, 246.) Hills could have sought relief from the stay under
section 362(d) of title 11 of the United States Code—which, not incidentally, he
represented to the court he would do in five separate case management statements filed
between December 2008 and May 2011. Merely requesting information and discovery
about the incident through “several telephone calls” with Mervyn’s counsel over the
period of several years, without more, does not reasonably explain the delay here.
A. Groppe & Sons Glass Co., Inc. v. Fireman’s Fund Ins. Co. (1991)
232 Cal. App. 3d 220, 224, involving a bankruptcy proceeding, albeit in a different
context, is illustrative. There, the plaintiff had filed a bankruptcy petition for
reorganization, and a trustee had been appointed to oversee it. A defendant moved to
dismiss for failure to timely serve the summons and complaint. Plaintiff, there, like Hills
16
here, contended that the bankruptcy proceeding made service “impossible, impracticable,
or futile due to causes beyond the plaintiff’s control.” The trial court rejected the
contention and dismissed the action. The Court of Appeal affirmed, holding “that
plaintiff had not met its burden of showing adequate excuse for lack of diligence in
prosecuting the action, since it could have sought an order from the bankruptcy court
compelling the trustee to maintain the action.” And the court summed up: “Because
plaintiff had means available to it to force prosecution of the action (or, alternatively, to
make a record showing it was impossible for it to do so), plaintiff failed to demonstrate
that service was “impossible, impracticable or futile” under the circumstances of this
case. We conclude that plaintiff did not meet its burden of showing the trial court abused
its discretion in failing to find the excuse of impossibility, impracticability or futility
applied to the facts of this case. Where, as here, plaintiff fails to establish abuse of
discretion or that it exercised reasonable diligence throughout the entire period of time
the case was pending, we need not reach the issue of whether the delay in service was
prejudicial to defendant.” (Id. at p. 227.) Likewise here.
Hills asserts that he exercised exceptional, not merely reasonable, diligence in
conducting discovery to identify the unknown defendants. We read the record
differently.
To begin with, while a plaintiff’s diligence may be a factor for other reasons under
section 583.240, subdivision (d), diligence in discovering relevant facts is no longer an
excuse for belated service of summons. (See Bishop v. Silva (1991) 234 Cal. App. 3d
1317, 1322; Dale v. ITT Life Ins. Corp. (1989) 207 Cal. App. 3d 495, 501-502.) Indeed,
section 583.240, subdivision (d) explicitly provides that “[f]ailure to discover relevant
facts or evidence is not a cause beyond the plaintiff’s control for the purpose of this
subdivision.”
But even assuming diligence is a factor, Hills does not demonstrate it. Reading
the record as favorably as possible to Hills, after the complaint was filed in August 2008,
the Dunnion firm attended the December 2008 case management conference. Then,
according to the de Guzman declaration, in early 2009 she had a few discussions with
17
Mervyn’s officers, which discussions apparently ended in March 2009,when she was told
that Mervyn’s would not stipulate to a relief from the bankruptcy stay and would not
provide any discovery. The next contact with Mervyn’s was not until May 17, 2011—
over two years later.
The sum total of the claimed diligence was to file the complaint and then, when
counsel learned of Mervyn’s bankruptcy, to file case management statements over a
period of almost 30 months representing counsel “anticipates filing for relief from stay to
the Chapter 7 [sic] trustee of the Bankruptcy Court when that trustee has been appointed,
in order to proceed with discovery and trial of case.” There is no evidence that counsel
ever filed any request with the bankruptcy court for any reason. Or even attempted any
discovery at all, discovery that might well have been allowed, as illustrated by In re
Miller (9th Cir. 2001) 262 B.R. 499.
There, plaintiff Groner sued defendant Miller, who then declared bankruptcy.
Groner thereafter amended her complaint to add Miller’s husband as a defendant, and
then served a deposition subpoena on Miller, who was described as “the key witness to
Groner’s claims” against the husband. Groner’s counsel advised Miller’s bankruptcy
counsel that he “was taking the deposition as a third party witness—not [as] a party—and
hence the subpena [sic] instead of the normal party deposition procedure that would be
utilized in state court.” (In re Miller, supra, at p. 501, fn. omitted.) Miller resisted, and
the bankruptcy court ultimately awarded sanctions against Groner’s counsel for violating
the automatic stay.
The Bankruptcy Appellate Panel reversed, holding that the automatic stay does not
protect a debtor from testifying in connection with pending litigation as long as the
discovery or testimony is not intended to assert a claim against the debtor or the property
of the debtor’s estate. Concluding that Groner’s counsel had not violated the automatic
stay by issuing the subpoena and seeking to compel compliance with it, the Bankruptcy
Panel held as follows:
“Section 362 (a) prohibits the commencement or continuation of an action against
the debtor; to the extent that [the plaintiff] was eliciting Debtor’s testimony for purposes
18
other than to continue the prosecution of her claims against Debtor, the proposed
discovery did not violate the automatic stay, unless the issuance of subpoenas itself
constitutes ‘issuance or employment of process’ against Debtor or a ‘judicial proceeding’
against Debtor. If this were true, a debtor could never be called as a witness (even in
actions where the debtor is not a party) without relief from the stay. Such an
interpretation of section 362 (a) defies common sense and the spirit of the Code.
Information is information, and we believe the discovery of it as part of the development
of a case against non-debtor parties is permissible, even if that information could later be
used against the party protected by the automatic stay.” (In re Miller, supra, at p. 505.)
Moreover, according to Werner’s brief, Hills did not even attempt to pursue the
claim against Mervyn’s bankruptcy. As Werner describes it, “As set forth in Werner’s
request for judicial notice, the bankruptcy court established January 9, 2009, as the
general ‘claims bar date’ in the Mervyn’s bankruptcy proceeding. Under the order
establishing the general ‘claims bar date,’ all creditors with claims against Mervyn’s
listed in the schedules filed by Mervyn’s as disputed, contingent or unliquidated, as Hills’
claim was, were required to file a ‘proof of claim’ by that date or their claim would be
barred. Hills did not file a ‘proof of claim’ in the Mervyn’s bankruptcy. As such, his
claim against Mervyn’s was barred. There was no reason, therefore, for Hills’ attorneys
to let almost three years and eight months pass before dismissing Hills’ complaint against
Mervyn’s on August 1, 2012, in exchange for obtaining information from Mervyn’s
bankruptcy attorneys. This could have and should have been done much earlier, at no
cost to Hills, since his failure to file a ‘proof of claim’ in the Mervyn’s bankruptcy
proceeding had already resulted in his claim against Mervyn’s being barred.” 7
Hills’s reply brief does not take issue with this description.
As to Hill’s assertion that there was no reason to suspect other tortfeasors, Hills
was unloading trucks on Mervyn’s property while employed by someone other than
7
On November 14, 2013, Werner filed a request for judicial notice. The request
was not opposed, and we granted it on December 12, 2013.
19
Mervyn’s. What would be so unusual if the trucks were in fact operated by someone else
as well.
In addition to his many assertions of diligence, Hills’s position intimates that in
essence there was nothing he could do about the predicament, his reply brief summing up
his position this way: “Second, even if the stay were lifted, the Court must further
speculate that Mervyn’s would have cooperated in discovery. The more likely scenario is
that Mervyn’s bankruptcy attorneys, rather than hire California counsel to litigate a
relatively small damages action, would have stipulated to some amount of damages, Hills
would have become an unsecured creditor in the bankruptcy, then gone to the back of the
line, with no hope of ever seeing a dime. In that event, Mervyn’s would not have
engaged in discovery that would eventually lead to respondents.
“Third, even in the completely unlikely event that the stay was lifted, and
Mervyn’s agreed to litigate and then participated in discovery that lead to respondents, it
is not certain that all those events would have occurred in a timely fashion. Mervyn’s
was out of business. Discovery was sure to be unusually difficult. Finding the relevant
records and former personnel with knowledge of the events would have taken even more
time in an already lengthy process. . . . [Citation.] Against these odds, and having no
reason to suspect other tortfeasors existed, the only viable option for Mr. Hills was to
allow Mervyn’s time to come out of its Chapter 11 bankruptcy, at which time the case
would go back on the active calendar. . . .”
Not only is this nothing but speculation, we again note that the applicable statute
requires strict construction, based on the policy that the service requirement is “to give
defendants timely notice of an action so they can make efforts to preserve evidence.”
(Shipley v. Sugita, supra, 50 Cal.App.4th at p. 326; Scarzella v. DeMers, supra,
17 Cal.App.4th at pp. 1770–1771.) Here, the accident happened in August 2006. It is
now August 2014, eight years later.
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DISPOSITION
The orders of dismissal are affirmed.
_________________________
Richman, J.
We concur:
_________________________
Kline, P.J.
_________________________
Brick, J.*
*
Judge of the Alameda County Superior Court, assigned by the Chief Justice
pursuant to article VI, section 6 of the California Constitution.
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