Misuraca v. Lyons CA1/2 ( 2013 )

Filed 3/5/13 Misuraca v. Lyons 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NOT TO BE PUBLISHED IN OFFICIAL REPORTS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
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or ordered published for purposes of rule 8.1115.
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
FIRST APPELLATE DISTRICT
DIVISION TWO
MALCOLM A. MISURACA,
Plaintiff and Appellant,
v. A133378, A135026
DAVID LYONS et al.
(Marin County Super. Ct.
Defendants and Respondents.
No. CIV 063033)
Malcolm A. Misuraca, proceeding in propria persona here and below, appeals
from orders of the trial court dismissing his suit against defendants David and Phyllis
Lyons (the Lyons), because it had not come to trial within five years from the time it was
filed, and awarding attorney‟s fees to the Lyons. We find no merit in Misuraca‟s
arguments that the trial court should have estopped the Lyons from seeking dismissal and
that the court abused its discretion in ordering the dismissal. Accordingly, we affirm the
dismissal of Misuraca‟s suit against the Lyons. Because Misuraca‟s request for reversal
of the award of attorney‟s fees is dependent on reversal of the dismissal, we also affirm
the award of attorney‟s fees.
BACKGROUND
In July 2006, Misuraca filed suit to recover $57,451.61 in allegedly unpaid
attorney‟s fees and costs from the Lyons and from Nacio Systems, Inc. (Nacio), which
had allegedly guaranteed payment on behalf of Lyons. Lyons cross-complained against
Nacio for indemnity. Nacio filed a cross-complaint against the Lyons for indemnity,
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contribution and for damages for malfeasance in office, fraud, and wrongful conversion
of corporate assets.
Nacio filed for bankruptcy and, in February 2008, filed a notice of an automatic
stay in the superior court. The notice of stay stated that it applies to the parties “Nacio
Systems, Inc., a Nevada corporation, David Lyons, [and] Phyllis Lyons.”
In a December 19, 2008 case management statement, Nacio stated, in regard to
when it would not be available for trial: “Case is subject to Bankruptcy Court stay for
Nacio Systems (Nevada) and by court and counsel‟s agreement is stayed as to all parties
pending bankruptcy resolution due to central position Nacio Nevada plays in the
proceedings.” Nacio stated this again in its March 24, 2009 case management statement,
but moved it to the “Other Issues” section as an additional matter to be considered or
determined at the case management conference.
In a March 3, 2010 case management statement, the Lyons stated in their
description of the case: “Parties in this action continue to be subject to the Bankruptcy
automatic stay.”
In a February 16, 2011 case management statement, the Lyons stated in their
description of the case: “Misuraca is stayed from proceeding against Nacio in the main
action. Likewise, the Lyons are stayed from proceeding against Nacio in its cross-
complaint for indemnification. However, Nacio‟s cross-complaint against the Lyons . . .
for contribution, malfeasance, conversion of corp. assets, etc., is not stayed. The
Bankruptcy trustee has not indicated how it intends to proceed. However, Misuraca &
Lyons cannot prosecute their complaint and cross-complaint with Nacio as a party.” In
the section concerning trial date, they stated: “Misuraca‟s main action and the Lyons
cross-complaint cannot be prosecuted as long as Nacio‟s bankruptcy is pending &
remains a party.”
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In July 2011, the Lyons filed a motion, pursuant to Code of Civil Procedure
section 583.310 et seq.,1 to dismiss Misuraca‟s complaint because five years had passed
since Misuraca filed the action. They argued that because a bankruptcy stay protects only
the debtor, and not related third parties, Misuraca was obligated to prosecute his case
against them, but had failed to do so.
Misuraca opposed the Lyons‟ motion, arguing that the Lyons were mistaken “that
a stay for one defendant in California litigation obligates the plaintiff to seek to bring the
rest of the defendants to trial within five years.”
The court dismissed Misuraca‟s complaint against the Lyons on August 29, 2011,
finding that Misuraca had failed to establish the existence of impossibility,
impracticability, or futility preventing him from bringing the case to trial within five
years. Misuraca timely appealed. The trial court subsequently awarded attorney‟s fees to
the Lyons, pursuant to Civil Code section 1717. Misuraca filed a second appeal,
requesting that we reverse the grant of attorney‟s fees if we reverse the dismissal of his
case against the Lyons.
DISCUSSION
I. Legal Background and Standard of Review
Section 583.310 provides: “An action shall be brought to trial within five years
after the action is commenced against the defendant.” In computing this five-year period,
time may be excluded for the following reasons: (1) “jurisdiction of the court to try the
action was suspended”; (2) “[p]rosecution or trial of the action was stayed or enjoined”;
and (3) “[b]ringing the action to trial, for any reason, was impossible, impracticable, or
futile.” (§ 583.340.)
The provision allowing exclusion of time for impossibility, impracticability, or
futility “must be liberally construed, consistent with the policy favoring trial on the
merits.” (De Santiago v. D &G Plumbing, Inc. (2007) 155 Cal.App.4th 365, 371.) “The
determination „of whether the prosecution of an action was indeed impossible,
1
Unless otherwise indicated, all code references hereafter are to the Code of Civil
Procedure.
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impracticable, or futile during any period of time, and hence, the determination of
whether the impossibility exception to the five-year statute applies, is a matter within the
trial court‟s discretion. Such determination will not be disturbed on appeal unless an
abuse of discretion is shown. [Citations.]‟ ” (Sanchez v. City of Los Angeles (2003) 109
Cal.App.4th 1262, 1271.)
II. Misuraca’s Claim of Estoppel
Misuraca claims that the Lyons and Nacio led the trial court into error by
claiming, for five years, that Nacio‟s bankruptcy stay applied to Misuraca‟s action against
the Lyons, and then, when the five-year period for bringing his suit to trial had passed,
changing their representations to the court and moving for dismissal. Because of the
Lyons‟ alleged misrepresentations to the court, Misuraca argues that they should be
estopped from seeking dismissal under section 583.310. As evidence of the alleged
misrepresentation, Misuraca cites the passages, quoted above, from the notice of stay and
case management statements.
“The doctrine of equitable estoppel is applicable to section 583.310 dismissal
motions. [Citations.] If a trial court finds statements or conduct by a defendant which
lulls the plaintiff into a false sense of security resulting in inaction, and there is
reasonable reliance, estoppel must be available to prevent defendant from profiting from
his deception.” (Tejada v. Blas (1987) 196 Cal.App.3d 1335, 1341.)
Misuraca undermines his case for estoppel by conceding that, even if the Lyons
made the misrepresentations he alleges, he did not accept them.2 Because Misuraca
believed that the bankruptcy stay did not apply to his action against the Lyons, he cannot
attribute inaction on his part to the Lyons‟ alleged misrepresentations.
However, Misuraca‟s actual claim is that the Lyons misled the court, not him. The
problem for Misuraca is that he fails to explain what actions the court took, adverse to
him, that were the result of the alleged misrepresentations. During the five years the case
2
Misuraca asserts that he “disputed the claim that the bankruptcy stay applied to
the Lyons . . . .”
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was on the docket, the court did routinely continue case management conferences a few
months at a time, but Misuraca does not argue that he opposed these continuances.
As the court in Lane v. Newport Bldg. Corp. (1986) 176 Cal.App.3d 870, 874-875
(Lane) noted, a plaintiff in Misuraca‟s position has a number of avenues by which he
might preserve his rights: “(1) apprising the trial court at the mandatory settlement
conference of the problem presented by [the] bankruptcy stay; (2) moving the court or
proposing a stipulation to stay the entire action, pending the outcome of the bankruptcy
proceeding; (3) proposing a stipulation to extend the time within which the action must
be brought to trial [citation]; (4) moving the court to specially set the entire action for
trial prior to the expiration of the five-year period pursuant to rule 375(b) of the
California Rules of Court [citation]; (5) moving the court to sever the causes pertaining to
[the defendant in bankruptcy proceedings] [citation] and proceeding
to trial on the remaining causes against respondents; or (6) seeking relief from the stay as
to [the defendant in bankruptcy proceedings] in bankruptcy court. [Citation.]” Misuraca
did none of these things and was not prevented from doing so by the alleged
misrepresentations of the Lyons. Accordingly, we reject Misuraca‟s argument that the
Lyons should be estopped from seeking to enforce the five-year period for bringing the
suit to trial.
III. The Five-Year Period for Bringing Misuraca’s Suit to Trial
Because Nacio was involved in bankruptcy proceedings and a notice of stay was
filed with the court, the five-year period for bringing to trial Misuraca‟s suit against
Nacio was tolled. However, “the general rule is that bankruptcy stays only toll the five-
year period as to the bankrupt.” (Santa Monica Hospital Medical Center v. Superior
Court (1988) 203 Cal.App.3d 1026, 1036.) Thus, unless some other factor operated to
make it impossible, impracticable, or futile for Misuraca to prosecute his suit against the
Lyons, that suit exceeded the five-year statutory period and there was no abuse of
discretion by the trial court when it dismissed the suit.
Nevertheless, Misuraca argues: “The California Supreme Court has for many
decades disapproved severing claims against two or more defendants to bring a case to
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trial against one within five years. There is one five-year statute for each case, not one
for each defendant.” In support of this argument, Misuraca cites Brunzell Constr. Co. v.
Wagner (1970) 2 Cal.3d 545, 553-554 (Brunzell): “In many situations in which it is
impossible or impracticable to proceed against one codefendant it may be impracticable,
in terms of the burden both to the parties and to judicial administration as a whole, to
proceed against other defendants in a separate suit. To require a plaintiff to sever causes
of action against multiple defendants whenever it becomes impossible or impracticable to
proceed against one defendant within the five-year period would be to require
unproductive duplication of effort, compel the incurrence of excessive expense, and
generally undermine all the policies served by modern theories of consolidation in a
substantial number of cases.” 3
“The lesson that we learn from Brunzell . . . as applicable here, is that whether it is
impracticable to bring a case to trial against a particular defendant depends on the
circumstances of the particular case and „practical realities‟ . . . .” (Dowling v. Farmers
Ins. Exchange (2012) 208 Cal.App.4th 685, 699.) Brunzell did not involve a stay for
bankruptcy proceedings, which do not present a compelling case for consideration of the
concerns expressed by the Brunzell court. As one court expressed it: “Appellants‟
further argument that it would be impractical or futile to proceed to trial without [the
defendant in bankruptcy proceedings] ignores the fact that the bankruptcy might
effectively result in the discharge of any claims appellants might have against [that
defendant]. [Citation.] Thus, appellants fail to demonstrate that they would ever be in a
position to prove their alleged causes of action against [that defendant] after termination
of the bankruptcy proceeding.” (Lane, supra, 176 Cal.App.3d at p. 875.)
In Lane, the plaintiffs filed a complaint against multiple defendants. (Lane, supra,
176 Cal.App.3d at p. 872.) The defendants answered and filed a cross-complaint against
a third-party, who was subsequently substituted as a named defendant for “DOE II” in the
complaint. (Ibid.) The third-party defendant then filed for bankruptcy and the
3
Misuraca misattributes the quoted passage to Christin v. Superior Court (1937)
9 Cal.2d 526 and omits the first, limiting sentence.
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bankruptcy court issued an automatic stay order. (Ibid.) More than five years after the
suit was originally filed, the original defendants filed a motion to dismiss the action,
which the trial court granted, because the suit had not yet come to trial. (Id. at p. 873.)
The plaintiffs appealed, claiming that it was impractical and futile for them to bring the
action to trial within five years because one of the defendants, a necessary party, was in
bankruptcy. (Ibid.) As noted above, the Lane court rejected the plaintiffs‟ argument and
found no abuse of discretion on the part of the trial court. (Id. at p. 875.)
Here, Misuraca is positioned similarly to the plaintiffs in Lane. Unlike the
plaintiffs in Lane, he does not argue that it was impossible, impractical or futile for him
to proceed separately against the Lyons. Rather, he attempts to convince us that “[t]here
is one five-year statute for each case, not one for each defendant.” While this may be
true as an abstract notion, the clear import of cases like Lane is that the five-year period
may be tolled for some defendants but not for others.
Misuraca has not demonstrated that the trial court wrongly applied the law when it
dismissed his case against the Lyons, nor has he shown that any of the factors that would
toll the five-year period against the Lyons applied. The only feature of this case that
would distinguish it from a case such as Lane is Misuraca‟s argument for estoppel, an
argument we rejected above. Accordingly, we discern no abuse of discretion on the part
of the trial court and affirm its order dismissing Misuraca‟s action against the Lyons.
IV. The Award of Attorney’s Fees to Lyons
Misuraca‟s argument that we reverse the award of attorney‟s fees to the Lyons is
dependent on our first concluding that the dismissal of his suit against the Lyons be
reversed. Because we affirm the dismissal, we also affirm the award of attorney‟s fees.
DISPOSITION
The trial court‟s orders dismissing Misuraca‟s suit against the Lyons and granting
the Lyons attorney‟s fees are affirmed.
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_________________________
Lambden, J.
We concur:
_________________________
Haerle, Acting P.J.
_________________________
Richman, J.
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