Opinion
E064564
05-18-2017
DAVID CRAWN, Plaintiff and Appellant, v. KARIM GONZALEZ et al., Defendants and Respondents.
Law Offices of John J. Jackman and John J. Jackman for Plaintiff and Appellant. The Phillips Firm, Thomas M. Phillips; Greines, Martin, Stein & Richland, Robert A. Olson, Gary J. Wax, and Jonathan H. Eisenman for Defendants and Respondents.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Super.Ct.No. RIC1200606) OPINION APPEAL from the Superior Court of Riverside County. Sunshine S. Sykes, Judge. Reversed with directions. Law Offices of John J. Jackman and John J. Jackman for Plaintiff and Appellant. The Phillips Firm, Thomas M. Phillips; Greines, Martin, Stein & Richland, Robert A. Olson, Gary J. Wax, and Jonathan H. Eisenman for Defendants and Respondents.
Plaintiff David Crawn appeals the judgment of dismissal of his personal injury action, which the trial court dismissed after settlement under California Rules of Court, rule 3.1385(b). The trial court gave as an alternate ground for dismissal counsel's failure to personally appear at an order to show cause hearing, and her failure to file a declaration within the deadline the trial court imposed. Crawn contends the dismissal was an abuse of discretion and we agree. We reverse the dismissal and remand for the trial court to return the case to the civil active list.
I
FACTUAL BACKGROUND
On January 12, 2012, David Crawn filed an action in the Riverside Superior Court which sought recovery for personal injuries sustained in an automobile accident with defendants and respondents Karim Gonzalez and Luis Bravo (collectively respondents). The matter was ordered to private mediation with the parties returning to court for a status conference on January 30, 2013. Respondents' attorney advised the court the parties had settled and were working on exchanging closing documents. The court continued the case to February 27, 2013 to allow Crawn's counsel to file the appropriate notice.
On February 27, 2013, respondents' counsel informed the court the "verbal settlement" referenced at the prior hearing had yet to be completed and referred to an issue with the settlement stating, "I think the issue is whether there's additional insurance, and that has to be resolved. But if the settlement falls through, we will need to do some additional [work]." Respondents' counsel added there was "a policy limit issue, so it's either they accept the policy or accept the fact that there is no other insurance. That is part of the problem in working the issue out." The court set a trial setting conference for April 29, 2013 and advised, "[i]f the Court can do anything to help get your settlement back on, let me know." At that conference, the parties appeared to be moving forward with settlement. Respondents' counsel informed the court "the policy limits were tendered, and closing documents were sent." The trial court scheduled the case for an order to show cause hearing regarding dismissal (OSC) on June 27, 2013.
At the OSC, Ms. Mindy Bish of Sedin, Begans & Bish appeared on behalf of Crawn and "Larry Parker's office since we're associated in." Ms. Bish informed the court of a provision within respondents' insurance policy that allowed the carrier to "pay $15,000 on the [non-named] driver rather than the [larger] policy limits" applicable to a named insured. As a result, she wanted to proceed with filing an underinsured motorist (UIM) claim against Crawn's carrier and believed she was required to obtain her client's insurance company's permission to settle with the respondents prior to making that claim. As soon as the UIM carrier "says we are all in agreement," her client was willing to accept the settlement and sign the paperwork. Ms. Bish requested the matter be continued 60 days, however, citing superior court budgetary constraints, the trial court continued the matter to January 12, 2015, more than 500 days.
In the interim, potential coverage issues continued to thwart final resolution. Rather than wait until January 12, 2015, Crawn filed an ex parte application for an order advancing the hearing on the OSC and setting a trial setting conference. Crawn's request was based on his belief the $15,000 offer did not represent the true limit available on the policy. In her declaration in support of Crawn's application, Ms. Bish declared the settlement had been conditioned on the policy being provided and it supporting the $15,000 policy limit. She explained her attempts to contact the court to get the matter back on calendar for a trial setting conference were unsuccessful, making the application her only option. The court found no exigent circumstance, denied the application, scheduled the motion for hearing on November 10, 2014, and deemed the filed ex parte paperwork a regularly noticed motion.
On November 10, 2014, Mr. Sublette, an attorney with Sedin, Begans & Bish, appeared and argued. Mr. Sublette outlined the policy limit dispute and requested the court place the matter back on its active trial calendar to allow for discovery on the policy issue. As further evidence of a policy dispute Mr. Sublette pointed out the named insured and the driver of respondents' vehicle have the same last name. Mr. Sublette needed to confirm whether the driver was, or was not, named on the policy as that implicated the available policy limits. Respondents argued they had provided all documentation necessary to answer those questions. The court denied the motion to advance the OSC and set a trial date.
The January 12, 2015 OSC remained on calendar. At that hearing, an attorney made a special appearance on behalf of Crawn and requested a jury trial. Respondents' attorney told the court the matter had settled. When the court asked the special appearance attorney about the settlement, she stated she was not aware of a settlement and had been instructed to ask for trial. The trial court continued the OSC for 30 days to February 20 and ordered Crawn's counsel to personally appear, warning that it would not permit the appearance of a special appearance attorney. The court advised the parties it intended to discuss "why this matter cannot be dismissed based upon the settlement that was reached." The transcript of that hearing does not include an order that Crawn file any additional documentation with the court, however, a subsequent minute order served on counsel states, "Attorney for Plaintiff is ordered to personally appear at next hearing" and "if no filing received on or before 2/11/15 by Attorney for Plaintiff, this matter will be ordered dismissed."
Ms. Bish filed a declaration in opposition to the OSC on February 17, 2015, six days late. She explained the coverage dispute and informed the court the settlement was conditioned upon confirmation of available coverage. She further declared she was engaged in trial in Pasadena and would have Mr. Sublette appear at the hearing. On February 20, Mr. Sublette appeared on behalf of Crawn, informed the court the settlement was dependent on resolution of the coverage issues, and advised the court there was no signed settlement agreement. Respondents argued the case had settled, the documents to answer the coverage question had been provided to Crawn's counsel, and, as a result, "the settlement should be honored." The trial court dismissed the case, reasoning the same issue was essentially made at a prior hearing, and "the order was for plaintiff's counsel to appear" and "[s]he's not present." The court added Ms. Bish's declaration "wasn't done in a timely fashion but done six days after the date I had set for that to be submitted."
The record on appeal does not contain a signed settlement agreement.
II
DISCUSSION
A. California Rules of Court, rule 3.1385(b)
The trial court decided to dismiss the case based on California Rules of Court, rule 3.1385 (b). This rule is a trial management provision enacted under the Trial Court Delay Reduction Act. (Gov. Code, § 68600 et seq.) "Since trial management is a discretionary area, the proper standard of review for a challenge to trial management orders is abuse of discretion. [¶] Discretion is abused whenever it exceeds the bounds of reason, all of the circumstances before it being considered. [Citations.] In exercising its discretion, the court does not have the absolute and unlimited power; it must act with an impartial discretion guided and controlled in its exercise by fixed legal principles." (Moyal v. Lanphear (1989) 208 Cal.App.3d 491, 498.)
Rule 3.1385(b) provides in pertinent part, "Except as provided in (c) or (d), each plaintiff . . . must serve and file a request for dismissal of the entire case within 45 days after the date of settlement of the case. If the plaintiff . . . does not do so, the court must dismiss the entire case 45 days after it receives notice of settlement unless good cause is shown why the case should not be dismissed."
Unlabeled rule citations refer to the California Rules of Court. --------
The purpose of the rule is to encourage parties who have settled their dispute to expeditiously complete performance of the settlement terms and dismiss the case. It allows the court to clean up its calendar by dismissing cases when they have been successfully settled and the terms of the settlement have been carried out, with the exception of the filing of a request for dismissal. The rule is not designed to punish parties for moving slowly on their settlement, but to motivate the parties to complete their settlement without unnecessary delay, to provide additional time if there is some impediment to completion within the prescribed time, to remind the parties the court is affected by their delay in dismissal, and to permit the court to dismiss a case when the plaintiff has neglected to do so. (Irvine v. Regents of University of California (2007) 149 Cal.App.4th 994, 1001 (Irvine).)
The question presented in this case is whether there was a settlement of the action, and if so, whether Crawn established good cause to prevent dismissal. We conclude there was no settlement and the ongoing unresolved policy dispute established good cause to prevent dismissal, requiring the court to either place the action back on the active trial calendar or provide additional time to resolve the dispute.
In Levitz v. The Warlocks (2007) 148 Cal.App.4th 531 (Levitz), plaintiff filed a notice with the court that the parties had '"agreed in principle"' to a settlement. (Id. at p. 533.) The trial court set a dismissal hearing pursuant to former rule 225(c) (now rule 3.1385(c)). Issues arose between the parties related to the settlement. The trial court continued the hearing on two occasions, the second of which it ordered the parties to file detailed declarations prior to the hearing explaining why the case should not be dismissed. The trial court was not satisfied with the declarations finding them too vague, and it was not persuaded by oral argument, so it dismissed the action as a sanction. In setting aside the dismissal, our colleagues in the Second District concluded the settlement "in principle" was not a settlement at all, and was not binding until the parties agreed on all the material terms. (Id. at pp. 534-535, italics added.) The court explained that because the attorneys were responsible for the lack of detail in the declarations, any sanctions for violating the pretrial rule to provide a proper declaration should be imposed on counsel, not the plaintiff. (Id. at pp. 535-536.)
As in Levitz, there was no settlement between Crawn and respondents and the court lacked authority to dismiss the case. There was a potential settlement contingent upon resolution of the insurance coverage issue. The coverage issue arose early in the proceedings and, although the substance of the dispute seemed to morph over time, the dispute continued up to the day the court determined the matter should be dismissed. During the last hearing on the case, respondents argued they had provided Crawn with all documents necessary to answer the coverage issue. However, Crawn's counsel disputed the issue was resolved stating, "some DMV records [were provided] regarding a Gonzalez, and there are several Gonzalezes listed as accepted drivers on the policy. There's no information to show that the driver was not a permissive user at the time of the accident or not scheduled under the policy in conjunction with no signed settlement agreement. There was not a settlement. That's why we've been trying to, as best we could procedurally through this court, get it set back on trial setting calendar and proceed to trial. We believe the policy is a hundred thousand and not $15,000. There is no settlement. It's a serious accident. If there's no [underinsured motorist coverage] for the plaintiff, the only money available for this is the hundred thousand." (Emphasis added.)
The record shows the coverage dispute persisted throughout this case and the court was repeatedly informed the dispute prevented final settlement. Of significance, there was no signed settlement agreement. There is no basis to dismiss the case in the absence of a legal settlement.
Respondents had a legal mechanism to request the court enforce settlement, and the court invited them at the November 10, 2014 hearing to use it. Code of Civil Procedure section 664.6 allows a party to move the court to enforce a completed settlement. But respondents elected not to file such a motion. They also elected not to exercise another option to force the settlement by way of a motion for summary judgment. Rather, respondents simply sat back and encouraged the court to enforce the settlement at the OSC. "[T]he Judicial Council formulated . . . rule 3.1385 as a case management tool for delay reduction, designed specifically to 'assist courts in identifying inactive cases from the active cases that may require judicial attention.' [Citation.] Although effective as a case management tool, rule 3.1385 is not intended as a means to enforce settlements." (Irvine, supra, 149 Cal.App.4th at p. 1001.)
In Irvine, after the parties advised the court they had reached settlement, and the court scheduled a dismissal hearing, the plaintiff rejected the agreement based on additional discovery received after the agreement had been reached. In reversing the judgment of dismissal, the appellate court concluded, "rule 3.1385 lacks the procedural safeguards built into other summary settlement enforcement procedures. For example, courts have strictly enforced section 664.6's requirement that the settlement agreement be either in writing and signed by the parties, or that the parties agree to the settlement in open court . . . It would be anomalous indeed for a defendant to obtain dismissal under rule 3.1385 over a plaintiff's objections where the settlement would not meet the requirements of section 664.6." (Irvine, supra, 149 Cal.App.4th at p. 1001.)
In this case, it is undisputed the settlement was not agreed to in open court and the record does not contain a signed settlement agreement. As a result, there can be no legal settlement. "The only decision before the court at a rule 3.1385 hearing is whether to dismiss the case or restore it to the civil active list." (Irvine, supra, 149 Cal.App.4th at p. 1001.)
In addition, by alleging a dispute over whether the parties reached a binding settlement, plaintiff demonstrated good cause to restore the case to the civil active list. (Irvine, supra, 149 Cal.App.4th at pp. 1001-1002.) Similar to Irvine, when Crawn's counsel advised the court of the ongoing policy dispute, this demonstrated good cause preventing dismissal of the action and restoring the case to the civil active list.
B. Counsel's Late Filing and Failure to Attend the Hearing
Counsel's late filing and Ms. Bish's failure to attend the hearing are not sufficient grounds to support dismissal of the action.
The involuntary dismissal of a civil case has potentially serious consequences for the citizen who has sought to redress his or her grievances in a court of law. "To remove a case from the trial track without exhausting every reasonable means to achieve compliance with the court's standards would favor efficiency above the pursuit of justice." (Moyal v. Lanphear, supra, 208 Cal.App.3d 491, 503.)
"[T]he Legislature has mandated that a dismissal sanction should be utilized 'only if it appears less severe sanctions would not be effective' . . . The drastic measure of dismissal should only be used where there is a clear showing that the client is the cause of counsel's failure to comply." (Traweek v. Fineley, Kumble, etc. Myerson & Casey (1991) 235 Cal.App.3d 1128, 1134.) The negative consequences of Ms. Bish's failure to personally appear and her failure to timely file a further declaration should affect her, not her client. She was engaged in trial at a different court in a different county. Her client, Crawn, may have had no input or bearing on her failure to personally attend the hearing, nor is there any indication (or any likelihood) Crawn was the cause for the late filing, yet he bears the brunt of the dismissal.
While we do not condone disregard for a trial court's orders, the facts on this record do not justify dismissal even if the client had personally approved counsel's choices. The order directed that "counsel for the plaintiff personally appear," but did not specify that Ms. Bish had to appear herself. Nor do we believe it would be appropriate for the court to substitute its judgment for the judgment of the client and his attorneys as to which individual attorney would represent him at a particular hearing. Mr. Sublette, who argued the policy dispute at each hearing, was an employee of the firm representing Crawn. He was adequately prepared and argued the substantive issue on the day the case was dismissed. We conclude the trial court abused its discretion by dismissing the case based on its disapproval about which of Crawn's attorneys appeared on his behalf at the hearing.
Nor does the late filing justify dismissal. "Preventing parties from presenting their cases on the merits is a drastic measure; terminating sanctions should only be ordered when there has been previous noncompliance with a rule or order and it appears a less severe sanction would not be effective." (Wantuch v. Davis (1995) 32 Cal.App.4th 786, 795.) There is no history of prior refusals to obey a court order in this case, nor did the court ever impose monetary sanctions against counsel for failure to follow court orders. We therefore conclude turning to the drastic measure of dismissal as a first response was unreasonable.
III
DISPOSITION
We reverse the judgment and remand the case with instructions to restore it to the civil active list. Appellant shall recover costs on appeal.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
SLOUGH
J. We concur: RAMIREZ
P. J. HOLLENHORST
J.