Opinion
G057417
04-24-2020
ART MENENDEZ, Plaintiff and Respondent, v. LAURA LYNN JONES, Defendant and Respondent; ATLANTIC SPECIALTY INSURANCE COMPANY, Movant and Appellant.
Matthiesen, Wickert & Lehrer, Zahra H. Aziz and Hector E. Salitrero for Movant and Appellant, Atlantic Specialty Insurance Company. DeWitt Algorri & Algorri, Mark S. Algorri and Carolyn L. Tan for Plaintiff and Respondent, Art Menendez. Law Offices of Cleidin Z. Atanous and Cleidin Z. Atanous; Raffalow, Bretoi & Adams and Dominick V. Lane for Defendant and Respondent, Laura Lynn Jones.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.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. 30-2017-00946685) OPINION Appeal from an order of the Superior Court of Orange County, David R. Chaffee, Judge. Affirmed. Matthiesen, Wickert & Lehrer, Zahra H. Aziz and Hector E. Salitrero for Movant and Appellant, Atlantic Specialty Insurance Company. DeWitt Algorri & Algorri, Mark S. Algorri and Carolyn L. Tan for Plaintiff and Respondent, Art Menendez. Law Offices of Cleidin Z. Atanous and Cleidin Z. Atanous; Raffalow, Bretoi & Adams and Dominick V. Lane for Defendant and Respondent, Laura Lynn Jones.
* * *
Plaintiff Art Menendez sued defendant Laura Lynn Jones for employment related injuries sustained in an auto collision incident. Movant Atlantic Specialty Insurance Company (Atlantic) filed a lien notice in Menendez's lawsuit based upon workers compensation benefits paid to Menendez. After Menendez notified Atlantic he had settled his lawsuit with Jones, Atlantic filed a motion to intervene. With the motion still pending, Menendez voluntarily dismissed his lawsuit. Atlantic appeals the trial court's denial of its motion to vacate the dismissal. We conclude the court properly found Atlantic lacked standing to bring the motion to vacate the dismissal and therefore affirm its order denying Atlantic's motion to intervene.
I
FACTS AND PROCEDURAL HISTORY
In September 2015, Jones's vehicle rear-ended Menendez when he was driving in the course and scope of his employment. Menendez applied for workers compensation benefits for injuries he sustained and his employer's insurer, Atlantic, paid the benefits. In September 2017, Menendez filed a personal injury lawsuit against Jones.
In August 2018, Atlantic filed a notice of lien in the lawsuit, based upon its payment of more than $38,000 in workers compensation benefits to Menendez. Over the next two weeks Menendez and Atlantic discussed the amount Atlantic would accept as reimbursement for the benefits it paid, after applying reductions favorable to Menendez. Menendez sent Atlantic an e-mail requesting a "reduction amount" and advising he intended to send Jones a statutory offer of compromise. Atlantic quickly responded with its initial calculation of a reimbursement amount, followed by a revised lower amount.
By September 28, 2018, Menendez had reached a settlement with Jones and notified Atlantic by mail. Nine days later, Atlantic's representative responded there was not yet "authority to resolve [its] lien," but he would communicate its "final position" later. On October 11, Menendez requested Atlantic send a "formal letter" regarding its calculated reimbursement amount. The following week, Atlantic informed Menendez it had filed a motion for leave to intervene in the lawsuit, explaining it believed Menendez improperly attempted to "'settle around'" its lien and Atlantic also recently discovered Jones's personal assets could satisfy any excess exposure over policy limits.
While Atlantic's motion was pending, Menendez voluntarily dismissed his lawsuit. A few weeks later, Atlantic filed a motion to vacate the dismissal under Code of Civil Procedure section 473. After hearing oral argument, the trial court denied Atlantic's motion. The court found Atlantic did not have standing to bring its motion and therefore the court lacked subject matter jurisdiction to act on it.
All further statutory references are to the Code of Civil Procedure.
II
DISCUSSION
Atlantic contends the trial court erred in concluding Atlantic had no standing to bring a motion to vacate Menendez's dismissal of his lawsuit against Jones. Atlantic also argues Menendez could not dismiss his case under section 581, subdivision (i), because Atlantic sought affirmative relief "not only to intervene but to challenge the settlement." Finally, Atlantic complains the court failed to exercise its discretion when it declined to hear Atlantic's intervention motion. Because we conclude Atlantic lacked standing to bring a motion to vacate the dismissal, the court did not err in finding it lacked jurisdiction to hear the matter. Consequently, we need not address Atlantic's other contentions. A. Atlantic Lacked Standing to Vacate Menendez's Dismissal of His Lawsuit Against Jones
Section 581, subdivision (i), in pertinent part provides, "No dismissal of an action may be made or entered, or both, . . . where affirmative relief has been sought by the cross-complaint of a defendant
To prevail on appeal, Atlantic must establish the trial court had jurisdiction to entertain Atlantic's motion to vacate Menendez's voluntary dismissal of his lawsuit. Although a voluntary dismissal generally will divest a trial court of jurisdiction to act further, the court retains power to vacate a dismissal under section 473. (Zamora v. Clayborn Contracting Group, Inc. (2002) 28 Cal.4th 249, 254-255; Basinger v. Rogers & Wells (1990) 220 Cal.App.3d 16, 21-23.) Notwithstanding this limited retention of jurisdiction, as a general principle, "persons who are not parties to litigation ordinarily cannot be heard in the litigation." (People v. Martinez (2009) 47 Cal.4th 399, 419, fn. 2.) Accordingly, whether the trial court had jurisdiction to act on Atlantic's motion to vacate turns on whether Atlantic had standing to make its motion. Because the material facts are undisputed, we review the question of standing de novo. (Scott v. Thompson (2010) 184 Cal.App.4th 1506, 1510.)
Section 473, subdivision (b), confers standing to move for relief as follows: "The court may, upon any terms as may be just, relieve a party or his or her legal representative from a judgment, dismissal, order, or other proceeding taken against him or her through his or her mistake, inadvertence, surprise, or excusable neglect." (Italics added.) Based on section 473's express statutory language, "'[o]nly a party to an action or his legal representative may avail himself of the relief afforded by Code of Civil Procedure section 473.'" (O'Dell v. Freightliner Corp. (1992) 10 Cal.App.4th 645, 658 (O'Dell).) "If [a statute's actual] words themselves are not ambiguous, we presume the Legislature meant what it said, and the statute's plain meaning governs.'" (Even Zohar Construction & Remodeling, Inc. v. Bellaire Townhouses, LLC (2015) 61 Cal.4th 830, 838.)
It is undisputed the trial court had not yet granted Atlantic leave to intervene at the time Menendez dismissed his lawsuit. Accordingly, Atlantic was a nonparty when it filed its postdismissal motion to vacate. (See § 387 [intervenor must obtain court's permission to intervene before it becomes a party in the lawsuit]; Lohnes v. Astron Computer Products (2001) 94 Cal.App.4th 1150, 1153 (Lohnes) [potential intervenor lacks standing if it did not obtain court's permission to intervene].) Atlantic failed to satisfy section 473's standing requirement because it was not a "party" subject to the dismissal order.
The decision in O'Dell guides our analysis. There, an employer received deficient notice of its injured employee's lawsuit against a third party defendant. (O'Dell, supra, 10 Cal.App.4th at pp. 656-657.) After the employee had dismissed his lawsuit, the employer filed a motion to vacate the dismissal so it could seek leave to intervene in the lawsuit. (Id. at p. 651.) The trial court denied the motion and the appellate court affirmed. (Id. at pp. 650, 665.) The O'Dell court held the denial of the motion had been proper because only a party to an action or his legal representative may seek relief under section 473 and the employer had been neither a party nor a legal representative. (Id. at pp. 658-660.) We agree the plain meaning of section 473 governs and therefore reach the same conclusion under the circumstances of this case. (See Even Zohar Construction & Remodeling, Inc. v. Bellaire Townhouses, LLC, supra, 61 Cal.4th at p. 838.)
Atlantic attempts to distinguish O'Dell by noting that it had filed a motion to intervene before Menendez filed his dismissal, but the potential intervenor in O'Dell had neglected to file its request to intervene. (O'Dell, supra, 10 Cal.App.4th at p. 651.) The distinction is immaterial because the trial court had not granted Atlantic leave to intervene before Menendez dismissed his lawsuit. Atlantic's failure to obtain the court's leave to intervene rendered Atlantic a nonparty without standing to move to vacate. The fact Atlantic had filed its motion to intervene does not change its status as a nonparty.
Next, we reject Atlantic's assertion it qualified as a party because section 473 "calls for an entity to be a 'party' if it is technically a 'party' or if it has sufficient interest to grant such standing." In support, Atlantic relies on Witkin, a leading treatise on California law, which noted that a "person with sufficient interest has standing" under section 473. (See 8 Witkin, Cal. Procedure (5th ed. 2008) Attack on Judgment in Trial Court, § 149, p. 743.) In context, Witkin referred to persons acting as a party's legal representative or who had a trust relationship with a party in the lawsuit, such as a person who posted a bond by depositing a letter of credit. (Ibid., citing Skolsky v. Electrovision Productions (1967) 254 Cal.App.2d 246.)
Here, it is clear Atlantic's interest in this case was not aligned with either Menendez or Jones. Atlantic sought further litigation against Jones, but Menendez and Jones had agreed to settle the Menendez lawsuit. The only case cited in the Witkin passage involving a claim for reimbursement of workers' compensation benefits is Roski v. Superior Court (1971) 17 Cal.App.3d 841, 846 (8 Witkin, Cal. Procedure (5th ed. 2008) Attack on Judgment in Trial Court, § 149, p. 743), which does not support Atlantic's argument. In Roski, the appellate court applied the plain language of section 473 to hold an injured employee who attempted to intervene in an insurer's dismissed case could not rely on section 473 for relief because he was neither a party or legal representative. (Roski v. Superior Court, supra, 17 Cal.App.3d at p. 846; accord O'Dell, supra, 10 Cal.App.4th at p. 658 [applying the holding of Roski in that case].) In sum, Atlantic's argument it had a "sufficient interest" under section 473 to qualify for standing is without merit.
Next, we reject Atlantic's contention the filing alone of its motion to intervene conferred standing "by virtue of the combination of the Judicial Tolling and Relation Back Doctrines." Atlantic claims "[t]here is a series of federal and state authorities" supporting its contention. In its opening brief, Atlantic cites to three out-of-state opinions, including U.S. for Use & Benefit of Canion v. Randall & Blake (5th Cir. 1987), 817 F.2d 1188 (Randall), to support its judicial tolling argument. In Randall, the Fifth Circuit Court of Appeals decided whether the trial court erred in granting a motion to intervene because it occurred after the one year statute of limitations deadline had passed. (Id. at pp. 1190, 1192.) The Randall court held that, under the federal rules of civil procedure, the intervenor's filed complaint was not time-barred because the underlying successful motion, filed before the statute of limitations deadline passed, had included a copy of the proposed complaint that was "adequate to notify the [defendants] they were being sued under the [statute the intervenor relied upon in litigation]." (Id. at p. 1191.) The reasoning in Randall was concerned with preserving defendants' rights to adequate notice. Randall offers no direct relevance for assessing a potential intervenor's standing to override a plaintiff's voluntary dismissal of his lawsuit.
Menendez and Jones both argue Randall and Atlantic's proffered tolling doctrine, are inapplicable to this case. We agree. The only case Atlantic cited that dealt with a claim for reimbursement of workers' compensation benefits was a Michigan state appellate decision in Petrosian v. Frizell (1970) 25 Mich.App. 141 (Petrosian), but it does not support Atlantic's contention.
In Petrosian, a workers' compensation insurer had been granted leave to intervene in an employee-plaintiff's lawsuit, but before it could file its complaint in intervention the employee and defendant stipulated to dismiss the lawsuit. (Petrosian, supra, 25 Mich.App. at p. 143.) The trial court denied the insurer's motion to "reinstate" the lawsuit, explaining the insurer "never actually intervened or became a party to the suit" because it failed to file a complaint. (Ibid.) The Michigan appellate court vacated the trial court's denial and reinstated the lawsuit, holding that "[u]pon the compensation insurance carrier being permitted to intervene it became a party to the litigation." (Id. at p. 144.) Here, in contrast to the intervenor in Petrosian, Atlantic had not been granted leave to intervene. Petrosian therefore does not support Atlantic's contention it "became a party to the litigation" predismissal. (Id. at p. 144.)
None of the other cases Atlantic relies on are relevant on the issue of standing to intervene, the dispositive issue in this case. Atlantic's citation to In re Napster, Inc. Copyright Litigation 2005 U.S. Dist. LEXIS (N.D.Cal., Feb. 3, 2005, No. C 04-3004-MHP) (Napster), actually demonstrates why Atlantic's tolling argument is unpersuasive. There, following a denial of the plaintiffs' motion to intervene in a different lawsuit, the plaintiffs filed their copyright infringement complaint after the applicable statute of limitations period had lapsed. (Id. at *11-12, 15.) The Napster court rejected the plaintiffs' argument to toll the statute of limitations based upon Randall, analogizing the unsuccessful motion to intervene to the dismissal of a complaint, which generally would not toll the statute of limitations. (Id. at 1-20.) In other words, the Napster court's reasoning on tolling distinguished between an unsuccessful motion to intervene and a successful one. (Ibid.)
Similar to Napster, the success of Atlantic's motion to intervene in this case—which we do not decide—was not a foregone conclusion. (See Lohnes, supra, 94 Cal.App.4th at p. 1153 ["Though a party may assert it holds unconditional right to intervention, that right is not absolute. A court must initially determine whether the petition is timely [under section 387]"].) In sum, we are not persuaded by Atlantic's arguments it had standing based on judicial tolling and the relation back doctrine. Based upon the clear statutory language of section 473, Atlantic was a nonparty without standing when Menendez dismissed his lawsuit.
Finally, we reject Atlantic's assertion that Lohnes is "very close to the facts of the instant case" and therefore we should reverse the trial court's order. In Lohnes, we concluded the trial court erred when it struck a worker's compensation insurer's complaint in intervention that had been filed without leave of court, according to a then local court policy allowing the filing without a court order. (Lohnes, supra, 94 Cal.App.4th at p. 1152-1153.) Atlantic contends the holding in Lohnes demonstrates an "implicit[] finding that the trial court had jurisdiction" and therefore we should follow suit. We reject the contention for two reasons. First, as to procedure, the complaint in intervention in Lohnes already had been filed (id. at p. 1152), but no complaint had been filed in this case. More importantly, the issue in Lohnes was not whether an insurer had standing to intervene, but whether a party had to obtain the trial court's permission to file a complaint in intervention and whether the court had to determine if the filing was timely presented. (Id. at pp. 1152-1153; see In re Marriage of Boswell (2014) 225 Cal.App.4th 1172, 1176 [precedential value of opinion depends upon issues raised].)
In sum, none of Atlantic's contentions are persuasive. Based upon the plain statutory language of section 473, Atlantic was a nonparty when it filed its postdismissal motion to vacate. Atlantic therefore lacked standing under section 473 and the trial court was without jurisdiction to act on Atlantic's motion.
III
DISPOSITION
The trial court's order denying Atlantic's motion to vacate is affirmed. Menendez and Jones are entitled to their costs on appeal.
ARONSON, J. WE CONCUR: BEDSWORTH, ACTING P. J. FYBEL, J.