Opinion
A155740
05-04-2020
BONNIE SMALL, Plaintiff and Respondent, v. DANIEL LIGHTFOOT, Defendant and Respondent; ILLINOIS MIDWEST INSURANCE AGENCY, LLC, Intervener and Appellant.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Sonoma County Super. Ct. No. SCV256969)
Appellant Illinois Midwest Insurance Agency (Illinois Midwest), a workers' compensation insurance carrier, sought to intervene in a personal injury action brought by its insured's employee, Bonnie Small, against Daniel Lightfoot, M.D. Lightfoot demurred to the complaint in intervention, arguing that Illinois Midwest did not have standing to intervene once Small settled and dismissed her lawsuit against him. The trial court sustained the demurrer without leave to amend. We affirm the judgment.
I. FACTUAL AND PROCEDURAL BACKGROUND
Bonnie Small was employed as a nurse with 4th Street Laser and Surgery Center. On April 16, 2014, Small was injured at work when a gurney pushed by Lightfoot from the operating room struck and injured her. Illinois Midwest paid workers' compensation insurance benefits to Small on behalf of her employer.
In April 2015, Small sued Lightfoot for general negligence. Although the parties disagree whether Small promptly notified Illinois Midwest of her lawsuit, there is no dispute that Illinois Midwest received notice of the complaint by June 2017. In January 2018, Small and Lightfoot settled the lawsuit and one month later, Small filed a request to dismiss the action with prejudice. The superior court clerk entered the dismissal in the register of actions on February 23, 2018.
Three days after the dismissal, Illinois Midwest moved to intervene under Code of Civil Procedure section 387 and Labor Code section 3853 to recoup the workers' compensation benefits paid to Small. Small opposed the motion, arguing that the lawsuit was barred under the Medical Injury Compensation Reform Act of 1975 (MICRA) (Civ. Code, § 3333.1 et seq). The trial court granted Illinois Midwest's motion to intervene. Illinois Midwest then filed its complaint in intervention, alleging that it was subrogated to the rights Small may have recovered from Lightfoot and entitled to recoup the workers' compensation benefits Illinois Midwest paid to Small.
Code of Civil Procedure section 387 provides that a nonparty may intervene in an action "upon timely application." (Code Civ. Proc., § 387, subds. (b), (d)(1), (d)(2).)
Labor Code section 3853 provides: "If either the employee or the employer brings an action against such third person, he shall forthwith give to the other a copy of the complaint by personal service or certified mail. Proof of such service shall be filed in such action. If the action is brought by either the employer or employee, the other may, at any time before trial on the facts, join as party plaintiff or shall consolidate his action, if brought independently." All further unspecified statutory references are to the Labor Code.
Lightfoot demurred to the complaint in intervention. He argued the trial court lacked jurisdiction to consider Illinois Midwest's motion to intervene as it was filed after Small had requested dismissal of her action. Lightfoot further argued that Illinois Midwest's complaint was time-barred and that MICRA precluded recoupment of workers' compensation benefits paid to Small. (Civ. Code, § 3333.1, subd. (a).) Illinois Midwest opposed, asserting that because Small failed to provide prompt notice of the complaint or settlement, her settlement with Lightfoot and subsequent dismissal should not preclude Illinois Midwest from intervening. Illinois Midwest also argued MICRA did not apply.
The trial court sustained the demurrer without leave to amend. It determined that Illinois Midwest lacked standing to intervene because Small's dismissal of the underlying action stripped the court of jurisdiction to act in the case. The court also found the complaint in intervention untimely under the applicable statute of limitations period. It declined to reach the MICRA issue, concluding its applicability is not determinable on the basis of the pleadings alone. The trial court entered judgment in December 2018.
II. DISCUSSION
A. Standard of Review
"On appeal from a demurrer sustained without leave to amend, we assume the truth of the allegations of the complaint and determine whether they state a cause of action and, if not, whether the defect may be cured by amendment. [Citation.] We will affirm the court's ruling if it is correct under any legal theory raised in the demurrer, whether the court relied on the theory or not. [Citation]. The denial of leave to amend we review for abuse of discretion." (Debro v. Los Angeles Raiders (2001) 92 Cal.App.4th 940, 946.) B. The Trial Court Properly Sustained the Demurrer
Illinois Midwest contends the trial court erred in concluding it lacked standing to intervene in the underlying action because Small had already dismissed the action. We conclude the dismissal extinguished Illinois Midwest's right to intervene in an action that was no longer pending.
"Under the workers' compensation statutes, an employee who suffers an industrial injury may recover compensation benefits from his or her employer without regard to the negligence of either party." (Abdala v. Aziz (1992) 3 Cal.App.4th 369, 374.) "Where the tort of a third party causes injury to an employee, . . . section 3852 permits the employee to sue the tortfeasor for all damages proximately resulting from the injury even though he or she has received from an employer workers' compensation benefits covering some of the same injuries and resulting disability." (Ibid.) "To prevent an employee from retaining both third party damages and workers' compensation benefits for the same injuries and disabilities, the Labor Code permits an employer to recover workers' compensation benefits it has become obligated to pay and/or has paid by . . . bringing an action directly against the tortfeasor (§ 3852) . . . [or] joining as a party plaintiff or intervening in an action brought by the employee (§ 3853)." (Abdala, at p. 374.) An "employer" includes a workers' compensation insurance carrier. (§ 3850, subd. (b); see Jordan v. Superior Court (1981) 116 Cal.App.3d 202, 206 (Jordan) ["[A] workers' compensation insurer has the same right to sue as an employer"].)
An employer, or the insurance carrier standing in its shoes, has the right to intervene in an action against the third party tortfeasor "at any time before trial on the facts." (§ 3853; see Jordan, supra, 116 Cal.App.3d at pp. 206-207.) Intervention is allowable even after the statute of limitations period has run, so long as the employer or employee has filed the underlying action against the third party within the applicable limitations period. (See County of San Diego v. Sanfax Corp. (1977) 19 Cal.3d 862, 885; see also O'Dell v. Freightliner Corp. (1992) 10 Cal.App.4th 645, 654 (O'Dell) ["[A]n employer or an employee has an unconditional right to intervene in the other's lawsuit any time prior to trial on the facts [citations] and thereby avoid the [applicable] statute of limitations."].)
The right to intervene, however, exists only so long as the underlying action has not been dismissed. With certain exceptions not applicable here, the plaintiff in a lawsuit has an absolute right to dismiss an action by written request to the clerk of the court. (Code Civ. Proc., § 581, subd. (b)(1); Roski v. Superior Court (1971) 17 Cal.App.3d 841, 846-847 (Roski); O'Dell, supra, 10 Cal.App.4th at p. 659.) "A written dismissal of an action shall be entered in the clerk's register and is effective for all purposes when so entered." (Code Civ. Proc., § 581d.) Because " '[t]he entry is a ministerial, not a judicial, act' " (S.B. Beach Properties v. Berti (2006) 39 Cal.4th 374, 380), both the trial court and the clerk are "without power to prevent entry of the dismissal." (Aetna Casualty & Surety Co. v. Humboldt Loaders, Inc. (1988) 202 Cal.App.3d 921, 931 (Aetna); 6 Witkin, Cal. Procedure (5th ed. 2008) Proceedings Without Trial, § 283, pp. 737-738 ["neither the clerk nor the court has any discretion in the matter" to disregard a request to dismiss].) Therefore, courts have held "[a] request for a dismissal is usually effective upon filing." (Law Offices of Andrew L. Ellis v. Yang (2009) 178 Cal.App.4th 869, 876; see Aetna, at p. 931 [same]; see also Long v. Superior Court (1936) 14 Cal.App.2d 753, 754-755 ["[T]he dismissal finally terminates the case when filed with the clerk whether or not he makes the proper entries."].) Once a case is dismissed, "the trial court loses jurisdiction to act in the case, 'except for the limited purpose of awarding costs and statutory attorney fees.' " (Ellis, at p. 876.)
Roski is instructive. After an injured employee received workers' compensation benefits, the employer sued the alleged third party tortfeasor, settled, and filed a voluntary dismissal of the action. (Roski, supra, 17 Cal.App.3d at p. 843.) The employee belatedly sought to set aside the dismissal under Code of Civil Procedure section 473 in order to intervene in the underlying action. (Roski, at pp. 843-844.) The trial court's order granting the motion to set aside the judgment was reversed. The appellate court concluded that although the employee was entitled to intervene "so long as that action remained pending" (id. at p. 844), dismissal of the action deprived the trial court of jurisdiction to entertain the employee's motion to vacate the judgment. (Id. at p. 846 ["Where the court has lost its jurisdiction, it has no discretion which can be exercised."].) The Roski court additionally held that "[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," and because the employee was never a party to the action prior to its dismissal, he lacked standing to set aside the judgment. (Roski, at p. 846.)
The same situation applies here. Small filed a request to dismiss the action against Lightfoot on February 23, 2018, and the dismissal was entered in the register of actions on the same date. Once the underlying action had been dismissed, there was no action pending in which Illinois Midwest could intervene. (Roski, supra, 17 Cal.App.3d at p. 845; see O'Dell, supra, 10 Cal.App.4th at p. 659 [voluntary dismissal of employee's action against third party tortfeasor deprived trial court of jurisdiction to entertain employer's motion to set aside dismissal].) Because Illinois Midwest moved to intervene three days after the dismissal, it lacked standing to intervene in an action that no longer existed, and the court was without jurisdiction to entertain its motion.
Illinois Midwest contends dismissal should nevertheless be set aside because notice of Small's complaint and settlement were inadequate. It is true that an employer or employee who sues a third party is required to deliver "forthwith" a copy of the complaint to the other by personal service or certified mail and file proof of service in the action (§ 3853). In addition, the Labor Code imposes certain obligations to provide notice of settlement of third party actions. (See §§ 3859, 3860, subd. (a); McKinnon v. Otis Elevator Co. (2007) 149 Cal.App.4th 1125, 1132-1133 (McKinnon).) It does not follow, however, that inadequate notice permits a trial court to unwind the voluntary dismissal of an action. The same arguments were considered and rejected in O'Dell.
In O'Dell, an employee brought a personal injury action against a third party after receiving workers' compensation benefits from his employer. (O'Dell, supra, 10 Cal.App.4th at p. 651.) The employee settled his case before trial and voluntarily dismissed the action. (Ibid.) The employer later moved to set aside the dismissal to intervene. (Ibid.) Although the appellate court found that the employee had not fulfilled his obligations under the Labor Code to notify his employer of the action or settlement (O'Dell, at pp. 656-657), it concluded that the dismissal precluded the employer's action against the third party defendant. (Id. at p. 662.) The employer was "therefore left to whatever remedies it might assert against [the employee] either by suit for breach of the duty to notify or as a credit against future compensation benefits it may have to pay [him]." (Ibid.) The same holding applies here. Even if a factual dispute exists whether Small properly complied with notice requirements under the Labor Code, voluntary dismissal of the underlying action by Small terminated the matter and extinguished Illinois Midwest's right of intervention.
Illinois Midwest's reliance on McKinnon is unavailing. In McKinnon, an employee was injured while using an elevator and received workers' compensation benefits from her employer. (McKinnon, supra, 149 Cal.App.4th at p. 1128.) Her employer filed a subrogation complaint against the third party elevator company, settled the action without providing adequate notice of the settlement to the employee or obtaining the employee's consent to the settlement, and dismissed the lawsuit. (Id. at pp. 1128-1129.) The employee later sued the elevator company. (Id. at p. 1129.) The trial court granted the elevator company's motion for summary judgment on the grounds that the employee failed to bring her suit together with her employer's action and her action was time-barred. (Ibid.)
The Court of Appeal reversed. (McKinnon, supra, 149 Cal.App.4th at p. 1138.) Although the employer failed to comply with the Labor Code's notice and consent requirements, the court concluded the voluntary dismissal terminated the court's jurisdiction and the judgment could not be set aside. (Id. at pp. 1133-1134.) It reasoned: "Does this mean the settlement between Employer and Otis [Elevator Company] and the dismissal based thereon are invalid, so that the lawsuit between Employer and Otis is still pending and Employee may now intervene in that lawsuit? No. The lawsuit between Employer and Otis has been voluntarily dismissed; it is over in a jurisdictional sense and cannot be resurrected at this point." (McKinnon, at pp. 1133-1134 [citing Roski & O'Dell].) The employee was not without recourse, however, and she might have an action against the employer or third party based on a failure to satisfy statutory notice and consent requirements. (McKinnon, at p. 1134.) McKinnon does not support Illinois Midwest's request to set aside the dismissal and permit intervention in a matter that has ended.
Finally, we reject Illinois Midwest's contention that the trial court, by sustaining the demurrer for lack of standing, "reversed" its prior order allowing the complaint in intervention to be filed. Because the court lost jurisdiction to entertain the motion to intervene when dismissal was entered, the order on that motion was void. (See Aetna, supra, 202 Cal.App.3d at p. 931.) In light of our conclusion that the trial court properly sustained the demurrer without leave to amend, we need not address the parties' remaining arguments on appeal.
III. DISPOSITION
The judgment is affirmed. Respondents are entitled to their costs on appeal.
/s/_________
Sanchez, J. WE CONCUR: /s/_________
Margulies, Acting P.J. /s/_________
Banke, J.