In Gaines v. Fidelity National Title Ins. Co., S215990, a divided California Supreme Court (5-2) upheld the dismissal of this case for failure to bring the matter to trial within five years, as required by Code of Civil Procedure § 583.310. In doing so, the Supreme Court affirmed the lower courts and rejected plaintiff’s argument that a 120-day stipulated stay of all court proceedings was sufficient under § 583.340 to toll the 5-year deadline.  Other related issues raised below, and the corresponding facts, are described in our previous post which addressed the Court of Appeal decision.

The parties stipulated to strike a previous trial date and stay the action for 120 days, excepting only discovery responses owed on pending requests, with the intention of attempting to mediate. Consistent with this, the trial court: (1) “struck” the existing trial date, (2) “stayed [the case] for a period of 120 days except” for responses “to all previously served and outstanding written discovery,” (3) set a post-mediation and trial-setting conference; and (4) directed “all parties . . . to participate in good faith in a mediation of all claims…” After the term of the stay, the matter was reassigned to a different court, a new party emerged, and there was other delays. Eventually, one defendant moved to dismiss the matter for violating the 5-year deadline. At that time, tolling the deadline for 120 days would have saved the action.

Justice Corrigan, writing for the majority, first explained that the provisions of the Civil Action Mediation Program applied here (See, Code Civ. Pro. § 1775, et seq.), even though that program and its provisions were not invoked by the parties below, or the trial court. Nevertheless, the majority found that these provisions apply whenever the trial court orders a matter to mediation in a county which has chosen to apply this program, apparently regardless of whether that program or its other provisions are invoked. As part of this statutory scheme, § 1775.7 bars any tolling of the 5-year deadline unless the mediation occurs in the last six months remaining, which was not the case in Gaines.

The majority then turned to § 583.340, which in relevant part tolls the 5-year deadline if the “Prosecution or trial of the action was stayed or enjoined,” or if “Bringing the action to trial, for any other reason, was impossible, impracticable, or futile.” (Subds. (b) and (c), respectively.) Regarding the stay of prosecution or trial, the majority cited its previous holding in Bruns that a partial stay was insufficient to invoke this provision. The majority concluded that the stay in Gaines was partial because it provided both for the completion of outstanding discovery and also ordered mediation. Discovery is an inherent part of litigation, and the majority found that the order to mediate incorporated that process into the prosecution of the case. As noted above, the legislative intent on this point is demonstrated by Civil Action Mediation Program, which limits any such tolling of the 5-year deadline to the last six months available. The Court distinguished this from contractual arbitration, which is intended to be a separate process from litigation, while mediation is intended to resolve the litigation itself. Under the circumstances, the majority characterized the “stay” of trial as a continuance for a period defined by the parties and not reliant on any condition external to the litigation, which therefore “does not qualify for automatic tolling.” The majority also noted that the parties could have expressly stipulated to extend the 5-year deadline under § 583.330, but did not. Since there was no representation that the 5-year deadline would be stayed, plaintiff’s estoppel argument was also rejected.

On similar grounds, the majority also found that this did not result in circumstances of “impossibility, impracticability, or futility” under § 583.340(c) to “move the case to trial” during the 120-day stay. The majority found that the trial court was within its discretion to make a factual determination that there was no impracticability since the delay was not one “over which plaintiff had no control,” but was instead by design and at plaintiff’s specific request. If the mediation was unproductive, plaintiff could have made a similar request to lift the stay and set a trial date. The majority noted that the plaintiff (1) “made meaningful progress toward resolving the case” during the stay, including the completion of all pending discovery and pursuing mediation, (2) remained “in control of the circumstances,” including entering into the voluntary stay, and (3) failed to show due diligence following mediation, which was partially responsible for extended the intended 120-day stay to 217 days. After the intended termination of the stay, there was a delay of 20 days attributable to preemptory challenges, and the majority agreed that the 5-year deadline should be tolled for that period, but this was insufficient to preserve plaintiff’s claim.

Justice Kruger dissented, joined by Justice Liu, finding that the original 120 days in which the court stayed the action falls within the statutory language for tolling the 5-year deadline, i.e., that the “prosecution or trial of the action was stayed or enjoined” by the trial court in all practical ways. The dissent argued that mediation was not part of the litigation, but was an alternative to it, and therefore should not be considered as acting to move the case to trial. Further, even if the stay was considered a partial stay under § 583.340(b), the dissent argued that the circumstances still made proceeding to trial impracticable under § 583.340(c) for that period. The dissent further noted that any dispute in this regard should be decided in favor of the legislative preference that cases be resolved on their merits.

Image courtesy of Flickr by Dimitris Kalogeropoylos (no changes).