Gaines v. Fid. Nat'l Title Ins. Co.

Decision Date25 February 2016
Docket NumberNo. S215990.,S215990.
Citation365 P.3d 904,62 Cal.4th 1081,199 Cal.Rptr.3d 137
CourtCalifornia Supreme Court
Parties Milton Howard GAINES, Plaintiff and Appellant, v. FIDELITY NATIONAL TITLE INSURANCE COMPANY et al., Defendants and Respondents.

62 Cal.4th 1081
365 P.3d 904
199 Cal.Rptr.3d 137

Milton Howard GAINES, Plaintiff and Appellant,
v.
FIDELITY NATIONAL TITLE INSURANCE COMPANY et al., Defendants and Respondents.

No. S215990.

Supreme Court of California

Feb. 25, 2016.


199 Cal.Rptr.3d 141

Ivie, McNeill & Wyatt, W. Keith Wyatt and Antonio K. Kizzie, Los Angeles, for Plaintiff and Appellant.

Fidelity National Law Group, Kevin R. Broersma and Jordan Trachtenberg, Los Angeles, for Defendants and Respondents Fidelity National Title Insurance Company and Bobbie Jo Rybicki.

Knapp, Petersen & Clarke, Garcia Legal, Steven Ray Garcia and Alexander Levy, Pasadena, for Defendants and Respondents Lehman Brothers Holdings, Inc., and Aurora Loan Services, LLC.

No appearance for Defendants and Respondents Joshua Tornberg, Craig Johnson, Ray Management Group, Inc., and A.J. Roop.

CORRIGAN, J.

365 P.3d 908
62 Cal.4th 1087

Plaintiff's lawsuit was dismissed for failure to comply with Code of Civil Procedure1 section 583.310, which requires that an action "be brought to trial within five years after the action is commenced against the defendant." The issue here is whether the statute was tolled by an order entered pursuant to the parties' agreement. The order struck the trial date and "stayed" the proceedings while the parties engaged in mediation and completed all outstanding discovery.

In computing the five-year time frame, the court must exclude any period when the "[p]rosecution or trial of the action was stayed or enjoined." (§ 583.340, subd. (b), hereafter section 583.340(b).) The court must also exclude any time when it was "impossible, impracticable, or futile" to bring the case to trial. (§ 583.340, subd. (c), hereafter section 583.340(c).) The trial court held that neither of those tolling provisions saved this case from dismissal. The Court of Appeal affirmed the dismissal as to all but one defendant. We affirm the Court of Appeal's judgment. As explained in greater detail below, the statutory framework and our own case law recognize that a stay can be either partial or complete. A complete stay will operate to automatically toll the five-year period. A partial stay will not do so unless it results in a circumstance of impossibility, impracticability, or futility. We conclude that the court's order did not effect a complete stay of the prosecution of the action. Nor did the order create a circumstance of impracticability because plaintiff agreed to it, remained in control of the circumstances, and made meaningful progress towards resolving the case during the stay period. Accordingly,

365 P.3d 909

the period of the "mediation stay" did not toll the five-year period.

I. BACKGROUND

Fannie Marie Gaines and her husband, Milton, owned a home in Los Angeles with an appraised value of $1.25 million. They held over $500,000 in equity in the property. A $554,000 loan with Countrywide Home Loans,

62 Cal.4th 1088

Inc. (Countrywide) was secured by a first deed of trust. The

199 Cal.Rptr.3d 142

Gaineses fell behind in their mortgage payments, received two notices of default from Countrywide, and failed in their attempts to refinance. Facing foreclosure, they agreed to sell the property to Tornberg, Johnson, and Ray Management (Tornberg) with an option to lease the property and repurchase it. Tornberg obtained loans that were secured by the property and subsequently transferred to various entities. The complaint here alleges that Tornberg and others involved in the transaction deceived the couple into selling their home under threat of foreclosure.

Milton died before the suit was filed. Mrs. Gaines filed a complaint on November 13, 2006, alleging negligence, fraud, intentional infliction of emotional distress, and failure to follow home equity sales contract requirements contained in the Civil Code. She sought rescission and cancellation of the deed transferring ownership of the property.

Once begun, the suit followed an involved procedural journey. Amended complaints and answers were filed and defendants substituted. In November 2009 Mrs. Gaines died and her son, Milton Howard Gaines, was substituted as successor in interest.2 An extended dispute subsequently arose concerning whether one of the defendants, Aurora Loan Services, LLC (Aurora) held legal title to the property. Aurora originally admitted holding title, but subsequently urged that Lehman Brothers Holdings, Inc. (Lehman), by then in bankruptcy, was the actual owner. Much delay resulted from disputes over that question and plaintiff's ultimate motion for relief from Lehman's bankruptcy stay. We need not delve into those complexities to resolve the question before us.

On May 19, 2012, Fidelity National Title Insurance Company (Fidelity) moved to dismiss for failure to bring the action to trial within the five-year time frame required by section 583.310. When the motion was filed, the case had been pending for approximately five and a half years. A trial date was scheduled for August 6, 2012. At no time did Gaines move to advance the trial date.

In opposition to the motion, Gaines claimed the five-year period had been tolled several times. In computing the period of pendency, the trial court excluded two months for the delay resulting from Mrs. Gaines's death, and 125 days during which plaintiff sought relief from Lehman's bankruptcy stay. Those rulings are not disputed here. However, the court did not exclude the time during which the court had vacated the trial date and ordered a 120–day

62 Cal.4th 1089

stay of proceedings to permit the parties to engage in mediation. It concluded that, because this mediation period did not support tolling, the scheduled trial date exceed the five-year limitation by 82 days. The case was ultimately dismissed in its entirety on August 24, 2012.

The facts relevant to the question before us are undisputed. In April 2008 Gaines applied for an order to vacate a September 2008 trial date, which was scheduled to occur less than two years into the pendency of the litigation. The application stated that all parties had agreed to vacate the trial date, to stay the action for 120 days, and to participate in mediation. The parties agreed that responses to pending discovery requests would not be stayed. Consistent with this agreement, the trial court's April 3, 2008 order: (1) "struck"

199 Cal.Rptr.3d 143

the current trial date of September 22, 2008; (2) "stayed [the case] for a period of 120 days except that [the] parties are to respond to all previously served and outstanding written discovery;" (3) set a post-mediation and trial-setting conference on July 16, 2008; and (4) directed "all parties ... to participate in good faith in a mediation of all claims in this case within the next 90 days." The ensuing mediation conducted on May 30, 2008, was not successful

365 P.3d 910

except that Gaines moved to dismiss one defendant on June 9, 2008, in exchange for the reconveyance of its $150,000 interest in the property.

At a November 6, 2008, status conference, the mediation stay was lifted and an August 29, 2009, trial date was set. The original stay was ordered to last 120 days, but was actually lifted after 217 days. The longer period was occasioned, in part, by judicial reassignments. We analyze the legal question here in terms of the 217–day period between granting and lifting the mediation stay.

The trial court concluded that section 583.340(b) did not apply to this period because there was not a complete stay of the prosecution as required under that exception. It further concluded that the mediation stay did not create a circumstance of impossibility, impracticability, or futility under section 583.340(c). The stay was requested by plaintiff and was not a circumstance beyond plaintiff's control. It was to last only 120 days and did not affect previously served and outstanding written discovery. Further, plaintiff did not demonstrate diligence during the period in question.

The Court of Appeal affirmed the trial court's dismissal as to all defendants but Lehman.3 We uphold the Court of Appeal.

II. DISCUSSION

An action must be brought to trial within five years after it is commenced. (§ 583.310.) If this deadline is not met, the action "shall be

62 Cal.4th 1090

dismissed by the court on its own motion or on motion of the defendant, after notice to the parties...." (§ 583.360, subd. (a).) "The requirements of this article are mandatory and are not subject to extension, excuse, or exception except as expressly provided by statute." (§ 583.360, subd. (b).) The question before us is whether the trial court's order vacating the trial date...

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2 cases
  • Gaines v. Fid. Nat'l Title Ins. Co.
    • United States
    • California Supreme Court
    • 25 Febrero 2016
  • Tony Fu v. Kaman Liu
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    ...literally impracticable to try the case, thus rendering the statute 'utterly indeterminate, subjective, and unadministerable.'" (Gaines, 62 Cal.4th at p. 1101.) In addition, delays associated with "ordinary incidents of proceedings leading up to the trial . . . must deprive the plaintiff of......

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