Kidd v. Kopald

• Decision Date: 28 December 1994
• Docket Number: No. B072109,B072109
• Court: California Court of Appeals Court of Appeals
• Parties: Katheryn KIDD, Plaintiff and Appellant, v. Steven D. KOPALD, et al., Defendants and Respondents.

Page 875

36 Cal.Rptr.2d 875

31 Cal.App.4th 132

Katheryn KIDD, Plaintiff and Appellant, v. Steven D. KOPALD, et al., Defendants and Respondents.

No. B072109.

Court of Appeal, Second District, Division 3, California.

Dec. 28, 1994.

Review Denied March 23, 1995.

Gelfand and Gelfand, Gary B. Gelfand, Beverly Hills and Horvitz & Levy, Barry R. Levy and Elizabeth S. Anthony, Encino, for plaintiff and appellant.

David C. Tardiff, Beverly Hills, for defendants and respondents.

ALDRICH, Associate Justice.

INTRODUCTION

Plaintiff and appellant Katheryn Kidd (Kidd) appeals from the order of dismissal of her action for legal malpractice against defendants and respondents Steven D. Kopald (Kopald) and the law firm Kopald & Mark (collectively Kopald) for failure to bring the case to trial within three years.

Kidd contends reversal is in order because the trial court based the dismissal on the stated grounds that Kidd failed to serve the summons and complaint within two years of filing the complaint, contrary to the facts. Also, Kidd suggests any delay in prosecuting the action was reasonable in order to learn the results of the underlying lawsuit and the alleged malpractice.

We find there was no abuse of discretion by the trial court and therefore affirm the order.

FACTUAL AND PROCEDURAL BACKGROUND

On March 14, 1989, Kidd also known as Katheryn Rusyniak filed a complaint alleging defendants undertook to represent Kidd with respect to a business matter involving Neal's Cookies in Hollywood, California, and negligently caused loss of insurance benefits and other damages. The summons and complaint were served by mail on the law firm and Kopald respectively on February 27, 1991 and March 6, 1991. Proof of service was filed on January 16, 1992.

Kidd's underlying action involved damages arising from Kidd's eviction from her cookie business. Kidd had entered into a franchise agreement with Cookie Cutter in July 1986. On November 25, 1986, the locks were changed on her store and Kidd was evicted for alleged failure to pay her rent and franchise obligations, including the cost of goods and materials that had been supplied her. Kidd, represented by Kopald, sued Cookie Cutter, Neal Elinoff and others. That matter was sent to arbitration and an award in favor of Kidd was entered on January 11, 1990, in the sum of $95,000 against Cookie Cutter and Elinoff jointly and severally. However, Kidd was unable to collect on the judgment ultimately entered. She therefore served the complaint against Kopald for malpractice for failure to pursue her insurance benefits for the damages resulting from the eviction. Service was made approximately two years after the complaint was filed and approximately five years after the events giving rise to this lawsuit.

The trial court noticed its intention to dismiss the malpractice action on its own motion, with a hearing set for February 11, 1992. In opposition to dismissal, Kidd's counsel, Gary Gelfand, declared the arbitration award was uncollectible, and Elinoff had recently been incarcerated. According to Gelfand the complaint was filed on March 14, 1989, and was served "shortly thereafter." Also, Gelfand represented he had "numerous telephone conversations" with Kopald and the parties were engaged in discovery and settlement discussions. An open extension to answer had been granted to defendants subject to 30 days written notice. The open extension was actually granted orally and confirmed in writing on February 28, 1991. ¹

In support of dismissal, Kopald declared he had only two telephone conversations with Gelfand. The first occurred immediately after service of the complaint. Gelfand informed In addition to supporting the court's motion for dismissal, Kopald responded to the complaint on February 4, 1992, by demurrer. The hearing on the court's motion to dismiss was continued to March 3, 1992, and the parties were requested to submit additional declarations and points and authorities.

                Kopald the lawsuit was filed as a result of his failure to tender a claim to Kidd's insurance carrier.  In response, Kopald faxed a copy of a cancellation notice of Kidd's insurance for nonpayment of premium, which had occurred prior to the events giving rise to the underlying action, and demanded dismissal of the action with prejudice. 2  Kopald also declared Kidd had filed an action one year prior to the instant action but dismissed it without service.  Kopald had represented Kidd from about April 1987 until the summer of 1990 without knowledge of Kidd's action against him.  Kidd never notified Kopald of any dissatisfaction with the services provided.  He represented Kidd on a contingency basis and had yet to collect any fees
                

Kidd declared she consulted Kopald at about 9 a.m. the morning she was locked out of her business on November 25, 1986, and he never mentioned possible insurance coverage. Kidd provided Kopald with a box containing all of her business papers, including her insurance policies and cancelled checks. She explained she filed a claim with her insurance carrier shortly after learning of such possible recovery from another attorney in late 1988. Farmers Insurance denied the claim as untimely. She declared Kopald "repeatedly assured" her she had an excellent case against Elinoff and Cookie Cutter and would collect on any judgment obtained. Kidd asked attorney Gelfand to do an asset search of Elinoff, paying $900 for the services of a private investigator in Texas. The report was received in December 1990 and thereafter Kopald was served. When Kopald called Gelfand about the complaint, Kopald claimed Kidd had no insurance coverage at the time of the damages caused by Cookie Cutter and Elinoff. Kidd claimed she was acting reasonably in light of her reliance on Kopald's claim her case had merit and was viable without resort to insurance coverage. She characterized her situation as a "classic dilemma." Her attorney, Gelfand, contended any delay in serving the complaint was due to their desire to mitigate damages in the hope it would not be necessary to prosecute this case.

In response to Kidd's opposition, Kopald declared he never represented to Kidd that the judgment was collectible but instead had expressed his concern that it may not be, due to the financial condition of the defendants. He stated, if he had ever been informed Kidd had filed a malpractice action against him, he would have requested immediately to be excused as the attorney of record in the underlying action. Kopald submitted copies of the retrospective notice of cancellation of insurance effective November 1, 1986, from the insurer, dated March 21, 1988. ³

After the hearing of March 3, 1992, the trial court denied its motion to dismiss and set the matter for a status conference on June 23, 1992. At the status conference the trial court determined the matter was not yet at-issue and then reset a hearing to dismiss pursuant to Code of Civil Procedure section 583.420, subdivision (a)(2)(B) ⁴ for July 30.

Kidd's attorney, Gelfand, asserted the case had been vigorously prosecuted: form interrogatories were sent to Kopald and were answered; ⁵ Farmers Insurance Group produced records of Kidd's coverage pursuant to a subpoena; Kopald was requested to file his answer or a default would be taken; the Having withdrawn his first demurrer, Kopald filed a second demurrer on July 13, 1992. In his declaration in support of the court's motion to dismiss, Kopald asserted he had spoken with Gelfand only once, in February 1991, after he was served, and that Gelfand had set his deposition on four separate occasions and each time Gelfand's office continued it.

deposition of Kopald had been set and continued a couple of times, ⁶ and Kopald had failed to produce Kidd's file pursuant to Kidd's request.

The matter was heard and the court ordered the case dismissed "for failure to bring case to trial within 3 years." In explaining the order, the trial court stated Kidd appeared to have done little to determine the merits of her insurance claim. The court pointed out, "Delay in service of process constitutes a 'particularly pernicious form of delay in terms of potential prejudice.' [Citation.] Here there was a 2 year delay in service, and a delay of a year and 1/2 thereafter during which some actions were taken, but no effort made to get the case to trial." The need to ascertain damages did not constitute "good cause" for delay in service. "There is no excuse for not informing a lawyer that he is being sued by his client and that his client expects the lawyer to continue to give his all for the client. Defendant was kept in the dark, and continued to represent the client for two years while the suit continued to pend. The defendant worked at risk for a client without knowing it."

Kidd appeals from the order of dismissal.

For the reasons given below we find the trial court did not abuse its discretion in ordering dismissal of the action.

DISCUSSION

1. The Standard Of Review Is Abuse-Of-Discretion.

" 'It has been aptly remarked that [Code of Civil Procedure] section 583.420 and the other dismissal-for-delay statutes serve a dual purpose: "[O]ne is effectually the same as that of statutes of limitations--they are both statutes of repose, seeking to discourage stale claims 'to promote justice by preventing surprises through the revival of claims that have been allowed to slumber until evidence has been lost, memories have faded, and witnesses have disappeared.' [Citations.] Secondly, the dismissal section is designed to compel reasonable diligence in the prosecution of actions, thereby expediting the administration of justice. [Citations.]" [Citations.] Balanced against these considerations is, of course, the strong public policy which seeks to dispose of litigation on the merits rather than on procedural grounds. [Citations.] Although that policy is generally viewed as more compelling than the one seeking to promote prompt prosecution ...