Olson v. Sacramento County

• Decision Date: 25 June 1969
• Court: California Court of Appeals Court of Appeals
• Parties: Allan T. OLSON et al., Plaintiffs, Cross-defendants and Respondents, v. The COUNTY OF SACRAMENTO, Defendant, Cross-complainant and Appellant. Civ. 12223.

Page 140

79 Cal.Rptr. 140

274 Cal.App.2d 316

Allan T. OLSON et al., Plaintiffs, Cross-defendants and Respondents, v. The COUNTY OF SACRAMENTO, Defendant, Cross-complainant and Appellant.

Civ. 12223.

Court of Appeal, Third District, California.

June 25, 1969.

Rehearing Denied July 25, 1969.

Hearing Denied Sept. 4, 1969.

Zarick & Zarick, Leonard P. Burke, Colley & McGhee, by Nathaniel S. Colley, Sacramento, for plaintiffs, cross-defendants and respondents.

John Heinrich, County Counsel, Sacramento, Clyde Small, Redding, for defendant, cross-complainant and appellant.

BRAY, Associate Justice (assigned).

Appeal by cross-complainant County of Sacramento from a judgment on the pleadings on the cross-complaint in favor of plaintiffs and cross-defendants Olson and Petrucci.

Motion by plaintiffs for dismissal of the appeal. ¹

QUESTIONS PRESENTED

A. Motion for dismissal.

Was the notice of appeal timely filed? Yes.

B. Appeal from judgment on the pleadings.

1. Is defendant's pleading a counterclaim? No.

2. Did the cross-complaint state a cause of action:

(a) Generally? Yes.

(b) Excuse adequately pleaded to avoid statute of limitations? No.

3. Did the trial court abuse its discretion in denying permission to file an amended cross-complaint? Yes.

RECORD

On February 10, 1965, plaintiffs filed a complaint against the county for breach of an exclusive garbage franchise awarded plaintiffs' predecessors in 1958 and which the county terminated in 1963 for alleged fraud in suppressing competition in the bidding for said franchise.

On April 13, 1966, the county filed its answer and separately a cross-complaint for moneys collected by plaintiffs through the exercise of the allegedly fraudulently obtained franchise.

On December 14, 1967, plaintiffs, as cross-defendants, filed a 'motion for summary judgment for cross-defendants on cross-complaint, for order striking affirmative defense to complaint, and for judgment for cross-defendants on the pleadings.' On May 10, 1968, the trial judge filed a 'Memorandum' to the effect that section 340, subdivision 1, of the Code of Civil Procedure is the statute of limitations applicable to the cause of action alleged in the cross-complaint and that as the latter did not allege facts showing due diligence in discovering the fraud, lack of knowledge of it within the statutory period, reason for failure to discover the fraud, and the means and manner by which it was discovered, the motion for judgment upon the pleadings in regard to the cross-complaint 'will be granted.' On the same day this memorandum was entered in the minutes the clerk sent to the parties 'notice of the court's ruling on the motion for judgment on the pleadings re cross-complaint,' stating that an order or decree had been entered in the minutes in the above entitled action on May 10, 1968, giving volume and page.

On July 9, 1968, and before any judgment was entered, the county filed a 'motion for new trial on order granting motion for judgment on the pleadings against cross-complaint and to vacate and set aside any judgment entered thereon; or, in the alternative, for leave to amend said cross-complaint.'

On July 10 the court entered 'judgment on the pleadings on cross-complaint.' The court additionally denied the plaintiffs' motion to strike the affirmative defense of fraud in defendant's answer. It is this judgment which is appealed herein. On September 5, 1968, an order denying motion for new trial on the order granting motion for judgment on the pleadings was entered in the minutes.

A. Motion to Dismiss Appeal.

The notice of appeal was timely filed. The motion was made on the ground that the appeal was not filed within the time allowed by law. The judgment was entered July 10, 1968. The notice of appeal was filed September 19--71 days thereafter. It is conceded that the notice was filed too late unless the time provided in rule 2, California Rules of Court, was extended as provided in rule 3, which provides that when a valid notice of intention to move for a new trial is served and filed, the time for filing notice of appeal, where the motion is denied, is extended until 30 days after entry of the order denying the motion.

It is likewise conceded that if rule 3 applies the notice of appeal was filed in time. A motion for new trial may be made on a judgment on the pleadings. (Carney v. Simmonds (1957) 49 Cal.2d 84, 89, 315 P.2d 305.)

It will be noted that the county filed its motion for new trial on the order granting judgment, etc., on July 9, the day before the judgment was filed but after the minute order of May 10. Plaintiffs contend that the motion was filed prematurely and hence cannot be considered as extending the time for appeal under rule 2. ²

Section 659 of Code of Civil Procedure provides so far as pertinent here that notice of intention to move for new trial must be filed 'Before the entry of judgment * * *.'

In Auto Equity Sales, Inc. v. Superior Court (1962) 57 Cal.2d 450, 458, 20 Cal.Rptr. 321, 369 P.2d 937, the court discusses at length '(t)he concept of prematurity as applied to new trial proceedings' and states that concept 'is based on two major concepts--one is that to vest the trial court with jurisdiction to pass on a motion for a new trial a timely notice must be made * * *. The other is that the motion cannote be made until there is a decision in the case.' The court points out that a jury's verdict or the filing of findings of fact and conclusions of law, even though no judgment be entered, are sufficient to constitute the 'decision' which starts the period for filing motions for new trial.

On the determination of a motion for judgment on the pleadings no findings are necessary. No reason exists where, as in this case, the memorandum of decision entered in the minutes of the court and notice thereof sent to the parties should not be equal to the filing of findings to start the time for the purpose which we are considering.

In section 659 the Legislature has made two provisions for starting the time for new trials. The notice may be given (1) 'Before the entry of judgment,' and (2) within a specified time after judgment. To hold that the memorandum of decision does not cause the application of the first provision of section 659 in this character of case would eliminate entirely the possibility of applying the first provision of the section.

It should be pointed out in answer to contentions of plaintiffs that findings of fact may be changed before judgment and jury verdicts may under certain conditions be set aside before judgment, hence the fact that a memorandum decision is not final is not important. Actually the only finality in any of these situations is the judgment. The Legislature, by providing for proceeding prior to judgment, has eliminated the necessity for complete finality.

The motion for new trial, which the parties and the court treated as equivalent to a notice of intention to move for new trial, was filed in time, and hence the time for appeal from the judgment was extended until after the denial of the motion.

B. Appeal From the Judgment.

1. Is defendant's pleading a cross-complaint or a counterclaim?

County contends that it is a counterclaim. Although it is sometimes difficult to distinguish between a cross-complaint and a counterclaim, it appears that the pleading is a cross-complaint.

A counterclaim must in some way qualify or defeat the judgment to which plaintiff is otherwise entitled; it must tend to diminish or defeat the claim for damages alleged in the complaint; as such, the counterclaim is confined principally to conflicting monetary claims. (Code Civ.Proc. § 438; Zainudin v. Meizel (1953) 119 Cal.App.2d 265, 267--268, 259 P.2d 460; see also, 2 Chadbourn, Grossman, Van Alstyne, Cal.Pleading, § 1686, p. 652.)

On the other hand, the cross-complaint must seek affirmative relief, but unlike the counterclaim it is not necessary that the relief sought by the cross-complaint should defeat or diminish that relief sought by the plaintiff in his complaint. (Chadbourn, Grossman, Van Alstyne, Cal.Pleading, § 1705, p. 660.)

Should plaintiffs be successful in sustaining the cause of action in their complaint, namely, that there was no fraud in obtaining the franchise, and hence the county is liable to them in damages for the breach of the franchise, or contract, no offset to the amount thereof is asserted by the county-there is nothing upon which to counterclaim, that is to offset or diminish. On the other hand, if plaintiffs are unsuccessful in prevailing, then it takes the cross-complaint to set up the affirmative relief entitling the county as trustee to obtain moneys collected by plaintiffs under a void franchise.

2. Did the cross-complaint state a cause of action: (a) Generally?

Plaintiff contends that, although the trial court in granting the judgment on the pleadings as to the cross-complaint found only that the cause of action appeared to be barred by the statute of limitations, there are other grounds upon which the court could have found the cross-complaint defective, and that the well-known rule applies that if the court's action is proper upon any ground, the judgment must be affirmed.

An analysis of these alleged grounds show plaintiffs' contentions to be erroneous. The first is that the county has no capacity to bring this action.

The cross-complaint alleges that the county is suing as trustee in behalf of those persons who paid service rates for garbage collection and disposal to the holders of the franchise thereinafter described; the proceeding relating to the calling of bids for the franchise and to the awarding of the franchise to plaintiffs as the lowest bidder; the collection or rates pursuant to the franchise; the conspiracy of plaintiffs and others to suppress competition in the bidding, and prays for a declaration that plaintiffs hold the sum of $4,833,000 in trust for the county as trustee.

Section 369 of the Code of...