Reserve Ins. Co. v. Universal Underwriters Ins. Co.

• Decision Date: 28 August 1975
• Court: California Court of Appeals Court of Appeals
• Parties: RESERVE INSURANCE COMPANY, a corporation, Plaintiff and Appellant, v. UNIVERSAL UNDERWRITERS INSURANCE, a corporation, Defendant and Respondent. Civ. 45647.

Page 763

123 Cal.Rptr. 763

51 Cal.App.3d 57

RESERVE INSURANCE COMPANY, a corporation, Plaintiff and Appellant, v. UNIVERSAL UNDERWRITERS INSURANCE, a corporation, Defendant and Respondent.

Civ. 45647.

Court of Appeal, Second District, Division 5, California.

Aug. 28, 1975.

Hearing Denied Oct. 23, 1975.

Murchison, Cumming, Baker & Velpmen, Friedrich W. Seiz and Benjamin George Williams, Los Angeles, for plaintiff and appellant.

Ball, Hunt, Hart, Brown & Baerwitz, Joseph A. Ball, Albert H. Ebright, James M. Polish, Beverly Hills, for defendant and respondent.

KAUS, Presiding Justice.

The trial court dismissed this action on motion of defendant Universal Underwriters Insurance ('Universal') because it had not been brought to trial within five years. (Code Civ.Proc. § 583, subd. (b).) Plaintiff Reserve Insurance Company ('Reserve') contends that the trial court was compelled to conclude, as a matter of law, that it would have been 'impracticable and futile' for plaintiff to proceed to trial, because a significant legal issue in this case was involved in an appeal by Universal from a judgment in favor of a party aligned with plaintiff.

FACTS ¹

In June 1966, Richard Metz was seriously injured by a driver driving a leased automobile. He sued the driver and the agency-owner.

An insurance policy written by Reserve covered the driver and the agency, with limits of $90,000. However, it was Reserve's position that this insurance policy was excess over any other applicable insurance. Universal had issued a policy with limits of $250,000 to the agency. It claimed, however, that the policy did not cover the driver of the leased car and was excess over Reserve's policy if it did.

In May 1968, Reserve filed an action against Universal and Metz seeking a declaration that the Universal policy covered the driver and that its own policy was excess over Universal's policy. In July 1968 Universal answered the complaint and contended that the driver was not covered under its policy and that, in any event, its coverage was excess over all other valid and collectible insurance, and limited in amount to the minimum legal requirements. Later, in his personal injury action, Metz obtained a judgment against the driver and the rental agency for a total of about $255,000. That judgment became final. Then, in February 1969, Metz, who had been joined as a defendant in Reserve's declaratory relief action, filed a cross-complaint against Universal alleging that Reserve had paid $90,000 toward the judgment and that, after deducting $10,000 paid by another insurance company not here involved, there remained about $155,000 unpaid on the judgment, which Universal owed. Universal denied any liability to Metz.

In October 1969, the trial court granted a summary judgment in favor of Metz on the cross-complaint, ruling that Universal's policy fully covered the driver.

In November 1969, Universal filed a timely notice of appeal. Nearly four years later, in September 1973, the Supreme Court filed its opinion in Metz v. Universal Underwriters Ins. Co., supra, 10 Cal.3d 45, 109 Cal.Rptr. 698, 513 P.2d 922, and held that Universal's policy did fully cover the driver of the rented car and--apart from an issue relating to interest--affirmed the judgment of the trial court in favor of Metz. (Id. at p. 58, 109 Cal.Rptr. 698, 513 P.2d 922.)

Reserve's complaint for declaratory relief had, as noted, been filed in May 1968. Thus, when the Supreme Court decided Metz, more than five years had elapsed. After the remittitur in Metz was filed, Reserve filed an at-issue memorandum. Universal then filed its motion to dismiss.

DISCUSSION

Reserve contends that because the issue whether Universal's policy covered the driver was involved both in its action for declaratory relief and in the cross-complaint brought by Metz, it would have been impracticable to proceed with the trial until that issue was finally decided in the Metz appeal.

We conclude, contrary to Reserve's position that, on the facts of this case, the trial court was not compelled to find that it would have been impracticable for Reserve to proceed, and that it therefore did not abuse its discretion in granting Universal's motion to dismiss.

The general rule is that, unless an action is brought to trial within five years after it has been filed, the action must be dismissed upon motion of the defendant. (See, E.g., Crown Coach Corp. v. Superior Court, 8 Cal.3d 504, 546, 105 Cal.Rptr. 339, 503 P.2d 1347 and cases collected.) Numerous decisions over the years have established 'certain implied exceptions where it would be impossible, impracticable or futile due to causes beyond a party's control to bring an action to trial during the five-year period.' (Id. at p. 546, 105 Cal.Rptr. at 342, 503 P.2d at 1350, and cases collected.

In Brunzell Const. Co. v. Wagner, 2 Cal.3d 545, 86 Cal.Rptr. 297, 468 P.2d 553, the court held that the 'impracticable and futile' exception could apply where legal complexities made it possible but not sensible for the plaintiff to proceed. There the plaintiff could have brought the case to trial only against some of the defendants; proceedings against other defendant were legally impossible because of numerous pending appeals and injunctions. (2 Cal.3d at pp. 548, 551, 86 Cal.Rptr. 297, 468 P.2d 553.) The trial court dismissed without considering the particular facts of the case, ruling as a matter of law that the mere fact of severability precluded the application of the 'impracticable and futile' concept.

Reserve relies on the standards set forth in Brunzell for determining impracticability and futility. These 'involve a determination of "excessive and Unreasonable difficulty or expense," in light of all the circumstances of the particular case'; a 'consideration of a great variety of factors, including, among others, the expense, complexity, and quantity of the evidentiary duplication that severance would entail, the potential problems that inconsistent judicial determinations would produce, and the degree of hardship or prejudice to the defendants occasioned by the delay.' (Italics in original. Id. at p. 554, 86 Cal.Rptr. at p. 303, 468 P.2d at p. 559.) "Impracticability' may vary not only as to different proceedings but as to different parties within the same proceeding. . . . (T)his exception to section 583 involves a judgment of practical realities, and artificial distinctions between participating litigants should be avoided.' (Id. at p. 555, 86 Cal.Rptr. at p. 303, 468 P.2d at p. 559.)

However, the legal effect of 'these diverse factual matters' is one which the 'trial court is in the most advantageous position to evaluate . . . in the first instance . . ..' (Id. at pp. 555--556, 86 Cal.Rptr. at p. 304, 468 P.2d at p. 560.) Therefore, while in Brunzell the order of dismissal was reversed, the Supreme Court did not mandate a denial on remand, but merely directed the trial court to exercise its discretion.

However, even if Brunzell had directed the trial court not to dismiss, Reserve's attempt to fit the facts and mold of Brunzell to this case will not do. Factually, Brunzell involved multiple defendants in a dispute involving the construction of a casino in Reno and a complaint alleging, Inter alia, fraud and misrepresentation, negligence and interference with contractual relationships. (2 Cal.3d at pp. 548--549, 86 Cal.Rptr. 297, 468 P.2d 553.) This case involves no disputed or complex facts; a trial would have involved an exchange of paper and arguments concerning the interpretation of conceded insurance policies.

Reserve relies chiefly...