Wong v. Davidian

• Decision Date: 29 November 1988
• Docket Number: No. G004839,G004839
• Citation: 253 Cal.Rptr. 675,206 Cal.App.3d 264
• Court: California Court of Appeals Court of Appeals
• Parties: Norman WONG, Plaintiff and Appellant, v. E. Jan DAVIDIAN, Defendant and Respondent.

Page 675

253 Cal.Rptr. 675

206 Cal.App.3d 264

Norman WONG, Plaintiff and Appellant, v. E. Jan DAVIDIAN, Defendant and Respondent.

No. G004839.

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

Nov. 29, 1988.

John Kappos, Stockton, for plaintiff and appellant

Redwine and Sherrill, Akulfi and Wysocki and David L. Wysocki, Riverside, for defendant and respondent.

OPINION

TAYLOR, Associate Justice ^*.

Norman Wong appeals an order dismissing his contract breach and reformation action for failure to prosecute. (Code Civ.Proc., § 583.410 et. seq.) He also challenges the court's award of attorney's fees and sanctions to defendant E. Jan Davidian. We affirm.

1. Facts

Wong filed his complaint on February 8, 1982, and his first amended complaint three months later. Davidian responded with a general denial. Wong's first at issue memorandum was filed in May 1983. In September 1983 he substituted in his present attorney. Thereafter the case slumbered for two years until September 1985 when Wong noticed a deposition.

In August 1986, four and one-half years after the action started, Davidian moved to dismiss the case under Code of Civil Procedure section 583.420, subdivision (a)(2)(A), for failure to prosecute within three years. Wong responded with a motion of his own to specially set the case for trial. At the motion hearing in September 1986, nobody appeared on Wong's behalf. The hearing was continued to the following month, at which time the court granted Davidian's motion to dismiss. In later hearings, Davidian was awarded attorney's fees and sanctions.

Wong attributes the delay in large part to the pendency of a related action in which Davidian was a cross-complainant. However, that action was concluded in May 1983 and cannot excuse the three and one-half year delay that followed. Wong further asserts extensive discovery was unnecessary because of the evidence developed in the related case; however, he concedes the taking of a broker's deposition was essential. ¹ Wong noticed that deposition for September 1985 and various times thereafter, but each time the broker was unavailable. Wong offers no excuse for the almost two and one-half years between May 1983 and September 1985 when the case lay completely dormant. ²

Davidian contends he has been prejudiced by the delay in that "the action relates to negotiations in the execution of a purchase and sale contract which is over six years old."

2. Dismissal

a. Discretion.

Code of Civil Procedure section 583.420, subdivision (a)(2)(A), gives a court discretion to dismiss a case if the action is not brought to trial within three years of its commencement. The party complaining bears the burden of establishing an abuse of discretion. (Blank v. Kirwan (1985) 39 Cal.3d 311, 331, 216 Cal.Rptr. 718, 703 P.2d 58.)

In ruling on a section 583.420, subdivision (a)(2)(A), motion a court must consider all relevant matters, including the parties' diligence in pursuing discovery, the pendency of other litigation which may have a bearing on the case, and "whether the interests of justice are best served by dismissal or trial of the case...." (Cal. Rules of Court, rule 373(e).)

A court is to be guided by the policy favoring trial on the merits over dismissal for failure to prosecute with reasonable diligence. (Code Civ.Proc., § 583.130; Cal. Rules of Court, rule 373(e).) However, "although the interests of justice weigh heavily against disposing of litigation on procedural grounds--a policy we reaffirm--that policy will necessarily prevail only if a plaintiff makes some showing of excusable delay. [Citations.]" (Salas v. Sears, Roebuck & Co., supra, 42 Cal.3d at p. 347, 228 Cal.Rptr. 504, 721 P.2d 590; fn. omitted.)

A motion to dismiss for dilatory prosecution will be more closely scrutinized on review than one denying the motion. (Corlett v. Gordon (1980) 106 Cal.App.3d 1005, 1012, 165 Cal.Rptr. 524; Daley v. County of Butte (1964) 227 Cal.App.2d 380, 389-390, 38 Cal.Rptr. 693.) The trial court nevertheless exercises a wide discretion in ruling on such a motion, and its determination will be reversed only upon a showing of manifest abuse of discretion resulting in a miscarriage of justice. (Blank v. Kirwan, supra, 39 Cal.3d at p. 331, 216 Cal.Rptr. 718, 703 P.2d 58; Sanborn v. Chronicle Pub. Co. (1976) 18 Cal.3d 406, 416-417, 134 Cal.Rptr. 402, 556 P.2d 764; Denham v. Superior Court (1970) 2 Cal.3d 557, 564, 86 Cal.Rptr. 65, 468 P.2d 193; Schumpert v. Tishman Co. (1988) 198 Cal.App.3d 598, 603, 243 Cal.Rptr. 810; Longshore v. Pine (1986) 176 Cal.App.3d 731, 736, 222 Cal.Rptr. 364; San Ramon Valley Unified School Dist. v. Wheatley-Jacobsen, Inc. (1985) 175 Cal.App.3d 1050, 1054, 221 Cal.Rptr. 342.)

"The appropriate test for abuse of discretion is whether the trial court exceeded the bounds of reason. When two or more inferences can reasonably be deduced from the facts, the reviewing court has no authority to substitute its decision for that of the trial court. [Citations.]" (Shamblin v. Brattain (1988) 44 Cal.3d 474, 478-479, 243 Cal.Rptr. 902, 749 P.2d 339.)

The concept that an appellate court should reweigh a trial court's exercise of discretion on a dismissal motion was expressed most fully in Hurtado v. Statewide Home Loan Co. (1985) 167 Cal.App.3d 1019, 1027, 213 Cal.Rptr. 712, when the court reviewed the trial court's decision "as largely a question of law subject to plenary appellate scrutiny." (Fn. omitted.) However, other cases have since noted that Hurtado runs counter to binding authority in Blank v. Kirwan, supra, 39 Cal.3d at p. 331, 216 Cal.Rptr. 718, 703 P.2d 58, and Wilson v. Sunshine Meat & Liquor Co. (1983) 34 Cal.3d 554, 561, 194 Cal.Rptr. 773, 669 P.2d 9, and should not be followed. (Cubit v. Ridgecrest Community Hospital (1987) 194 Cal.App.3d 1552, 1565-1566, 240 Cal.Rptr. 346; San Ramon Valley Unified School Dist. v. Wheatley-Jacobsen, Inc., supra, 175 Cal.App.3d at pp. 1054-1055, 221 Cal.Rptr. 342.) We agree, and decline to follow Hurtado.

We agree with the role of an appellate court as stated in Bennett v. City of Los Angeles (1970) 12 Cal.App.3d 116, 120, 90 Cal.Rptr. 479: "[W]e must be constantly aware of the different functions performed by the superior court and ourselves. Unless, ultimately, each case of this nature is to be decided by the Court of Appeal as if no trial court had ever acted on the petition, we must be careful to preserve the area of the superior court's discretion and we must do this in fact, as well as in words. It is easy enough to give the appearance that the respective functions of the two courts are being preserved: all we need do is label as an 'abuse of discretion' any ruling with which we happen to disagree."

As stated in San Bernardino City Unified School Dist. v. Superior Court (1987) 190 Cal.App.3d 233, 241, 235 Cal.Rptr. 356, "[w]hile we may have ruled differently had we heard the motion, the appellate court may not substitute its own view as to the proper decision. [Citation.]" We must follow the admonition of our Supreme Court: "When the trial court has ruled on such a motion, ' "unless a clear case of abuse is shown and unless there has been a miscarriage of justice a reviewing court will not substitute its opinion and thereby divest the trial court of its discretionary power." ' [Citations.]" (Blank v. Kirwan, supra, 39 Cal.3d at p. 331, 216 Cal.Rptr. 718, 703 P.2d 58.)

Applying these principles to the facts of this case, we conclude there is substantial evidence of two and one-half years of unexcused delay to support the trial court's ruling. The trial court did not abuse its discretion in concluding Wong's delay in bringing his case to trial was unreasonable.

b. Prejudice.

Davidian's showing of prejudice was weak.

The courts remain divided on the issue of whether a discretionary dismissal must be supported by an affirmative showing of prejudice. The Hurtado line of cases held that the dismissal sanction cannot be imposed without a showing of actual prejudice. (Hurtado v. Statewide Home Loan Co., supra, 167 Cal.App.3d at p. 1030, 213 Cal.Rptr. 712.) This court adopted that view in Troupe v. Courtney (1985) 169 Cal.App.3d 930, 934, 215 Cal.Rptr. 703.

However, the Supreme Court impliedly overruled that view in Blank v. Kirwan, supra, 39 Cal.3d 311, 216 Cal.Rptr. 718, 703 P.2d 58, when it affirmed a discretionary dismissal despite no showing of actual prejudice. (Id., at p. 332, 216 Cal.Rptr. 718, 703 P.2d 58.) Other courts have noted that the Hurtado prejudice rationale is irreconcilable with Blank, and should not be followed. (See, e.g., Freedman v. Pacific Gas & Electric Co. (1987) 196 Cal.App.3d 696, 711, 242 Cal.Rptr. 8; Schumpert v. Tishman Co., supra, 198 Cal.App.3d at pp. 605-606, 243 Cal.Rptr. 810.) We follow the rule implicit in Blank and later cases: Lack of prejudice to a defendant remains a valid consideration where the plaintiff has acted diligently from the outset; however, no affirmative showing of actual prejudice is necessary to be entitled to dismissal when the delay is unreasonable.

We concluded the trial court did not abuse its discretion in deciding Wong's delay was unreasonable. We therefore need not address the issue of prejudice.

3. Attorney's Fees

The trial court awarded Davidian $9,454.29 attorney's fees under Civil Code section 1717. That section provides at subdivision (a): "In any action on a contract, where the contract specifically provides that attorney's fees and costs, which are incurred to enforce the provisions of that contract, shall be awarded either to one of the parties or to the prevailing party, then the party who is determined to be the prevailing party ... shall be entitled to reasonable attorney's fees...."

Wong's first amended complaint for reformation and breach essentially alleged Davidian, in selling his orthodontic practice to Wong, significantly overstated the value of the accounts receivable. Wong argues his action was solely for...