General Insurance v. Superior Court

541 P.2d 289, 15 Cal. 3d 449, 124 Cal. Rptr. 745, 1975 Cal. LEXIS 243

• Court: California Supreme Court
• Decided: October 24, 1975
• Docket: S.F. 23238
• Status: Published

Opinions

Opinion

CLARK, J.

General Insurance Company of America, defendant in an action pending in respondent superior court, petitions for writ of mandate to compel dismissal of the action.

Approving subdivision maps, City of Livermore—plaintiff—required developers to make certain improvements and to post performance bonds. Petitioner issued the performance bonds. The developers allegedly defaulted, and plaintiff commenced an action against petitioner and the developers on 18 January 1971. After mailing summons and complaint to petitioner’s designated agent in Southern California, plaintiff’s attorney and petitioner’s attorney agreed by telephone that the latter would accept service for petitioner. By letter dated 16 February 1971, petitioner’s attorney confirmed the understanding: “Pursuant to our telephone conversation with you on February 16, 1971, we hereby confirm that we represent General Insurance Company of America in connection with the above matter; that we hereby agree to accept service of the Summons and Complaint on behalf of our client. . . and that our client has a sixty-day extension of time until and including April 17, 1971, within which to appear, answer, demur or otherwise plead to the complaint on file in the above described action.”

On three subsequent occasions, petitioner’s attorney acknowledged additional extensions of time by letter, finally confirming—also by letter—an open extension of time to answer or otherwise respond, terminable on 10 days’ written notice.

On 10. September 1974 plaintiff gave petitioner written notice to answer; petitioner then moved to dismiss pursuant to Code of Civil Procedure section 581a, subdivisions (a) and (c), and the motion was denied. Petitioner now asks us to mandate dismissal; we must deny its petition.

The Statutory Provisions

i

Code of Civil Procedure section 581a provides: “(a) . . . [A]ll actions heretofore or hereafter commenced shall be dismissed by the court in which the same shall have been commenced, on its own motion, or on the motion of any party interested therein, whether named as a party or not, unless the summons on the complaint is served and return made within three years after the commencement of said action, except where the parties have filed a stipulation in writing that the time may be extended or the party against whom the action is prosecuted has made a general appearance in the action. [¶]. . . [¶] (c) All actions, heretofore or hereafter commenced, shall be dismissed by the court in which the same may be pending, on its own motion, or on the motion of any party interested therein, if no answer has been filed after either service has been made or the defendant has made a general appearance, if plaintiff fails, or has failed, to have judgment entered within three years after service has been made or- such appearance by the defendant, except where the parties have filed a stipulation in writing that the time may be extended. [¶] (d) The time during which the defendant was not amenable to the process of the court shall not be included in computing the time period specified in this section. [¶] (e) A motion to dismiss pursuant to the provisions of this section shall not, nor shall any extension of time to plead after such motion, or stipulation extending time for service of summons and return thereof, constitute a general appearance.” (Italics added.)

Discussion of Subdivision (a)

A written stipulation between attorneys recognizing jurisdiction of the court over the parties constitutes a general appearance by defendant. (Anglo-California Bank v. Griswold (1908) 153 Cal. 692, 696-697 [96 P. 353]; Roth v. Superor Court (1905) 147 Cal. 604, 605 [82 P. 246]; Cooper v. Gordon (1899) 125 Cal. 296, 300-302 [57 P. 1006]; RCA Corp. v. Superior Court (1975) 47 Cal.App.3d 1007, 1009-1010 [121 Cal.Rptr. 441]; O’Keefe v. Miller (1965) 231 Cal.App.2d 920, 924 et seq. [42 Cal.Rptr. 343]; Brown v. Douglas Aircraft Co. (1958) 166 Cal.App.2d 232, 235 et seq. [333 P.2d 59]; Merner Lumber Co. v. Silvey (1938) 29 Cal.App.2d 426, 428 [84 P.2d 1062]; Smith v. Moore Mill & Lumber Co. (1929) 101 Cal.App. 492, 494 et seq. [281 P. 1049]; California etc. Co. v. Superior Court (1910) 13 Cal.App. 65, 69 [108 P. 882]; see Davenport v. Superior Court (1920) 183 Cal. 506, 508 et seq. [191 P. 911]; Palmer v. Superior Court (1961) 192 Cal.App.2d 302, 306 [13 Cal.Rptr. 301]; cf. Code Civ. Proc., § 417.10, subd. (d).)

Whether a particular act of the defendant reflects an intent to submit to the jurisdiction of the court, constituting a general appearance, depends upon the circumstances. (Davenport v. Superior Court, supra, 183 Cal. 506, 511; Smith v. Moore Mill & Lumber Co., supra, 101 Cal.App. 492, 494 et seq.; see 1 Witkin, Cal. Procedure (2d ed. 1970) pp. 646-647.)

Petitioner accepted service in its first letter to the Livermore City Attorney reflecting an intent to submit to the court’s jurisdiction. Having received petitioner’s written stipulation accepting service, plaintiff cannot have been expected to then commence service, to complete service not commenced, or to return service.¹

Petitioner’s written stipulation constituting a general appearance, and executed within the service period, may be filed following expiration of the three-year period (Anglo-California Bank v. Griswold, supra, 153 Cal. 692, 696-697; Roth v. Superior Court, supra, 147 Cal. 604, 605; Cooper v. Gordon, supra, 125 Cal. 296, 301), bringing the case within the express exception in subdivision (a).

Discussion of Subdivision (c)

Subdivision (c) penalizes a plaintiff who fails to obtain default judgment within the prescribed period by requiring dismissal. Like the service requirement of subdivision (a) and five-year trial requirement of Code of Civil Procedure section 583, it is designed to encourage diligence in the prosecution of an action once it has been filed. (Gonsalves v. Bank of America (1940) 16 Cal.2d 169, 172 [105 P.2d 118]; Moore v. Superior Court (1970) 8 Cal.App.3d 804, 810 [87 Cal.Rptr. 620]; J. A. Thompson & Sons, Inc. v. Superior Court (1963) 215 Cal.App.2d 719, 722 [30 Cal.Rptr. 471].) However, the three provisions allow extension of time by filed written stipulation, reflecting² that the policy of diligence is subordinate to the parties’ own interests. The provision requiring written stipulations also reflects a policy designed to avoid unseemly dispute between counsel over purported waiver of the statutory requirements. (Cf. Tresway Aero, Inc. v. Superior Court (1971) 5 Cal.3d 431, 443-444 [96 Cal.Rptr. 571, 487 P.2d 1211] (dissenting opn.); Miller & Lux Inc. v. Superior Court (1923) 192 Cal. 333, 340 [219 P. 1006]; Elmhurst Packers v. Superior Court (1941) 46 Cal.App.2d 648, 650 [116 P.2d 487].) Once a stipulation has been filed, extrinsic evidence is admissible to explain its meaning. (Woley v. Turkus (1958) 51 Cal.2d 402, 407-409 [334 P.2d 12]; Smith v. Bear Valley etc. Co. (1945) 26 Cal.2d 590, 597-601 [160 P.2d 1].)

The written stipulation extending time to answer may be filed after expiration of the three-year period—when filed prior to an order of dismissal. (Big Bear Mun. Water Dist. v. Superior Court (1969) 269 Cal.App.2d 919, 923 [75 Cal.Rptr. 580]; see Miles & Sons, Inc. v. Superior Court (1960) 181 Cal.App.2d 151, 152 [5 Cal.Rptr. 73]; cf. Lewis v. Neblett (1957) 48 Cal.2d 564, 568 [311 P.2d 489]; Smith v. Bear Valley etc. Co., supra, 26 Cal.2d 590, 597; Estate of Thatcher (1953) 120 Cal.App.2d 811, 814 [262 P.2d 337].)

A written stipulation extends section 583’s five-year term for bringing the action to trial if it expressly either waives the right to dismissal, or extends the time of trial to a date beyond the five-year period. But merely extending the time of trial to sometime within the five-year term—absent a showing the parties intended otherwise—will not extend the deadline. (J. C. Penney Co. v. Superior Court (1959) 52 Cal.2d 666, 669 [343 P.2d 919].) The instant case falls between the two rules set forth in J. C. Penney. Here, the stipulation does not expressly extend time either within or beyond the allotted period. Rather, time is extended indefinitely, subject to termination by notice, and the stipulation remained in force at expiration of the period.

A written agreement extending time to answer reflects mutual intent to defer the proceedings and must be enforced. It would be unconscionable to permit a plaintiff, after he had granted a defendant time to answer, to take default judgment during the extension. Expressly excusing the duty to answer, the agreement impliedly stays the power of the plaintiff to take default.

Having by the instant written agreement precluded plaintiff from taking a default judgment prior to expiration of the three-year period, petitioner may not now rely on plaintiff’s failure to take default to obtain dismissal of the action.³ Our conclusion meets the purpose of the statute. Expressly reflecting petitioner’s intent to obtain time to answer and by necessary implication precluding default judgment, the agreement establishes the requisite mutual intent allowing each party to excuse the other from diligence both in answering and in taking default. And being written, the agreement will afford counsel little opportunity for dispute, over its substance and operative effect.⁴

We conclude that the trial court properly denied the motion to dismiss.⁵

Defendant’s petition for writ of mandate is denied.

McComb, J., Tobriner, J., and Mosk, J., concurred.

1 Busching v. Superior Court (1974) 12 Cal.3d 44, 50-51 [115 Cal.Rptr. 241, 524 P.2d 369],involving an extension of time to obtain representation, is distinguishable. There existed neither stipulation accepting service nor any other document executed within the three-year period indicating an intent to submit to jurisdiction.

2 In 1949, the Legislature provided for waiver of the judgment or answer requirement. (Stats. 1949, ch. 463, p. 810.) Prior to that time, a provision permitting stipulations extending time applied to the five-year period for bringing to trial but not to the three-year default judgment requirement. Rio Del Mar etc. Club v. Superior Court (1948) 84 Cal.App.2d 214, 225-226 [190 P.2d 295] and Schultz v. Schultz (1945) 70 Cal.App.2d 293, 298-299 [161 P.2d 36] were decided before the 1949 amendment. Language in those cases that the parties may not extend by stipulation the three-year period for judgment or answer states the law as it existed at the time of those decisions—prior to the 1949 amendment.

3 In City of Los Angeles v. Superior Court (1921) 185 Cal. 405, 413 [197 P. 79], the stipulation deferred trial for one year and further provided that at least a 90-day notice of the time set for trial shall be given. The agreement also provided that “plaintiff shall not be held to have failed to prosecute said cause during the said year, and that no part of the said year shall be considered should any question arise in said cause concerning the prosecution thereof.” (At p. 408.) The express provision excluding one year from the computation of the period to bring to trial precludes inferring a further extension based on the notice requirement, and serves to distinguish the case. Moreover, in that case the plaintiff could bring the cause to trial within the five-year period while performing the agreement, whereas in the instant case default could not be obtained without either terminating the agreement or violating its implied term.

4 Requiring dismissal for failure to return service within three years, Miles & Sons, Inc. v. Superior Court, supra, 181 Cal.App.2d 151, 152, held a written stipulation extending time to appear, answer, or otherwise move or plead did not extend time for service return. However, the court did not consider the general appearance doctrine or the cases cited above discussing it. Accordingly, the case is not helpful in determining whether there was compliance with subdivision (a) in the instant case. Although it involved the effect to be given to a written stipulation extending time to plead, the case was not concerned with the answer or default requirement of subdivision (c). Obviously, an extension of time to plead reflects an intent to extend time to answer and by necessary implication precludes taking default; it does not reflect an intent to extend time for service return.

5 The plaintiff alleged in its answer to the alternative writ that during the three-year period following acceptance of service by petitioner, there was performance of some obligations guaranteed by petitioner and promises of performance of all by petitioner’s principals and their successors in interest, and that plaintiff gave notice to answer only after it appeared that the obligations were not to be performed. These allegations in the return to the alternative writ are not disputed. In the view we have taken of the matter, it is unnecessary to reach the question whether petitioner was estopped from seeking dismissal for delay by continued performance of the obligations sued upon after action commenced, and assurances of complete performance, coupled with the stipulations extending time to answer. (Cf. Tresway Aero, Inc. v. Superior Court, supra, 5 Cal.3d 431, 436 et seq.; Cooper v. Gordon, supra, 125 Cal. 296, 301.)