05AS00595

Sacramento Hotel Partners LLC vs. Swinerton Builders, Inc.

Nature of Proceeding: Motion to Vacate Dismissal with Prejudice

Filed By: Fierro, Christine M.

Zurich’s Motion to Vacate Dismissal With Prejudice is denied, without prejudice.

Circo’s evidentiary objections are sustained.

On October 31, 2011, Zurich’s counsel filed a dismissal “with prejudice” of the 1st, 2nd,
3rd and 5th causes of action in Zurich’s subrogation action after Zurich prevailed at
summary adjudication of the express indemnity clause of action in this Department.
The express indemnity claim was appealed. The Court of Appeal reversed the ruling
in Zurich’s favor on the summary adjudication, finding that there was a triable issue of
fact as to the indemnity claim. Because Zurich had not separated out the duty to
defend from the duty to indemnify in its motion, the court necessarily had to reverse
the judgment on finding an issue of fact in the indemnity claim.

The case was remanded to this court, and subsequently Zurich made a motion for
summary adjudication on the duty to defend. On May 22, 2014 this Court granted
Zurich’s motion to summarily adjudicate Circo’s duty to defend arising from the express
indemnity cause of action. Circo argued that because Zurich had dismissed the
remaining causes of action with prejudice, it was somehow precluded from bringing an
express indemnity claim. This Court rejected Circo’s argument that the dismissal
affected Zurich’s ability to pursue its claim for express indemnity: “Nor does the Court
concur with opposing party Circo’s contention that in the absence of the dismissed
causes of action, Circo cannot be found liable for negligence or breach of contract to
trigger a duty to defend under the indemnity provision. The facts alleged in the
Amended Cross-Complaint after the dismissal of four legal theories against Circo remain unchanged.”

The Court has already rejected Circo’s erroneous legal theory that Zurich is somehow
barred from bringing its express indemnity claim because the dismissal of the other
causes of action [equitable indemnity, contribution, breach of contract and negligence]
was “with prejudice.”

Nonetheless, Zurich now seeks relief pursuant to CCP 473 to vacate its prior dismissal
“with prejudice”, and to convert the dismissal to “without prejudice”. Although it is not
clear whether the motion is based on the mandatory fault provision or the “excusable
neglect” provision, the Reply makes clear that Zurich is relying on excusable neglect.
Zurich contends that its counsel was not authorized to dismiss the remaining claims
with prejudice. However, no admissible evidence is offered on that point and there is
no declaration from the attorney who checked the “with prejudice” boxes on the
dismissal, therefore excusable neglect has not been established.

An attorney’s unauthorized disposition of clients’ substantive rights is invalid, and a
judgment based thereon is therefore void. Dismissal of a cause of action by an
attorney acting without any authority from his client is an act beyond the scope of his
authority which, on proper proof, may be vacated at any time. Obviously, such action
requires strong and convincing proof, and the longer the delay in the application for
relief the stronger and more convincing the factual proof must be. Romadka v. Hoge
(1991) 232 Cal.App.3d 1231, 1236. No such proof has been shown here.

However, the dismissal of the 1st, 2nd, 3rd and 5th causes of action, whether with or
without prejudice, has no res judicata or other effect on the remaining claim that was
remanded by the Court of appeal.

The minute order is effective immediately. No formal order pursuant to CRC Rule
3.1312 or further notice is required.