Tentative Ruling

Judge Pauline Maxwell
Department 6 SB-Anacapa
1100 Anacapa Street P.O. Box 21107 Santa Barbara, CA 93121-1107

CIVIL LAW & MOTION
Ryan Kaufman vs Apeel Technology Inc
Case No: 17CV03060
Hearing Date: Wed Jan 22, 2020 9:30

Nature of Proceedings: Set Aside Dismissal of Cross-Defendant

TENTATIVE RULING: The motion is denied.

Background: This action arises from serious injuries sustained by plaintiff Ryan Kaufman on June 1, 2017, when he was severely burned while working inside of the power feed area of an industrial building. The area was surrounded by a chain-link fence with a locked gate. The enclosure was unlocked and open when he entered the area. Plaintiff was hospitalized in an induced coma following his injuries, and was not discharged until August 3, 2017.

Plaintiff’s complaint was filed on July 12, 2017. On November 14, 2017, plaintiff added Beyond Heating and Air, Inc. (BHA) as a Doe defendant, under the apparent belief that BHA had access to the utility area at the time plaintiff was injured. On January 2, 2018, BHA answered the complaint and served initial discovery on plaintiff, consisting of contention interrogatories and a demand for production of documents. At that time, no witness depositions had yet been taken, because of an agreement to hold off on doing so until the case was at issue. Contending that he first needed to take depositions and/or verify BHA’s involvement in the incident, plaintiff did not respond to the discovery, and BHA then filed motions to compel responses which were set to be heard on May 2, 2018.

After the motions were filed, plaintiff’s counsel spoke with BHA’s counsel, contending that plaintiff’s theory of liability against BHA was that it may have had access to the restricted utility area and may have given plaintiff access to the area where he was injured. He told BHA’s counsel that the complaint was filed in good faith on information and belief, and that he did not want to serve verified responses to questions he could not be certain about, until he was allowed to conduct discovery. BHA’s counsel declined to hold off on obtaining the responses, and would neither continue or withdraw the motions. She represented to him that her clients reported that BHA did not have access to the utility area where plaintiff was injured on the day of the incident, in that it had gained access to the roof from an interior stairwell and did not use the ladder on the outside of the building. She represented further that BHA had not opened the gate to the utility area on the date of the incident. Plaintiff’s counsel requested that BHA’s counsel speak again with her clients and confirm the information. She did so, and confirmed to plaintiff’s attorney that her representations regarding BHA’s role in providing access to the utility area were accurate. She confirmed the representations in an e-mail, adding that her clients do not have unfettered access to the property and must go through the manager when access is required.

Based upon those representations, and in order to avoid being required to respond to BHA’s discovery, plaintiff’s counsel agreed to dismiss BHA without prejudice. The dismissal was filed on April 26, 2018.

Plaintiff associated additional counsel with the firm of Carpenter, Zuckerman & Rowley LLP into the case on December 3, 2018. Because BHA remained as a cross-complaint in the case and therefore was included on all proofs of service, plaintiff’s new counsel apparently did not understand that it had been dismissed as a defendant, and contends he was not aware of that until September 20, 2019. Counsel noticed the deposition of BHA’s PMQ on 3 separate occasions (April 8, 2019; August 6, 2019; August 20, 2019.)

The two-year statute of limitations for plaintiff’s personal injuries expired on June 1, 2019. (Code Civ. Proc., § 335.1.)

On July 18, 2019, the deposition of John Matulich was taken. Mr. Matulich’s identity and relationship to the action are not made clear by plaintiff’s current motion, although the excerpts from his testimony attached to the motion reference his position as facilities manager during Allergan’s occupancy of the building. Plaintiff asserts that Mr. Matulich testified that BHA had the gate code, had access to the gated area at any time, and had opened the gate on the day of the injury, giving plaintiff access to the area. He testified further that the only way for BHA to have gotten to the roof on the day of the injury was through the locked gate and exterior ladder. He had observed on other occasions that BHA would leave the gate open while working on the roof. BHA’s supervisor admitted to him immediately after the incident that they had left the gate open and that plaintiff must have followed them into the gated area on the day he was injured.

On September 10, 2019, the deposition of Anthony Ferrera was taken, as BHA’s PMQ. Mr. Ferrera identified himself as BHA’s Chief Operating Officer since January 2015. He was out of the country on the date of the incident, but was advised of its occurrence by his employees at a company safety meeting. He acknowledged that he had been given the combination to the lock on the gate a couple of years prior to the accident, and had shared it with employee Eric Smith, who had been present on the day plaintiff was injured. Their only rule was that the gate must be locked when they left for the day; there were no rules about closing or locking the gate once they had entered it, and their custom was to leave it open so that other people would know someone was on the roof. The exterior ladder in the gated area was the main path to the roof. A crane sometimes used to lift equipment to the roof was located in the gated area. Eric had told him that his workers gained access to the roof on the day of the accident by going through the interior doors. He had no knowledge whether the workers used the crane to get any tools or equipment to the roof on that day.

After the Matulich and Ferrera depositions, plaintiff’s attorney Stephen McElroy met with BHA attorney Kevin Place, and requested that BHA stipulate to rejoin the action as a defendant. Mr. Place confirmed on September 23, 2019 that BHA would not agree to set aside the dismissal. BHA remains a cross-defendant, and has participated in the discovery and litigation activities.

Motion: On December 27, 2019, plaintiff filed the current motion to vacate his dismissal of BHA, under the authority of Code of Civil Procedure section 473(b). Plaintiff cites In re Marriage of Connolly (1979) 23 Cal.3d 590, 596, for the principle that relief under Section 473 is authorized where there is proof of fraud which results in excusable neglect or mistake. Plaintiff essentially contends that his dismissal of BHA was a mistake which resulted from the fraudulent misrepresentations made by BHA’s counsel. Plaintiff cites H.D. Arnaiz, Ltd. v. County of San Joaquin(2002) 96 Cal.App.4th 1357, 1368, for the principle that a mistake of fact exists when a person understands the facts to be different than they are, and that a mistake sufficient to vacate a dismissal may be found where a party, under some erroneous conviction, does an act he would not do but for the erroneous conviction.

Plaintiff contends that he relied upon BHA’s material representations when he agreed to dismiss BHA without prejudice, but has since learned the facts were different than what was represented to him, i.e., that the only access to the roof on the day of plaintiff’s injury was through the locked gate and up the exterior ladder; that BHA had the combination to the gate; that Matulich had instructed BHA not to go into the building and instead to access the roof by the exterior ladder; that Matulich had seen BHA leave the gate open while working on the roof; and that BHA’s supervisor admitted to Matulich that they had left the gate open and plaintiff must have followed them into the gated area. Plaintiff contends that had he known these facts, he would never have dismissed BHA.

Plaintiff further argues that relief under Section 473 should be freely and liberally exercised to dispose cases on their merits rather than on technical matters of procedure. Plaintiff further argues that BHA will not suffer any prejudice if the dismissal is set aside, because it at all times remained as a cross-defendant, and has fully participated in the litigation.

BHA has opposed the motion. BHA first contends that plaintiff did not qualify for discretionary relief under Section 473(b), in several respects. First, 473(b) requires a motion for relief to be filed within 6 months from the relevant dismissal, not 20 months, and requires the moving party to attach proposed pleading. Second, counsel’s decision not to conduct discovery with BHA, and subsequent surprise in learning of a third party’s speculation that BHA may have had access to the gate is not an excusable “surprise” within 473(b). Plaintiff’s counsel made a calculated decision in prosecuting the case, and when that decision proves deficient, it is not a “surprise” sufficient to justify a second attempt. Third, the motion never clearly states what the purported mistake justifying relief was, and does not establish that counsel’s mistake was excusable; Section 473 was never intended to be a catch-all remedy for every case of poor judgment by counsel which results in a dismissal. Plaintiff made calculated decisions both to dismiss BHA, and not to conduct any discovery with BHA until after the statute had run. The purported mistake was not a mistake at all, and counsel opted to dismiss BHA rather than respond to its discovery or face discovery sanctions.

BHA further opposes, contending that the motion was neither based upon the mandatory relief provisions of 473(b), nor does it meet the requirements for such a motion. Again, such a motion must be filed within 6 months after entry of judgment. There has been no judgment, but instead a voluntary dismissal, which does not legally constitute a judgment. (Lavaysse v. Superior Court (1944) 63 Cal.App.2d 223, 227.) Further, it only allows the court to vacate a default judgment, or a dismissal entered against the client, not a dismissal entered by the client. Additionally, the dismissal did not result from mistake, inadvertence, surprise, or neglect, but from a calculated decision to forego discovery responses, and not conduct follow-up discovery for nearly two years.

BHA further contends that the recent deposition testimony in fact confirmed its attorney’s 2018 representations to plaintiff that its employees had entered through an interior stairwell on the date of the incident. Plaintiff’s decision to accuse an officer of the court of fraud to cover his own error in judgment is a breach of the standards of professional conduct. Mr. Matulich never testified that BHA left the gate open, and has no firsthand knowledge about any use of the gate on the date of the accident.

In his reply, plaintiff focuses on the factual issues regarding the use of the gate on the day of his accident. He emphasizes that BHA failed to provide evidence in opposition to the motion, failed to provide a declaration from the attorney who made the representations, and they failed to provide a declaration from any employee present at the site on the date of the incident. Plaintiff contends that BHA’s PMQ contradicted the earlier representations of counsel, in acknowledging BHA had the combination to the gate, and it was BHA’s practice to leave the gate open when they were on the roof, so that others would know someone was on the roof, among other testimony, and concluding that it is highly likely that BHA workers left the gate unlocked on the day of the incident. Finally, plaintiff contends that BHA has not shown any prejudice that it would suffer if the dismissal was vacated, given its continued presence in the case as a cross-defendant.

ANALYSIS: The motion is denied.

Plaintiff’s injury occurred on June 1, 2017. He voluntarily dismissed BHA as a party defendant on April 26, 2018, purportedly in reliance upon representations made by BHA’s counsel with respect to the facts related to BHA’s potential liability in the case. The 2-year statute of limitations on plaintiff’s claims expired on June 1, 2019. (Code Civ. Proc., § 335.1.)

Plaintiff believes that recent discovery in the case has shown that the representations made by BHA’s counsel with respect to its potential liability were in fact fraudulent, and that it is likely that BHA left the gate open on the day of the accident, thereby providing plaintiff access to the area in which he was injured.

Since the period during which a case that was dismissed without prejudice was previously pending does not toll the applicable statute of limitations (see Wood v. Elling Corp. (1977) 20 Cal.3d 353, 359), the complaint cannot simply be refiled against BHA. Consequently, Plaintiff seeks relief from voluntary dismissal of BHA as a defendant in this case pursuant to Code of Civil Procedure section 473(b), contending that his agreement to dismiss BHA was a mistake arising from fraudulent misrepresentations made by BHA’s counsel in 2018.

Section 473(b) provides, in relevant part:

The court may, upon any terms as may be just, relieve a party or his or her legal representative from a judgment, dismissal, order, or other proceeding taken against him or her through his or her mistake, inadvertence, surprise, or excusable neglect. Application for this relief shall be accompanied by a copy of the answer or other pleading proposed to be filed therein, otherwise the application shall not be granted, and shall be made within a reasonable time, in no case exceeding six months, after the judgment, dismissal, order, or proceeding was taken. . . .”

The 6-month limit for relief is jurisdictional, and the court has no power to grant relief after this time has lapsed. (Austin v. Los Angeles Unified School District (2016) 224 Cal.App.4th 918, 928.)

Neither plaintiff’s moving papers nor its reply papers ever acknowledged the time requirement for a Code of Civil Procedure section 473(b) motion for relief from a dismissal based upon mistake, instead focusing on attempting to establish the dismissal as a mistake made by counsel in reliance upon purportedly fraudulent misrepresentations about the factual circumstances underlying BHA’s potential liability, and upon the lack of prejudice to BHA should the dismissal be vacated, given its continued presence in this action as a cross-defendant.

In addition to contesting the existence of any misrepresentations, and whether the circumstances could conceivably qualify as “mistake” or “surprise” within the meaning of Section 473(b), BHA opposed by asserting that the motion failed to meet the requirements of the statute, in failing to attach a copy of the pleading proposed to be filed, and because it was filed well beyond six months after the dismissal. While the continued pendency of the complaint in this action could conceivably negate the requirement that a proposed pleading be attached to the motion, the statute very clearly requires that any motion for relief be filed within six months after the dismissal was entered. That period expired on October 26, 2018. As of that date, plaintiff still had another seven months prior to the expiration of the statute of limitations on his claims, within which he could easily have brought BHA back into the action as a party defendant.

Certainly, BHA would not be prejudiced by the vacation of the dismissal of it as a defendant, since it has participated in the litigation, including in discovery, because of its continued presence in the action as a cross-defendant. However, even if this Court were to also assume that the representations made by BHA’s counsel were absolutely fraudulent—something it need not determine in resolving this motion—it has no jurisdiction to grant relief under Section 473(b), because plaintiff failed to bring the motion within 6 months after the dismissal was entered

The motion to set aside the dismissal is therefore denied.