2012-00129235-CU-CL

NCCS, Inc. vs. Pro-Tech Industries, Inc.

Nature of Proceeding: Motion to Dismiss Complaint

Filed By: Watts Jr., Richard M.

Defendant David J. Baker’s (Baker) motion for mandatory dismissal for failure to bring the matter to trial within five years is GRANTED.

Plaintiff Northern California Collection Service, Inc.’s (NCCS) request for judicial notice of court documents filed in this case is GRANTED.

NCCS’ request for judicial notice of documents filed in another case is DENIED.

On its own motion, the court takes judicial notice of the prove-up package filed in this case on 4/06/16 as well as the Stipulation for Settlement filed on 1/15/14.

NCCS commenced this collection action against Baker and others on 8/01/12, more than six years ago. The other defendants are Pro-Tech Industries, Inc. (Pro-Tech) and Donald H. Gordon (Gordon). NCCS filed its complaint as assignee of Radoslovich Law Corporation, which allegedly obtained causes of action against the defendants for open book account and account stated. Although no contract or other exhibit is attached to the complaint, the allegations describe joint and several contractual liability.

NCCS settled with Pro-Tech and Gordon in January 2014. The settlement required Gordon to pay $15,000 in exchange for NCCS’ release of claims against both Gordon and Pro-Tech. NCCS requested Gordon’s dismissal from the lawsuit, and the dismissal was entered in March 2014.

On 2/17/15, NCCS took Baker’s default. On 4/06/16 — more than 13 months later — NCCS filed a default judgment package, and the court clerk entered a judgment against Baker the same day. On 10/04/16, NCCS and Baker filed a stipulation to set aside the default and allow Baker to file a responsive pleading within 20 days.

Trial is set to commence on 4/02/18.

Baker now moves for a mandatory dismissal on grounds NCCS failed to bring the matter to trial within five years. (See CCP §§ 583.310 et seq.) Noting that more than six years have passed since the case was filed, Baker argues the case must be dismissed.

In opposition, NCCS argues that the period between entry of Baker’s default and the stipulated order setting aside his default and default judgment must be excluded from the computation of time. According to NCCS, that exclusion of 607 days means the trial need not commence until 3/31/19.

Baker concedes that the period between entry of default judgment and entry of the order setting the judgment aside must be excluded from the calculation. That period falls between 4/06/16 and 10/04/16, or just shy of six months. Excluding that six-month period from the calculation still yields more than five years since the case against Baker was filed. The question thus becomes whether the additional period between entry of Baker’s default and entry of the default judgment against him must be excluded as well.

On the question whether the period between entry of default and entry of default judgment is excluded from the five-year calculation, the cases are not uniform. (Compare Maguire v. Collier (1975) 49 Cal.App.3d 309 [period of default must be excluded] and Dale v. ITT Life Ins. Corp. (1989) 207 Cal.App.3d 495 [same] with Hughes v. Kimble (1992) 5 Cal.App.4th 59 [criticizing Maguire and concluding that any exclusion is discretionary and that the plaintiff’s failure diligently to pursue entry of default judgment barred a discretionary exclusion]; see also Howard v. Thrifty Drug & Discount Stores (1995) 10 Cal.4th 424, 438-439 [“In the context of a default judgment, courts have held that a reasonable period of time between the defendant’s default and the entry of the default judgment should be excluded from the calculation of the five-year period”].) As best the court can tell, the view expressed in Hughes has become the prevailing view. The court thus inquires whether discretion warrants the exclusion of time after Baker’s default was entered but before entry of default judgment.

The entire default judgment package NCCS submitted consists of (1) a declaration with one page of text and a one-page exhibit attached; (2) a one-page calculation of interest; (3) a one-page request for statutory attorney’s fees; (4) a one-page summary of the case; (5) a form-request for entry of clerk’s judgment; (6) a proposed judgment; and a request for dismissal of Pro-Tech as well as DOE defendants. Forty-five days is a liberal allotment of the time to compile and submit this package. (Cf. CRC 3.110(h) [default must be reduced to default judgment within 45 days absent order granting an extension].) The court finds, however, that NCCS was not diligent in pursuing a default judgment during the remaining 12 months between entry of default and entry of default judgment.

An excuse NCCS offers for failing to obtain default judgment earlier that it did is that such a judgment would have violated the one-judgment rule. The one-judgment rule,

though, does not bar entry of a judgment against one defendant in a multi-defendant case such as this. (See Nguyen v. Calhoun (2003) 105 Cal.App.4th 428, 437.)

NCCS also argues it would have been impracticable to pursue a default judgment against Baker at an earlier time because Baker was jointly liable with Gordon and Pro-Tech. There are cases providing that, where a defaulted defendant is jointly liable with a defendant who has raised affirmative defenses that could exonerate the defaulted defendant, entry of default judgment should be delayed until the defenses are resolved. (See Mirabile v. Smith (1953) 119 Cal.App.2d 685, 688-689.) In the instant case, however, NCCS had already released all its claims against Pro-Tech and Gordon by the time it took Baker’s default. As a result, there were no defenses to be resolved before obtaining default judgment against Baker.

Because more than five years have elapsed since the case against Baker was filed, and because NCCS has not established tolling that could accommodate a trial within the five-year period, the action against Baker must be dismissed.

The minute order is effective immediately. No formal order granting the motion is required.

Pursuant to CRC 3.1312, Baker shall lodge a judgment of dismissal for the court’s signature.