MICHAEL D. MARCUS’S MEDIATION MESSAGE NO. 119
AVOIDING DISMISSAL UNDER THE FIVE-YEAR RULE
The five-year rule, tolling, stay orders, stipulations and certainty/uncertainty are the core subjects of Gaines v. Fidelity National Title Insurance Co. (February 25, 2016; Cal. Supreme Ct.) S215990; 2016 DJDAR 1909. Contrary to the legal headlines, mediation plays only a small part in the discussion. Essentially, Gaines is a primer on the necessary steps to prevent the running of the five-year trial rule and resulting dismissal pursuant to C.C.P. sec. 583.310.
In Gaines, a 5-2 majority held that dismissal under sec. 583.310 was not tolled by a trial court order, entered pursuant to the parties’ agreement striking the trial date and staying the proceedings for 120 days, while they engaged in mediation and completed all outstanding discovery. Although a court stay following an express stipulation from the parties staying all proceedings for an agreed-upon period in a case will toll the running of the statute for the length of that stay (see sec. 583.340, subd. (b)), Gaines noted that a continuance generally does not have the same effect. Relying upon Bruns v. E-Commerce Exchange, Inc. (2011) 51 Cal.4th 717, 722, Gains holds that “’the prosecution of an action is stayed under subdivision (b) only when the stay encompasses all proceedings in the action.’” (Emphasis added.) In the instant matter, mediation and completion of outstanding discovery reflected that the prosecution of the matter was still ongoing and the stay, as a result, was only a partial and not a complete one. (Note that under C.C.P. sec.1775.7, subd. (b), mediations continuing into or beginning after the last six months of the five-year period toll the period beginning on the date four years and six months after plaintiff has filed the action and ending when the mediator files a statement of nonagreement.)
Section 583.340, subd. (c) also provides that a trial court will exclude any time when it was “impossible, impracticable, or futile” to bring the case to trial. Gaines found that the court order striking the trial date did not “create a circumstance of impracticability because plaintiff agreed to it, remained in control of the circumstances, and made meaningful progress towards resolving the case during the stay period.” (The dissent observed it is difficult to meaningful progress towards resolving a case during a stay when only outstanding discovery was to be completed.)
Unlike mediation, which the majority in Gains found to be an event inside a lawsuit and, therefore, does not abate a proceeding, the case holds that contractual arbitration tolls the five-year period under section 583.340, subd. (b).
Judge Michael D. Marcus (Ret.)
ADR Services, Inc.
1900 Avenue of the Stars, Suite 250
Los Angeles, California 90067
Copyright Michael D. Marcus, February 2016