Gomez et al. v. Dole Food Co.
Filed 6/24/13 Gomez et al. v. Dole Food Co. CA2/5
(unmodfied version)
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California
Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or
relying on opinions not certified for publication or ordered published, except
as specified by rule 8.1115(b). This
opinion has not been certified for publication or ordered published for
purposes of rule 8.1115.
IN THE COURT OF
APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE
DISTRICT
DIVISION FIVE
EMPERATRIZ MARINA MENDOZA GOMEZ et al.,
Plaintiffs
and Appellants,
v.
DOLE FOOD COMPANY, INC.,
Defendant
and Respondent.
B242400
(Los
Angeles County Super.
Ct.
No. BC412620)
APPEAL
from the judgment and orders of the Superior
Court of
County, Anne I. Jones, Judge. Reversed.
Conrad
& Scherer, Terrence P. Collingsworth, Eric Hager; and David Seth Grunwald
for Plaintiffs and Appellants.
Gibson,
Dunn & Crutcher, Theodore J. Boutrous, Jr., Andrea E. Neuman, William E.
Thomson and KatieLynn B. Townsend for Defendant and Respondent.
____________________________________
In this action for wrongful
death and related claims, plaintiffs’ and appellants’ 65 heirs appeal from
the order of February 15, 2012, dismissing their action against Dole Food
Company, Inc., under Code of Civil Procedure section 581, subdivision (f)(2),
following the denial of plaintiffs’ motions to set aside the dismissal under
section 473 and for relief from a cost bond order under section 1030. Plaintiffs contend the orders dismissing the
action and denying mandatory relief from dismissal under section 473,
subdivision (b) were erroneous as a matter of law. Plaintiffs further contend the denial of
relief from cost bond was an abuse of discretion. We reverse.
I. Prior Proceedings
Complaint
On April 28, 2009, 73 plaintiffs, who were heirs of 51 deceased
Colombian nationals, filed a complaint against Dole, a corporation
headquartered in California, for wrongful death and
related causes of action. It was alleged
the decedents were murdered in or around banana plantations in Colombia that Dole owned or operated
between 1994 and November 2007 by members of Autodefensas Unidas de Colombia
(“AUCâ€), a paramilitary organization hired by Dole and Dole’s wholly-owned
subsidiary CI Tecnicas Baltime de Colombia SA (“Tecbacoâ€) to provide security
and protection services.
B. First
Amended Complaint
On April 9, 2010, a first amended complaint
was filed alleging wrongful death,
battery, assault, negligent hiring and supervision, intentional and negligent
infliction of emotional distress, civil conspiracy, and negligence. Plaintiffs were 67 of the original 73
plaintiffs, plus 118 new plaintiffs.
Plaintiffs were heirs of 167 decedents.
C. Proceedings on Demurrer to First Amended
Complaint and Motion for
Cost Bond
Demurrer and Motion for Cost Bond
On May 17, 2010, Dole filed a demurrer to the first amended complaint
on the grounds, among others, of failure to:
(1) comply with the applicable
two-year statute of limitations; (2)
adequately allege Dole’s liability for the conduct of Tecbaco; and
(3) join Tecbaco as a necessary and
indispensible party. On May 27, 2010, Dole filed a motion for cost bond under section
1030, on the grounds all plaintiffs resided outside California and there was a reasonable
possibility Dole will prevail in the action.
Plaintiffs submitted evidence from the World Bank and other public
sources that plaintiffs lived in a poor area of Colombia, the per capital gross
national income for Colombia was $4,620, and the per
capital gross domestic product for the region where plaintiffs resided was
$2,649.66.
Trial Court Rulings on Demurrer
and Cost Bond Motion
On July 7, 2010, the trial court ruled the statute of limitations
barred the action as to all plaintiffs except for Arelis Margarita Hernandez
Rivera (“Hernandezâ€) and Julio Medina Coronado (“Medinaâ€). “As to all plaintiffs except these two, the
demurrer is granted without leave to amend.â€
“As to these two plaintiffs, their current allegations against Dole
under the doctrines of alter ego and agency are insufficient as a matter of law
and, further, necessitate adding Tecbaco as an indispensible party.â€
amend. Hernandez and Medina did not file an amended
pleading.
In a
separate order on July 7, 2010, the trial court
“decline[d] to waive or reduce the posting of security in this action.†The court found “plaintiffs have not made the
requisite prima facie showing to justify waiving a bond.†Accordingly, the court ordered, “each
plaintiff in this action must post $16,926 within 30 days of entry of this order.†No plaintiff posted a cost bond.
Dole’s Ex Parte Motion to Dismiss
On
September 10, 2010, Dole filed an ex
parte application to dismiss with prejudice the claims of all plaintiffs
except Hernandez and Medina under section 581, subdivision (f)(1), on the
ground the trial court sustained Dole’s demurrer without leave to amend except
as to the claims of Hernandez and Medina.
Dole asked the court to dismiss with prejudice Hernandez’s and Medina’s claims under section 581,
subdivision (f)(2), on the ground the demurrer was sustained with leave to
amend and they failed to timely file an amended pleading. Dole also asked the court to dismiss with
prejudice Hernandez’s and Medina’s claims under section
1030, subdivision (d), for failure to post a cost bond.
Trial Court Dismissal Ruling
On September 14, 2010, the trial court gave judgment to Dole against all
plaintiffs, including Medina and Hernandez, and ordered
the action dismissed with prejudice. The
judgment stated: “On August 25, 2010,
Dole Food appeared before this Court to request that the above-captioned action
be dismissed with prejudice pursuant to . . . sections 581[,
subdivision] (f)(1) and (2), and 1030[, subdivision] (d), and that judgment be
entered in Dole Food’s favor. By
separate order, the Court has granted Dole Food’s request and dismissed
plaintiffs’ First Amended Complaint with prejudice.â€
Plaintiffs
appealed from the “judgment of dismissal after an order sustaining a demurrer.â€
Court of Appeal Ruling
On October 27, 2011, this court affirmed the order sustaining the
demurrer, reversed the denial of leave to amend, and remanded the matter to
permit plaintiffs to amend the first amended complaint. We agreed with the trial court that the
causes of action of all plaintiffs were predicated on killings that occurred
prior to April 28, 2007, and thus accrued prior to
that date. Sustaining the demurrer
without leave to amend, however, was an abuse of discretion. Under the delayed discovery rule, the
limitations period did not begin to run until Dole’s role was publicly
disclosed in May 2007. For pleading
purposes, the claims in the original complaint were viable under the discovery
rule. The claims first brought in the
first amended complaint were presumptively time-barred, but we granted leave to
amend because plaintiffs represented on appeal they could amend the first
amended complaint to adequately plead delayed discovery.
We
affirmed the trial court’s ruling that the first amended complaint failed to allege
“agency and alter ego liability with sufficient specificity to overcome the
legal presumption that Tecbaco functioned as a separate corporate entity†and
granted leave to amend to cure this pleading defect. We rejected the trial court’s finding that
Tecbaco is a necessary and indispensible party as premature.
G. Issuance of Remittitur
The remittitur and notice of issuance of the remittitur
were issued on December 27, 2011.
II. Current Proceedings
Dole’s Ex Parte Application for
Dismissal
Dole
filed an ex parte application for dismissal of the action with prejudice
pursuant to sections 472b and 581, subdivision(f)(1), to be heard on Wednesday,
February 15, 2012, at 8:30 a.m. Notice
of the motion, but not the motion papers, was served on plaintiffs’ counsel by
e-mail on February 14, 2012.
name="_ftnref4" title="">[4] Dole contended plaintiffs failed to timely
file an amended complaint within 30 days of the mailing of notice of the
issuance of the remittitur, as required by the section 472b. Plaintiffs’ counsel responded in a letter to
Dole,
stating notice was too short for counsel to be able to attend the hearing in
person
and requested that Dole provide plaintiffs with “a few additional days.†“I request that you work with us to schedule
a hearing date next week that will permit an appearance by counsel for the
Plaintiffs.†Counsel also objected to
the requested relief, contending that dismissal of the claims of the 67
plaintiffs in the original complaint was improper because this court in the
previous appeal ruled those claims timely under the discovery rule and, to the
extent the claims alleged theories of direct liability against Dole which the
trial court found sufficient to withstand demurrer, the claims could proceed
without amendments to the allegations of alter ego and agency. Plaintiffs’ counsel further objected on the
ground he was not aware of the 30-day statutory deadline, and had he been
aware, he would have requested an extension of time to amend the complaint. Counsel asked Dole to agree to plaintiffs
filing a second amended complaint April 1, to obviate the need for proceedings
for relief for dismissal under section 473, subdivision (b). Dole refused to agree to reschedule the
hearing or to plaintiffs filing the second amended complaint April 1.
At
the hearing on February 15, 2012, Dole appeared through counsel, but plaintiffs
were not present. Dole had a
substantive, ex parte colloquy with the trial court which encompassed seven
pages of reporter’s transcript, before plaintiffs’ counsel joined the hearing
via telephone. In the colloquy, Dole
argued the merits of dismissal, relief from dismissal, and the underlying
action. Dole characterized the nature of
the prior proceedings and orders and the nature of plaintiffs’ past and present
conduct in the litigation.
The
trial court began by stating it made sense to continue the hearing to the
following week so that plaintiffs could make an appearance. Dole stated plaintiffs could appear that day
by phone. Dole’s counsel wanted the
matter heard immediately. The court
asked if there was an emergency. Dole’s
counsel stated there was no emergency, but Dole was very eager to get “the
outlandish and scurrilous charges†dismissed as soon as possible. Counsel quoted language from a prior order
that Dole’s evidence “‘overwhelmingly refutes plaintiffs’ primary claim[,]’†to
explain to the court what “the company has been subjected to, for almost three
years now.†Dole argued that it did not
rush to file the motion to dismiss; the appellate opinion was filed October 27,
2011, and that it was now two weeks after the deadline to amend. Dole argued that this was the second time
plaintiffs had missed a deadline to file an amended complaint after a demurrer
was sustained with leave to amend. Dole
wanted the matter resolved quickly, “given the scurrilous nature of the claims
and the attempts to publicize them, and that sort of thing.†After reading plaintiffs’ letter, the court
stated that, if she dismissed the action, it was likely she would vacate the dismissal
and give plaintiffs leave to amend under section 473 because plaintiffs were
not aware of the statutory deadline. The
judge stated she would rather not dismiss the action without giving plaintiffs
“some opportunity to file some opposition.â€
Dole encouraged the court to call plaintiffs’ counsel right then,
stating, “they’ve had many months to prepare an amended pleading. From all indications, they don’t have one
ready. From all indications, they
haven’t even been working on one.â€
Quoting from an appellate opinion, Dole argued the law was clear that it
was not enough under section 473 to simply claim “‘we didn’t know the
law.’†Dole reiterated, “this is the
second time we’ve been here on exactly the same posture, where a deadline to
amend has come and gone; they’ve done nothing.â€
Dole’s counsel argued plaintiffs will have to show good cause for
missing the deadline and the details of what they have been doing. Dole contended that a prior, final order,
required each plaintiff to post a cost bond and “there’s no indication that
they are prepared to do that. [¶] Without doing that, . . . there would be no
way for them to continue with the case or amend the complaint.â€
The
trial court asked, “isn’t it better to be safe than sorry? Wouldn’t it be better to have this all on the
table, and I give them a date by which they have to file [the amendment], and
that they have to file the cost bond at the same time?†Dole’s counsel disagreed, preferring the
dismissal to be entered and then let plaintiffs try to set it aside. “But from our past experience and what we . .
. would expect to happen now, I would be very surprised if, in fact, they’re
able to make the kind of showing that they would need to do to set aside the
entry of dismissal. [¶] They’ve had a long time to amend this
complaint, and they’ve basically done nothing, as far as one can tell, your
honor.â€
Suspecting
the matter would return to the Court of Appeal again if the action were
dismissed, the trial court stated, “why don’t we just act reasonably here and
put a cap on it?†The court proposed
setting the ex parte motion to dismiss in 30 days, allowing plaintiffs the 30
days to file an amended complaint and post a cost bond. Dole argued against this proposal. “They haven’t made any showing of good cause
. . . that would even remotely get them around the code provision that required
them to have filed their amended complaint two weeks ago. [¶] .
. . There’s no indication that one is even in the works.†At that point, plaintiffs’ counsel was
brought into the hearing via telephone.
When plaintiffs’ counsel was contacted by telephone, he asked the court
to grant plaintiffs until April 1 to file the second amended complaint, stating
they were in the process of re-interviewing hundreds of people in Colombia to
add the necessary tolling provision allegations. Plaintiffs reiterated that, in any event,
since the first group of plaintiffs had viable claims of direct liability that
were timely, the entire case should not be dismissed. Counsel advised the court plaintiffs were
also being re-interviewed to establish they were entitled to be excused from
posting the cost bond. The court ordered
the action dismissed with prejudice, but allowed plaintiffs six weeks to file
an application under section 473 for relief from the order of dismissal and to
file a proposed second amended complaint.
B. Proceedings on Plaintiffs’ Motion for Relief
from Dismissal Under
Section 473 and on Plaintiffs’
Motion for Relief From Cost Bond Order
Under Section 1030
1. Plaintiffs’ Motion Under
Section 473, Filed April 2, 2012; Dole’s
Opposition
Plaintiffs
relief from dismissal must be granted pursuant to section 473, subdivision
(b). Plaintiffs submitted attorney
affidavits stating the attorneys were unaware of the deadline imposed by
section 472b, accompanied by a proposed second amended complaint.
Dole
contended section 473’s provision for mandatory
relief did not apply in this case, because plaintiffs appeared and opposed
the request to dismiss.
Plaintiffs’ Motion Under Section
1030, Filed April 2, 2012; Dole’s
Opposition;
Ruling
Plaintiffs filed a motion for relief from the $16,926.00
per plaintiff cost bond on the ground of indigency, supported by declarations
from 63 plaintiffs which showed the 2011 income of each of those
plaintiffs. The incomes ranged from zero
to $14,848, with most of the incomes less than $4,000. Plaintiffs also filed evidence that cost
bonds were not available on less than full collateral. Dole contended plaintiffs’ motion was barred
because they failed to challenge the cost bond order in their appeal from the
judgment dismissing the action.
3. Trial
Court’s Ruling
The
trial court denied both motions on May 31, 2012.
The
trial court ruled that section 473’s mandatory relief provision only applies in
cases where the dismissal is akin to a default.
Mandatory relief was not available here, because plaintiffs appeared and
presented evidence at the hearing on Dole’s motion to dismiss.
Concerning
relief from the cost bond order of July 7, 2010, the trial court stated the
August 25, 2010 dismissal of the action expressly incorporated the cost bond
order and was part of the September 14, 2010 judgment. Plaintiffs’ failure to raise in the appeal
any issue concerning the cost bond order precluded them from challenging the
determination on remand.
On
July 2, 2012, judgment was entered against all plaintiffs. This timely appeal followed.
DISCUSSION
Error in Granting Dole’s Ex
Parte Application to Dismiss the Action
Plaintiffs contend the trial court erred in granting
Dole’s ex parte application to dismiss the action for failure to comply with
section 472b, because Dole’s ex parte application was unauthorized.
Where, as here, the applicability of a
disputed facts and presents a pure question of law, review is de novo. (Leader
v. Health Industries of America, Inc. (2001) 89 Cal.App.4th 603,
612.)
Section
472b provides: “When an order sustaining a demurrer without leave to amend is reversed
or otherwise remanded by any order issued by a reviewing court, any amended
complaint shall be filed within 30 days after the clerk of the reviewing court
mails notice of the issuance of the remittitur.â€
California
Rules of Court, rule 3.1320,
name="_ftnref9" title="">[9] cited by Dole to support the contention it was
proper to apply for dismissal ex parte, provides: “(h) A
motion to dismiss the entire action and for entry of judgment after expiration
of the time to amend following the sustaining of a demurrer may be made by ex
parte application to the court under . . . section 581[, subdivision]
(f)(2).†Section 581, subdivision (f)
provides: “The court may dismiss the
complaint as to that defendant when: [¶]
. . . [¶] (2) . . . after a demurrer
to the complaint is sustained with leave to amend, the plaintiff fails to amend
it within the time allowed by the court and either party moves for dismissal.â€
Although
Dole purported to bring the motion to dismiss under section 581, subdivision
(f)(2), the terms of that provision apply to an order by the superior court that establishes the deadline for filing an
amended complaint. It does not apply to
the circumstances presented to the trial court here, where the filing deadline
was established by a statute. As rule
3.1320’s provision for bringing a dismissal motion on an ex parte basis applies
by its terms only to applications under section 581, subdivision (f)(2), and
the application in this case was not governed by that section, rule 3.1320 did
not authorize Dole to move for dismissal ex parte. Dole has cited no other authority to support
its ex parte application. Accordingly, plaintiffs should have been
afforded an opportunity to make a full appearance to defend against the motion.
In the circumstances of this case,
counsel’s telephonic appearance did not amount to a full appearance. Counsel was given less than 24 hours notice
of the hearing. This was not enough time
for him to be able to be present in person.
He requested the minimum courtesy of putting the motion over for a few
days so he could appear in person. Dole
should have granted the request, as no urgent circumstances existed that
required an immediate hearing on the motion.
Counsel did not participate in the full colloquy between the court and
Dole. One-third of the hearing had taken
place before he was brought in via telephone.
Dole contends plaintiffs forfeited
the contention that dismissal under section 581, subdivision (f)(2), was
unauthorized by their failure to assert the contention in opposition to
dismissal or in support of mandatory relief under section 473. We disagree.
Because plaintiffs’ counsel was given less than 24 hours notice of the
dismissal motion and was not served with a copy of the motion papers, counsel did
not have an effective opportunity to raise all legal grounds in opposition to
the dismissal motion. As to the
application for mandatory relief, section 473, subdivision (b), by its terms,
addresses attorney mistakes resulting in a dismissal, not trial court errors in
granting the dismissal. In any event,
the contention raises a pure question of law which we may address for the first
time on appeal. (In re Sheena K. (2007) 40 Cal.4th 875, 886-887;
742.)
As a matter of law, the trial court
erred in dismissing the action on an unauthorized, ex parte application.
In addition, we agree with
plaintiffs’ contention that a viable action existed following the first
appeal. The first amended complaint
adequately stated causes of action alleging Dole’s direct liability for
conspiracy, intentional torts, and negligence, as determined by the trial court
in its July 7, 2010 ruling on the demurrer to the first amended complaint. We concluded in the prior appeal that the
claims of the original plaintiffs who remained in the action were timely under
the two-year statute of limitations in section 335.1 [“Within two
years: An action for assault, battery,
or injury to, or for the death of, an individual caused by the wrongful act or
neglect of another.â€].
Accordingly, at the time of the trial court’s dismissal of this action,
there was an operative complaint in place to be amended in accordance with our
appellate opinion. Dismissal was
therefore erroneous.
Error in Denying Mandatory Relief Under Section 473, subdivision (b)
Our
resolution of the first issue in this opinion arguably renders moot any
discussion of the trial court’s ruling denying relief from dismissal under
section 473, subdivision (b). However,
we exercise our discretion to address the issue, as the question of granting
leave to file the second amended complaint will undoubtedly arise after
issuance of the remittitur, and should the trial court again deny mandatory
relief from dismissal on the ground the dismissal was not akin to a default,
the issue will return to this court for a third appeal.
Whether
section 473, subdivision (b)’s mandatory relief provision applies in the
present case, where there are “no factual determinations that affect
entitlement to mandatory relief,†is a question of statutory construction,
which we review de novo. (Huh v. Wang
(2007) 158 Cal.App.4th 1406, 1418.)
Section
473, subdivision (b) provides: “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. . . . Notwithstanding any other requirements of this section,
the court shall, whenever an application for relief is made no more than six
months after entry of judgment, is in proper form, and is accompanied by an
attorney’s sworn affidavit attesting to his or her mistake, inadvertence,
surprise, or neglect, vacate any (1) resulting default entered by the clerk against
his or her client, and which will result in entry of a default judgment, or (2)
resulting default judgment or dismissal entered against his or her client,
unless the court finds that the default or dismissal was not in fact caused by
the attorney’s mistake, inadvertence, surprise, or neglect.â€
“Section 473, subdivision (b) provides for two distinct types of
relief. Under the discretionary relief
provision, on a showing of ‘mistake, inadvertence, surprise, or excusable
neglect,’ the court has discretion to allow relief from a ‘judgment, dismissal,
order, or other proceeding taken against’ a party or his or her attorney. Under the mandatory relief provision, on the
other hand, upon a showing by attorney declaration of ‘mistake, inadvertence,
surprise, or neglect,’ the court shall vacate any ‘resulting default
judgment or
dismissal entered.’ [¶] The range of attorney conduct for which
relief can be granted in the mandatory provision is broader than that in the
discretionary provision, and includes inexcusable neglect. But the range of adverse litigation results
from which relief can be granted is narrower.
Mandatory relief only extends to vacating a default which will result in the
entry of a default judgment, a default judgment, or an entered dismissal.†(Leader v. Health Industries of
America, Inc.,
pp. 615-616.)
“Relief is mandatory only from those dismissals which are
the ‘procedural equivalent of a default’; i.e., those which deprive
dismissals based on plaintiffs’:
within the time ordered by the court . . . ; or failure to oppose a dismissal motion[.]†(Weil & Brown, Cal. Practice Guide: Civil Procedure Before Trial (The
Rutter Group 2012) ¶ 5:299.2, p. 4-76 (rev. #1, 2011) [italics in original].)
“If
the prerequisites for the application of the mandatory relief provision of
section 473, subdivision (b) exist, the trial court does not have
discretion to refuse relief.†(
Limited Partnership v. City of Los Angeles (2006) 136 Cal.App.4th 511, 516.)
Here, relief was
mandatory under section 473, subdivision (b).
There was an entered dismissal, and it was akin to a default because it
was based on plaintiffs’ negligent failure to amend the complaint within the
time allowed by statute. (See Weil & Brown, supra, ¶ 5:299.2,
p. 4-76 (rev. # 1, 2011); compare Leader v. Health Industries of America, Inc., supra,
89 Cal.App.4th at p. 616 [mandatory relief was not available where the
prerequisites for it did not exist: the
action had not been dismissed and counsel’s conduct was deliberate, not
neglectful].) Accordingly, the trial
court erred as a matter of law in failing to grant mandatory relief under
section 473, subdivision (b), and on remand, leave to amend the complaint shall
not be denied on the ground the complaint was not timely amended under section
472b.
The Order
Denying Relief From Cost Bond Was an Abuse of Discretion
Plaintiffs
contend denial of their motion for relief from the cost bond was an abuse of
discretion. We agree.
We
“[review] the trial court’s decision whether to waive the requirement an
out-of-state plaintiff post an undertaking under an abuse of discretion
standard[.]†(Alshafie v.
Lallande (2009) 171 Cal.App.4th 421, 430.)
“The appropriate test for abuse of discretion is whether the trial court
exceeded the bounds of reason.†(
474, 478.) “‘[A] court’s discretion must
“‘be “‘exercised in conformity with the spirit of the law and in a manner to
subserve and not to impede or defeat the ends of substantial justice.’†[Citations.]’
[Citation.]†(
431-432.)
Section
1030 provides: “(a) When the plaintiff in
an action or special proceeding resides out of the state, . . . the defendant
may at any time apply to the court by noticed motion for an order requiring the
plaintiff to file an undertaking to secure an award of costs and attorney’s
fees which may be awarded in the action or special proceeding. . . . [¶] (b) The
motion shall be made on the grounds that the plaintiff resides out of the state
. . . and that there is a reasonable possibility that the moving defendant will
obtain judgment in the action or special proceeding. The motion shall be accompanied by an
affidavit . . . [which] shall set forth the nature and amount of the costs and
attorney’s fees the defendant has incurred and expects to incur by the
conclusion of the action or special proceeding.
[¶] (c) If the court, after hearing, determines that
the grounds for the motion have been established, the court shall order that
the plaintiff file the undertaking in an amount specified in the court’s order
as security for costs and attorney’s fees.
[¶] (d) The plaintiff shall file the undertaking not
later than 30 days after service of the court’s order requiring it or within a
greater time allowed by the court. If
the plaintiff fails to file the undertaking within the time allowed, the
plaintiff’s action or special proceeding shall be dismissed as to the defendant
in whose favor the order requiring the undertaking was made.â€
Section
995.240 provides: “The court may, in its
discretion, waive a provision for a bond in an action or proceeding and make
such orders as may be appropriate as if the bond were given, if the court
determines that the principal is unable to give the bond because the principal
is indigent and is unable to obtain sufficient sureties, whether personal or
admitted surety insurers. In exercising
its discretion the court shall take into consideration all factors it deems
relevant, including but not limited to the character of the action or
proceeding, the nature of the beneficiary, whether public or private, and the
potential harm to the beneficiary if the provision for the bond is waived.â€
“‘The
purpose of [section 1030] is to enable a California resident sued by an
out-of-state resident “‘to secure costs in light of the difficulty of enforcing
a judgment for costs against a person who is not within the court’s
jurisdiction.â€â€™ [Citation.] The statute therefore acts to prevent
out-of-state residents from filing frivolous lawsuits against California
residents.’ [Citation.]†(Alshafie
v. Lallande, supra, 171
Cal.App.4th at p. 428.) “Even if
the defendant establishes the grounds for an undertaking, the trial court may
waive the requirement if the plaintiff establishes indigency. . . . [¶]
The public policy underlying an indigent’s entitlement to a waiver of
security costs is essentially ‘access trumps comfort.’ [Citation.]
‘In ruling indigents are entitled to a waiver of security for costs,
[the State is] saying one party’s economic interest in receiving its costs of
litigation should it win cannot be used to deny an indigent party his
fundamental right of access to the courts.’
[Citations.]†(
“[T]o
fulfill its statutory duties when exercising its discretion, the court must
review the plaintiff’s showing, identify deficiencies, if any, and give the
plaintiff the opportunity to supply additional information that may be
necessary to establish his or her entitlement to a waiver under the
circumstances of the particular case.
Only by taking such a proactive role can the trial court properly
balance the respective rights of the parties while minimizing the circumstances
in which a potentially meritorious case is dismissed solely because the
plaintiff cannot post an undertaking.†(
omitted.)
The
trial court’s denial of the motion for relief from the cost bond on the ground
plaintiffs’ failure to appeal the 2010 cost bond ruling precluded them from
challenging the order on remand was error.
The court sustained Dole’s demurrer to the first amended complaint as to
all current plaintiffs without leave to amend in 2010. Accordingly, the ruling requiring a $16,926
per plaintiff cost bond did not apply to plaintiffs but applied only to the two
individuals, no longer plaintiffs, who were granted leave to amend. In these circumstances, the current
plaintiffs had no standing to appeal the cost bond order. “[O]nly a person aggrieved by a decision may
appeal. ([Cf. § 902] [‘Any party
aggrieved may appeal . . . .’].) An
aggrieved person, for this purpose, is one whose rights or interests are
injuriously affected by the decision in an immediate and substantial way, and
not as a nominal or remote consequence of the decision.†(In re K.C. (2011) 52 Cal.4th 231,
236.) Moreover, as plaintiffs’ complaint
was not dismissed in 2010 because they failed to post the cost bond, the cost
bond order was not an appealable order for them. (See § 1030, subd. (g) [“An order granting or
denying a motion for an undertaking under this section is not appealable.â€].) Failure to raise an appellate
challenge to a cost bond order that did not apply to them and was not
appealable by them did not preclude plaintiffs from subsequently requesting a
waiver of cost bond in the trial court on remand.
Plaintiffs
presented individualized evidence of their indigency and inability to obtain a
cost bond from a surety. It was an abuse
of discretion for the trial court to rule on the motion without reviewing
plaintiffs’ evidence and all other relevant factors under section 995.240.
The
judgment and orders are reversed. Costs
on appeal are awarded to plaintiffs.
KRIEGLER, J.
We
concur:
MOSK, Acting P. J.
O’NEILL, J.
name="_ftn1" title="">[1] Hereinafter, all statutory references
will be to the Code of Civil Procedure, unless noted otherwise.
name="_ftn2" title="">[2] The
court also found the first amended complaint adequately stated causes of action
for conspiracy, intentional torts, and negligence.
