Court of Appeal decision highlights exceptions to five-year statute

Trial counsel are well aware of the five-year statute within which to bring a case to trial after the complaint is filed. Of course, certain exceptions apply, including the time a case is submitted to a court-sponsored mediation program.

Posit this scenario: At a case management conference, counsel inform the court that they have agreed to go to a private mediation instead. The court issues a case management order referring the case to private mediation with a private neutral, pursuant to the parties' agreement, and plaintiffs' counsel files a stipulation signed by all parties agreeing to continue the post-mediation and trial setting conference.

The mediation is unsuccessful. Defendants then move for dismissal based upon the five-year statute. Plaintiffs argue that the time spent in private mediation, pursuant to stipulation and the case management order, should toll the statute. Not so, according to a recent Court of Appeal decision in which the court affirmed dismissal of the entire case, a wage and hour class action.

In Castillo v. DHL Express (USA), 2016 DJDAR 469 (Jan. 24, 2016), truck driver Henry Castillo brought a wage-and-hour class action against KWK Trucking, Inc., and DHL Express in the 2nd District Court of Appeal. The complaint was filed on March 5, 2009. At a regularly scheduled status conference on Sept. 30, 2013, the parties informed the court that they planned to pursue private mediation. The court set a post-mediation and trial setting conference and issued a case management order referring the case to private mediation, per the parties' agreement. The case management order advised the parties that they were within six months of trial.

The plaintiff filed a stipulation signed by all parties continuing the post-mediation and trial setting conference, apparently to provide more time within which to engage in mediation. On Feb. 28, 2014, the parties advised the court that mediation had been unsuccessful.

On April 4, 2014, five years and one month after the complaint was filed, defendants successfully moved to dismiss the action for failure to prosecute within five years. The trial court refused to exclude the time the parties participated in private mediation, which would have tolled the running of the five-year statute and resulted in denial of the motion to dismiss.

California Code of Civil Procedure Section 583.310 provides that, "[a]n action shall be brought to trial within five years after the action is commenced against the defendant." If trial is not commenced by that time, dismissal is mandatory, subject to certain exceptions. Under the civil action mediation program (Civil Code Section 1775 et seq.), courts may order cases into mediation as an alternative to judicial arbitration if the court adopts a civil mediation program. As part of the civil mediation program, participation in a court-sponsored mediation program may extend the five-year period pursuant to Section 1775.7(b).

At issue in this case was whether the case was "submitted to mediation" within the meaning of Section 1775.7 (b), when the parties participated in private mediation, thereby triggering the automatic tolling provision.

Castillo argued that the case was submitted to mediation. Either the court ordered the parties to mediation under California Rule of Court 3.891 (a) (1), or under Rule 3.891(a)(2). Both rules pertain to civil action mediation programs established by the Los Angeles County Superior Court, and in other courts that elect to apply the civil action mediation program act. Rule 3.891 (a) (1) authorizes the court to order parties into mediation in matters where the amount in controversy is under $50,000 and, Rule 3.891(a)(2) involves all other cases if the parties stipulate to mediation.

The appellate court rejected Castillo's argument that the case was "submitted to mediation." The case management order "referred" (not "ordered") the parties to a "private neutral," and not with "court services," then added the handwritten notation: "parties agreement." In addition, the minute order reflected that "[c]ounsel have agreed to private mediation."

After analyzing the statutory language and legislative history, the appellate court concluded that private mediation did not trigger the tolling provisions of Section 1775.7(b). The trial court had not ordered the parties to mediation, nor was there a stipulation between them to mediate the case and bring it within that section. In short, only court-annexed (and not private) mediation tolls the five-year statute.

While the result in this case may seem harsh, it can be easily avoided. If the five-year statute is close to running and the parties wish to engage in private (and not court-annexed) mediation, they can stipulate to toll the five-year statue. Section 583.330 provides that the parties may extend the five-year period within which to bring the case to trial. They may do so by written stipulation or oral stipulation in open court entered in the court minutes or recorded by transcript. In fact, a footnote in the Castillo opinion makes clear that the court's holding should not be construed in any way to limit the parties' ability to stipulate a stay to the proceedings while they pursue mediation. They just cannot rely on the tolling from court-annexed mediations if they engage in private mediation.

Failure to appreciate the difference between a private and court mediation is a pitfall for unwary plaintiff's counsel.

Steven H. Kruis has been a full-time mediator since 2002, and mediated well over 2,000 matters. He currently is with the San Diego Office of ADR Services, Inc. You can reach him at skruis@adrservices.org.