Filed 12/1/15 Yu v. Northland Insurance Co. CA4/3




                      NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication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

                                     FOURTH APPELLATE DISTRICT

                                                DIVISION THREE


BANN-SHIANG LIZA YU,

     Plaintiff and Appellant,                                          G050776

         v.                                                            (Super. Ct. No. 30-2009-00255065)

NORTHLAND INSURANCE                                                    OPINION
COMPANY,

     Defendant and Respondent.



                   Appeal from a judgment of the Superior Court of Orange County, Kim
Garlin Dunning, Judge. Reversed.
                   Mohammed K. Ghods, William A. Stahr, Jeremy A. Rhyne; LEX OPUS
and Eric M. Schiffer for Plaintiff and Appellant.
                   The Aguilera Law Group, A. Eric Aguilera, Raymond E. Brown and
Richard A. Semon for Defendant and Respondent.
                                          *                  *                  *
              Plaintiff Bann-Shiang Liza Yu appeals from a judgment of dismissal under
Code of Civil Procedure sections 583.310 and 583.360 (all further statutory references
are to this code) for failure to bring her claims against codefendant Northland Insurance
Company (Northland) to trial within five years from the date of its filing. She asserts
there was an agreement among the multiple codefendants that commencement of trial as
to one codefendant constituted commencement of trial as to all codefendants. Thus, she
contends, she met the statutory requirements when she tried the first case against one of
the codefendants within the five-year period.
              Plaintiff also argues Northland waived or is estopped from raising the issue
of timeliness based on its own delays, and that trying the case as to all the codefendants
within five years was “impossible, impracticable, or futile.” (§ 583.340.)
              We conclude the parties did agree commencement of trial against one of the
codefendants was commencement of trial against all codefendants, and the case was
timely tried against at least one codefendant within the five-year period. Therefore, we
reverse the judgment.
                        FACTS AND PROCEDURAL HISTORY
              This case arose out of plaintiff’s development of a hotel. Plaintiff alleged
the hotel was poorly constructed and filed a construction defect action against the general
contractor and various subcontractors. As part of settlements with some of the parties to
that underlying action, plaintiff became the assignee of several insurance policies. She
also was a direct beneficiary of other policies.
              On March 25, 2009, plaintiff filed the current action against 18 insurance
companies for declaratory relief, breach of contract and the implied covenant of good
faith and fair dealing, and subrogation and contribution. Thus, barring any exceptions,
the five-year date to try the case was March 25, 2014.
              The trial court determined this action was “complex.” (Cal. Rules of Court,
rule 3.400(a), (c).) Pursuant to the original case management order dated April 12, 2011,

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trials were bifurcated into two phases. Phase I trials were to be court trials as to coverage
under the insurance policies. The original anticipated dates for Phase I trials were in
January or February 2012. The court ordered a hearing in August 2011 to determine
which if any parties were ready to go forward with a Phase I trial. Phase II trials were to
proceed if any party’s issues were not entirely resolved in a Phase I trial.
              In May 2012, plaintiff, Northland, and nine other insurance companies filed
a status conference report (Report) regarding various matters, including which
codefendants planned to bring a summary judgment motion prior to the Phase I trials, the
order of the Phase I trials, and which codefendants did not want to schedule a Phase I trial
at that time. The first Phase I trial was to begin the week of November 5, 2012.
              The Report also stated the following: “The Parties Have Agreed to
Commence Phase [I] Bench Trials With Trial-Related Cut[]Off Dates to Correlate to
Phase [II] (Jury) Trial Date. (Boldface & underscoring omitted.) [¶] The parties
recognize and agree that, pursuant to statute, the commencement of Phase [I] Trial
involving any party is commencement of Trial for the case in general. The parties further
recognize that discovery, law & [sic] motion, and expert designation cutoff dates are
statutorily tied to commencement of trial of the case. Accordingly, the parties wish to
alter the trial[-]related cut[]off dates by agreement and this court’s order thereon. The
parties agree the case shall proceed to [t]rial of Phase [I] issues under the Case
Management Order (“CMO”) and commencement of the trial as between Plaintiff and
any party shall be without prejudice to discovery, law & [sic] motion, and expert
designation cutoff dates which shall only begin to run, under the CMO, in relation to the
trial date(s) for Phase [II] Jury Trial in this matter. The Parties are continuing their meet
and confer to reach an agreement on practical parameters for discovery, law & [sic]
motion, and expert designation cutoff dates in relation to Phase I Trial and will submit a
supplemental report before the hearing to address this issue.” (Italics added; we refer to
this particular portion of the Report as the Stipulation.)

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              Plaintiff and the 10 codefendants who were parties at that time, including
Northland, signed the Report. Plaintiff’s lawyer prepared the first draft of the report and
invited all defense counsel who wished to do so to propose “edits.”
              At a subsequent status conference held on June 27, 2012, the court
scheduled several Phase I trial dates, including Northland’s for March 25 through 26,
2013. The notice of ruling showed that the first Phase I trial, originally set for November
5, 2012, was continued to December 10, 2012. Other trials were set for the end of 2012
through the first half of 2013. The notice provided that cutoffs for law and motion and
discovery did not apply to the Phase I trial dates. Another case management conference
was scheduled for October 3, 2012, with a joint status conference report due September
26, 2012.
              In December 2012, the first Phase I trial was held and judgment was
entered.
              In March 2013, two weeks before its Phase I trial was to begin, Northland
sought to vacate the trial date, stating it was not ready to proceed on the scheduled date.
It had a motion for summary judgment pending as to a coverage issue. But other issues
as to the duty to defend remained. Although the court encouraged Northland to take the
motion off calendar and conduct its Phase I trial to determine all coverage and defense
issues, Northland declined. Nothing in the record shows Northland and plaintiff
conducted a Phase I trial.
              In preparation for a trial setting conference in September 2013, plaintiff
filed a trial setting conference report requesting the court set Phase II jury trials for the
remaining eight codefendants, including Northland, in April or May of 2014.
              In February 2014, at a status conference attended by plaintiff’s lawyer and
some insurance companies, although not Northland, the court asked, “What are we doing
about the five years?” Plaintiff’s lawyer answered, “Everybody’s waived that.” Kevin
G. McCurdy, counsel for three of the insurance companies stated, “Trial’s already

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started.” Plaintiff’s lawyer repeated the same statement. McCurdy amplified, “The trial
may take longer than five years, but we’ve started.” McCurdy’s clients had not begun
their trial; they were scheduled to go to mediation.
              In April 2014, Northland filed a motion for mandatory dismissal pursuant
to section 583.360. The court granted the motion, finding the parties had not waived the
requirement that the case against Northland be tried within five years of being filed.
                                       DISCUSSION
1. Applicable Law
              Section 583.310 provides, “An action shall be brought to trial within five
years after the action is commenced against the defendant.” Otherwise, “An action shall
be dismissed by the court on its own motion or on motion of the defendant, after notice to
the parties.” (§ 583.360, subd. (a).) “The requirements of this article are mandatory and
are not subject to extension, excuse, or exception except as expressly provided by
statute.” (Id., subd. (b).) In calculating the time by which a case must be brought to trial,
the court must exclude time when “(a) The jurisdiction of the court to try the action was
suspended. [¶] (b) Prosecution or trial of the action was stayed or enjoined. [¶] (c)
Bringing the action to trial, for any other reason, was impossible, impracticable, or
futile.” (§ 583.340.)
              Unless otherwise provided by statute or court rule, “the policy favoring the
right of parties to make stipulations in their own interests and the policy favoring trial or
other disposition of an action on the merits are generally to be preferred over the policy
that requires dismissal for failure to proceed with reasonable diligence in the prosecution
of an action in construing the provisions of this chapter.” (§ 583.130; cf. Dowling v.
Farmers Ins. Exchange (2012) 208 Cal.App.4th 685, 694.)
2. Satisfaction of the Five-Year Statute
              The court granted Northland’s motion to dismiss on the ground plaintiff
had not brought the case against Northland to trial within the five-year statutory period

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and there had been no agreement to waive the statutory period. Plaintiff relies on the
Stipulation to argue the contrary. Its first sentence states: “The parties recognize and
agree that, pursuant to statute, the commencement of Phase [I] Trial involving any party
is commencement of Trial for the case in general.” She claims the five-year deadline was
met once the first Phase I trial began, which was before expiration of the statute.
              Northland challenges that interpretation of the Stipulation. It acknowledges
section 583.330, which allows parties to extend the deadline for bringing a case to trial by
a written stipulation or an oral agreement in open court if it is documented in the court’s
minutes or a transcript. But Northland asserts a stipulation must explicitly extend the
time to try the case past the five-year deadline. (Camille Corp. v. Superior Court (1969)
270 Cal.App.2d 625, 628.) And according to Northland, the Stipulation did not meet that
standard for several reasons.
              First, Northland contends, it never agreed to extend the five-year statute.
Instead, it maintains, the purpose of the Stipulation was only to apply to triggering of
discovery and motion cutoff dates to Phase II trials instead of Phase I trials. It also
argues there was no clear intent to extend the five years when the Stipulation was
executed. Its lawyer’s declaration filed in support of the motion states the parties did not
discuss extension of the period when the document was drafted.
              But the declaration by plaintiff’s counsel states the parties understood that,
given the complexity of the case, bifurcation of trials was the most realistic way to
manage the litigation. In addition, the parties contemplated that, given these
circumstances, it was likely the case could not all be tried within the five-year period.
Therefore, he concludes, the parties entered into the Stipulation to extend that period.
              Further, statements at the February 2014 status conference belie
Northland’s contention. In answer to the court’s question, plaintiff’s counsel stated
“[e]verybody’s waived that.” Insurance defense counsel McCurdy did not contradict that
statement. Rather, he added that trial had already started. But his clients’ Phase I trial

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had not yet begun; they had a mediation scheduled. So the context of his statements
shows the understanding that commencement of a Phase I trial against any one
codefendant was commencement of trial against all codefendants.
              Northland argues it did not attend the February 2014 status conference and
thus did not waive the five-year statute there when counsel stated, “[e]verbody’s waived
that.” We do not disagree but that is beside the point. Rather, counsels’ statements were
an explanation or acknowledgement the parties had previously agreed the statute had
already been satisfied because the first Phase I trial had been completed.
              Northland notes that neither plaintiff’s counsel nor McCurdy specifically
stated the parties had stipulated to waive the five-year statute. It contends that had there
been such a waiver counsel “would have said exactly that.” Despite the fact there must
be an explicit agreement to extend the five-year period, no magic words are necessary.
              It is true there was no stipulation explicitly stating the the five-year statute
was extended. Nonetheless, by executing the Stipulation, where they agreed trial as to
one party was trial as to all, they agreed that once a Phase I trial began, section 583.310
was satisfied. The effect was that any remaining trial beginning after what would have
been expiration of the five-year statute would be timely under that section.
              Northland also contends the Stipulation does not contain any language
stating the rights of one party are affected by another’s. Not so. The first sentence of the
Stipulation states that “commencement of Phase [I] trial involving any party is
commencement of Trial for the case in general.” (Italics added.) The italicized phrase
can only refer to the trials against the other codefendants. Otherwise the entire sentence
is surplusage and there was no reason to have included it. (In re Tobacco Cases I (2010)
186 Cal.App.4th 42, 49 [agreement must be interpreted to avoid surplusage].) That
sentence itself has nothing to do with discovery and law and motion cutoff dates.
              Further, the Stipulation provides that the agreement commencement of one
Phase I trial is commencement of trial for the entire case is made “pursuant to statute.”

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There is no logical explanation as to what statute could apply to this part of the
Stipulation other than section 583.110 et seq.
              In addition, the second sentence of the Stipulation begins, “The parties
further recognize that discovery, law & [sic] motion, and expert designation cutoff dates
are statutorily tied to commencement of trial of the case,” thus signifying that the next
portion of the sentence that mentions discovery and law and motion cutoffs is a different
topic.
              Northland points to the title of the Stipulation, “The Parties Have Agreed to
Commence Phase [I] Bench Trials With Trial-Related Cut[]Off Dates to Correlate to
Phase [II] (Jury) Trial Date.” (Boldface & underscoring omitted.) This shows, Northland
argues, the Stipulation applied only to the parties’ agreement that discovery cutoffs
would be extended. But despite the title, the substance of the first sentence of the
Stipulation is broader. And the fact the Stipulation goes on to discuss law and motion
and discovery issues does not limit the applicability or meaning of the agreement in the
first sentence of the Stipulation. To hold otherwise would improperly render the first
sentence of the stipulation meaningless. (Kavruck v. Blue Cross of California (2003) 108
Cal.App.4th 773, 783 [contract may not be interpreted so as to make provision
meaningless].)
              In a related argument, Northland posits a general rule that each party is
entitled to have the claims against it tried within the statutory five-year period, citing,
among other cases, Lane v. Newport Bldg. Corp. (1986) 176 Cal.App.3d 870, 874-875.
We need not discuss that principle because, in any event, the parties agreed otherwise in
the Stipulation.
              Since we reverse on this basis we have no need to discuss either estoppel or
waiver under section 583.140 or whether it was impossible, impracticable or futile for
plaintiff to try her case against Northland.



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              In sum, consistent with the policy favoring trial on the merits, we conclude
the parties agreed in the Stipulation that for purposes of the five-year statute set out in
section 583.310, commencement of a Phase I trial was commencement of trial against
any codefendant. Thus, the five-year statute was satisfied when the first Phase I trial
occurred.
                                       DISPOSITION
              The judgment is reversed and the case remanded for the superior court to
deny Northland’s motion to dismiss. Plaintiff is entitled to costs on appeal.



                                                   THOMPSON, J.

WE CONCUR:



MOORE, ACTING P. J.



ARONSON, J.




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