Opinion
B324617 B327504
09-20-2024
DAVID DREXLER et al., Plaintiffs, Cross-defendants, and Respondents, v. GERALD OWEN RYCKMAN et al., Defendants, Cross-complainants, and Appellants.
Jonathan Lee Borsuk PC and Jonathan Lee Borsuk for Defendants, Cross-complainants, and Appellants. Krane & Smith and Daniel L. Reback for Plaintiffs, Cross-defendants, and Respondents.
NOT TO BE PUBLISHED
APPEALS from an order and a judgment of the Superior Court of Los Angeles County, No. LC103510 consolidated with No. 18VECV00361 J. Stephen Czuleger, Judge. Reversed and remanded.
Jonathan Lee Borsuk PC and Jonathan Lee Borsuk for Defendants, Cross-complainants, and Appellants.
Krane & Smith and Daniel L. Reback for Plaintiffs, Cross-defendants, and Respondents.
WEINGART, J.
In this appeal, we revisit the legal saga between attorney David Drexler and his former office manager, Gerald Owen Ryckman, this time to determine whether the trial court properly dismissed Ryckman's claims against Drexler pursuant to Code of Civil Procedure sections 583.310 and 583.360 for Ryckman's failure to bring them to trial within five years.
All subsequent unspecified statutory citations are to the Code of Civil Procedure.
Among other things, Ryckman argues the trial court erred because a prior trial of bifurcated claims relating to partition of real property-which did begin within the five-year statutory period-served to commence trial on the entire case such that the five-year statute was satisfied. As we describe below, we agree with that assertion and reverse.
BACKGROUND
A. Events Giving Rise to the Partition Action
We derive our factual summary concerning the events giving rise to the partition action from our prior opinion, Drexler v. Ryckman (June 26, 2023, B316564) (nonpub. opn.). On our own motion, we take judicial notice of the register of actions in superior court case No. LC103510; the docket, pleadings, record, and our opinion in Ryckman v. Superior Court (June 27, 2019, B294148 (nonpub. opn.); and the docket, briefing, record, and our opinion in Drexler v. Ryckman, supra, B316564. (Evid. Code, § 452, subd. (d); Epic Communications, Inc. v. Richwave Technology, Inc. (2015) 237 Cal.App.4th 1342, 1347, fn. 3 [" 'a court may take judicial notice of the contents of its own records' "], quoting Dwan v. Dixon (1963) 216 Cal.App.2d 260, 265; Deschene v. Pinole Point Steel Co. (1999) 76 Cal.App.4th 33, 37, fn. 2 [sua sponte taking judicial notice of unpublished prior opinion].)
In 1978, Drexler began working at a law firm where Ryckman was a legal assistant and office manager. In 1985, Drexler started his own firm, the Law Office of David Drexler (Firm), and recruited Ryckman to work with him. Drexler considered Ryckman to be more like a consultant than an employee and paid Ryckman the same amount as he paid himself based upon the Firm's profits. (Drexler v. Ryckman, supra, B316564.)
In 2002, Drexler used the Firm's funds for a downpayment to purchase an office building from which to operate the Firm's business (Property). Drexler vested title of the Property equally between Ryckman and himself. It is undisputed that upon purchase, the Drexlers' and Ryckmans' family trusts owned the Property equally. (Drexler v. Ryckman, supra, B316564.)
After purchasing the Property, Drexler continued to compensate Ryckman as before and paid all expenses for the Property, including building maintenance, improvements, and the mortgage out of the Firm's accounts. Two tenants rented office space in the Property, and Drexler split the third-party rents evenly between Ryckman and himself. (Drexler v. Ryckman, supra, B316564.)
According to Ryckman, when he and Drexler started the Firm, Drexler did not have money to pay him. Rather than receive a salary, Ryckman wanted Drexler to pay him what Drexler believed was the reasonable value of his services. Ryckman and Drexler orally agreed that they would be equal partners, equally share in the profits of the Property, equally participate in the management and control of the Property, and jointly make all decisions regarding the Property. (Drexler v. Ryckman, supra, B316564.)
Ryckman ceased working for the Firm on August 10, 2015. Drexler and Ryckman dispute whether Ryckman left voluntarily, or Drexler fired him after learning that Ryckman was suffering from bladder cancer. (Drexler v. Ryckman, supra, B316564.)
B. Procedural History
The procedural history of the disputes between Ryckman and Drexler is both multifaceted and protracted. We summarize only those portions relevant to the issues before us.
1. Complaint in Case No. LC103510
On November 2, 2015, Drexler and his wife Laura Drexler, as trustees of the Drexler Trust, filed a verified complaint against Ryckman and his wife, Judith Lorraine Ryckman, as trustees for the Ryckman Trust, for partition of the Property and recovery of half the Property's operating expenses and mortgage payments. To avoid confusion, we refer to this case by its case number, LC103510.
2. Cross-complaint in Case No. LC103510
On March 14, 2016, Ryckman and Judith, individually and as trustees of the Ryckman Trust (together, the Ryckmans), acting in propria persona, filed a verified cross-complaint against Drexler and Laura, individually and as trustees of the Drexler Trust, the Firm (together, the Drexlers), and a third-party tenant. The cross-complaint alleged 19 causes of action, including breach of contract, fraud, financial elder abuse, equitable set off, quiet title, and declaratory relief. The cross-complaint asserted the Ryckmans were owed approximately $3.8 million relating to the Property including amounts for unpaid rent, the value of Ryckman's services in remodeling the Property, and the alleged enhanced value of the Property resulting from the remodel. The cross-complaint also attached four handwritten notes as exhibits and stated, "At the time of Ryckman's termination, Drexler owed Ryckman approximately $6.5 million. Attached . . . are copies of a series of documents authored and handwritten by David Drexler wherein he . . . acknowledge[d] owing Ryckman millions of dollars for services performed by Ryckman at the request and direction of Drexler. The last acknowledgement of monies owed Ryckman was prepared by Drexler in 2014. In that document Drexler acknowledge[d] owing Ryckman $5 [m]illion." (Capitalization omitted.) Additionally, some of the Ryckmans' causes of action incorporated wages as alleged damages. For example, the cause of action for equitable set off sought $8 million as monies the Firm owed to Ryckman not only for rent, but for services Ryckman rendered at Drexler's direction. The cause of action to quiet title alleged the parties agreed the Property would act as security for the Drexlers' debt to Ryckman for $6 million in unpaid wages and was evidenced by the handwritten notes.
The parties dispute whether the figure stated in the August 5, 2014 promissory note is $5,000,000 or $3,000,000.
We recite the figures used by the parties but recognize that they do not appear to reconcile.
3. First Amended Cross-complaint in Case No. LC103510
On August 2, 2016, the Ryckmans, now represented by counsel, filed a first amended cross-complaint, alleging 11 causes of action. Each claim was based upon the Drexlers' failure to pay rent, the value of Ryckman's services in remodeling the Property, or for the enhanced value of the Property to the Ryckmans, or the Drexlers' breaches of duties relating to the "partnership business that included the purchase, management and maintenance of the [Property]." The first amended cross-complaint did not attach the handwritten notes reflecting the alleged promises to pay Ryckman and did not refer to unpaid wages. However, the Ryckmans alleged the Drexlers improperly comingled monies due to Ryckman with the Firm's and the partnership's monies.
4. Case No. BC645026: Complaint Alleging Employment Claims
On December 27, 2016, Ryckman, represented by counsel, filed a separate lawsuit entitled, Ryckman v. Drexler, case No. BC645026, against Drexler and Drexler doing business as the Firm for employment-related claims of age-based discrimination, medical condition-based discrimination, failure to prevent discrimination, wrongful termination, failure to pay all wages, failure to pay minimum or overtime wages, failure to provide wage statements, intentional infliction of emotional distress, breach of written contract(s), breach of oral contract, and unfair competition under Business and Professions Code section 17200 et seq.
Ryckman alleged he was misclassified as an exempt employee, and instead of Drexler paying Ryckman a regular wage, Drexler provided Ryckman with handwritten "promissory notes reflecting the value of [Ryckman]'s services on the cases he worked on while employed by Drexler and the [Firm]." The complaint identified the same four promissory notes as those that had been attached to the original cross-complaint in LC103105. Later, in opposition to the Drexlers' motion for summary judgment, Ryckman would acknowledge that each note superseded the prior one. Thus, we describe only the fourth and most recent promissory note, dated August 5, 2014, which stated, "This will confirm that the Law Offices of David Drexler owe Gerald Ryckman $5,000,000 for services rendered on cases." Ryckman prayed for, among other things, "all lost wages." The complaint did not allege Drexler and Ryckman had formed a partnership.
On February 8, 2017, the trial court related case Nos. LC103510 and BC645026.
5. Second Amended Cross-complaint in Case No. LC103510 and Dismissal of Case No. BC645026
On June 29, 2017, the trial court (Judge Frank J. Johnson) heard the Drexlers' demurrer to the BC645026 complaint, which argued the claims therein were compulsory cross-claims that should have been filed in the LC103510 action. The court stayed its ruling on the demurrer to allow Ryckman to file a motion for leave to file a second amended cross-complaint in the LC103510 action, which the court granted. It then sustained Drexler's demurrer to the BC645026 complaint without leave to amend because "[a]ll of Ryckman's claims [therein] are now incorporated into the [second] amended cross[-]complaint in LC103510."
On November 26, 2018, the trial court entered a judgment of dismissal as to BC645026 that stated, "All of Mr. Ryckman's claims are incorporated into the [second] am[ended] cross-complaint in LC103510."
The Ryckmans' second amended cross-complaint alleged causes of action relating to the Property for breach of contract and partition as well as employment-based causes of action for age-based and medical condition-based discrimination, failure to prevent discrimination, wrongful termination, failure to pay all wages, failure to pay minimum or overtime wages, failure to provide wage statements, breach of the four handwritten promissory notes, breach of oral contract, and unfair competition.
6. Third Amended Cross-complaint in Case No. LC103510
On September 28, 2017, the trial court (Judge John J. Kralik) sustained the Drexlers' demurrer to the Ryckmans' cause of action for failure to pay all wages with leave to amend. The court observed, "The allegation that Mr. Drexler is owed millions of dollars for work 'on cases' conflicts with the portrayal of him as an hourly non-exempt worker who would normally be paid by the hour.... The alleged contracts themselves seem[ ] at odds with the notion that Mr. Ryckman was a wage earner paid by time or piece work."
On October 6, 2017, the Ryckmans filed a third amended cross-complaint (TAXC) alleging the same 13 causes of action as did their second amended cross-complaint. As to the causes of action for failure to pay all wages and for failure to pay overtime wages, the TAXC alleged Ryckman was paid by task, piece, or other method of calculation that did not render him an exempt employee.
On December 13, 2017, the court sustained the Drexlers' demurrer to the Ryckmans' cause of action for failure to pay all wages without leave to amend. The court reasoned that the "allegations reveal that he was not a worker who was paid in a manner contemplated by the Labor Code provisions on which he relies. As Mr. Ryckman now confirms, he did not receive a regular 'rate of compensation.' . . . [¶] Mr. Ryckman's other causes of action more than adequately address his other theories of monies owed."
On October 17, 2018 and November 6, 2018, the trial court (Judge Elaine W. Mandel) granted summary adjudication in favor of the Drexlers as to Ryckman's cause of action for breach of contract relating to the promissory notes (which we refer to hereafter as the 11th cause of action) as well as his causes of action for failure to pay minimum wage, failure to pay overtime, failure to provide itemized wage statements, and unfair competition.
On December 3, 2018, Ryckman filed a petition for writ of mandate challenging the trial court's ruling as to the 11th cause of action.
7. Complaint in Case No. 18VECV00361
On December 26, 2018, Ryckman, acting in propria persona, filed a new lawsuit against Drexler and the Firm for breach of contract and fraud relating to a fifth "promissory note." (Ryckman v. Drexler, case No. 18VECV00361.) Ryckman alleged that in 1985, because Drexler did not have the money to pay Ryckman a traditional salary, Drexler promised to employ Ryckman as long as Ryckman wished to work and to pay Ryckman on a merit basis. Ryckman alleged that in December 2014, Drexler gave Ryckman a document, entitled "Proposed Salary at Year End," stating that Ryckman's salary was approximately $1 million, but after deducting taxes, other standard withholdings, and adjustments for amounts Ryckman owed the Firm (including charges on an office credit card and a $175,000 final mortgage payment for the Property), Drexler determined Ryckman's year-end salary to be approximately $326,000. Ryckman alleged these wages related to his work on a case called Sedighan v. Luckman. Ryckman alleged Drexler breached the note by not paying Ryckman $1 million for his 2014 year-end salary and fraudulently withholding amounts that Drexler allegedly "pocketed" for himself. Ryckman further alleged he did not know of or have reason to discover Drexler's fraudulent conduct until July 2018. Ryckman prayed for, among other things, damages, "including all lost wages," and a judgment "of the sums of money . . . expended in maintaining and preserving the [Property] for the benefit of both [Ryckman] and [Drexler]."
8. The Ryckmans' Motions to Bifurcate and Consolidate and the Drexlers' Demurrer to the Case No. 18VECV00361 Complaint
On March 18, 2019, the Ryckmans moved to bifurcate the trial of the partition claims, including their claim for rent, from Ryckman's employment, contract, and fraud claims so that the Property could be more expeditiously sold. The Ryckmans also moved to consolidate LC103510 with 18VECV00361. They argued that both actions included claims for payment on notes that Drexler had provided to Ryckman for past work Ryckman had performed, and thus, included, among other things, the same parties, fact pattern, witnesses, evidence, and issues of law.
On May 16, 2019, Drexler demurred to the complaint in 18VECV00361. He argued that the 18VECV00361 case "improperly attempts to reassert causes of action that were adjudicated summarily in the [sic] LC103510 in Drexler's favor." Drexler further argued the 18VECV00361 case had only recently begun, that motion practice might resolve it, and claimed that "[r]esolution of the [11th] cause of action in the LC103510 [case] (currently submitted to the Court of Appeal by way of writ) would act as res judicata for the claims of the 18VECV00361 case."
The Drexlers opposed the Ryckmans' motion to consolidate, in part, based on claims the Ryckmans sought consolidation to delay trial and obtain discovery they could not obtain in LC103510. As to the motion to bifurcate, the Drexlers argued that "given the intertwined nature of the partition issues with the other issues raised in the Ryckmans' cross-complaint (namely the entire 40[-plus-]year business relationship between the Ryckmans and the Drexlers) bifurcation would cause delay and inefficiency, would inconvenience the witnesses, would cause prejudice, and would not promote justice. To the contrary, bifurcation would require essentially duplicate trials of duplicate factual issues."
On July 11, 2019, the trial court (Judge Shirley K. Watkins) heard argument on the motions to bifurcate and to consolidate as well as Drexler's demurrer to Ryckman's complaint in 18VECV00361. The record on appeal includes only portions of the transcript of that hearing. Preliminarily, the trial court stated its view that 18VECV00361 "basically is just a restatement of the same claims with different titles on-that the LC103510 case is. In fact, it is-attache[d] the same evidence. It talks about the same chronology. It appears to me, essentially, just with different captions for the causes of action, the same case." The court observed that the causes of action in the 18VECV00361 matter were for "the same pot of money based upon the same theory [as in LC103510], which is that [Drexler] was supposed to do certain things and pay certain things, and he didn't pay those things and he didn't do those things, and now he owes you money for it." "[Ryckman] . . . already [alleged] a failure to pay all wages[, . . . breach of written contract and breach of oral contract in the [TAXC] where [he] allege[d] that [Drexler] owes [him] money for wages, of which this document that [he] attached to the new complaint are part of those wages. They're already an element of [Ryckman's TAXC]." Thus, the court indicated it would sustain the demurrer to the l8VECV0036l complaint.
In the portions of the transcript in the record, no one advised the court that Ryckman's cause of action for all wages had been dismissed following a demurrer on December 13, 2017.
Later that day, Judge Watkins issued a written ruling. The trial court overruled Drexler's demurrer to the complaint in 18VECV00361. It explained, "While it is true that the court indicated at [the] hearing that it would sustain the demurrer to the [f]irst [c]ause of [a]ction for breach of contract on the grounds that the Ryckmans are splitting a cause of action, the Ryckmans are not barred from filing a motion to amend the [TAXC]." Thus, "in the furtherance of justice and as a way of saving the parties additional fees and the court further time and preparation, the court overrule[d] the demurrer and . . . consolidate[d] the cases." "Both cases are consolidated for all purposes under the LC103510 case number." "All future documents must be filed under LC103510 .... Case numbers on all subsequent filings should be reflected under the lead case. [¶] There shall be no further filings under the 18VECV00361 case number." It further ruled, "Because the court finds that the allegations of [case No.] 18VECV00361 could be pleaded in an amended cross-complaint because all of the issues are related, and because discovery is already cut-off in the lower . . . number[ed] case, the court will limit discovery . . . to the allegations contained in the 18VECV00361 case." It ordered Drexler and the Firm "to answer the complaint in the 18VECV00361 case within 20 days."
As to bifurcation, the trial court ruled that the partition claims were equitable, to be tried by the court and not a jury, and thus, those claims "will be tried to the court first and the jury trial on the remaining legal issues and for damages in the complaint and [TAXC] will be tried immediately following the partition trial."
9. Peremptory Writ of Mandate
On June 27, 2019, this court issued a peremptory writ of mandate directing the trial court to vacate its November 6, 2018 order granting the Drexlers' motion for summary adjudication of the Ryckmans' cause of action for breach of a written contract and to issue a new and different order denying the same. That same day, Judge Watkins did so. Thus, Ryckman's claim concerning the first through fourth promissory notes was reinstated.
The Drexlers state, and the Ryckmans do not dispute, that the action was stayed for a total of 404 days, 206 of which were the days between the December 3, 2018 petition for writ of mandate and this court's issuance of a peremptory writ on June 27, 2019. However, a writ petition does not automatically stay trial court proceedings. (See In re Brandy R. (2007) 150 Cal.App.4th 607, 610.) The record does not indicate that the trial court stayed proceedings in LC103510 at this time. Nor did this court. Although the Ryckmans petitioned this court to issue a stay of the trial court proceedings because the trial was currently scheduled for April 29, 2019, the Drexlers opposed that request, noting they agreed to apply, ex parte, to the trial court to continue the trial. On June 27, 2019, the same day we issued our peremptory writ of mandate, this court denied the request for stay as moot.
10. First Amended Complaint in Case No. 18VECV00361
Although the LC103510 and 18VECV00361 actions were consolidated under LC103510, and case No. 18CECV00361 was ordered to be no longer used, the trial court and the parties continued to refer to both case numbers. We accordingly do the same for the sake of clarity. On August 30, 2019, the Drexlers moved for judgment on the pleadings concerning the 18VECV00361 complaint. They argued the second cause of action for fraud was insufficiently pleaded and merely a restatement of Ryckman's breach of contract claim based upon Drexler's alleged breach of promise to pay. On October 21, 2019, Judge Watkins granted the motion and gave the Ryckmans leave to amend their complaint.
On December 9, 2019, Ryckman filed a first amended complaint (FAC) in 18VECV00361. He again alleged that he and Drexler had agreed he would be paid the amount described on the "Proposed Salary at Year End" document. He further alleged the approximately $1 million figure reflected Ryckman's services relating to Sedighan v. Luckman. Additionally, he claimed that the amount between the third and fourth promissory notes dated September 2013 and August 2014, respectively, had increased by $2 million to reflect his work on Sedighan v. Luckman and another case.
As a result of the COVID-19 pandemic, Emergency Rule 10 extended the time limit under section 583.310 for civil actions filed on or before April 6, 2020 to be brought to trial by six months. (Cal. Rules of Court, appen. I, Emergency rule 10(a).)
11. Trial and Appeal of the Partition Claims
The bench trial of the partition claims (Judge J. Stephen Czuleger presiding) began on August 10, 2021. The testimony and evidence presented during that trial are described in our opinion Drexler v. Ryckman, supra, B316564. Relevant here is that at trial, Ryckman attempted to introduce the promissory notes into evidence. Drexler objected that the notes were irrelevant. The trial court agreed, observing to Ryckman, "You have to tell me what the relationship was, vis-a-vis, this building. This is nothing more than a partition action dividing up the [P]roperty and deciding if there was money that goes back and forth between the [P]roperty. Your employment relationship is of no concern to us at this time. That's the second phase of the trial. Let's talk about the building."
On August 13, 2021, Judge Czuleger provided a detailed oral ruling. As relevant here, the trial court found the Drexler Trust and the Ryckman Trust were each 50 percent owners of the Property, there had been a de facto partnership between Drexler and Ryckman, and "that the [r]eal Property was a part but not the entirety of that partnership." The trial court explained that Drexler and Ryckman "had a business relationship that predated the ownership of the [P]roperty in 2002; that as a part of that business relationship that they were engaged in, they chose to purchase a piece of property to operate that business relationship out of." "They operated the Property together until 2015, when Mr. Ryckman, for reasons that are still unknown, left the business relationship. That did not divest him of his one-half interest in the . . . Property. But it ended the business relationship, the de facto partnership that existed between Mr. Drexler and Mr. Ryckman."
The court ruled the Drexlers and the Ryckmans were each responsible to pay half of the Property's operating expenses, as well as half the costs of the partition action, including attorney fees; the court further awarded prejudgment interest on these amounts. The court denied the Drexlers' claim that they were entitled to credit for half the payoff amount of the mortgage, which totaled $250,783.06, noting it was "clear that that mortgage was paid out shortly after Mr. Ryckman left the business relationship with Mr. Drexler . . . [from] a fund which had been used, in large part, by both parties to pay each other for any-since at least 2002.... Mr. Ryckman would have received that money as a part of a distribution. So therefore, he has [already] paid his portion of the mortgage."
On August 23, 2021, the Drexlers lodged a proposed judgment. It stated, in relevant part, "A de facto partnership existed between David Drexler and Gerald Ryckman, the [Property] was a part but not the entirety of the de facto partnership, which predated the acquisition of the [Property] in 2002, and also included the operation of the Law Offices of David Drexler. As part of their de facto partnership, David Drexler and Gerald Ryckman chose to purchase the [Property] to operate their de facto partnership out of.... From the date the [Property] was acquired until August 10, 2015, when Mr. Ryckman chose to leave the de facto partnership, Mr. Drexler and Mr. Ryckman operated the [Property] together. Mr. Ryckman's voluntary departure from the de facto partnership on August 10, 2015 did not divest the Ryckman Trust of its ownership interest in the [Property], but it ended the de facto partnership between Mr. Drexler and Mr. Ryckman."
On September 2, 2021, the Ryckmans filed written objections to the findings of fact and conclusions of law contained in the proposed judgment, arguing many did not reflect what the trial court stated on the record. Among other things, Ryckman objected that the court's ruling did not include that the de facto partnership "included the operation of the Law Offices of David Drexler," that Ryckman "chose to leave the [de facto] partnership," or that Ryckman "voluntary[ily] depart[ed] from the de facto partnership." On September 17, 2021, the trial court overruled those objections and entered the proposed interlocutory judgment provided by the Drexlers.
On November 15, 2021, the Ryckmans appealed the interlocutory judgment concerning the partition claims pursuant to section 904.1, subdivision (a)(9). The appeal included an argument that the trial court erred in overruling Ryckman's objections to statements in the judgment that were beyond the scope of the trial court's findings. (Drexler v. Ryckman, supra, B316564.)
On February 2, 2022, the Ryckmans applied ex parte to continue trial of the remaining claims. Ryckman explained that due to his cancer treatment, he needed to hire an attorney to represent him during trial. The Drexlers objected to a continuance. According to the portion of the hearing transcript included in the record, the court scheduled the trial setting conference for April 2022, but Ryckman asked that the court continue it to May 2022, after his treatment. The record does not indicate which date the court ultimately selected.
On June 26, 2023, we affirmed the trial court's judgment as to the partition-related claims. However, we found merit to "two [of the] objections concerning Ryckman's departure from the de facto partnership. In particular, the judgment state[d] . . . that 'Ryckman chose to leave the de facto partnership' and . . . that 'Mr. Ryckman's voluntary departure from the de facto partnership on August 10, 2015 did not divest ....' The court found Drexler and Ryckman 'operated the Property together until 2015, when Mr. Ryckman, for reasons that are still unknown, left the business relationship.' In other words, the trial court did not determine whether Ryckman's departure was voluntary or not. Because the cause of Ryckmans' departure may be relevant to his claim for wrongful termination (the resolution of which may not yet be final), these statements should be corrected. Accordingly, we will remand for the limited purpose that the trial court replace the phrase 'chose to leave' . . . with 'left' and strike the word 'voluntary.'" (Drexler v. Ryckman, supra, B316564.)
12. The Drexlers' Motions to Dismiss for Violation of the Five-year Rule
a. First Motion to Dismiss
In May 2022, the Drexlers moved to dismiss "this action" pursuant to sections 583.310 and 583.360 for failure to bring the matter to trial within five years. Ryckman opposed the motion.
On June 24, 2022, the trial court heard argument on the Drexlers' motion to dismiss. It observed the BC645026 complaint was dismissed in November 2018, and judgment in LC103510 was entered in September 2021. Thus, the court believed all that remained were Ryckman's claims against Drexler and the Firm in the case formerly numbered 18VECV00361. The complaint in 18VECV00361 had been filed on December 26, 2018, and the court found that once one accounted for tolling as a result of the emergency rules, the five-year statutory period for trial commencing would not run for another two years. Counsel for both parties then sought clarification about the remaining claims in LC103510, and the court stated it believed the only thing before it was "whether the 18VEC[00361] case has expired due to the five-year rule." That same day, the trial court issued a minute order denying the motion to dismiss.
b. The Second Motion to Dismiss
On July 6, 2022, the Drexlers filed a motion to dismiss the TAXC filed in LC103510 and for clarification of the June 24, 2022 minute order. They did not seek to challenge the trial court's ruling denying dismissal of the causes of action in 18VECV00361. They instead argued the Ryckmans' original March 14, 2016 cross-complaint in the LC103510 action "alleg[ed] facts that form the basis of their employment law and contract causes of action" and that the Ryckmans' later amendments of those claims related back to their original cross-complaint. The Drexlers sought "a definitive ruling that the operative [c]ross-[c]omplaint in [LC103510] . . . is subject to mandatory dismissal under [sections] 583.310 [and] 583.360, even if the 18VECV00361 [c]omplaint remains."
The Ryckmans opposed the Drexlers' motion as an improper request for reconsideration. They further argued that because LC103510 and 18VECV00361 were consolidated and Judge Watkins had determined the allegations in 18VECV00361 could have been pleaded as an amended cross-complaint, the five years should be calculated from the date the complaint was filed in 18VECV00361, which was December 26, 2018. The Ryckmans also argued the partition trial, which the trial court had acknowledged would "affect the issues in the jury trial on damages," constituted a partial trial of the claims in LC103510 and, thus, section 583.310 no longer applied as trial had commenced.
At an August 12, 2022 hearing, the trial court granted the second motion to dismiss. It found the motion did not seek reconsideration. Further, the court found trial had not begun because "the resolution of the partition action had no relation to the claims in the [TAXC], which only addressed employment issues."
13. Motion for Judgment on the Pleadings
On November 1, 2022, Drexler and the Firm filed a motion for judgment on the pleadings as to the claims in the FAC in 18VECV00361. They argued the causes of action alleged therein were a combination of compulsory cross claims that should have been brought in LC103510 or repetitive of claims that were in fact asserted in the TAXC in that case. Drexler and the Firm argued that in 2019, rather than consolidate the two actions, the trial court should have sustained the demurrer to the 18VECV00361 complaint and ordered the Ryckmans to amend the TAXC to incorporate those claims: "By ordering consolidation, the court blurred, conflated, and obfuscated the [five-]year statutory deadline to try those claims; the unintended consequence of the consolidation order was to appear to add time beyond the [five-]year deadline (plus tolling), when that was not warranted or intended."
In opposition, the Ryckmans argued the motion was an improper attempt to revisit the trial court's July 11, 2019 order overruling the Drexlers' demurrer, in violation of section 438, subdivision (g), which prohibits granting a motion for judgment on the pleadings if the court overruled a demurrer on the same grounds.
At a January 13, 2023 hearing, the trial court granted the motion. It observed, "The causes of action brought in [18VECV00361] are related to the causes of action in the earlier [TAXC]. Both complaints allege Drexler recruited and hired Ryckman to assist Drexler in building his law firm. Both complaints allege Drexler fired Ryckman despite promising to employ Ryckman for as long as Ryckman wanted. Both complaints allege at various times of Ryckman's employment, Drexler could not afford to pay Ryckman the full wages he was owed, so Drexler instead gave Ryckman handwritten promissory notes memorializing Drexler's debt to Ryckman. Most notably, both complaints assert causes of action for breach of written contract based on Drexler's failure to satisfy the handwritten promissory notes." Because "the instant lawsuit is inextricably linked to an earlier dismissed action" as to which the five-year statute had run, "the instant action, 18VECV00361, must suffer the same fate as its related sibling LC103510. Therefore, the Drexlers' motion for judgment on the pleadings should be granted." On January 27, 2023, the trial court entered judgment in the Drexlers' favor.
On October 25, 2022, the Ryckmans filed a notice of appeal from the trial court's order granting the Drexler's motion to dismiss the TAXC in case No. LC103510, initiating appellate case No. B324617. On February 27, 2023, Ryckman filed a notice of appeal from the January 27, 2023 judgment in appellate case No. B327504. On November 16, 2023, we granted the Ryckmans' motion to consolidate the appeals for all purposes.
DISCUSSION
A. General Legal Principles and Standard of Review
Section 583.310 requires an action to be brought to trial within five years after it commenced. "The statute serves to 'prevent[ ] prosecution of stale claims where defendants could be prejudiced by loss of evidence and diminished memories of witnesses [and] to protect defendants from the annoyance of having unmeritorious claims against them unresolved for unreasonable periods of time. [Citations.]' [Citation.]" (Sagi Plumbing v. Chartered Construction Corp. (2004) 123 Cal.App.4th 443, 447 (Sagi).) Section 583.310 applies separately to complaints and cross-complaints. (See General Motors Corp. v. Superior Court (1966) 65 Cal.2d 88, 93 [interpreting § 583, predecessor to § 583.310].) Thus, for a cross-complaint, the clock for the five-year period begins to run on the date the cross-complaint is filed. (Tomales Bay etc. Corp. v. Superior Court (1950) 35 Cal.2d 389, 393-394.)
If an action is not brought to trial within the five-year period, dismissal of the action is mandatory and "not subject to extension, excuse, or exception except as expressly provided by statute." (§ 583.360, subds. (a), (b).) "In computing the time within which an action must be brought to trial . . ., there shall be excluded the time during which any of the following conditions existed: [¶] (a) The jurisdiction of the court to try the action was suspended[;] [¶] (b) Prosecution or trial of the action was stayed or enjoined[;] [or] [¶] (c) Bringing the action to trial, for any other reason, was impossible, impracticable, or futile." (§ 583.340.) "It is the policy of the state that a plaintiff shall proceed with reasonable diligence in the prosecution of an action but that all parties shall cooperate in bringing the action to trial or other disposition. Except as otherwise provided by statute or by rule of court adopted pursuant to statute, 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.) "Accordingly, the tolling provisions of . . . section 583.340 must be liberally construed consistent with the policy favoring trial on the merits." (Dowling v. Farmers Ins. Exchange (2012) 208 Cal.App.4th 685, 693.)
"A trial court's dismissal of an action for failure to prosecute under section 583.310 is generally reviewed for abuse of discretion. [Citation.] However, proper interpretation of statutes and court rules are issues of law, and in such instances we review the trial court's decision de novo. [Citations.]" (Barron v. Santa Clara County Valley Transportation Authority (2023) 97 Cal.App.5th 1115, 1123-1124; see Munoz v. City of Tracy (2015) 238 Cal.App.4th 354, 358 ["We independently review a ruling on a motion to dismiss for failure to bring an action to trial within the five-year period provided by section 583.310 to the extent the ruling is based on an interpretation of the statute"].)
Ryckman argues that when the facts are undisputed, our review is de novo. We need not address this argument because we reach the same result whether our review is de novo or for an abuse of discretion.
B. The Partition Trial Was a Partial Trial of the Remaining Causes of Action
As noted above, the trial court consolidated the LC103510 and 18VECV00361 actions for all purposes and ordered that all future filings and proceedings were to take place under the LC103510 case number. Thus, "the two actions [were] merged into a single proceeding under one case number" and could "result in only one verdict or set of findings and one judgment." (Hamilton v. Asbestos Corp. (2000) 22 Cal.4th 1127, 1147.) Trial then later timely commenced on a portion of the claims in the consolidated action concerning partition, with the remaining claims to be tried thereafter.
Section 583.310" 'only requires that the action be brought to trial within the five-year period, and places no limitation upon when the trial shall be completed.' [Citation.] Thus, once trial commences, the statute no longer applies, 'even though the proceedings amount only to a partial hearing. [Citation.]' [Citations.]" (In re Marriage of Macfarlane & Lang (1992) 8 Cal.App.4th 247, 253-254 (Macfarlane).) "[R]ecognizing it would be impossible to identify every situation in which a mechanical application of Code of Civil Procedure section 583 [predecessor statute to current sections 583.310 and 583.360] would produce injustice, . . . the statute must be applied in light of all the circumstances in the individual case, including the acts and conduct of the parties and the nature of the proceedings themselves." (General Motors Corp. v. Superior Court, supra, 65 Cal.2d at p. 96.)
Relying on Macfarlane, supra, 8 Cal.App.4th 247, Ryckman argues that the trial of the partition claims, which started on August 10, 2021, served as a partial trial of his remaining claims, thereby satisfying the five-year rule under section 583.310. On the other hand, the Drexlers argue that here, as in Sagi, supra, 123 Cal.App.4th 443, the trial of the bifurcated claims was not a partial trial of Ryckman's remaining claims because the trial did nothing to resolve any issues relating to the remaining causes of action. (See id. at p. 449.) Before turning to these cases, we first review Patapoff v. City of Los Angeles (1959) 171 Cal.App.2d 635, a case to which both Macfarlane and Sagi turned for guidance.
"In Patapoff, plaintiffs sued the City of Los Angeles for property damage and trespass. The trial court consolidated the case with a separate action by the Schworers involving the ownership of the same property at issue in plaintiffs' action. The trial court subsequently ordered that trial of plaintiffs' action follow trial of the Schworers' action, received evidence and testimony regarding the latter action, rendered a decision in it determining plaintiffs' interest in the property, and then declared a mistrial. [Citation.] On these facts, the appellate court reversed a dismissal of plaintiffs' action under the five-year statute, finding that there had been a partial trial. It explained: 'One of the issues to be proved in an action for trespass and damage to real property is the interest of the plaintiff in that property. Consequently, the determination in [the Schworers' action] of the extent of the interest of Patapoff in the real property involved in both actions constituted a partial trial of the instant action .... [Citations.]' [Citation.]" (Macfarlane, supra, 8 Cal.App.4th at p. 254.)
In Macfarlane, on October 11, 1985, a wife filed a petition for dissolution of marriage. (Macfarlane, supra, 8 Cal.App.4th at p. 250.) Her husband moved to bifurcate the proceedings and for judgment on the issue of dissolution of marital status. (Ibid.) The court granted husband's motion, and after the parties presented evidence, ordered termination of the marriage "[f]orthwith," reserving jurisdiction over all other issues. (Id. at pp. 250-251.) The court then held separate hearings on two of the remaining issues: whether the parties had entered into a transmutation agreement and the validity of certain quitclaim deeds wife had executed. (Id. at p. 251.) The court determined there was not a transmutation agreement and, separately, entered judgment as to the deeds. (Ibid.) On November 5, 1990, husband moved for dismissal of the dissolution petition for failure to bring the matter to trial within five years, and the court granted the motion. (Ibid.) Wife filed a new petition for dissolution of marriage, which husband sought to quash on the basis that there was no longer a marriage to dissolve. (Ibid.) The court granted the motion and wife appealed. (Id. at p. 252.)
The appellate court concluded the court had erred in dismissing the action under the five-year statute because there had been a partial trial. The court explained," 'A "trial" is the examination before a competent tribunal, according to the law of the land, of questions of fact or of law put in issue by pleadings, for the purpose of determining the rights of the parties. [Citations.]' [Citations.] Thus, an action has been brought to trial if there 'is a trial of issues of fact with the purpose of determining the case on the merits.' [Citation.] In a nonjury case, the swearing of a single witness satisfies this requirement; in jury cases, the impaneling of the jury suffices. [Citation.]" (Macfarlane, supra, 8 Cal.App.4th at p. 254.) The appellate court concluded a partial trial had occurred. "Not only did the court grant a judgment of dissolution after the parties presented evidence, it received evidence, swore witnesses, and took testimony in determining the existence of a transmutation agreement and the validity of the quitclaim deeds, which were two of the major issues relating to the property over which it had reserved jurisdiction." (Id. at pp. 254-255.)
The Macfarlane court further reasoned, "[O]ur conclusion is consistent with the policies that encourage parties in a dissolution action to bifurcate trial. [Citation.] The 'most beneficial use' of bifurcation 'is to help the parties by resolving a pivotal issue which has to be tried, with the expectation the parties will then be able to resolve all remaining disputed issues by agreement.' [Citation.] The determination of particular issues through bifurcation also may simplify or determine other issues. [Citation.] A ruling that, notwithstanding the partial trial of the issues, a dissolution proceeding was still vulnerable to the five-year statute would discourage the petitioner in a dissolution proceeding from agreeing to bifurcation, thus eliminating these potential benefits. It would also subvert the purpose of bifurcation-to assist expeditious resolution of cases-by enabling crafty respondents to use bifurcation as a trap for cooperative petitioners who agree to bifurcated trials in a good faith effort to resolve litigation." (Macfarlane, supra, 8 Cal.App.4th at p. 257, fn. omitted.)
In Sagi, supra, 123 Cal.App.4th 443, a subcontractor sued the general contractor for breach of contract based on the general contractor's failure to pay on three unrelated projects. The first project concerned the Hollywood Bowl and the second and third projects concerned two high schools. (Id. at p. 445.) A different court consolidated and related the lawsuit with other cases filed against the general contractor by other subcontractors on the Hollywood Bowl project. (Ibid.) The parties stipulated to bifurcate the two causes of action arising out of the high school projects from the remainder of the consolidated action and that the two high school-related causes of action could be tried by bench trial after the remainder of the action. (Id. at pp. 445-446.) The consolidated action was tried, and thereafter severed from the other two causes of action so that final judgment could be entered therein. (Id. at p. 446.) The general contractor moved to dismiss the two causes of action for failure to commence trial within five years. (Ibid.) The subcontractor countered that there had been a partial trial of the issues. (Ibid.) The trial court disagreed, as did a majority of the appellate court. (Id. at p. 447.) The appellate court observed, "[N]one of the issues determined in the Hollywood Bowl action related to any of the issues to be tried in the causes of action based upon [the high school] projects. Resolution of the Hollywood Bowl action did nothing to resolve any of the issues in those two causes of action. Consequently, we reject appellant's argument that the trial of the Hollywood Bowl action constituted a partial trial of the remaining two causes of action." (Id. at p. 449.)
The Sagi majority explained the case before it did not implicate the policy concerns identified in Macfarlane. Because the issues determined in the Hollywood Bowl proceeding were not relevant to the two remaining causes of action, "the bifurcation could not simplify or expedite their resolution." (Sagi, supra, 123 Cal.App.4th at p. 449.) Bifurcation merely simplified the issues in the first trial. (Id. at p. 450.) It further explained that it agreed with the general contractors that it was only through the permissive joinder statute, section 427.10, that the subcontractor was able to include three, separate, unrelated causes of action in one case." 'Statutes designed for judicial economy should not be used to tie unrelated actions, then give litigants unlimited time to bring stale claims to trial more than five years later.'" (Id. at p. 450.)
Justice Norman Epstein dissented. (Sagi, supra, 123 Cal.App.4th at p. 451.) He rejected the majority distinguishing the case before it from McFarlane and Patapoff based on "some aspect of the issue tried first [bearing] on the remaining aspects of the case." (Ibid.) He urged a more brightline rule, relying on the definition of" 'action'" in section 583.310 to mean a lawsuit and "not each of the component parts of the suit." (Id. at p. 452) "Were this not the case, operation of the five-year statute would depend on fine distinctions whether the cause of action first tried had some impact on those not yet tried. If it did, but only then, all would be considered to have been brought to trial within the five-year period.... That is a regime rife with opportunities for mischief, and one which would discourage counsel and courts from managing cases such as this by bifurcation." (Ibid.)
We need not decide whether the majority or the dissent in Sagi have the better argument because even under the majority's view, the partition phase commenced trial on all of the claims in the consolidated action. The trial court's findings in the partition judgment that the parties' business relationship was a de facto partnership related to the ultimate disposition of Ryckman's remaining claims. Indeed, the Drexlers offer no reasoned argument to the contrary. For example, case law interpreting Government Code section 12940 of the Fair Employment and Housing Act (FEHA) suggests that FEHA does not protect a bona fide partner from discrimination by the partnership. (See Fitzsimons v. California Emergency Physicians Medical Group (2012) 205 Cal.App.4th 1423, 1426-1427 [" 'The FEHA prohibits employment discrimination . . .,' not discrimination or retaliation in other relationships. [Citation.] 'The fundamental foundation for liability is the "existence of an employment relationship between the one who discriminates . . . and [the person] who finds himself the victim of that discrimination"' "].) The partition action resulted in a finding that the de facto partnership between Drexler and Ryckman "included the operation of the Law Offices of David Drexler." Although the full extent of the partnership was not explored during the partition trial, and thus it is unclear at this juncture whether the finding that Ryckman was a de facto partner will be dispositive of his FEHA claims or any of his other claims, the issues on which evidence was taken during the first phase of a bifurcated proceeding need not fully resolve the remaining issues to qualify as a partial trial. (See Mussat v. Superior Court (1936) 16 Cal.App.2d 291, 292 ["partial hearings [a]re sufficient to take the case out of the [five-year] statute though it may be conceded that, aside from [certain evidence being] received, the proceedings may not have contributed materially to a final determination of the issues"].) It is sufficient for purposes of the five-year rule that the finding that Ryckman and Drexler were de facto partners may "simplify or expedite" resolution of Ryckman's remaining claims. (Sagi, supra, 123 Cal.App.4th at p. 449.)
Fitzsimons v. California Emergency Physicians Medical Group, supra, 205 Cal.App.4th 1423, held, however, that a bona fide partner could sue under Government Code section 12940, subdivision (h) for retaliation against the partner as a result of the partner opposing discrimination or harassment of an employee. (Id. at p. 1429.)
Further, unlike Sagi, this case does not involve wholly unrelated causes of action brought together in a single action under the doctrine of permissive joinder. In addition to the partnership issue, the partition trial helped to advance Ryckman's breach of contract and fraud claim based on the final promissory note. All the claims in the consolidated action relate to the business relationship between Drexler and Ryckman and there is considerable overlap between financial aspects of the partition and employment, contract, and fraud claims. For example, Ryckman alleged Drexler withheld money from his wages to pay the mortgage on the Property, but then never paid it. Following the partition trial, the trial court found Ryckman did not owe any further monies for the final mortgage payment because Drexler used money he would have otherwise distributed to Ryckman as wages to make that final payment. This finding likewise will "simplify or expedite" resolution of Ryckman's remaining claims. (Sagi, supra, 123 Cal.App.4th at p. 449.)
Because trial timely commenced on the consolidated case including on issues overlapping with the non-partition claims, the trial court erred in granting the Drexlers' motion to dismiss and motion for judgment on the pleadings on the basis that Ryckman failed to bring those claims to trial within five years.
Ryckman raises other arguments, including that the trial court lacked jurisdiction to dismiss his claims while his appeal of the partition action was pending, that one of his prior appeals stayed the five-year period commenced not on March 14, 2016 but on December 26, 2018, that the trial court committed procedural errors in granting the Drexlers' motion for judgment on the pleadings, and that he demonstrated a statutory excuse under section 583.360 for not bringing the matter to trial sooner. Given our holding, we need not address these arguments.
DISPOSITION
The trial court's order and judgment are reversed, and the matter is remanded for further proceedings. The Ryckmans are awarded their costs on appeal.
We concur: ROTHSCHILD, P. J. BENDIX, J.