Opinion
NOT TO BE PUBLISHED
APPEAL from a judgment of the Superior Court of Kern County No. S-1500-CV-239083. William D. Palmer, Judge.
Restituto Q. Dumag and Magdalena Dumag, in pro. per., for Plaintiffs and Appellants.
McCormick, Barstow, Sheppard, Wayte & Carruth, Kurt F. Vote and Todd W. Baxter for Defendants and Respondents.
OPINION
Wiseman, Acting P.J.
The trial court dismissed this case pursuant to Code of Civil Procedure sections 583.310 and 583.360 because the plaintiffs failed to bring it to trial within five years of its commencement. The plaintiffs, Restituto and Magdelena Dumag, argued that these statutes did not apply because the trial court had stayed the entire action, for almost its entire pendency, on account of the bankruptcy of defendant Robert E. Allen. Code of Civil Procedure section 583.340, subdivision (b), tolls the five-year period while “[p]rosecution or trial of the action was stayed or enjoined.” The trial court reasoned that dismissal was still required because the Dumags failed to act diligently to comply with the trial court’s instructions to obtain relief from the bankruptcy court, sever Allen, or dismiss him. In doing so, the trial court applied an incorrect legal standard, for there is no lack-of-diligence exception to the tolling provision of Code of Civil Procedure section 583.340, subdivision (b).
The defendants also argued to the trial court that the case should be dismissed because Allen’s debt to the Dumags was discharged in bankruptcy and because the statute of limitations and defects of pleading prevented the Dumags from obtaining judgment against defendants Chris Marx and David Morgan. The trial court did not rule on these claims. Defendants advance them now as alternative bases for affirmance of the dismissal, but as we will explain, these claims are not appropriate for decision in the first instance in this court.
We reverse.
FACTUAL AND PROCEDURAL HISTORIES
The Dumags and Javier Medina filed a complaint in superior court on June 17, 1999, and a first amended complaint on July 30, 1999. As defendants, the first amended complaint named Allen as an individual, Allen as conservator of the estate of Twila J. Nickovich, Walter Jones, Alkop Agriservices Inc. (alleged to be Allen and Jones’s company), and 100 Doe defendants. Defendants David Morgan and Chris Marx, as officers of Alkop, were added by means of Doe amendments on August 22, 2001. Morgan was also added as an officer of a company called Regent Cold Storage, Inc.
The first amended complaint alleged a plot whereby Allen, intending to seize the Dumags’ land, fraudulently lured them into a consignment agreement for 1996 and 1997, under which Alkop would finance the Dumags’ grape crop, sell the grapes, and remit the proceeds to the Dumags after deducting a commission and expenses. After the grapes were sold, Alkop allegedly concealed the amount of the proceeds and paid the Dumags nothing, resulting in the Dumags’ default on their mortgage on the land. As conservator of the estate of Twila Nickovich, Allen purchased the mortgage from its holder in 1998 and foreclosed.
The first amended complaint further alleged that Javier Medina entered into a partnership agreement with the Dumags, under which Medina would finance the 1999 crop and take a 40-percent interest in it. On June 9, 1999, defendants, having foreclosed on the mortgage, allegedly threw Medina and his employees off the land and converted the crop. The plaintiffs prayed for damages of more than $1.5 million and an order voiding the foreclosure sale and reconveying the property to the Dumags.
By the time the original complaint was filed, Allen had already filed a Chapter 11 bankruptcy petition and had his debts discharged. He filed his petition on February 5, 1998. An order confirming a reorganization plan was filed in the bankruptcy court on April 26, 1999.
When a bankruptcy court confirms a Chapter 11 debtor’s reorganization plan, the automatic bankruptcy stay on all collection actions is dissolved. Its place is taken by a permanent injunction against acts to recover discharged debts. (Bigelow v. C.I.R. (9th Cir. 1995) 65 F.3d 127, 129; In re Watson (Bankr. 9th Cir. 1996) 192 B.R. 739, 746; 11 U.S.C. §§ 362(c)(2)(C), 524.) With some exceptions, a debt is not discharged, and the injunction does not bar its recovery, if the debtor omitted it from the schedules filed in the bankruptcy court, unless the creditor had notice or actual knowledge of the bankruptcy proceedings in time to file a claim or (in the case of some debts arising from intentional torts, including fraud) in time to file a claim and a nondischargeability complaint. (11 U.S.C. § 523(a); In re Beezley (1993) 994 F.2d 1433, 1435-1436 (conc. opn. of O’Scannlain, J.).) After the automatic stay is lifted, a state court has jurisdiction to rule on the applicability of the discharge injunction to an obligation at issue in that court. (In re Watson, supra, 192 B.R. at p. 746.) Further, the discharge injunction is no bar to any proceeding against a codebtor. (Forsyth v. Jones (1997) 57 Cal.App.4th 776, 781, citing Green v. Welsh (2d Cir. 1992) 956 F.2d 30, 33.)
Although the automatic stay was dissolved before the complaint in this case was filed, and the trial court had the power to determine whether the discharge injunction applied—and although the discharge injunction never applied to Marx and Morgan in the first place—the trial court repeatedly ordered the entire action stayed, as to all defendants, on account of Allen’s bankruptcy. According to a docket sheet included in the appellate record, the trial court received notice of Allen’s bankruptcy on October 25, 1999, in conjunction with defendants’ request that the court deny entry of a default plaintiffs had requested. Two days later, the court ordered the entire matter stayed, citing 11 U.S.C. section 362, the section of the Bankruptcy Code providing for the automatic stay. The court stated that its stay was subject to plaintiffs’ dismissing Allen, moving to sever him, obtaining leave to proceed from the bankruptcy court, or proving that Allen’s obligation was not subject to discharge. It directed plaintiffs to file certificates of progress on Allen’s bankruptcy every 90 days.
The docket shows the court reaffirmed its stay 12 times, the first on April 27, 2000, and the last on November 16, 2007. Some of these orders stated that the stay applied to Allen, but most, including the more recent, stated that the action was stayed in its entirety or as to all parties. Some of the orders reiterated steps plaintiffs could take to have the court lift the stay. On September 2, 2003, the court stated that the entire action was stayed as to all remaining parties because of Allen’s bankruptcy, subject to plaintiffs’ obtaining relief in the bankruptcy court, dismissing Allen, or moving to sever him by showing that he was not a necessary party. On November 16, 2007, the court stated that, in order to proceed on a request for a default judgment, plaintiffs would have to file a noticed motion to vacate the stay. The court also repeated on a number of occasions its direction that plaintiffs file certificates of progress on Allen’s bankruptcy.
Plaintiffs made some attempts to comply with the court’s instructions, but seem to have been hampered by withdrawals of their attorneys and periods without representation by an attorney. On January 26, 2000, plaintiffs’ counsel Indra Lahiri filed a certificate of progress informing the court that another attorney, Max Gardner, would be seeking relief for plaintiffs in the bankruptcy court. Gardner filed a motion in the bankruptcy court, but withdrew the motion on July 7, 2000. Lahiri filed another certificate of progress on April 24, 2000. Lahiri filed a motion to withdraw as plaintiffs’ counsel on May 24, 2000. The motion was granted over plaintiffs’ opposition. Attorney Ramon Pellicer substituted in on June 12, 2001. On February 3, 2006, Edward Brenner substituted in for Pellicer. Ameer Shah substituted in for Brenner on November 30, 2006. At the court’s request, Shah apparently presented the court with an order from the bankruptcy court stating that Allen’s bankruptcy case was closed, but the court returned the order to Shah on September 26, 2007, stating that a face page was required and that Shah should specify why the case was closed. The order does not appear to have been resubmitted. Shah continued to represent plaintiffs when they opposed defendants’ motion to dismiss for failure to bring the case to trial within five years, but they are unrepresented now.
Jones filed an answer, but the docket does not show any responsive pleadings filed by the remaining defendants. Pellicer, Brenner, and Shah made several attempts to have those defendants’ defaults entered. All these requests were denied because the case was stayed due to Allen’s bankruptcy, among other reasons.
Jones filed a successful motion for summary judgment and plaintiffs appealed. On December 14, 2001, the trial court issued a stay—backing up the stay already in place, presumably—to remain in effect during the pendency of the appeal. We affirmed the summary judgment for Jones on August 19, 2002. (Dumag v. Jones (Aug. 19, 2002, F037483).) The trial court received notice of the remittitur on October 24, 2002.
Defendants Allen, Marx, and Morgan filed the instant motion to dismiss on June 30, 2008. They relied on the following provisions of the Code of Civil Procedure:
“An action shall be brought to trial within five years after the action is commenced against the defendant.” (Code Civ. Proc., § 583.310.)
“(a) An action shall be dismissed by the court on its own motion or on motion of the defendant, after notice to the parties, if the action is not brought to trial within the time prescribed in this article.
“(b) The requirements of this article are mandatory and are not subject to extension, excuse, or exception except as expressly provided by statute.” (Code Civ. Proc., § 583.360.)
Defendants pointed out that the case had commenced against Allen in 1999, nine years earlier, and had also commenced within the five-year period against Marx and Morgan, who were added by amendment in 2001, regardless of whether the amendment related back to the original filing date or not.
Plaintiffs filed an opposition stating they were not able to bring the case to trial at any time because the trial court had stayed the action shortly after the complaint was filed and had never lifted the stay. Although plaintiffs’ brief did not mention it, Code of Civil Procedure section 583.340 was directly relevant:
“In computing the time within which an action must be brought to trial pursuant to this article, 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.
“(c) Bringing the action to trial, for any other reason, was impossible, impracticable, or futile.” (Italics added.)
Subdivision (b) would seem to be an obstacle to dismissal in this case. At the hearing, the trial court orally explained its view in this discussion with plaintiffs’ counsel:
“MR. SHAH: Your Honor, plaintiff has … not been able to bring this case to conclusion in five years. The reason plaintiff could not do that was bankruptcy of Mr. Allen.
“THE COURT: Let me make sure I do understand correctly. Wasn’t the discharge back in ’99? Wasn’t Mr. Allen discharged in ’99?
“MR. SHAH: The discharge was back in ’99, but we have [minute orders showing that the superior court imposed its own stay].
“THE COURT: Right. And nothing was ever done to lift that stay even though it could have been lifted in 1999. And the plaintiff—and they were told and asked on several occasions to take the necessary steps to lift the stay.
“MR. SHAH: Your Honor, I got this case in 2006.
“THE COURT: I’m not blaming you. [¶] … [¶] … And if you were talking to me in 2003, I’d have no problems, but I think the statute is pretty clear and the obligation—and it really … runs long before you were ever involved. I realize you’re trying to resurrect it and you’ve been gallant in doing that, but unfortunately, the [L]egislature has dictated this. And in fact, because of what happened in ’99, I think that it’s just—it’s gone, so.”
Code of Civil Procedure section 583.340, subdivision (b), was not mentioned by the court or parties.
The court issued a minute order granting the motion to dismiss on August 14, 2008. It did not state reasons in the order.
The Dumags were no longer represented by counsel when they filed this appeal. The notice of appeal includes the following statement: “Said appeal is based upon all grounds provided by law and upon all named Defendants with the exception of Robert E. Allen, who is represented to have been discharged in bankruptcy.” In spite of this language, Allen is listed in the caption of plaintiffs’ briefs as a respondent. Defendants’ brief also includes him, makes separate arguments why the dismissal should be affirmed as to him, and never contends that the dismissal has not been appealed from as to him. We infer from this that all parties understand the appeal to be directed against Allen; any argument to the contrary is waived by defendants’ failure to assert it.
DISCUSSION
I. Tolling of the five-year dismissal period
The Dumags’ primary contention is that the trial court should not have dismissed the case for failure to bring it to trial within five years because it was stayed for almost the entire time it was pending. Their appellate briefs, which were not drafted by counsel, are not very clear in making this or any other argument. They do, however, state that the trial court abused its discretion; and they quote Code of Civil Procedure section 583.340, emphasizing the word “stayed” in subdivision (b) by printing it in large type. The issue of whether the superior court’s stay prevented the running of the five-year period was briefed and discussed at oral argument before the trial court and has been intelligibly referred to in plaintiffs’ appellate briefs, so we conclude that the issue has been both preserved in the trial court and sufficiently raised here.
We review a dismissal for failure to prosecute for abuse of discretion. (Blank v. Kirwan (1985) 39 Cal.3d 311, 331.) One way the court can abuse its discretion is by applying an erroneous legal standard. (Conservatorship of Scharles (1991) 233 Cal.App.3d 1334, 1340.) To put the same point a different way, if the appeal presents a question of law, we review that question de novo. (Bostean v. Los Angeles Unified School Dist. (1998) 63 Cal.App.4th 95, 107-108.)
Although the trial court’s written order did not state reasons for the decision, the court’s reasons are clear from its oral comments. It granted the motion to dismiss because it determined that plaintiffs were not diligent in seeking a dissolution of the stay. In ruling on this basis, the court applied an erroneous legal standard, for the tolling effect of Code of Civil Procedure section 583.340, subdivision (b), applies to every stayed action, with no exception for plaintiffs who are not diligent in seeking relief from the stay.
We have found only two published appellate opinions dealing with the relationship between diligence and the Code of Civil Procedure section 583.340, subdivision (b), time exclusion, and they are in agreement with each other. In Brock v. Kaiser Foundation Hospitals (1992) 10 Cal.App.4th 1790, the trial court dismissed a lawsuit that had not been brought to trial for five years where the dispute had been ordered to arbitration and the lawsuit was stayed during the long pendency of the arbitration. (Id. at p. 1793.) The trial court’s view was that the plaintiffs did not pursue the arbitration with reasonable diligence. (Id. at p. 1794.) The Court of Appeal reversed, holding that section 583.340, subdivision (b), tolled the five-year period. “We disagree that application of the stay exclusion … depends on the reasonable diligence of the plaintiff in the related arbitration proceedings.” (Brock, supra, at pp. 1798-1799.)
In Ocean Services Corp. v. Ventura Port Dist. (1993) 15 Cal.App.4th 1762, the defendant moved to dismiss for failure to bring the case to trial within five years. The trial court denied the motion. For a period of about a year, the case had been stayed by order of the Court of Appeal because of proceedings by the defendant to disqualify the plaintiff’s trial counsel. The trial court ruled that this tolled the five-year period under Code of Civil Procedure section 583.340, subdivision (b). (Ocean Services, supra, at pp. 1773-1774.) The case went forward and the jury returned a verdict for the plaintiff. (Id. at p. 1772.) On appeal, the defendant argued that the motion should have been granted because, with reasonable diligence, the plaintiff could have had the stay vacated six months earlier, and subtracting those six months from the tolling period would have brought the case past the five-year limit. (Id. at pp. 1773-1774.)
The Court of Appeal rejected this argument. Justice Gilbert wrote:
“[The defendant] contends that the trial court miscalculated the tolling period because the stay could have been vacated six months earlier. It asserts that any tolling of the five-year statute was conditioned upon [the plaintiff’s] ‘exercise of reasonable diligence.’ The argument is without merit.
“Code of Civil Procedure section 583.340, subdivision (b), provides that the five-year period ‘shall be’ tolled if ‘[p]rosecution or trial of the action was stayed or enjoined.’ The statute is unconditional and is intended to have uniform application. ‘“This is consistent with the treatment given other statutory excuses; it increases certainty and minimizes the need for a judicial hearing to ascertain whether or not the statutory period has run.” [Citation.] It also is consistent with the general policy favoring trial over dismissal. (§ 583.130.)’ (Holland v. Dave Altman’s R.V. Center (1990) 222 Cal.App.3d 477, 484.)” (Ocean Services Corp. v. Ventura Port Dist., supra, 15 Cal.App.4th at p. 1774.)
This understanding of Code of Civil Procedure section 583.340, subdivision (b), contrasts with courts’ interpretation of section 583.340, subdivision (c), which tolls the five-year period when bringing the action to trial is “impossible, impracticable, or futile.” In Baccus v. Superior Court (1989) 207 Cal.App.3d 1526, for instance, Presiding Justice Lillie stated that the plaintiff’s reasonable diligence is the critical factor in applying subdivision (c). (Baccus v. Superior Court, supra, at p. 1532.) The two different approaches are well tailored to the two different provisions of the statute. To determine whether it was impossible, impracticable, or futile to proceed, it is necessary to consider how hard the plaintiff tried to proceed. Determining whether a stay or injunction existed does not require this effort.
No purpose would be served by remanding this case to the trial court for application of the correct standard as set forth in Brock v. Kaiser Foundation Hospitals and Ocean Services Corp. v. Ventura Port District. The record reveals that the court imposed the stay in October 1999, reaffirmed it many times through 2007, and never lifted it. The five-year dismissal period was tolled from the time the stay was first imposed and therefore has not expired. As a result, the court abused its discretion in granting the motion to dismiss.
II. Court’s refusal to enter defendants’ defaults
Plaintiffs argue that the court should have granted their several requests to enter defaults and default judgments. We disagree.
The court denied requests for entry of default or default judgment on September 30, 1999, April 18, 2001, July 19, 2001, April 16, 2002, June 20, 2002, September 6, 2002, December 11, 2002, January 13, 2003, May 19, 2003, June 16, 2003, July 31, 2003, June 15, 2006, November 16, 2007, and April 8, 2008. The court gave various reasons for refusing, including missing summonses, improper proofs of service and discrepancies in names, but the stay due to Allen’s bankruptcy is also mentioned in most of these docket entries. On July 31, 2003, the court issued an order stating that it could not enter a default against any defendant because it had not been kept informed of the status of the bankruptcy; and on September 2, 2003, it stated that, because of the bankruptcy, it would accept no more requests for entry of default until further order.
We cannot say this was improper. There was no reason why the court could not impose a stay when first informed of the bankruptcy and no reason why it could not place on plaintiffs the burden of showing when and why the stay should be lifted. Although they went through four lawyers, plaintiffs never succeeded in bringing to the court’s attention the facts and law that justified lifting the stay, i.e., the fact that the bankruptcy was dismissed and the automatic stay lifted and the law stating that the superior court had jurisdiction to determine whether the discharge injunction applied to the bankrupt defendant’s alleged debt to plaintiffs. It also is uncontroverted that plaintiffs never asked the superior court to rule on the applicability of the discharge injunction. In light of this state of affairs, there is no basis for holding that the court was required to lift its stay and consequently no basis for holding that the court erred in refusing to enter defaults or default judgments. In subsequent proceedings, the trial court will be aware of the situation.
III. Alternative bases for dismissal
In their motion, defendants argued that, even if the five-year dismissal statute did not compel dismissal, the court should still grant the motion as to Allen because his debt was discharged by the bankruptcy court. They argued that Marx and Morgan also should have been dismissed because the statute of limitations had run when they were added by amendment and because alter-ego allegations, necessary to show their liability, were not included in the complaint or amendment. The trial court did not rule on these claims, but defendants now contend that we can rely on them as alternative bases for affirming the dismissal order. As we will explain, none of these claims can be resolved in this appeal.
A. Allen’s bankruptcy
Defendants argue that Allen’s alleged obligation to the Dumags was discharged in bankruptcy and that, in any event, only the bankruptcy court has jurisdiction to find it nondischargeable. Therefore, defendants say, the Dumags’ complaint against Allen should be dismissed.
There are several problems with this argument. First, the argument is self-defeating. If the trial court and this court lacked jurisdiction over the issue of the debt’s nondischargeability, it and we would also lack jurisdiction to make the finding defendants request, namely, that the debt is dischargeable.
Second, it is not the case that the bankruptcy court has exclusive jurisdiction to find nondischargeability. Bankruptcy courts do not have exclusive jurisdiction to determine the applicability of either the automatic stay or the discharge injunction. (In re Watson, supra, 192 B.R. at p. 746.) In fact, for unscheduled fraud debts where the creditor did not have notice or knowledge of the bankruptcy proceedings—those covered by 11 U.S.C. § 523(a)(3)(B), and possibly the kind of claim at issue here—it has been held that a nondischargeability complaint “‘can be brought any time, any place.’” (In re Jenkins (Bankr. E.D.Tenn. 2005) 330 B.R. 625, 631.) “Not only may dischargeability of the fraud claim be litigated in state court, the action, like all the concurrent jurisdiction nondischargeability actions, may be filed ‘at any time’ after the bankruptcy case is first filed.” (In re Franklin (Bankr. E.D.Cal. 1995) 179 B.R. 913, 924.) True, a state court does not have jurisdiction to modify a discharge injunction (In re McGhan (9th Cir. 2002) 288 F.3d 1172, 1179), but that does not mean a state court lacks jurisdiction to determine the applicability of a discharge injunction when the discharge is raised as a defense to a creditor’s state-court action. (Id. at p. 1180.) No potential modification of the injunction appears to be at issue here, only a determination of its applicability to a particular debt.
Defendants rely on In re Marriage of Williams (1984) 157 Cal.App.3d 1215, 1222, in which we stated that bankruptcy courts have exclusive jurisdiction to determine the dischargeability of debts. In that case, we were not referring to the dischargeability of debts dischargeable under 11 U.S.C. § 523(a)(3), i.e., those which were not scheduled by the debtor where the creditor did not have notice or knowledge of the bankruptcy proceedings. Where the creditor has an opportunity to raise nondischargeability during the bankruptcy proceedings, it is required to do so; where it has no opportunity, it is not required to do so.
Defendants’ reliance on an Advisory Committee Note to Bankruptcy Rule 4007 is similarly misdirected. The note defendants quote says that the bankruptcy court has exclusive jurisdiction to determine the dischargeability of debts set out in 11 U.S.C. § 523(a)(2), (4) and (6). Immediately adjacent to this note, however, is another that says jurisdiction over the dischargeability of debts described in 11 U.S.C. § 523(a)(1), (3), (5), (7), (8) and (9) “is held concurrently by the bankruptcy court and any appropriate nonbankruptcy forum.” (See Advisory Com. Notes, Fed. Rules Bankr.Proc., 11 U.S.C.A. (2005) foll. rule 4007, p. 200.)
Third, the question of whether Allen’s alleged debt to the Dumags was dischargeable is a complex factual matter that would have to be presented to the trial court by means of evidence before we could review it. In their complaint, the Dumags allege that the obligation is based on Allen’s fraud, and in their opening appellate brief they claim the obligation was not listed in Allen’s bankruptcy schedules. To use these claims to establish nondischargeability under 11 U.S.C. section 523(a)(3)(B), for instance, plaintiffs would have to show that the debt was based on fraud or another intentional tort and was not included in Allen’s bankruptcy schedules, and that they did not have notice or actual knowledge of Allen’s bankruptcy proceedings in time to file a timely claim or nondischargeability complaint in the bankruptcy court. (In re Beezley, supra, 994 F.2d at p. 1436 (conc. opn. of O’Scannlain, J.).) Defendants claimed in their motion that the Dumags had notice of the bankruptcy before the plan confirmation was issued, but they did not present any admissible evidence of this fact. Instead, without proper authentication or foundation, they presented the trial court with a document that appears to be a notice of the automatic stay, prepared for use in another lawsuit between Restituto Dumag and Allen, and stamped “RECEIVED APR 15 1999.” This document was attached to a declaration by defendants’ counsel, but the declaration did not explain how counsel knew the document was authentic or how he knew whether or when the Dumags or their counsel ever received the document. It simply said, “However, prior to filing the [first amended complaint], Plaintiffs received a Notice of Automatic Stay to their proceedings against ALLEN on April 15, 1999, a copy of which is hereto attached as Exhibit ‘B.’ Thus, Plaintiffs’ then-counsel received notice of ALLEN’s United States Bankruptcy Court proceedings.”
Even if it were shown by some evidence that the Dumags’ counsel received this notice on April 15, 1999, it would have to be established that that date was early enough to enable the Dumags to file a nondischargeability complaint in the bankruptcy court before that court issued the plan confirmation on April 26, 1999, 11 days later.
Defendants also argue that plaintiffs’ filed-and-withdrawn motion for relief in the bankruptcy court also shows they had notice of the bankruptcy. The motion, however, was filed and withdrawn after the bankruptcy court issued the plan confirmation. Attorney Gardner filed the motion on February 14, 2000 and withdrew it on July 7, 2000. These events, as a result, do not show that the Dumags had knowledge of the bankruptcy in time to file a nondischargeability complaint before the discharge.
From this limited discussion, we are in no position to rule on defendants’ claim that Allen’s alleged debt to the Dumags was covered by the discharge injunction issued by the bankruptcy court. The contention requires the resolution of factual issues that have never been ruled upon by, or even properly presented to, the trial court. The issue is, therefore, not properly before this court.
Defendants argue that they should prevail on this issue because the Dumags did not address it in their opening brief. This is not correct. There is no authority for the proposition that a judgment must be affirmed on a basis the trial court did not rely on if the appellant fails to refute that basis in its opening brief. An appellant is not required to anticipate in its opening brief every argument a respondent may make. The cases defendants cite simply stand for the proposition that, in order to obtain an appellate court’s ruling on an issue, a party must adequately raise the issue. (Tiernan v. Trustees of Cal. State University & Colleges (1982) 33 Cal.3d 211, 216, fn. 4; Lyons v. Chinese Hospital Assn. (2006) 136 Cal.App.4th 1331, 1336, fn. 2.) We are reversing based on the tolling of the five-year mandatory dismissal period by the stay the trial court imposed, an issue which was adequately raised.
B. Limitations and pleading issues as to Marx and Morgan
Defendants contend that the dismissal order should be affirmed as to Marx and Morgan for two reasons. First, the complaint was amended to substitute them for Doe defendants on August 22, 2001. The alleged fraud took place in 1997, they argue, so by 2001 the three-year statute of limitations for fraud (Code Civ. Proc., § 338, subd. (d)) had expired. The amendment did not relate back to the filing date of the original complaint, defendants contend, because plaintiffs knew the identities of Marx and Morgan in 1997 and therefore the Doe amendment provisions of Code of Civil Procedure section 474 did not apply.
Plaintiffs’ arguments are, again, less than ideally well expressed. We can, however, discern that they contend they discovered the fraud in 1999, so the delayed discovery provision of Code of Civil Procedure section 338, subdivision (b), applies; and that they did not know of Marx’s and Morgan’s involvement in the fraud until 2001, so the requirements of Code of Civil Procedure section 474 were met and the amendment did relate back.
Once again, defendants’ request that we find alternative grounds for dismissal is not properly before this court. No evidence from which the trial court could have found what plaintiffs knew or when they knew it was placed before the trial court and the trial court did not rule on the matter. Code of Civil Procedure section 458 states that if a statute-of-limitations defense is controverted, “the party pleading [the statute] must establish, on the trial, the facts showing that the cause of action is so barred.” Defendants’ motion did not establish these facts and we do not see how it could have done so. To the extent that defendants’ motion to dismiss was based on the statute of limitations, it was comparable to a demurrer, but a demurrer on statute-of-limitations grounds lies only if it appears clearly and affirmatively on the face of the complaint that the statute has run. It is not enough to show merely that the action may be, but is not necessarily, barred. (Marshall v. Gibson, Dunn & Crutcher (1995) 37 Cal.App.4th 1397, 1403; Weil & Brown, Cal. Practice Guide: Civil Procedure Before Trial (The Rutter Group 2008) ¶ 7:50, p. 7(I)-27.) Here the statute-of-limitations defense depends on facts about when plaintiffs knew of the fraud and when they knew of Marx’s and Morgan’s involvement, times that do not appear on the face of the complaint. According to the complaint, Allen consummated his fraud by obtaining the Dumags’ land sometime after he purchased their mortgage using a third-party entity he controlled, the estate of Twila Nickovich, in 1998. Even if the Dumags knew of the fraud immediately at that point, and even if their Doe amendment did not relate back, the action might have been commenced timely against Marx and Morgan in 2001. Further, even if defendants had brought a successful demurrer, plaintiffs likely would have been granted leave to amend.
Defendants assert that plaintiffs “admit” they knew of Marx’s and Morgan’s involvement because their opposition to the motion to dismiss contains the statement that Marx and Morgan were officers or directors of Alkop in 1996. This contention lacks merit. The fact that plaintiffs knew Marx’s and Morgan’s status as officers or directors when they opposed the motion in 2008 does not show that they knew it when they filed the complaint in 1999; and it shows nothing about when they knew of Marx’s and Morgan’s involvement in the alleged fraud.
Defendants’ second alternative argument why the dismissal should be affirmed as to Marx and Morgan is that the complaint and amendment merely allege that they were officers of Alkop—there is no allegation that Alkop was their alter ego and no other claims connecting Marx and Morgan to plaintiffs’ injury. In effect, defendants argue that the claims against Marx and Morgan are demurrable because, as the pleadings currently stand, Marx and Morgan can have no liability unless the corporate form is improperly disregarded.
This is a claim upon which the trial court should rule before it is presented in an appeal, for if the trial court were to find the claim meritorious, it would then have to exercise its discretion in granting or denying leave to amend. It is likely, judging from the appellate record, that leave to amend would be proper.
Defendants argue that it would not, because if the complaint did contain alter-ego allegations, plaintiffs “would still be unable to prove” these claims. Defendants attempt to support this argument with a variety of factual assertions: Marx and Morgan were merely board members, not directors; they had no ownership interest in Alkop at the relevant times; and they were managing agents but had no control of the corporation. Here defendants are, again, asking us to make factual findings in the first instance in relation to issues upon which the trial court has not ruled. This is not a proper request to make in an appeal.
DISPOSITION
The order dismissing the action for failure to bring it to trial within five years of commencement is reversed. Costs on appeal are awarded to appellants.
WE CONCUR: Levy, J., Kane, J.