Varwig v. Leider

California Court of Appeal Aug 21, 1985 No. A020888Published

Before: Smith

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Holding. The court held that a settlement agreement does not automatically preclude the mandatory dismissal of an action under Code of Civil Procedure section 583, subdivision (b) if the case is not brought to trial or judgment is not entered on the settlement within five years.

Issues

Whether a settlement agreement precludes dismissal of an action for failure to bring it to trial within five years under Code of Civil Procedure section 583, subdivision (b).

Disposition. affirmed

Quotations verified verbatim against the opinion

“until a party seeks to enforce a compromise agreement and to have judgment entered thereon, the underlying lawsuit has not finally been disposed of”

“if the lawsuit is not brought before the trier of fact or if judgment is not entered on the compromise agreement within five years of the filing of the action, the provisions of section 583, subdivision (b) will apply”

[314]

Opinion

SMITH, J.

Appellant Ervin D. Varwig brought suit against respondents Elias N. and Louise R. Leider, and the Crystal Springs Golf Club, Inc. in 1976. Varwig alleged that he and his wife owned a piece of property in Lake County. They used this property to secure a $40,000 loan from the Leiders. The Leiders agreed to make the loan and to waive interest thereon in exchange for Varwig’s promise to do some work free of charge on the Crystal Springs golf course. This work involved excavating and grading the -site of a proposed driving range, repairing a parking lot, and correcting earth slippage at the 6th tee of the golf course.

In his suit Varwig sought to recover the deed on the Lake County property and the value of the goods and services he had provided to the Crystal Springs Golf Club. He set the value of the work performed at in excess of $120,000. The Leiders cross-complained for payment of the $40,000 they had lent Varwig.

At a pretrial conference on January 30, 1980, Varwig agreed to cancel all liens that had been filed against the judgment in the action and to pay all bills that had been submitted to him on the golf course project. He was to provide proof of cancellation of the liens and proof of payment to respondents within 30 days. At that time respondents would be obligated to pay Varwig $75,000. Of this amount, $40,000 would be used to cancel Varwig’s note to the Leiders and the balance of $35,000 would be paid in cash to Varwig and his attorney. No proof of cancellation of the liens or of payment of the bills was forthcoming.

The underlying lawsuit was taken off calendar after the parties agreed to settle their claims. It remained off calendar until 1982 when respondents moved to dismiss the action pursuant to Code of Civil Procedure section 583, subdivision (b).

Varwig opposed the motion to dismiss and argued that the settlement disposed of all issues to be tried and that dismissal under section 583, subdivision (b) therefore was inappropriate. The trial court granted the motion to dismiss and Varwig appeals from the dismissal.

The trial court as a rule has a mandatory duty to dismiss an action not brought to trial within five years.

Varwig v. Leider

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SMITH, J.

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