Opinion
FEINBERG, J. This petition challenges a trial court refusal to dismiss an action for failure to serve and return service of summons within three years of filing the action (Code Civ. Proc., § 581a).1 We issued an alternative writ.
The Facts
The lawsuit underlying this petition is for alleged medical malpractice in the delivery of Jose Lopez on January 14, 1970. Under the provisions of section 340.5,2 Jose Lopez was entitled to bring suit any [479]time before his eighth birthday. Pursuant to the notice requirements contained in section 364,3 plaintiff was first required to inform defendant of the legal basis of the claim and the type of loss sustained. This Jose Lopez did by letter addressed to defendant, dated January 13, 1978, the day before his eighth birthday.
The same day, Jose Lopez, by his guardian Fae J. Lopez, filed a complaint for damages for medical malpractice, naming only Doe defendants. Apparently, the naming of only Doe defendants was intended to avoid violation of the 90-day notice requirement (see § 364, subd. (a)). This complaint was never served.
The 90-day notice sent to petitioner was turned over to petitioner’s counsel. By letter of January 27, 1978, petitioner’s counsel wrote to real parties’ counsel, indicating that he would be willing to discuss the case prior to suit being filed. Obviously, petitioner’s counsel was unaware that real parties had filed a Doe complaint.
On April 7, 1978, real parties’ counsel answered the letter of January 27, 1978, by indicating that if petitioner had “a proposal for initiating settlement negotiations in the near future to obviate the expense and [480]time that would be incurred in discovery and trial preparation [he] would be pleased to discuss it with [him]. Therefore, any Complaints which may be placed on file in order to protect against the running of the statute of limitation, will not be served ... until [counsel] have had an opportunity to explore the possibility of such negotiations.”4 On April 11, 1978, real parties filed a first amended complaint in the same action, naming petitioner as defendant but made no attempt to effect service.
Thereafter, for approximately three years, there was an exchange of letters between respective counsel. On September 19, 1979, counsel for real parties, in writing, offered to settle the case against petitioner for $250,000 and stated that the offer would be “held open through and including October 15, 1979.” On October 10, 1979, counsel for petitioner answered by saying that real parties’ offer would be given serious consideration, but before a decision could be made, petitioner wished to have a medical examination of real party in interest Jose Lopez. Counsel for real parties agreed. For various reasons, that examination was not completed until March 18, 1980. On November 24, 1980, counsel for real parties wrote to petitioner’s counsel, stating that he desired a response to the longstanding offer of settlement ($250,000) and that a response should be available by January 15, 1981. On January 22, 1981, by letter, counsel for petitioner rejected the offer but indicated that he was still willing to negotiate at some lesser amount.
It appears that real parties terminated settlement negotiations at that point and then proceeded to serve petitioner on April 8, 1981 with the first amended complaint.5
Petitioner then filed a notice of motion to quash service of summons and complaint. In his moving papers he sought alternatively to dismiss the lawsuit for failure to return service within three years of filing the complaint (§ 581a) or the sustaining of a demurrer for violation of the statute of limitations of eight years (§ 340.5). The court, in its order denying the motion to dismiss and overruling the demurrer, stated that: “The complaint for damages as to Dr. Clarence A. Lesko is deemed to [481]have been filed on January 13, 1978, and copies of the summons and complaint were served on Dr. Lesko on April 8, 1981. The Court further finds that defendant, by his conduct, did not in any way mislead plaintiff as to the need to serve summons and complaint within three years after the complaint was filed. The Court further finds that it was not impossible, impracticable or futile to attempt to serve Dr. Lesko within three years after the complaint was filed since from the outset plaintiff knew his identity and he was amenable to process. Finally, the Court finds that plaintiff acted reasonably and with due diligence in prosecuting this action and in serving Dr. Lesko with summons and complaint orí April 8, 1981.”
Discussion
I. Has Hocharian v. Superior Court (1981) 28 Cal.3d 714 [170 Cal.Rptr. 790, 621 P.2d 829] Added a New Implied Exception to Code of Civil Procedure Section 581 a, Whereby a Diligent Plaintiff May Avoid Dismissal Without Showing Impracticability, Impossibility or Futility or the Facts Constituting an Estoppel?
1. Preliminarily, we must determine whether the three-year period prescribed in section 581a runs from the filing of the John Doe complaint on January 13, 1978, as the trial court held or from the filing of the amended complaint on April 11, 1978, as real parties contend. For, if the latter, service was effected within three years.
Real parties assert that the amended complaint was, for all practical purposes, the first pleading filed, because it is the first pleading which, under section 364, would have allowed petitioner to be named as a defendant. Therefore, “the normal rules on naming fictitious defendants, relation back of amendments to original pleadings, and commencement of a cause of action, should not apply,” real parties argue.
In effect, real parties contend the January 13, 1978, complaint was a nullity because of the provisions of section 364, subdivision (a).
Further, real parties point out they could have filed a new complaint on April 11, 1978, as if to argue that because they could have done so, they should be deemed to have done so.
The trial court correctly rejected these arguments when made below. Regardless of what real parties could have done, what they did was file [482]a formal complaint on January 13, 1978, and amend that same complaint on April 11, 1978. The amendment alleged the same operative facts and substituted the name of petitioner for a previously named Doe defendant. Contrary to real parties’ assertion that petitioner’s name could not have been fised in any earlier pleading, the 90-day notice requirement of section 364 is not jurisdictional. Failure to comply merely furnishes a ground for discipline by the State Bar of California in any case brought to its attention. (§ 365; Toigo v. Hayashida (1980) 103 Cal.App.3d 267 [162 Cal.Rptr. 874].)
2. We come now to the Hocharian decision.
Section 581a, subdivision (a) provides: “(a) No action heretofore or hereafter commenced by complaint shall be further prosecuted, and no further proceedings shall be had therein, and all actions heretofore or hereafter commenced shall be dismissed by the court in which the same shall have been commenced, on its own motion, or on the motion of any party interested therein, whether named as a party or not, unless the summons on the complaint is served and return made within three years after the commencement of said action, except where the parties have filed a stipulation in writing that the time may be extended or the party against whom the action is prosecuted has made a general appearance in the action.” Despite the apparently mandatory language of section 581a, subdivision (a), prior to Hocharian, a number of implied exceptions developed to the requirement of mandatory dismissal. Thus where service of summons was impossible, impractical or would have been futile, mandatory dismissal is not required. And where the defendant by his conduct lulled the plaintiff into not effecting service, the defendant may be estopped to assert the dismissal requirement of section 581a.
Then came Hocharian. In Hocharian, the plaintiff was injured while driving a car leased by her employer, Georgia-Pacific Corporation. Allegedly, the accident was caused by faulty brakes. On August 30, 1976, plaintiff sued General Motors, one Beasley, the operator of an Arco Station where the car was usually serviced, another named defendant and a number of Doe defendants. In September 1979, more than three years after the filing of the complaint, General Motors deposed an employee of Georgia-Pacific who usually drove the car in question. He testified that while Beasley usually serviced the car, there had been one occasion when the brakes had been inspected by Hocharian, the operator of a Texaco Service Station. In October 1979, Hocharian was deposed. Thereafter, in November 1979, Hocharian was served with [483]summons as a Doe defendant. Service was thus made some nine weeks after the three-year period specified in section 581a had elapsed.
In the course of the Hocharian opinion, the court stated, “[T]he courts have suggested at least three ‘implied exceptions’ to section 58la’s rule of mandatory dismissal—impossibility, impracticability, and futility—to be applied in the trial court’s discretion. [Citations.] ... [I]t now appears necessary to articulate some general guidelines for the exercise of this discretion which are consistent with the underlying statutory intent.
“In applying any of these exceptions to a given factual situation, the critical question is whether a plaintiff used reasonable diligence in prosecuting his or her case. The particular factual context or cause of the noncompliance should not be determinative, rather, the primary concern must be the nature of the plaintiff’s conduct.” (Hocharian v. Superior Court, supra, 28 Cal.3d at pp. 721-722, fns. omitted.)6
Real parties thus argue, and the trial court impliedly held, that the attempt to settle the case during the three-year period following the filing of the complaint, without effecting service, was the exercise of “reasonable diligence in prosecuting his ... case.” It is not casuistry to say that a plaintiff who seeks a favorable settlement of his case is “prosecuting” his case.
Surely, we should seek to encourage settlement rather than trial. And, in a concrete way, some progress was made towards a resolution by trial if trial became inevitable. For example, during the course of the negotiations, the minor plaintiff was made available for medical examination and was so examined by a physician of defendant’s choice as to the nature, extent and etiology of the disabilities complained of.
Nevertheless, we are of the view that real party has misperceived the thrust of Hocharian. We have come to this conclusion reluctantly, for this is a hard case. But hard cases should not make bad law.
As we read Hocharian, we believe that it holds simply that the mandatory dismissal of section 581a may not apply where, despite [484]reasonable diligence on the part of plaintiff, service could not be effected upon the defendant within the statutory three-year period.7
Put differently, the “implied exceptions” to section 581a have now been modified so that, for example, it is not necessary to show that service of summons was an “impossibility.” It is enough to show that plaintiff was “reasonably diligent,” though unsuccessful, in attempting to serve defendant in the three-year interval.
Why, then, did the court speak in terms of “reasonable diligence in prosecuting his or her case,” rather than in terms of reasonable diligence in attempting to effect service?
The answer lies in the peculiar factual context of Hocharian. In the usual case where service is not effected within the three years, the identity of the defendant is known to plaintiff; it is his whereabouts that are not known. In that context, one can speak of attempts to find the defendant and serve him. But, in Hocharian, the converse was true. Plaintiff did not know of the existence of Hocharian as a possible defendant. Obviously, therefore, it would have been meaningless to speak of an attempt to serve him. Instead, the issue became whether the plaintiff had used reasonable diligence in prosecuting the case against the named defendants during the three years following the filing of the complaint. For, if the plaintiff had, the failure to ascertain the existence of Hocharian as a potential defendant and the consequent lack of service would not bring the mandatory dismissal of section 581a immediately into play. On the other hand, if the failure to discover Kocharian’s role as a possible tortfeasor within the three-year period so as to be able to serve him during that time, was due to a lack of diligence on plaintiff’s part in prosecuting the action, i.e., not using discovery procedures to seek out potential defendants (see id., p. 723, fn. 8) then, the mandatory dismissal of section 581a would operate.
In short, in our view, the concept of “reasonable diligence” relates to an inability to effect service within the statutory time. Thus, when a [485]known defendant is not served despite reasonably diligent efforts to serve the defendant or an unknown possible defendant is not ascertained in time to serve within the three years, despite reasonably diligent efforts by the plaintiff to prosecute the action against the named defendants, in either case, the first prong of the Hocharian test for avoiding mandatory dismissal under section 581a has been met.
We are fortified in our opinion by a statement by the Hocharian court “that a trial court must dismiss if the plaintiff fails to prove reasonable diligence in attempting to serve and return summons.” (Id., at p. 721, fn. 3; see also House v. State of California (1981) 119 Cal.App.3d 861, 874 [174 Cal.Rptr. 279].)
If we are correct, then it follows that real party in the case at bench cannot avail himself of the rule of Hocharian. Petitioner was known to real party as the defendant at all times. It is not disputed that petitioner was, at all times, available for the service of summons. Real parties apparently, in order to facilitate settlement discussions and “to obviate the expense and time that would be incurred in discovery and trial preparation,” decided on his own not to effect service of summons. While this may have been a commendable reason for not making service, it is not one that comes within the “implied exceptions” to section 581a as. elaborated in Hocharian.
II. Is Petitioner Estopped From Seeking Dismissal Under Section 581 al
The answer is no. Real parties, relying on Tresway Aero, Inc. v. Superior Court (1971) 5 Cal.3d 431 [96 Cal.Rptr. 571, 487 P.2d 1211], argue that petitioner, by engaging in settlement negotiations, impliedly agreed that service of process could be withheld. Therefore, say real parties, petitioner should be estopped from seeking dismissal under section 581a. Real parties’ reliance on Tresway is misplaced.
In Tresway, defective service of summons was made upon the defendant. Plaintiff appears not to have been aware that the service was defective. If the service had been valid, defendant would have been required to plead, by way of answer or demurrer, before the three-year period specified in section 581a would have expired. Such a pleading would have constituted a general appearance, thus avoiding the mandatory dismissal provision of section 581a. Or, if instead of pleading at or [486]before the time required, defendant had moved to quash service of summons, it would have apprised plaintiff of the defective service in time to effect valid service. Instead, defendant asked plaintiff for and obtained a 20-day extension of time in which to make an appearance. The extension of time carried the complaint beyond the three-year period for effecting service. As the court said, “By requesting that extension, defendant led plaintiff to believe that further service of process on defendant would be duplicatory and redundant.” (Id., at p. 441, fn. omitted.) Therefore “since the responsibility for plaintiff’s failure to effect valid service within the period of section 581a rests upon defendant, ‘the ends of substantial justice’ [citation] will be best served by estopping defendant from moving to dismiss under that section.” (Id., at p. 442.)
We compare, now, the case at bench with Tresway.
In Tresway, the plaintiff thought he had effected valid service, timely, upon the defendant. In the case at bench, real parties knew that he had not served petitioner.
In Tresway, the defendant, by asking for a continuance, effected two results. First, he led plaintiff to believe that there was no issue as to defective service. Second, he prevented plaintiff from finding out that the service was defective in time to effect valid service. In the case at bench, petitioner did not ask for anything; he simply entered into settlement negotiations with real parties. Petitioner said nothing in response to real parties’ statement that service would not be made. Petitioner never represented that he would settle, he represented only that he was willing to discuss settlement. Was pétitioner under some duty to apprise real parties that petitioner was not waiving his rights under section 581a? We perceive none.
Real parties seek to bring themselves within Tresway by arguing that if petitioner had rejected the offer of settlement before January 13, 1981 (three years following the filing of the Doe complaint), real parties would have been aware of the necessity of effecting service and could have done so in time. Real parties concede, however, that they gave petitioner until January 15, 1981, to respond, by which time it was too late to make timely service. Thus, it was not any act of petitioner’s that prevented timely service. And, as we pointed out (see footnote 5), even after negotiations were terminated, real parties waited more than 60 days before serving petitioner.
[487]Assuming for the moment that by entering into settlement negotiations petitioner’s conduct could be construed as manifesting some tacit acquiescence in the real parties’ decision not to effect service while negotiations were pending, were real parties reasonably entitled to rely on petitioner’s conduct? Tresway tells us that plaintiff’s reliance must bd “reasonable” before estoppel will apply. (Id., at p. 440; accord Hocharian v. Superior Court, supra, 28 Cal.3d at p. 721, fn. 4.) Here, from real parties’ perspective, petitioner’s conduct with regard to the question of service of summons was ambiguous, at best. Section 581a provides its own escape hatch from its mandatory dismissal requirement by making an exception therefrom where the parties have filed a stipulation in writing that the time for effecting service may be extended. Surely, the reasonable thing for real parties to have done as the negotiations dragged on for three years would have been to send a stipulation to petitioner extending time to make service. If petitioner signed the stipulation, there could be no problem regarding dismissal under section 581a. If, on the other hand, petitioner would not sign such a stipulation, then real parties would have been alerted to the necessity of effecting service.
We conclude that the trial court was correct in finding no estoppel.
Let a peremptory writ of mandate issue directing the court to set aside its order denying petitioner’s motion to dismiss, and in its place and stead, issue its order granting said motion and dismissing real parties’ action pursuant to section 581a.
Barry-Deal, J., concurred.
Hereafter, all section references are to the Code of Civil Procedure.
Applicable portion of section 340.5: “In an action for injury or death against a health care provider based upon such person’s alleged professional negligence, the time for the commencement of action shall be three years after the date of injury or one year after the plaintiff discovers, or through the use of reasonable diligence should have discovered, the injury, whichever occurs first. In no event shall the time for commence[479]ment of legal action exceed three years unless tolled for any of the following” (1) upon proof of fraud, (2) intentional concealment, or (3) the presence of a foreign body, which has no therapeutic or diagnostic purpose or effect, in the person of the injured person.
“Actions by a minor shall be commenced within three years from the date of the alleged wrongful act except that actions by a minor under the full age of six years shall be commenced within three years or prior to his eighth birthday whichever provides a longer period. Such time limitation shall be tolled for minors for any period during which parent or guardian and defendant’s insurer or health care provider have committed fraud or collusion in the failure to bring an action on behalf of the injured minor for professional negligence.”
Applicable portion of section 364: “(a) No action based upon the health care provider’s professional negligence may be commenced unless the defendant has been given at least 90 days’ prior notice of the intention to commence the action.
“(b) No particular form of notice is required, but it shall notify the defendant of the legal basis of the claim and the type of loss sustained, including with specificity the nature of the injuries suffered.
“(c) The notice may be served in the manner prescribed in Chapter 5 (commencing with Section 1010) of Title 14 of Part 2.
“(d) If the notice is served within 90 days of the expiration of the applicable statute of limitations, the time for the commencement of the action shall be extended 90 days from the service of the notice.
“(e) The provisions of this section shall not be applicable with respect to any defendant whose name is unknown to the plaintiff at the time of filing the complaint and who is identified therein by a fictitious name, as provided in Section 474.”
In the same letter, real parties stated that if the case went to trial, they would assume that “the amount of the recovery ... could well exceed $1,000,000.”
Real parties waited over two months after negotiations broke down to make service. We surmise that he was under the impression that the three years, under section 581a, began to run from the filing of the amended complaint on April 11, 1978.
In footnote 4 (id., at p. 721), the court recognized estoppel as an additional “implied exception” to the mandatory dismissal of section 581a.
We are aware that Hocharian imposes a twofold test. First, did the plaintiff exercise “reasonable diligence?” Second, if he did, the trial court in exercising its discretion as to whether to dismiss, must balance “the harm to the plaintiff if the motion is granted against the prejudice to the defendant if he is forced to defend the suit.” (Id., at p. 724, fn. omitted.) Because, in our view, the plaintiff did not act with “reasonable diligence,” we have no occasion to discuss the “balancing.”