Consolidated Dock & Storage Co. v. Superior Court

Opinion

FILES, P. J. The petitioners here are the defendants in an action brought by alleged shareholders in the right of a domestic corporation. The defendants’ motion for security for costs under Corporations Code section 8341 [951]was denied by the superior court upon the ground that “it has been waived by failure to make it within the 30 days.” This petition has been brought to compel the superior court to hear the motion on' its merits. We have concluded that there was no waiver, and that the defendants are entitled to have the merits of their motion decided in the trial court.

On May 21, 1970, the shareholders’ suit was filed. Summons and complaint were served on June 25, 1970. In a telephone conversation between the attorneys for the respective parties on July 1, it was agreed that defendants might have until July 16, 1970, “to move, answer or otherwise plead to the complaint.” The oral agreement was confirmed by a letter sent by defendants’ attorney the same day, a copy of which was signed by one of the attorneys representing plaintiffs (real parties in interest).

On the telephone the attorneys agreed it would be desirable for them to meet to try to dispose of the case. Such a meeting was held on July 17, but no settlement was reached. It was then orally agreed that the original extension of time would be further extended to July 31. At the request of defendants’ counsel time was orally extended to August 15, and finally to September 17,1970.

On September 16, 1970, defendants served and filed demurrers to the complaint, motions to strike from the complaint, a motion to transfer the case from the central district to the south district of the superior court, and a motion to require security under Corporations Code section 834.2 The motions were noticed for hearing on September 28.

At the request of counsel for plaintiffs the hearing on the motions was continued to December 28, to February 8, 1971, and then to February 24. On that date the court and counsel discussed the question of the timeliness of the motion for security, and put the hearing over to March 10 to allow the parties to submit declarations and authorities.

Defendants then submitted declarations describing the stipulations which had preceded the filing of the motion. Plaintiffs did not controvert any of [952]