Opinion
Plaintiffs David Freedman (Freedman) and I.M.S. (U.S.A.), Inc. (IMS), appeal from an order granting a motion to dismiss their fifth *699 amended complaint against defendants Pacific Gas and Electric Company (PG&E), Mutual Petroleum Marketing Co., Inc. (MPM), and R. P. Benton (Benton) for plaintiffs’ failure to diligently prosecute the action (Code Civ. Proc., § 583.420).
The issue is whether there was an abuse of discretion by the superior court. Finding none, we will affirm.
Background
The allegations
Plaintiffs are oil brokers suing over commissions allegedly due them under two 1974 agreements. Underlying those agreements is an April 1974 contract (the sales contract) by which MPM, a New York corporation, agreed to sell crude oil to PG&E, a California corporation, through December 1975 with month-to-month extensions continuing beyond that term until canceled by either party. In a related contract (the exchange contract), PG&E agreed to pay MPM a service fee of 27.5 cents per barrel for having crude oil sold and delivered under the sales contract exchanged for refined oil.
There were two commission agreements. Under one executed in March 1974 (the MPM commission agreement), MPM promised to pay plaintiffs an aggregate commission of 13.75 cents for every barrel of crude sold under the sales contract (including any renewals or extensions). Under one executed in May (the PG&E commission agreement), PG&E (through defendant Benton, its materials department manager) promised to pay IMS 17 cents for each barrel, also for the life of the sales contract.
In mid-1975, plaintiffs executed releases of all claims against MPM and PG&E, as to both commission agreements, in return for payment of commissions on contract sales projected for the remainder of 1975. The releases recite that MPM advised plaintiffs that it had “negotiated to conclude” the sales contract with PG&E.
Plaintiffs filed an original complaint on August 24, 1981. As currently framed in the fifth amended complaint, their allegations are set out in three causes of action: (1) that PG&E breached its commission agreement with IMS by presenting plaintiffs with a final commission statement and yet continuing, to the present, to take deliveries pursuant to the sales and exchange contracts; (2) that PG&E and Benton intentionally interfered with plaintiffs’ rights under the MPM commission agreement by advising that PG&E was no longer taking deliveries under the sales contract, *700 delivering a final commission statement and ceasing commissions after December 1975; and (3) that all defendants breached the MPM commission agreement by their acts. Each cause of action states that defendants’ acts and concealment prevented plaintiffs from discovering the alleged wrongs until plaintiffs became aware of the continued sales in February 1981 through certain PG&E reports.
In a cross-complaint filed in January 1986, MPM alleged that plaintiffs breached the MPM commission agreement and their fiduciary duties to MPM when they subsequently entered and earned commissions under the PG&E commission agreement without MPM’s knowledge or consent.
The litigation
We glean the events material to defendants’ motion to dismiss from a record that is in many respects incomplete or vague, and without the aid of a comprehensive statement of the relevant facts (Cal. Rules of Court, rule 13) from any party. Also, we will note some factual conflicts in the declarations but, for purposes of review, resolve them in favor of the judgment as the trial court apparently did.
(Gunner
v.
Van Ness Garage
(1957)
Freedman and former IMS president Harry Banks, since deceased, retained San Francisco Attorney Seymour Ellison (Ellison) in August 1981, and he filed the original complaint on their behalf that same month. Over the next 14 months, Ellison filed first, second, third and fourth amended complaints, each time after the superior court granted a demurrer or a motion to strike by PG&E and Benton, with leave to amend. MPM was not served until August 1982, about one year after the action was commenced.
The litigation stalled after then, for reasons that are not fully apparent from the record. PG&E demurred and moved to strike portions of the fourth amended complaint, and at a hearing on February 10, 1983, the superior court ordered parts of the complaint stricken and certain other modifications made. Unsatisfied with a proposed order drafted by PG&E, the court ordered preparation of a revised and interlineated complaint that would better reflect its ruling. Plaintiffs failed to do so, however, until their fifth amended complaint, filed about two and a half years later, on September 5, 1985. It appears from a series of letters from defendants’ attorneys to plaintiffs’ attorney, Ellison, that defendants at some point reached an understanding with Ellison that until he either filed a new or revised complaint, or elected to stand on the old one, all discovery plaintiffs had sought would be suspended indefinitely and defendants would not attempt to file answers. Ellison announced in November 1984 that he would be filing a fifth *701 amended complaint but did not follow through, and the prior understanding remained in effect. MPM had not yet demurred to the complaint but refrained from doing so on representations from Ellison that the existing pleading did not accurately state plaintiffs’ claims against MPM.
Meanwhile, Ellison was placed on probation by the State Bar in February 1985 for misuse of client funds, a matter not involving these plaintiffs. He told Freedman about it and assured him that there was no reason to worry—that he could continue practicing law and representing the plaintiffs in this case. When MPM’s president, Sanford Brass, also advised Freedman of the situation in a February 1985 phone call, Freedman replied that he already knew and that there was no problem with Ellison continuing in the case. According to Brass, Freedman said he still had “ ‘plenty of time under the five years to try the case.’ ” Freedman evidently did most of plaintiffs’ interacting with Ellison. Janet S. Banks, the widow of IMS’s former president, had apparently succeeded to her husband’s office by then, but there is no record of her being involved in the litigation beyond signing documents.
Ellison’s troubles escalated. He was arrested in July or August 1985 on a grand theft charge, again unrelated to his handling of these plaintiffs’ case. An attorney named Arthur Groza was assigned by the State Bar in August to monitor funds and assist Ellison, where needed, with pending cases. Ellison did not tell plaintiffs about the arrest or criminal charges. However, he did tell Freedman in an August phone call that he was having some trouble with respect to his use of client funds and that it “would be worked out and would not affect his representation” of them.
Ellison was unsure at that point what the outcome of the charges or his standing with the State Bar would be, and he continued representing plaintiffs. He filed the fifth amended complaint on September 5 and conducted discovery against PG&E and Benton, who answered the complaint in October.
During this same time, Ellison deliberately refrained from pressing the case against MPM. According to him, Freedman “told me [in mid-1985] that he was engaged in settlement discussion with MPM’s president, Sanford Brass, and asked me not to put pressure on MPM for the time being.” MPM was contemplating changing counsel, and plaintiffs had agreed to extend the time in which MPM could answer the new complaint. On November 18, while in San Francisco on other business, Brass met for an hour and a half with Freedman and Ellison, and the three reached an agreement to settle with MPM. Ellison agreed to draw up the formal agreement but, within a week or 10 days, called Brass to say that the agreement was off. Brass accordingly went ahead and retained new counsel for MPM, who *702 filed MPM’s answer and cross-complaint on January 6, 1986. According to Brass, the November 18 meeting was the only settlement effort, despite any contrary inference in what Freedman had told Ellison.
Ellison’s involvement ended later that month. He tendered his resignation to the State Bar on January 17, after pleading guilty to the grand theft charges, and told Freedman he could no longer represent him. He also advised Freedman of the five-year statute and the need to bring a motion to advance the case to trial. On the 23d, all files in the case were turned over to the firm of Coblentz, Cahen, McCabe & Breyer, who agreed to take over the case. Freedman had already begun looking for new counsel the month before, after Ellison told him in a December phone call that he was having problems with the State Bar. Freedman had contacted the Coblentz firm himself, on the advice of a New York attorney. The State Bar filed Ellison’s resignation on January 23 and, although the final disposition does not appear from the record, issued an interim suspension order in April. The Coblentz firm formally substituted in before then, on March 12. Meanwhile, Attorney Groza filed an at-issue memorandum for plaintiffs on February 6.
On March 24, exactly four years and seven months after the commencement of the action, MPM filed a motion to dismiss for lack of diligent prosecution (Code Civ. Proc., § 583.140 et seq.), and the other defendants joined in the motion.
Plaintiffs’ formal representation by the Coblentz firm lasted only about two weeks. A conflict was discovered, and the firm of Khourie & Crew was therefore substituted in its place on March 28. The firm concurrently filed a motion to advance trial and served several discovery requests.
The motion to advancé was heard by Judge Campilongo, who granted the motion and ordered a trial date of August 11. Defendants moved for reconsideration.
The motion to dismiss was subsequently heard by Judge Figone on May 9, before the motion for reconsideration could be heard. Judge Figone took the matter under submission and granted the motion in an order of May 16. Plaintiffs moved for reconsideration of the dismissal, relying in part on testimony by MPM president Sanford Brass taken in New York while the motion was under submission. Plaintiffs’ motion was heard before Judge Figone on June 20 and denied in a minute order of June 26. In light of that ruling, defendants had their motion for reconsideration of the other matter taken off calendar, without prejudice.
Plaintiffs appealed on July 10 from the May 16 order granting the motion to dismiss and from a prior minute order as well.
*703 Appeal
I
Initially, there are problems of appealability not addressed by the parties. Code of Civil Procedure section 58Id (all further section references are to that code) provides that a signed and filed order of dismissal is a judgment effective for all purposes. However, neither of the designated orders here actually orders the action dismissed. They only grant the motion, and there is no dismissal order in the record. Also, the minute order neglects to grant the motion as to PG&E and Benton, who had joined in the motion as brought by MPM. Only the subsequent order of May 16 correctly grants as to all defendants.
Because the minute order is incomplete and clearly intended to be preliminary to the court’s May 16 order, we deem the May 16 order to be the “appealable” one. Also, rather than dismiss the appeal and return the parties to the superior court to obtain a dismissal order, a time-consuming formality, we will amend the order ourselves to add the needed dismissal and interpret the notice of appeal as applying to that dismissal.
(Bellah
v.
Greenson
(1978)
II
The trial court has discretion to dismiss an action for delay in prosecution (§ 583.410, subd. (a)) if it is not brought to trial within three years after it was commenced (§ 583.420, subd. (a)(2)(A)). “When the trial court has ruled on such a motion [formerly under § 583, subd. (a)], ‘ “unless a clear case of abuse is shown and unless there has been a miscarriage of justice a reviewing court will not substitute its opinion and thereby divest the trial court of its discretionary power.” ’ [Citations.] ‘ “The burden is on the party complaining to establish an abuse of discretion . . . .” ’ [Citation.]”
(Blank
v.
Kirwan
(1985)
Factors a court must consider in ruling on the motion include, as far as pertinent here: “the extent to which the parties engaged in any settlement negotiations or discussions; the diligence of the parties in pursuing discovery or other pretrial proceedings . . . ; the nature and complexity of the case; . . . the condition of the court’s calendar and the availability of an earlier trial date if the matter was ready for trial; whether the interests of justice are best served by dismissal or trial of the case; and any other fact or circumstance relevant to a fair determination of the issue.” (Cal. Rules of Court, rule 373(e).)
The ultimate question on review is whether, under all the circumstances, the plaintiff has shown a “clear” or “manifest” abuse of discretion.
(Blank
v.
Kirwan, supra,
Ill
The key disputed question in this case is whether plaintiffs should be charged with Ellison’s delay in moving the case to trial. Ellison conducted the litigation for them from the filing of the original complaint in August 1981 until January 1986, when he tendered his resignation and turned the case files over to other counsel—a period of four years and five months. It was only after then, beginning two months before MPM filed its motion to dismiss, that plaintiffs assumed independent control of the case. The question of imputing Ellison’s negligence to them is therefore critical.
Carroll
v.
Abbott Laboratories, Inc.
(1982)
“[A]s a general rule an attorney’s inexcusable neglect is chargeable to the client. [Citation.]”
(Carroll, supra,
“However, an exception to this general rule has developed. ‘[Ejxcepted from the rule are those instances where the attorney’s neglect is of that extreme degree amounting to positive misconduct, and the person seeking relief is relatively free from negligence. . . . The exception is premised upon the concept the attorney’s conduct, in effect, obliterates the existence of the attorney-client relationship, and for this reason his negligence should not be imputed to the client.’ (Italics added.) [Citations.] Courts applying that exception have emphasized that ‘[a]n attorney’s authority to bind his client does not permit him to impair or destroy the client’s cause of action or defense.’ [Citations.]” (Ibid.)
The court in
Carroll,
faced with a supportable trial court finding that plaintiff’s counsel in that case had been guilty of “gross” negligence, nevertheless reversed the trial court’s grant of relief as an abuse of discretion. The court reviewed and found distinguishable the leading cases which had found the “positive misconduct” exception applicable. In
Daley
v.
County of Butte
(1964)
The court noted: “What Daley, Orange Empire and Buckert have in common is a total failure on the part of counsel to represent the client: each attorney had de facto substituted himself out of the case. Under such circumstances it would have been unconscionable to apply the general rule charging the client with the attorney’s neglect. The case before us is, however, quite different. Though counsel grossly mishandled a routine discovery matter [resulting in dismissal for repeated failure to appear and obey motions to compel], no abandonment of the client appears. The record and counsel’s own declaration reveal quite the opposite: after filing the complaint in 1975, he attended [a] deposition in August 1976, propounded interrogatories to a physician-codefendant and answered four sets of interrogatories by that defendant with whom he eventually settled. In July 1978 he propounded 40 interrogatories and 22 requests for admission to Abbott. When Abbott, in turn, served its request for production of documents, counsel did not ignore them .... Finally, after the action was dismissed, he started a rescue operation which resulted in the favorable judgment from which Abbott appeals. In brief, though in connection with the production of documents he obviously failed to give effective representation, he did not . . . ‘obliterate the existence of the attorney-client relationship.’ [Citation.]” (Id., at p. 900, italics added.)
Carroll continues: “ ‘The policy that the law favors trying all cases and controversies upon their merits should not be prostituted to permit the slovenly practice of law .... When inexcusable neglect is condoned even tacitly by the courts, they themselves unwittingly become instruments undermining the orderly process of the law.’ [Citation.] Given this concern, the Daley exception should be narrowly applied, lest negligent attorneys find that the simplest way to gain the twin goals of rescuing clients from defaults and themselves from malpractice liability, is to rise to ever greater heights of incompetence and professional irresponsibility while, nonetheless, maintaining a beatific attorney-client relationship.” (Ibid., italics added.)
The trial court in this case expressly found that Ellison’s performance did not fall within the narrow exception defined in
Carroll.
We agree. Ellison did not
totally fail to represent plaintiffs
and thus
de facto substitute out of the case. (Carroll, supra,
Plaintiffs urge that this is a case not of mere delay, but of delay coupled with an attorney’s affirmative concealment or misrepresentation of crucial matters. (See, e.g.,
Carroll, supra,
Nor does Ellison’s asserted failure to disclose his problems with the State Bar hold up, factually or legally. First of all, it is undisputed that Freedman knew of Ellison’s probationary status since its inception, in February 1985. He was so advised both by Sanford Brass and by Ellison himself, who assured Freedman (correctly) that he could still practice law and handle the case. Second, while Ellison did not specifically disclose the fact of his subsequent (July or Aug.) arrest or the underlying charges, he did advise Freedman in August, and again in December, that he was having problems with the State Bar. There is direct evidence that Ellison’s reassurances about *708 being able to continue in the case were made in good faith, without knowledge that he would later have to resign his bar membership. Third and most important, there is no evidence—only supposition on plaintiffs’ part—that Ellison’s difficulties impaired his performance in this case. In fact, he did more during the five or six months between his arrest and resignation than he had in the preceding year and a half. Also, by the time Ellison tendered his resignation in mid-January 1986, Freedman had already sought new counsel, and the case files were turned over to them within a week.
We emphasize that this is not a case where the attorney purports to represent the client while disbarred or suspended from the practice of law. (See, e.g.,
Aldrich
v.
San Fernando Valley Lumber Co., supra,
Plaintiffs urge that the reasonableness of their reliance on Ellison is a factor bearing on whether to impute his negligence to them. They are mistaken. Whether the
Carroll
exception applies does depend on whether there is “positive misconduct”
and
whether the client is relatively free from negligence.
(Carroll, supra,
Aldrich
v.
San Fernando Valley Lumber Co., supra,
The trial court correctly imputed Ellison’s neglect to plaintiffs. Plaintiffs do not attempt to argue that Ellison’s delay was excusable.
IV
The remaining question is whether it was an abuse of discretion under all the circumstances, including plaintiffs’ efforts to undo the state of *709 affairs left them by Ellison, to order dismissal. Mindful that the test is whether the trial judge exceeded the range of discretion accorded to him— and not necessarily whether we would have ruled the same way—we find no abuse.
During Ellison’s four years and five months on the case, plaintiffs managed to file a justiciable complaint (four years into the action), conducted limited discovery against PG&E, and conducted none against MPM. There were settlement efforts with MPM, but those were apparently limited to one meeting, in November 1985, and resulted in a tentative agreement that fell through within 10 days. Such nominal, latecoming efforts cannot excuse the preceding four years and three months of total inaction against MPM. (Cf.
San Bernardino City Unified School Dist.
v.
Superior Court
(1987)
Plaintiffs do appear to have diligently sought new counsel, and it was not their fault that their first choice, the Coblentz firm, turned out to have a conflict of interest necessitating the Khourie firm stepping in. However, the Coblentz firm did not formally substitute in or file anything in the action during the six to seven weeks (Jan. 23 to Mar. 12) that they had the files. Obviously, no conflict of interest was known during that time; otherwise, the formal substitution executed at the end of that time would never have occurred. Thus, the most that can be said of the conflict, as it later developed, is that formal substitution of new counsel was delayed from March 12 to March 27—two weeks.
Defendants’ motion to dismiss was filed on March 24, four years and seven months into the action. Except for an at-issue memorandum filed by Groza on February 6, plaintiffs had not moved the case any further by then than they had when Ellison took leave.
Four days later, on March 28 (along with filing their new substitution of attorneys), plaintiffs served discovery requests, sought leave to file a sixth amended complaint that would have added four new causes of action, and
*710
filed their motion to advance the case to trial based on the pendency of the five-year limit. Our courts have long taken a dim view of such postmotion activity and have discounted it as “nothing [but] an effort to build up a belated defense to the motion.”
(Dunsmuir Masonic Temple
v.
Superior Court
(1970)
That was the history of plaintiffs’ activities when Judge Figone heard the dismissal motion on May 9. For reasons set out in the margin, we conclude that plaintiffs’ then recent victory in getting a preferential trial date set within the five-year period added little, if anything, to their showing. 2
We look next to defendants’ showing of prejudice from the delay. Plaintiffs insist, first, that a defendant must always show actual prejudice, and *711 second, that the record here refutes the existence of such prejudice. We have to disagree on both points.
First, the notion advanced in a trio of 1985 Court of Appeal decisions that actual prejudice must always be shown
(Hurtado
v.
Statewide Home Loan Co., supra,
Second, defendants in this case clearly did show actual prejudice in any event. All events crucial to this lawsuit took place in 1974 and 1975, 11 to 12 years before the motion to dismiss was brought. Plaintiffs had failed to frame their contentions against MPM until the fifth amended complaint in September 1985, and had conducted no discovery against MPM. An important witness, former IMS president Harry Banks, had died since the original complaint was filed. In response to a postmotion request for document identification and production, MPM objected that the delay and longstanding lack of a justiciable complaint had deprived MPM of the opportunity to complete discovery of its own and that MPM had encountered “considerable difficulty” in locating records and files. MPM indicated that further responsive information would be divulged if and when discovered. In a deposition taken while the dismissal motion was still under submission, MPM president Sanford Brass explained that he was currently the only MPM employee, that the company had become inactive several years ago and had moved to smaller quarters, and that company records had been burnt or thrown away at that time. Records had also been dumped “[f]rom time to time all along.” In page after page of testimony about events in 1974 and 1975, Brass displayed a poor or nonexistent memory of transactions, *712 memos, meetings, past understandings, whether documents were sent, whose writing appeared on documents he was shown, who people were and where they might be now.
Plaintiffs try to characterize the case as involving simple facial interpretation of known documents, and they point to testimony by Brass that he cannot recall any particular documents being missing. However, the case is obviously not that simple. A brief review of the questions asked at the Brass deposition shows that the documents alone do not resolve important issues, and the fact that Brass cannot pinpoint particular missing documents tends more to prove than to disprove prejudice. Finally, it is clear from reading the fifth amended complaint that PG&E’s defense is in many ways factually bound up in MPM’s. Thus, prejudice to one defendant is prejudice to the other.
Actual prejudice has been shown. Moreover, courts hold that prejudice
inheres
in cases like this one, where long delay inevitably results in dimmed memories and lost witnesses. (See
Lopez
v.
Larson, supra,
In conclusion, plaintiffs have not met their burden of demonstrating a manifest abuse of discretion. We summarily deny defendants’ request for sanctions. (§ 907; Cal. Rules of Court, rule 26(a).) Plaintiffs’ appeal lacks merit but is far from “frivolous” in the sense mandated by
In re Marriage of Flaherty
(1982)
Disposition
The order of May 16, 1986, granting defendants’ motion to dismiss is amended by adding to it a paragraph dismissing the action (see part I, ante)-, as so amended, the order is affirmed.
Kline, P. J., and Benson, J., concurred.
Notes
Freedman actually stated: “I was very concerned about the pace at which this case was progressing and asked Mr. Ellison several times to proceed with the case. He repeatedly assured me that it was progressing well and with all possible speed.”
There was conflicting authority at the time of the motion to advance whether a trial court had any discretion to deny preferential trial setting where the case was running up on the five-year mark. The issue was resolved by our Supreme Court but not until three months after the motion in this case was heard.
Salas
v.
Sears, Roebuck & Co.
(1986)
A further reason to discount Judge Campilongo’s ruling is that it was in a sense provisional—that is, still subject to defendants’ motion for reconsideration—at the time when Judge Figone granted defendants’ motion to dismiss. We do not know whether the trial date would have stood. (Cf.
White
v.
Mortgage Finance Corp.
(1983)
Bearing all that in mind, the existence of the trial date does not significantly affect our decision.
(Gunner
v.
Van Ness Garage, supra,