[EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *Page 716 [EDITORS' NOTE: THIS PAGE CONTAINS HEADNOTES. HEADNOTES ARE NOT AN OFFICIAL PRODUCT OF THE COURT, THEREFORE THEY ARE NOT DISPLAYED.] *Page 717 OPINION

This court must decide what criteria govern operation of the mandatory dismissal provision of Code of Civil Procedure section581a, under which a summons on a complaint must be served and return made within three years after an action is filed, in view of the implied exceptions to the statute as recognized inWyoming Pacific Oil Co. v. Preston (1958) 50 Cal.2d 736 [329 P.2d 489].

On September 14, 1979, General Motors took the deposition of Robert Ermer, an employee of Georgia-Pacific who usually drove the automobile in which Ms. Perez was injured. He was questioned about the maintenance work on the car and testified that defendant Beasley usually serviced the car but that on one occasion the brakes were checked by petitioner, Serob Hocharian, a Texaco service station owner. Hocharian was deposed in October of 1979 and he was served with a summons as Doe VI on November 5, 1979. This was some nine weeks after the expiration of the three-year summons service period provided for in Code of Civil Procedure section 581a¹

There is no question that plaintiff had no knowledge of Hocharian or his possible involvement until the Ermer deposition in September of 1979. Georgia-Pacific was apparently aware of this information in early November of 1975 when it contacted Hocharian and his insurance company seeking to recover for damages to the car. However, Georgia-Pacific never informed Ms. Perez about the potential liability of Hocharian.

After receipt of the summons, Hocharian moved to dismiss the action against him because section 581a, subdivision (a), had not been complied with. Plaintiff countered that there was an implied exception to this section, citing Wyoming Pacific Oil Co. v.Preston, supra, 50 Cal.2d 736, 740-741, and arguing that since the failure was due to plaintiff's inability to learn of petitioner's involvement, it was "impossible" to comply with the statute. The trial court summarily denied *Page 719 Hocharian's motion to dismiss and this petition for writ of mandate followed.

Both sections 581a and 583 impose strict time limits on plaintiffs prosecuting lawsuits. In applying these statutes, the courts recognized that an inflexible interpretation often led to unfair results. Therefore, some courts held that if compliance was impossible for jurisdictional or other reasons, noncompliance would be excused. (See generally Rose v. Knapp (1951)38 Cal.2d 114, 117 [237 P.2d 981]; Christin v. Superior Court (1937) 9 Cal.2d 526, 530 [71 P.2d 205, 112 A.L.R. 1153]; Kinard v. Jordan (1917) 175 Cal. 13, 15-16 [164 P. 894]; Estate ofMorrison (1932) 125 Cal.App. 504, 510-511 [14 P.2d 102].) This "impossibility" exception was later extended to cases in which compliance was either "impracticable" or "futile." (SeeChristin v. Superior Court, supra, 9 Cal.2d at p. 533; see also Rose v. Knapp, supra, 38 Cal.2d at p. 117; City ofPasadena v. City of Alhambra (1949) 33 Cal.2d 908, 916-917 [207 P.2d 17]; Pacific Greyhound Lines v. Superior Court (1946) 28 Cal.2d 61, 67 [168 P.2d 665].)

As early as 1920, the appellate courts recognized that "[t]he object intended to be attained by section 581a of the Code of Civil Procedure is, obviously, to compel reasonable diligence in the prosecution of an action after it has been commenced, and thus afford the party or parties against whom it is brought an opportunity to present such evidential *Page 720 support to any defense he or they may have thereto as may be available at the time the action is instituted, but which may be lost or destroyed through the death of witnesses or otherwise before the action is brought to issue by reason of an unreasonably long delay in serving the defendant or defendants with appropriate legal process notifying him or them of the pendency of the action." (People v. Kings County Dev. Co. (1920) 48 Cal.App. 72, 76 [191 P. 1004], italics added.)

Fifty years later, in Black Bros. Co. v. Superior Court (1968) 265 Cal.App.2d 501, 505,² this concept was reiterated. "It is the policy of the law, as declared by the courts, that when a plaintiff exercises reasonable diligence in the prosecution of his action, the action should be tried on the merits. This policy is counter-balanced, however, by the policy declared by the Legislature and the courts that when a plaintiff fails to exercise reasonable diligence in the prosecution of his action it may be dismissed by the trial court." (Italics added.)

Thus, the idea of reasonable diligence has been the cornerstone of statutory analysis of section 581a (See CrownCoach Corp. v. Superior Court (1972) 8 Cal.3d 540, 548 [105 Cal.Rptr. 339, 503 P.2d 1347]; Wyoming Pacific Oil Co. v.Preston, supra, 50 Cal.2d at p. 740-741; Ostrus v. Price (1978) 82 Cal.App.3d 518, 521 [146 Cal.Rptr. 922]; Hunot v.Superior Court (1976) 55 Cal.App.3d 660, 664 [127 Cal.Rptr. 703];McKenzie v. City of Thousand Oaks (1973) 36 Cal.App.3d 426, 429 [111 Cal.Rptr. 584]; Watson v. Superior Court (1972) 24 Cal.App.3d 53, 58, 59 [100 Cal.Rptr. 684]; Flamer v. Superior Court (1968) 266 Cal.App.2d 907, 911, 915 [72 Cal.Rptr. 561]; Daley v. County of Butte (1964) 227 Cal.App.2d 380, 390 [38 Cal.Rptr. 693].) Exceptions to the literal language of time-limit statutes were developed in recognition not only of "objective impossibility in the true sense, but also impracticability due to excessive and unreasonable difficulty or expense." (Christin v. Superior Court, supra, 9 Cal.2d at p. 533.) As every litigator knows, the prosecution or defense of a lawsuit involves the difficult problem of balancing the effectiveness of any given tactic or procedure against its cost in terms of time and expense. Even the attorney who utilizes every reasonable and cost-effective discovery procedure must acknowledge the possibility that he or she will fail to *Page 721 discover the identity of a potential defendant within the statutory three-year period.

Certainly the state has an interest in assuring that lawsuits are prosecuted expeditiously. (Schultz v. Schultz (1945)70 Cal.App.2d 293, 297 [161 P.2d 36].) As a result, plaintiffs are required by statutes, such as sections 581a and 583, to use reasonable diligence in bringing lawsuits to trial. However, the Legislature, cognizant of the cost-benefit balancing process inherent in the litigation system, would not have required a plaintiff to be more than reasonably diligent.

(1) (See fn. 3.) In recognition of this fact, the courts have suggested at least three "implied exceptions" to section581a's rule of mandatory dismissal³ — impossibility, impracticability, and futility⁴ — to be applied in the trial court's discretion. (Crown Coach Corp. v. Superior Court,supra, 8 Cal.3d at pp. 546-547; Tresway Aero, Inc. v.Superior Court, supra, 5 Cal.3d at p. 437; Wyoming Pacific OilCo. v. Preston, supra, 50 Cal.2d at p. 740; Watson v.Superior Court, supra, 24 Cal.App.3d at p. 58.) Notwithstanding the wisdom of the Wyoming Pacific court's admonition against the formulation of "fixed rules" (50 Cal.2d at p. 741; see p. 719) ante, it now appears necessary to articulate some general guidelines for the exercise of this discretion which are consistent with the underlying statutory intent. *Page 722 (2a) 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;⁵ rather, the primary concern must be the nature of the plaintiff's conduct.⁶ (3), (4) (See fn. 7.) The statute sets forth the three-year limitation period which must be complied with unless plaintiff shows that the greater-than-three-year delay was not due to his or her unreasonable conduct. Thus in effect, the statute operates as a rebuttable presumption: if plaintiff fails to serve and return summons on a defendant within three years of the commencement of the action, plaintiff may be presumed to have failed to use reasonable diligence. This presumption may be overcome by plaintiff, who bears the burden of proving that he falls within an implied exception to section 581a⁷ (Busching v. Superior Court (1974) 12 Cal.3d 44, 53 [115 Cal.Rptr. 241, 524 P.2d 369]; Ostrus v. Price, supra, 82 Cal.App. 3d at p. 521; County of Los Angeles v. Security Ins. Co. (1975) 52 Cal.App.3d 808, 816 [125 Cal.Rptr. 701]; McKenzie v. City of Thousand Oaks, supra, 36 Cal.App.3d at pp. 430-431;Watson v. Superior Court, supra, 24 Cal.App.3d at *Page 723 p. 58.) (2b) In the present case, the trial court denied petitioner's motion to dismiss without any factual finding as to the nature of the plaintiff's conduct. Since the record before this court is inadequate to allow such a finding,⁸ and in view of the previous lack of any articulated standards to guide the trial court in exercising its discretion, a writ must issue to compel the trial court to hold a hearing on the issue of reasonable diligence.⁹ *Page 724 (5) Although the decision to issue the writ adequately disposes of this case, it is appropriate to briefly comment on the issue of prejudice, since it may become a factor in the lower court.

The primary purpose of section 581a is to assure reasonable diligence in the prosecution of lawsuits. This concern is motivated, at least in part, by a desire to insure that defendants faced with a lawsuit have a reasonable opportunity to locate evidence and witnesses in preparing a defense. As this court stated in Crown Coach Corp. v. Superior Court, supra, 8 Cal. 3d at page 546: "The dismissal statutes, like statutes of limitation, `promote the trial of cases before evidence is lost, destroyed, or the memory of witnesses becomes dimmed. . . .' (General Motors Corp. v. Superior Court (1966) 65 Cal.2d 88, 91 [52 Cal.Rptr. 460, 416 P.2d 492].)" (See also Ippolito v.Municipal Court, supra, 67 Cal.App.3d at p. 687; Flamer v.Superior Court, supra, 266 Cal.App.2d at p. 915; Black Bros.Co. v. Superior Court, supra, 265 Cal.App.2d at pp. 505-506.) Thus, even in a situation where plaintiff has demonstrated reasonable diligence at every stage of the lawsuit, a delay in serving summons may result in substantial prejudice to a defendant. If this delay exceeds the three-year statutory limit, the court must at least consider the issue of prejudice in deciding whether or not to dismiss the defendant from the lawsuit.

Thus, once a plaintiff has proven his use of reasonable diligence, the trial court still has discretion to dismiss as to the defendant pursuant to section 581a In exercising this discretion, the court must be aware of the fact that it is dealing with two essentially innocent parties — a plaintiff who has demonstrated reasonable diligence and a defendant who has only recently been given notice of the lawsuit. The court must also keep in mind the strong public policy that litigation be disposed of on the merits wherever possible. (Denham v.Superior Court, supra, 2 Cal.3d at p. 566; accord Crown CoachCorp. v. Superior Court, supra, 8 Cal.3d at p. 548; McDonoughPower Equipment Co. v. Superior Court (1972) 8 Cal.3d 527, 538 [105 Cal.Rptr. 330, 503 P.2d 1338] (dis. opn. by Peters, J.).)

The decision whether or not to dismiss must be based on a balancing of the harm to the plaintiff if the motion is granted against the prejudice to the defendant if he is forced to defend the suit.¹⁰ As long as the *Page 725 court engages in this balancing process, its decision should not be disturbed on appeal absent an abuse of discretion. (SeeDenham v. Superior Court, supra, 2 Cal.3d at p. 566.)

Tobriner, J., Mosk, J., and Newman, J., concurred.

I respectfully dissent. In my view the trial court erred in denying defendant's motion to dismiss the action on the ground that plaintiff failed to serve summons within the three-year period specified in section 581a, subdivision (a), of the Code of Civil Procedure.

Plaintiff was injured in a motor vehicle accident in September 1975. She filed her action for damages in August 1976, naming the manufacturer and owner of the vehicle, the service station and mechanic who serviced it, and various "Doe" defendants. In September 1979, in the course of a deposition of plaintiff's own coemployee conducted by one of the named defendants, plaintiff learned that defendant Hocharian had serviced the vehicle's brakes prior to the accident. Accordingly, on November 5, 1979, plaintiff served him as a Doe defendant.

In pertinent part, section 581a, subdivision (a), provides that "No action . . . shall be further prosecuted . . . unless thesummons on the complaint is served and return made within threeyears after the commencement of said action. . . ." (Italics added.) The Legislature added an important qualification to the foregoing rule in subdivision (d) of the same section: "The time during which the defendant was not amenable to the process ofthe court shall not be included in computing the time period specified in this section." (Italics added.) Although the clear implication of these provisions is that mere delay in locating or identifying an otherwise amenable defendant does not extend the three-year period, the majority's new "reasonable diligence" rule accomplishes precisely such a result. The majority's holding is not only unprecedented and indeed *Page 726 contrary to prior law, it also contravenes the very policy underlying section 581a to assure that defendants receive timely notice of the institution of an action against them.

Despite the seemingly mandatory language of section 581a, subdivision (a), certain nonstatutory exceptions to its directive have been recognized. (See Busching v. Superior Court (1974)12 Cal.3d 44, 53 [115 Cal.Rptr. 241, 524 P.2d 369]; WyomingPacific Oil Co. v. Preston (1958) 50 Cal.2d 736, 740-741 [329 P.2d 489].) Until today's decision, however, these exceptions were carefully limited to two restricted categories, excusing plaintiff's delay where (1) defendant is estopped to complain (Tresway Aero., Inc. v. Superior Court (1971) 5 Cal.3d 431, 441-442 [96 Cal.Rptr. 571, 487 P.2d 1211]), or (2) there are circumstances beyond plaintiff's control which made it "impracticable, impossible, or futile" to comply with section581a (Ippolito v. Municipal Court (1977) 67 Cal.App.3d 682, 687 [136 Cal.Rptr. 795]; Highlands Inn, Inc. v. Gurries (1969) 276 Cal.App.2d 694, 698 [81 Cal.Rptr. 273]). Plaintiff, here, concedes that there is no basis for finding that defendant should be estopped from relying on section 581a Similarly, plaintiff must acknowledge that timely service upon defendant Hocharian was wholly within her control, for defendant was amenable to process throughout the entire period in question.

The majority excuses compliance with section 581a if plaintiff exercised "reasonable diligence" in prosecuting her action, and if defendant was not unduly prejudiced by the delay. As I will seek to demonstrate, such a judicially declared broad exception to the statutory three-year requirement finds no support in the cases.

In Wyoming Pacific, supra, we held that despite the mandatory language of section 581a, "discretion has entered into the application of this provision so as to prevent it from being used to compel the dismissal of actions where the plaintiff has not had a reasonable opportunity to proceed to trial. [Citation.] [¶] [T]he trial court is vested with discretion . . . comparable to the discretion with which it is vested in applying the exceptions to section 583 [specifying a five-year period in which to bring one's case to trial]." (50 Cal.2d at pp. 740-741.) Significantly, the cases interpreting section 583 have agreed that an exception exists "where it would be impossible, impracticable or futiledue to causes beyond a party's control to bring an action to trial during the five-year period. [Citations.]" (Crown CoachCorp. v. Superior Court (1972) *Page 727 8 Cal.3d 540, 546 [105 Cal.Rptr. 339, 503 P.2d 1347], italics added; accord, Christin v. Superior Court (1937) 9 Cal.2d 526, 532 [71 P.2d 205, 112 A.L.R. 1153]; Hunot v. SuperiorCourt (1976) 55 Cal.App.3d 660, 664 [127 Cal.Rptr. 703].)

I have found no case which has excused compliance with either section 581a or 583 based upon circumstances which are within plaintiff's control, such as the failure to discover relevant facts or evidence. As stated in a recent section 583 case, "it has never been held or even hinted that time stands still while the parties are going through the necessary motions of getting a case ready for trial. [¶] On the contrary, it is quite firmly established that `the time consumed by the delay caused by ordinary incidents of proceedings like disposition of demurrer, amendment of pleadings, and the normal time of waiting for a place on the court's calendar or securing a jury trial are not within the contemplation of the implied exceptions for exclusion from a computation of the applicable period. . . .' [Citations.]" (Standard Oil Co. v. SuperiorCourt (1976) 61 Cal.App.3d 852, 857 [132 Cal.Rptr. 761]; accord, Crown Coach Corp. v. Superior Court, supra,8 Cal.3d 540, 548.) Similarly, time does not "stand still" until, during the course of discovery, plaintiff stumbles across evidence which discloses the identities of legally vulnerable persons who previously had been sued as Doe defendants. The failure to discover such evidence, even when a party exercises reasonable diligence, should not excuse a delay beyond the statutory three-year period.

Section 581a is aimed at assuring that a defendant receives timely notice of the commencement of an action, so that he may, in turn, undertake discovery, preserve evidence, and locate witnesses. (Ippolito v. Municipal Court, supra, 67 Cal.App.3d 682, 687.) Insofar as the "Doe defendant procedure" is concerned, the California system has received academic criticism, for "it indiscriminately lets any plaintiff add as much as 3 years to any applicable statute of limitations. For example, the California statute of limitations for breach of a written contract is 4 years. This would seem to provide ample time for a plaintiff to identify all potential defendants. A defendant who first learns of the suit almost 3 years after the expiration of such a lengthy period is justified in complaining that a procedural gimmick is being used to deprive him of the protections that a reasonable, set period of limitations is supposed to provide." (Hogan, California's Unique Doe DefendantPractice: A Fiction Stranger Than Truth (1977) 30 Stan.L.Rev. 51, 101-102, fns. omitted.) *Page 728

Under the present majority's holding, the period within which service of summons may be made on a Doe defendant may be extended even further than the unusually lengthy prenotification period envisaged by Professor Hogan. Thus, as construed by the majority, the time sequences in the foregoing example could well be four years (for the underlying action) plus three years (§ 581a),plus an undetermined, indefinite prolonged period within which the plaintiff may attempt to show that his or her diligence has been "reasonable" and that the defendant has not been unduly "prejudiced" by the delay. The introduction of such rubberized, elastic standards into what is essentially a limitations statute (now judicially transformed by the majority into a mere presumption), results in neither fairness nor certainty in civil procedure. The unsettling consequence doubtless will leave innumerable civil actions entirely open-ended subject to the vagaries of a case-by-case inquiry as to the "reasonableness" of plaintiff's conduct and the "prejudice" to defendant. Such a consequence does not serve the timely and orderly resolution of civil disputes.

For all the foregoing reasons, I would reverse the trial court's order denying defendant's motion to dismiss.

Clark, J., concurred.

I join the view ably expressed by Justice Richardson that today's majority decision is contrary to prior law and contravenes the policy underlying Code of Civil Procedure section581a But the majority decision goes even further. By requiring an "unreasonable conduct" test, (ante, p. 720), it removes all substantive effect from section 581a

Code of Civil Procedure section 583, subdivision (a) provides for dismissal of actions not brought to trial within two years. When a plaintiff is guilty of unreasonable conduct in failing to bring the case to trial, dismissal under the two year statute is appropriate. (Cal. Rules of Court, rule 203.5; Sanborn v.Chronicle Pub. Co. (1976) 18 Cal.3d 406, 418-419 [134 Cal.Rptr. 402, 556 P.2d 764]; Denham v. Superior Court (1970)2 Cal.3d 557, 564 [86 Cal.Rptr. 65, 468 P.2d 193]; Corlett v.Gordon (1980) 106 Cal.App.3d 1005, 1013 et seq. [165 Cal.Rptr. 524]; Brown v. Pacific Tel. Tel. Co. (1980)105 Cal.App.3d 482, 487 et seq. [164 Cal.Rptr. 445]; Lopez v.Larson (1979) 91 Cal.App.3d 383, 396 et seq. [153 Cal.Rptr. 912];Moore v. El Camino Hosp. Dist. *Page 729 (1978) 78 Cal.App.3d 661, 663 [144 Cal.Rptr. 314]; City of LosAngeles v. Gleneagle Dev. Co. (1976) 62 Cal.App.3d 543 [133 Cal.Rptr. 212].)

Obviously, a case cannot be brought to trial before the defendant has been served or has appeared, and because the majority has now adopted the same test for section 581a as is applied under section 583, subdivision (a), there is no longer any need for section 581a In any case where there is an unreasonable delay in serving process for three years, dismissal is available under section 583, subdivision (a). While a difference may exist in appellate court review of orders under the two provisions, the test before the trial court is now the same. The majority opinion effectively forges the two sections into one.

Petitioner's application for a rehearing was denied, March 2, 1981. Clark, J., and Richardson, J., were of the opinion that the application should be granted. *Page 730