Atkinson v. Elk Corporation

In Atkinson v. Elk Corporation (2003) 109 Cal.App.4th 739, the appellant, Atkinson, contracted with Pacific Coast Roofing, in 1992, to replace the roof on his home. The shingles he selected had been manufactured by Elk. The written warranty in the brochure Atkinson saw indicated that the warranty for the shingles was "30 years: Material/Labor: 5 years: Wind." (Id. at p. 745.) In 1998, Atkinson noticed that some of the shingles were cracked. After a number of communications among the parties, Atkinson filed a complaint against Elk and Pacific Coast Roofing alleging breach of express warranty under the Song-Beverly Consumer Warranty Act (Song-Beverly) (Civ. Code, 1790 et seq.) against Elk, breach of implied warranty under Song-Beverly against Elk, and violation of the Consumers Legal Remedies Act (Civ. Code, 1750 et seq.) against both defendants. Atkinson later moved to amend the complaint to add two new causes of action under the Magnuson-Moss Warranty Federal Trade Commission Improvement Act (15 U.S.C. 2301 et seq.), a cause of action for fraud, and a cause of action for violations of the Unfair Practices Act (Bus. & Prof. Code, section 17000 et seq.), and to continue the trial. Elk opposed the motions, and the court denied them. In its trial brief, Elk contended that the shingles were not "consumer goods," and that Song-Beverly thus did not apply. Elk also challenged the timeliness of Atkinson's second cause of action. The trial court concluded that Atkinson was not a buyer of consumer goods within the meaning of Song-Beverly, and that he therefore did not have standing to pursue his remaining causes of action. In holding that the trial court erred in denying the motions to amend the complaint and to continue the trial, the Atkinson court noted that section 473, subdivision (a)(1) "has received a very liberal interpretation by the courts of this state." (Atkinson, supra, 109 Cal.App.4th at p. 760.) The Court held that Code of Civil Procedure section 581c, subdivision (a), precludes the defendant from moving for nonsuit before the completion of the plaintiff's opening statement, as Laing did here. (Atkinson at p. 747.) The court noted that the Legislature amended the statute to preclude such motions because "'a motion for non-suit after an opening statement is logical because a plaintiff in an opening statement must state that the evidence will prove every element of the particular case at bar. If the plaintiff doesn't promise the jury evidence of every element of the case, then it's logical and sensible for the defendant to make the motion, and for the court to grant it. A motion for non-suit prior to the opening statement, however, is nonsensical and wasteful of court time for all concerned.'" (Id. at p. 748, fn. 11.) The trial court in Atkinson, however, had granted a nonsuit on its own motion, not on a motion for nonsuit by the defendant. (Id. at pp. 747-748.) The Court of Appeal called this procedure "irregular," but concluded that the plaintiff was not prejudiced in that case because, based on stipulated facts, the plaintiff was "not a buyer of consumer goods within the meaning of the Song--Beverly" Act and therefore, as a matter of statutory interpretation, could not maintain a claim under that statute. (Id. at pp. 748-758.) In Atkinson v. Elk Corp. (2003) 109 Cal.App.4th 739, outlining the permissible standards for dismissing an action at trial, Atkinson v. Elk Corp. (2003) 109 Cal.App.4th 739, the court reviewed a judgment of dismissal entered after a nonsuit heard on the trial court's own motion, following a previous denial of leave to amend the complaint. The court found that although the plaintiff had failed to state a certain statutory cause of action, and nonsuit could have been properly entered on that theory, the trial court had nevertheless erred in declining to allow the plaintiff leave to amend to state an alternative theory that was supported by the same general set of facts. (Ibid.) Atkinson also stands for the proposition that even where a grant of nonsuit in favor of respondent on the court's own motion was irregular, the order must still be analyzed for prejudice. (Atkinson, supra, 109 Cal.App.4th at p. 749.) This is because "in the absence of express statutory authority, a trial court may, under certain circumstances, invoke its limited, inherent discretionary power to dismiss claims with prejudice. Citations, including 581, subd. (m) the provisions of 581 shall not be deemed to be an exclusive enumeration of the court's power to dismiss an action or dismiss a complaint as to a defendant." (Atkinson, supra, at pp. 748-749.) However, the power of the court to dismiss actions with prejudice " 'has in the past been confined to two types of situations: (1) the plaintiff has failed to prosecute diligently ; or (2) the complaint has been shown to be "fictitious or sham" such that the plaintiff has no valid cause of action .' " (Id. at p. 749.) Even where neither of those justifications is present, a court will not reverse a dismissal granted in an irregular procedure, unless it finds that plaintiff was prejudiced. (Ibid., citing, e.g., Cal. Const., art. VI, 13 "No judgment shall be set aside . . . for any error as to any matter of procedure, unless, after an examination of the entire cause, including the evidence, the court shall be of the opinion that the error complained of has resulted in a miscarriage of justice".) In Atkinson, the key factor was that even though the plaintiff did not have any cognizable statutory causes of action as originally alleged, the trial court nevertheless erred in denying him leave to amend to state causes of action under other applicable statutory schemes and/or common law fraud. (Atkinson, supra, 109 Cal.App.4th 739, 759-760.) Although in some cases, a trial court may deny leave to amend, where the conduct of the moving party or his belated presentation of the amendment is unacceptable, that was not the case in Atkinson. (Ibid.) Thus, the appellate court required amendment to be allowed and then other appropriate proceedings could take place to let the parties test its legal sufficiency. (Id. at p. 760.)