California 5 Year Dismissal Statute - Settlement Agreement

The following cases uniformly agree that once there has been a settlement in open court, the court can reasonably assume the matter has been finally disposed of and will not go to trial, even though details of execution may remain; consequently, there is no compelling reason a settlement agreement must be reduced to judgment within five years. See: Brown & Bryant, Inc. v. Hartford Accident & Indemnity Co. (1994) 24 Cal. App. 4th 247, 255 [29 Cal. Rptr. 2d 144] (Brown & Bryant, Inc); Malouf Bros. v. Dixon (1991) 230 Cal. App. 3d 280, 285 [281 Cal. Rptr. 235] (Malouf Bros.); Schiro v. Curci (1990) 220 Cal. App. 3d 840, 844-845 [269 Cal. Rptr. 639] (Schiro); Gorman v. Holte (1985) 164 Cal. App. 3d 984, 988 [211 Cal. Rptr. 34] (Gorman).) As Gorman observed, section 583.310 does not require a case to reach judgment in five years, but merely that trial commence within that period. ( Gorman, supra, at p. 988.) Gorman and its progeny also reason that the Varwig view thwarts the policy favoring settlements by discouraging settlement negotiations as the end of the five-year period approaches. (See Brown & Bryant, Inc., supra, at pp. 254-255.) Additionally, since Varwig v. Leider (1985) the five-year statute has been amended to particularly incorporate what had been simply a judicially created exception to the mandatory five-year dismissal. The computation of the five-year period now specifically excludes the time during which bringing the action to trial was impossible, impracticable, or futile. ( 583.340, subd. (c).) As both Schiro and Brown & Bryant, Inc., conclude, the time during which a settlement agreement is in effect tolls the five-year period, for the reason that attempting to bring an action to trial when all issues have been resolved through settlement would be futile. ( Brown & Bryant, Inc., supra, 24 Cal. App. 4th at pp. 255-257; Schiro, supra, 220 Cal. App. 3d at p. 845.)