II. Parties' Position
The County argues that it has the unilateral right to voluntarily dismiss this complaint because the trial has not yet commenced. CCP § 581 allows a plaintiff to voluntarily dismiss his Complaint without prejudice prior to commencement of trial. A dismissal of an action "is available to a plaintiff as a matter of right. The entry is a ministerial, not a judicial, act, and no appeal lies therefrom. [cit.om.] Following entry of such dismissal, the trial court is without jurisdiction to act further in the action." Associated Convalescent Enterprises v. Carl Marks & Co., Inc. et al., (1973), 33 Cal App. 3d 116, 120.
The court in Kyle v. Carmon (1993 3rd Dist.) 71 Cal. App. 4th, 901, 908, noted:
"Section 581 allows a plaintiff to voluntarily dismiss a case before `commencement of trial.' [cit.om.] `The purpose behind this right is to allow a plaintiff a certain amount of freedom of action within the limits prescribed by the code.' [cit.om.] `Apart from certain . . . statutory exceptions, a plaintiff's right to a voluntary dismissal [before commencement of trial pursuant to section 581] appears to be absolute. Upon the proper exercise of that right, a trial court would thereafter lack jurisdiction to enter further orders in the `dismissed action' [cit.om.], except for matters such as attorney's fees." [emphasis added.]
The County states that it filed this action without consulting with its legal counsel. See Shephard Dec., ¶ 4. The action was filed by a County employee who the county alleges had neither the legal experience, nor legal authority from the County Board of Supervisors to file an action. Id. Had the County's legal counsel been aware of the proposed submission of the Complaint to the Commission, the County claims it would have strongly opposed the submission. Id. The County's position now is that the Orange County Superior Court is the proper venue for this dispute. The contract between the County and AT&T refers to the "appropriate court in Orange County, California" for resolution of disputes and the Superior Court follows the California Rules of Civil Procedure which provides for more extensive discovery. Shephard Decl., at ¶ 4 and Exhibit "A" attached to its motion.
The County claims its dispute with AT&T is factually complex, and will likely require several phases of discovery before the complexities of billing charges, rate discounts, "extra-contractual" obligations etc., can finally be unraveled. Id. At the very least, the County believes a thorough accounting is required of the approximate $650,000 in disputed charges, and such accounting can only come through a vigorous and time-consuming discovery effort. The County claims the Commission's discovery process may not be adequate for such an effort, Decl., ¶ 3, particularly because the Commission cannot award damages.
The County contends that AT&T willfully breached written contracts with the County. As such, the County argues that it is entitled to damages, including consequential damages, and perhaps attorney's fees. The Commission has no jurisdiction to award these damages. The County also claims it has a constitutional right to a jury trial on the disputed factual issues. The County claims it should not be required to pursue a matter in a forum where the County cannot obtain full relief.
As an independent argument to support dismissal, the County argues that because the dispute in this matter is a contract dispute, the Commission lacks subject matter jurisdiction over the entire controversy, and the complaint must be dismissed. Moreover, the County denies that it has "waived" this jurisdictional defect because by no act or omission may County expand the subject matter jurisdiction of the Commission which is derived from the California Constitution and statutory delegations from the California Legislature. In support of this petition, the County cites Decision (D.) 01-02-057 in Quality Conservation Services vs. San Diego Gas & Electric Company which states:
"The California Supreme Court in Hempey v. Public Utilities Commission (1961) 56 C.2d 214, has held that the Commission may not adjudicate contract disputes absent express authorization by the Legislature. The rule is based on Article VI of the California constitution, which assigns purely judicial functions to the courts."
The County also claims that the funds it has deposited into escrow relating to this complaint should be returned to the County. The County argues that once the dismissal has been granted, the Commission has no authority to transfer the County's funds to AT&T since AT&T has not prevailed in the complaint.
In support of its claim to deposited escrow funds, the County cites Creative Labs, Inc., et al., v. Orchid Technology, et al., 1997 U.S. Dist. (N. Cal.) LEXIS 13911. In Creative Labs, the plaintiffs moved to dismiss their complaint without prejudice in the US court, and litigate their claims against the defendants in a court in Singapore. Moreover, as in the present action, the defendant in Creative Labs had an alleged interest in funds in an escrow account that could be released to them pursuant to a final judgment in the case.
The Creative Labs court granted the plaintiffs' motion to dismiss without prejudice, rejecting the defendants' argument, inter alia, that a dismissal without prejudice would constitute legal prejudice and financial harm to the defendants. The court noted that "the inconvenience of defending another lawsuit or the fact that the defendant has already begun trial preparations does not constitute prejudice." (Creative Labs, p.3.) Further, the Creative Labs court rejected the defendants' argument with respect to the funds in the escrow account, stating "[t]he escrow account has no relationship to the merits of this case and has no effect on defendants' ability to defend this action." (Creative labs, p. 3, emphasis added.)
Similarly, the County argues, there is also no relationship between the Commission's escrow account and AT&T absent a judgment on the merits of this action. AT&T has not won anything in this lawsuit.
Response of AT&T
As a general proposition, AT&T argues that where a party files a complaint before this Commission, that party normally is permitted to withdraw the complaint where no activity has occurred on the complaint and no party is prejudiced. AT&T argues, however, that such is not the case here. AT&T argues that California courts have long denied a plaintiff the right to dismiss its case where there has been a determination of law or fact before trial and that determination is adverse to the plaintiff.
In Goldtree v. Spreckels, 135 Cal. 666, 67 P. 1091 (1902) the trial court sustained without leave to amend, two of three causes of action of plaintiff's complaint and thereafter held that plaintiff could no longer voluntarily dismiss his complaint, even if "trail" had not commenced within the usual meaning of that term. "Trial" can take many forms, said the Goldtree court, including the testing of the sufficiency of a complaint on demurrer.
AT&T claims that its motion to dismiss, filed in this complaint on July 31, 2000, was the legal equivalent of a demurrer. Compare Cal. Civ. Proc. Code § 430.10 ("The party against whom a complaint or cross-complaint has been filed may object, by demurrer or answer as provided in Section 430.30, to the pleading on any one or more of the following grounds *** (e) The pleading does not state facts sufficient to constitute a cause of action."); Cal.Civ.Proc. Code § 430.30(a) ("When any ground for objection to a complaint, cross-complaint or answer appears on the face thereof, or from any matter of which the court is required to or may take judicial notice, the objection on that ground may be taken by a demurrer to the pleading.")
The ALJ's Ruling was issued on October 5, 2000 regarding AT&T's motion to dismiss. AT&T claims that ruling is the functional equivalent of an order sustaining a demurrer, arguing that it sustained AT&T's objections to the facial sufficiency of the Complaint in finding a portion of the County's claims absolutely barred as a matter of law. Under similar reasoning as was applied by the California Supreme Court in Wells v. Marina City Properties, 29 Col. 3d 781, 787-9, AT&T claims an ALJ ruling, like an order sustaining a demurer, falls within the definition of "trial" under Cal.Civ.Proc. Code § 581, so as to preclude voluntary dismissal as a matter of right. See also, Harris v. Billings, 16 Cal.App. 4th 1396, 1402, Cal.Rptr.2d 718, 721 (1993).
AT&T argues that the County may no longer dismiss its Complaint as a matter of right, and that to allow the County unconditionally to dismiss and re-file its Complaint in another forum would expose AT&T "to duplicative `annoying and continuous litigation.'" Wells, supra. AT&T argues that any order of this Commission dismissing this Complaint should be made only on condition that all funds deposited into escrow by the County be turned over to AT&T immediately. Otherwise, AT&T claims the County will have received a windfall of many months of telephone service for nothing, when even its own Complaint does not seek a complete refund of charges paid. If this Commission believes that it lacks jurisdiction both to dismiss the matter and to release escrowed funds to AT&T, then AT&T's position is that this matter should in no event be dismissed.
AT&T further claims that the County has committed a Rule 1 violation. Rule 1 of this Commission's Rules of Practice and Procedure provides in pertinent part: "Any person who signs a pleading or brief, enters an appearance at a hearing, or transacts business with the Commission, by such act represents that he or she is authorized to do so and agrees . . . never to mislead the Commission or its staff by an artifice or false statement of fact or law. (emphasis added.)
AT&T claims the County violated Rule 1 by submitting mutually contradicting sworn statements to the Commission. On the one hand, in its present motion to dismiss, the County alleges for the first time, after nearly one year of litigation before this Commission, that the County's Complaint was filed "by a County employee who had neither the legal experience, nor legal authority from the County Board of Supervisors to file the action." Declaration of Daniel Shephard dated February 21, 2002 at ¶ 3 (emphasis added).
AT&T argues that Mr. Shephard's assertion under penalty of perjury contradicts the sworn verification of the County's Complaint. On June 15, 2000 Mr. Fred Voss, the County's Manager and CEO for Information and Technology, submitted a verification to the Complaint under penalty of perjury, stating: "I am an authorized employee of the complaining municipality herein, and am authorized to make this verification on its behalf." AT&T argues that either Mr. Shephard's sworn statement, or Mr. Voss's sworn statement, is false. In either case, AT&T claims the County has violated Rule 1.
In its Motion to dismiss, the County counsel asserts under oath, that "Had the County's legal counsel been aware of the proposed submission of the Complaint to the Commission, it would have strongly argued against it." Declaration of Daniel Shephard dated February 21, 2001 at ¶ 4.
Yet, there was no suggestion last summer in the County's Opposition to AT&T's Motion to Dismiss, prepared by its current counsel and filed months after the Complaint was submitted to this Commission, that the County's Mr. Voss lacked authority of any sort. AT&T claims that the escrow funds should be released to it as a Rule 1 sanction.
The County denies it has committed a Rule 1 violation, and claims that there is nothing inconsistent about County's opposition to AT&T's motion to dismiss filed last July 13, 2000, and County's current motion to dismiss. AT&T's motion to dismiss was based upon its argument that the complaint failed to state a claim for relief, and based upon statute of limitations grounds. County argued that the only proper grounds for dismissal on motion by a defendant are jurisdictional grounds or forum inconvenience grounds. Thus, the County argues, because two motions to dismiss were made by different parties on different legal grounds, there is no inconsistency between its current motion to dismiss and its prior opposition to AT&T's motion.
