I respectfully dissent.
Contrary to my colleagues, I apply the Putnam standard,1 and in doing so conclude the trial court abused its discretion in dismissing this case. In my opinion, Putnam provides long overdue guidance to trial courts in exercising their discretion to dismiss cases where service is not accomplished within two years after filing the complaint. I have considered and expressly reject the criticism of this standard found in Roach v. Lewis (1993) 14 Cal.App.4th 1179 [18 Cal.Rptr.2d 281], a recent decision of Division One of this court.
In Putnam, the Fifth District analyzed the law governing a court’s discretion to dismiss an action for delay in prosecution under Code of Civil Procedure section 583.420, subdivision (a)(1). In that case three medical malpractice cases had been dismissed for failure to serve the complaint within two years after the filing date. Plaintiffs offered three excuses for this delay: (1) the pendency of similar cases arising out of the same surgical technique out of which would come a “test case”; (2) extensive discovery and production of evidence; and (3) deliberate staggering of service of process so as to avoid creating unmanageable demands on both parties and their counsel. The court reviewed several Court of Appeal cases where plaintiffs had offered some explanation to excuse or justify the delay. In some of those cases the appellate court concluded the plaintiff met his burden and dismissal was unwarranted. In other cases, however, the appellate court concluded the plaintiff’s showing was insufficient and dismissal was justified even if the defendant did not demonstrate actual prejudice from the delay.
*107In order to provide some guidance to the lower courts in the exercise of their discretion when determining excusable delay, the Putnam court distilled a two-part analysis from previous case law. First, the trial court must ask, is the explanation credible under all the circumstances? If the facts are disputed and the trial court finds on substantial evidence the explanation is merely an afterthought or pretext designed to cover up neglect, dismissal may be warranted. Second, if the explanation is credible, the court should consider whether the reasons given for the decision are clearly unreasonable. That is, could a reasonably competent attorney conclude that delay was justified under the circumstances? .
I believe this analysis correctly states the rule for courts to follow in determining whether a plaintiff has offered sufficient evidence of excusable delay in service of the summons. The subjective first prong of the test gives appropriate deference to the trial courts’ findings of fact while the objective second prong provides reasonable boundaries within which the lower court may exercise its discretion. The inattentive plaintiff will not be able to nullify the dismissal statute by simply invoking the general policy favoring trial on the merits. However, if an offered excuse is both credible and not clearly unreasonable, the court will consider all other factors, including prejudice to the defendant.
Since the Putnam decision there have been four published opinions of the Court of Appeal, and one depublished opinion regarding the discretionary dismissal statute.
The most recent of these cases, Roach, was decided in April of 1992 by Division One of this court, and declined to follow the Putnam standard. The Roach court questioned the soundness of the two-pronged analysis. Regarding the credibility prong, the court said attorneys are required to be truthful at all times, and the attorney’s cause should not be advanced simply because the trial judge finds the attorney is not lying. I do not think it is granting too much deference to attorneys and their litigation strategies to employ a reasonable attorney standard. The Legislature does not consider immediate service of pleadings to be an absolute good or it would set a much shorter time limit with exceptions limited to situations where it was impossible to locate or effect service on defendants. Instead the Legislature recognizes there may be other, worthwhile reasons for delaying service for up to three years and an absolute entitlement to delay for two years. True, it may irritate courts when their dockets—and thus their backlog statistics—include unserved complaints. Yet the interests of litigants, the possibilities of quiet settlement, and similar interests may be well served by some restraint in serving complaints on the other side. The “reasonable attorney” standard *108propounded in Putnam supplies a sound approach for recognizing and reconciling these interests.
Just two months before Roach, Division One had the opportunity to decide a related issue in the case of Dubois v. Corroon & Black Corp. (1993) 12 Cal.App.4th 1689 [16 Cal.Rptr.2d 719]. There, the court was considering a discretionary dismissal for failure to prosecute within three years. Division One cited to Putnam, but did not expressly follow the two-pronged rule, nor reject it. Instead, the court invoked the credibility first prong as an all or nothing test for sufficiency of excusable delay and then instructed the lower court to move to a “totality of the circumstances” test in deciding whether dismissal is appropriate. The court affirmed the dismissal of an action for not bringing the matter to trial within three years after the action is commenced. The case was remarkable though due to a 31-month period where there was absolutely no activity done on the file.
On the other hand, the Fourth Appellate District seems clearly to have adopted the Putnam standard in the case of Yao v. Anaheim Eye Medical Group, Inc. (1992) 10 Cal.App.4th 1024 [12 Cal.Rptr.2d 856]. The Yao case was an action alleging medical malpractice where the Court of Appeal reversed the lower court’s order granting defendant’s motion to dismiss for failure to serve the complaint within two years. The plaintiff tendered two justifications for the delay in service of the summons and complaint: first, the plaintiff had sought two expert standard of care reviews, and, second, plaintiff had substituted counsel during the time the complaint remained unserved. The court cited Putnam in reversing the trial court. The court held plaintiff had offered a legally sufficient excuse for his failure to serve the complaint, at which point the burden shifted to the defendants to show actual prejudice.
Applying the Putnam standard to the instant case, I conclude the trial court abused its discretion in dismissing this case for failure to serve within two years. As to the first prong, the record fails to support a finding appellant’s avowed explanation lacks credibility. This is not one of those cases where plaintiffs counsel was inactive for two or three years and then asks the trial court to believe he or she was thinking about the case and had a secret reason for delaying service. To the contrary, this record is replete with evidence plaintiff’s counsel was engaged in continuing investigation and settlement negotiations about the case. Moreover, the results of those investigations and negotiations are consistent with the attorney’s explanation for why he delayed serving the complaint.
As to the second prong, this is one of those situations where a reasonable attorney might well decide it was in his client’s best interests to delay *109service. Furthermore, it is a situation where a reasonable attorney would know the defendant was not suffering prejudice merely because the complaint had not been formally served on it. Indeed respondent school district knew of plaintiffs cause of action even before the complaint was filed, was aware of the complaint’s existence less than five months after it was filed, and received a copy of the complaint itself less than fourteen months after the filing.
As the record clearly reflects, for more than a year after filing the complaint, plaintiffs counsel was seeking to negotiate a suitable settlement of what he regarded as a modest claim without involving his client in the costs and inconvenience of the full-scale litigation process. He knew as any reasonable attorney knows that once a complaint is served, it generally triggers a series of litigation events which are expensive and time-consuming for both sides. An answer must be filed, almost invariably followed by demurrers and opposition to demurrers, various motions, hearings, conferences, summary judgment proceedings, and the like. This appears to be an eminently reasonable justification for delaying service while there is a possibility of reaching a suitable settlement.
Appellant’s counsel was not seeking to hide its lawsuit from respondent during these negotiations. Indeed plaintiff had filed a timely claim with respondent school district months before filing the complaint. Respondent was aware of the complaint itself soon after it was filed. On June 13, 1990, less than five months after the filing of the complaint, respondent’s adjuster contacted appellant’s attorney seeking a copy of that complaint. A few months later the adjuster renewed his request for proof of filing of the complaint. It should be noted the adjuster did not ask to be served with the complaint, but only for a copy of the complaint and proof it had been filed. (Presumably this was because respondent did not want to trigger the litigation process any more than plaintiff did.)
Meantime, appellant’s counsel was seeking to determine the severity of plaintiff’s injuries. By April 11, 1991, he had enough information to submit a demand for $5,000 to respondent based on medical specials of $842. Plaintiff’s counsel accompanied this demand with medical bills and a copy of the complaint. A week later respondent’s adjuster rejected the demand and counteroffered at $232, purportedly based on the district’s own investigation of the event.
Finally, on October 1, 1991, still well within the two-year period, appellant obtained a summons on the complaint from the municipal court. Three days later, however, plaintiff’s counsel received a disturbing report from the *110doctor who was treating his client. The condition was far more serious than earlier diagnoses had suggested. By late November, the doctor reported plaintiff would require surgery and the medical specials suddenly increased tenfold—to over $8,000.
Appellant’s counsel immediately forwarded the new medical report to respondent’s adjuster, along with a settlement demand for $125,000. When respondent rejected this offer, appellant realized this was no longer a municipal court case and moved expeditiously to get it where it belonged, in superior court. He filed an amended complaint on February 20, 1992, seeking damages within the superior court’s jurisdiction and a transfer order to superior court on March 16. When that transfer was complete, appellant’s counsel moved expeditiously to serve this expanded legal action on respondent.
Appellant in effect tenders two explanations for the delay in serving respondent, each explanation covering a different period of the delay.
The first explanation relates to the first 18 months when appellant’s counsel thought he was dealing with a $5,000 case in municipal court. He was attempting to negotiate a settlement somewhere in that range without activating a full-scale litigation process which would have imposed costs on litigants and court alike. This appears reasonable, even commendable, conduct for an attorney handling such a case. Statutes of limitations compel plaintiffs to file lawsuits early on just to preserve their option to sue. It is not always in the best interests of the parties or of the judicial system itself to force them to proceed full bore into the litigation contest while there remains a reasonable prospect of settlement without litigation. This is especially so when the defendant is fully aware of the lawsuit and its nature, as respondent was in this case..
Appellant’s second explanation relates primarily to the period after he began learning unsettling news about the true extent of his client’s injuries. From that time on, plaintiff’s counsel was busy effecting a transfer from what he now knew to be the wrong court into the right court. In his brief, appellant asks that a good portion of this period be “tolled” and simply not considered a part of the period service was delayed.
Appellant might have had to depend on some sort of “tolling” if these events had delayed service beyond the mandatory three-year period. But it must be remembered appellant effected service in less than three years. The courts have “discretion” to dismiss this case in appropriate circumstances because appellant took longer than two; but they have no duty to do so. As a result, appellant need not establish this period was “tolled.”
*111The only question is whether it was reasonable behavior for an attorney to draft an amended complaint, move to transfer to superior court, etc., without serving on respondent an outmoded complaint which reflected the case would be heard in a different, soon to be erroneous, court. In my opinion, what appellant’s counsel did was not the only reasonable course he could have followed. But it was a reasonable course, and indeed probably the most reasonable one, given the circumstances of this case. This is especially true where as here service of the outmoded complaint would have been at best a formality since respondent already had a copy of that complaint and knew its contents.
For these reasons, I would reverse and allow plaintiff to have her day in court.
Putnam v. Clague (1992) 3 Cal.App.4th 542 [5 Cal.Rptr.2d 25].