Preview
FILED/ENDORSED
1 Richard W Freeman, Jr. (State Bar No 50533)
Scott 8 Brooks (State Bar No. 267320)
2 WOOD, SMITH, HENNING & BERMAN LLP
1401 Willow Pass Road, Suite 700 JAN 1 1 2011
3 Concord, California 94520-7982
Phone 925 356 8200 • Fax 925 356 8250 A IVlAClAS
4 By. Deputy Clerk
Attorneys for Defendant, R4C0RP, a California Corporatiofr
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8 SUPERIOR COURT OF THE STATE OF CALIFORNIA
9 COUNTY OF SACRAMENTO - UNUMITED JURISDICTION
10
11 FLORENTINE AND RODNEY ABBOTT, CASE NO. 07AS04450
12 Plaintiffs, DEFENDANT'S NOTICE OF MOTION
t o " AND MOTION TO SEVER ISSUE OF
13 V. SUCCESSOR LIABILITY;
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« ^^ 2 • DECLARATION IN SUPPORT THEREOF
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Z M CO o o 14 R4C0RP, a California Corporation, et al.,
z|^tS Complaint Filed November 8, 2007
15 Defendant
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DATE: January 14, 2011
£ 4o ^ 16 TIME, 9:00 am
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Q JOB AND RELATED CROSS-ACTIONS DEPT,: 43
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o Trial Date January 17, 2011
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19 TO ALL PARTIES AND THEIR ATTORNEYS OF RECORD:
20 PLEASE TAKE NOTICE that on January 14, 2011 at 9:00 am or as soon
21 thereafter as the matter may be heard in Department 43 of the above-entitled Court,
22 Defendant R4C0RP ("Defendant") will and hereby does move this Court for an order,
23 pursuant to section 1048(b) of the Code of Civil Procedure, that the issues of successor
24 liability to Plaintiffs FLORENTINE AND RODNEY ABBOTT ("Plaintiffs") be severed and
25 that this issue be tried, if necessary, after all others.
26 This motion is brought on the grounds that Defendant's alleged liability to Plaintiffs
27 as a successor must be tned separately because the resolution of this issue is dependant
28 on whether-liability is found, and a judgment entered, against the other defendants in the
LEGAL 05936-0065/1579619 1 _-j.
DEFENDANTS NOTICE OF MOTION AND MOTION TO SEVER ISSUE OF SUCCESSOR LIABILITY,
DECLARATION IN SUPPORT THEREOF
1 case It is also dependant on a damages award being entered against these other
2 defendants, as well as a subsequent failure on their part to satisfy that judgment to
3 Plaintiffs. Finally, since Defendant's potential liability rests on a "successor liability"
4 theory, which is equitable in nature, this issue must be determined by a judge in a
5 separate proceeding, since the other matters require a jury trial, while the successor
6 liability issue does not.
7 This Motion is based on this Notice of Motion and Motion, the attached
8 Memorandum of Points and Authorities, the attached Declaration of Richard W. Freeman
9 all documents and pleadings on file with this Court, and upon such oral and documentary
10 evidence as may be presented at the hearing of this Motion
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13 DATED: January 10, 2011 WOOD, S M I T A VHENNING & BERMAN LLP
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15 By: c^4-j^^
RICHARD W FREEMAN, JR.
16 SCOTT S. BROOKS
oO ? Attorneys for Defendant, R4C0RP, a California
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LEGAL 05936-0065/1579619 1
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DEFENDANT'S NOTICE OF MOTION AND MOTION TO SEVER ISSUE OF SUCCESSOR LIABILITY,
DECLARATION IN SUPPORT THEREOF
1 MEMORANDUM OF POINTS AND AUTHORITIES
2 I. INTRODUCTION
3 Plaintiffs claim that on or about October 1, 2005, they entered into an oral contract
4 with Defendant Britschgi, whereby Britschgi agreed to help them build their home
5 Plaintiffs further claim that on or about October 25, 2005, they entered into a written
6 contract with Defendant Ruybali dba CA Construction, to perform construction on the
7 subject home. Thereafter, Plaintiffs claimed their home suffered from construction
8 defects related to soil, foundation, and elevation issues
9 Plaintiffs filed their originai Complaint on November 8, 2007. On November 5,
10 2010, Plaintlffs filed a Third Amended Complaint, naming Defendant R4Corp as "the
11 successor to Richard Ruybalid dba CA Construction " Plaintiffs allege that Defendant "is
2 o S 12 thus liable for the acts of said defendant, as alleged herein, as a successor thereto, and
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13 not for any acts committed by defendant R4Corp on its own "
14 Plaintiffs' claims against Defendant are based solely on a theory of "successor
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15 liability." This is an equitable issue, which is dependant on their being a judgment of
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ill 17 Construction Therefore, the issue of Defendant's liability should be determined, if
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5 18 necessary, after the resolution of the other, foundational issues in this case.
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II. LEGAL STANDARD OF THE COURT'S POWER TO SEVER LIABILITY
20 ISSUES.
21 A trial judge has broad authority to sever specific issues from a lawsuit, and
22 appellate courts will not disturb an order of severance absence a clear abuse of
23 discretion. {McLetlan v. McLellan (1972) 23 Cal App.3d 343, 353 ) The authority is
24 rooted in several statutes, pnmarily. Code of Civil Procedure § 1048(b) ("section 1048"),
25 which provides the following:
26 The court, in furtherance of convenience or to avoid prejudice, or when
separate trials will be conducive to expedition and economy, may order a
27 separate tnal of any cause of action . . . or of any separate issue or of any
number of causes of action or issues.
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LEGAL 05936-0065/1579519 1
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DEFENDANTS NOTICE OF MOTION AND MOTION TO SEVER ISSUE OF SUCCESSOR LIABILITY,
DECLARATION IN SUPPORT THEREOF
1 The overriding objective of the doctrine of severance is to avoid wasting time and
2 money on the trial of one cause of action or issue, when they would be better resolved in
3 an independent action, or if the resolution of one set of issues will render moot the
4 resolution of others. (See, e g , Horten v. Joties (1972) 26 Cal. App. 3d 952, 955 )
5 Section 1048 provides ample authority to this Court to order that the issue of Defendant's
6 liability be tried independently, following resolution of the other issues in this case.
7 A Motion to Sever can be raised at any time, since section 1048 contains no
8 statutory deadlines. (See Code Civ Proc §1048). Therefore, "theoretically at least,
9 motions to sever or bifurcate can be made at any time " (Cal. Prac. Guide Civ Trials &
10 Ev. Ch. 4-G, § 4:398.) Furthermore, the court has discretion to sever issues sua sponte
11 at any time. (Buran Equipment Co v. H. & C. Investment Co. (1983) 142 Cal.App.3d 338,
12 343 [The Legislature, in the year prior to this trial, amended [this bifurcation statute] to
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15 handling the litigation."]) Buran Equipment concemed bifurcation, a specific type of
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18 III. THE ISSUE OF DEFENDANT'S LIABILITY SHOULD BE SEVERED BECAUSE
IT IS DEPENDANT ON A PREEXISTING JUDGMENT AGAINST OTHER
19 DEFENDANTS IN THE CASE, AND INVOLVES PURELY EQUITABLE ISSUES
THAT SHOULD BE TRIED BY A JUDGE, NOT A JURY.
20
21 The alleged liability against Defendant is based exclusively on a theory that
22 Defendant is "successively liable" for any debts or obligations imposed on defendant
23 Ruybalid dba CA Construction There are two broad reasons for why such an issue must
24 be tried separately, and secondanly, to the other issues in this case First, as a practical
25 and legal matter, a company cannot be successively liable unless and until another entity
26 or individual is shown to be liable in the first instance Further, before successive entities
27 can be looked to, the pnmanly liable defendants must have failed to respond to a
28 damages award entered against them. Second, the concept of "successor liability" is
LEGAL 05936-0065/1579619 1 ^ .
DEFENDANTS NOTICE OF MOTION AND MOTION TO SEVER ISSUE OF SUCCESSOR LIABILITY,
DECLARATION IN SUPPORT THEREOF
1 purely equitable, which means it must be tned exclusively by a judge, not a jury.
2
THE ISSUE OF DEFENDANT'S LIABILITY SHOULD BE SEVERED
3 BECAUSE IT PRESUPPOSES A FINDING OF LIABILITY AND
DAMAGES AGAINST DEFENDANT'S PREDECESSORS.
4
5 The claim asserted against Defendant is explicitly predicated on a preliminary
6 finding of liability against Defendant Richard Ruybalid dba CA Construction (See
7 Plaintiffs Third Amended Complaint, page 3 ["R4Corp is thus named as a defendant
8 solely as a successor to defendant Ruybalid dba CA Construction."].) Plaintiffs own
9 pleading, therefore, acknowledges the necessity of first finding liability against other
10 individuals and entities before any liability could possibly be imposed on Defendant.
11 Furtftermore, before Plaintiffs could recover from Defendant, they would have to
12 prove the amount of damages they were owed by defendant Ruybalid dba CA
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13 Construction. Next, Plaintiffs would have to show that they were unable to recover those
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O B. THE ISSUE OF DEFENDANT'S UABILITY SHOULD BE SEVERED
18 BECAUSE IT INVOLVES A PURELY EQUITABLE CLAIM THAT MUST
BE TRIED BY THE JUDGE, AND WOULD THUS BE IMPROPER TO
19 INCLUDE IN THE UPCOMING JURY TRIAL.
20 The general rule of successor liability provides that when "one corporation sells or
21 transfers all of its assets to another corporation, the latter is not liable for the debts and
22 liabilities of the former unless" one of four exceptions are satisfied {Ortiz v South Bend
23 Lathe (1975) 46 Cal App.3d 842, 846 [disapproved of in part on other grounds]) The
24 determination of successor liability involves "broad equitable considerations" and "is
25 exclusively for the tnal court." (Rosales v Thermex-Thermatron, Inc. (1998) 67
26 Cal App.4th 187, 196.) The court's job is ultimately to make a "determination of fairness."
27 (Id) Therefore, it would be improper to permit this issue to proceed in the current action,
28 in which a jury will be impaneled, and which will consume nine court days of tnal on
LEGAL 05936-006,5/15796191 .5.
DEFENDANT'S NOTICE OF MOTION AND MOTION TO SEVER ISSUE OF SUCCESSOR LIABILITY
DECLARATION IN SUPPORT THEREOF
1 issues not directly involving Defendant
2 IV. CONCLUSION
3 The severing of this matter is required in the interests of justice, because
4 Defendant cannot legally be held liable to Plaintiff unless and until liability is found on the
5 part of defendant Ruybalid dba CA Construction It is also dependant on a damages
6 award being entered against defendant Ruybalid dba CA Construction, as well as a
7 showing that Ruybalid dba CA Construction is unable to compensate Plaintiff
8 Furthermore, the question of Defendant's alleged "successor liability," if indeed it
9 ever needs to be examined, is a purely equitable determination for the trial judge, not a
10 jury Since a jury will be used in the present action, it would be improper to consolidate
11 this equitable issue with the other legal determinations.
z o 8 12 Finally, granting this Motion to Sever will also result in greater convenience for all
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13 parties involved, as well as the Court. Specifically, absent an order of severance.
14 Defendant will be forced to file various motions challenging Plaintiffs legal nght to
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16 drain on judicial resources. In sum, sevenng this case will benefit all parties and this
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21 DATED: January 10, 2011 WOOD, SMIT>4r1\IENNING & BERMAN LLP
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By. i
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RICHARD W FREEMAN, JR
SCOTT S. BROOKS
Attorneys for Defendant, R4C0RP, a California
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Corporation
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LEGAL 05936-0065/1579619 1
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DEFENDANTS NOTICE OF MOTION AND MOTION TO SEVER ISSUE OF SUCCESSOR LIABILITY,
DECLARATION IN SUPPORT THEREOF
1 DECLARATION OF RICHARD W. FREEMAN
2 I, Richard W. Freeman, do hereby declare as follows"
3 1. I am an attorney at law duly admitted to practice before the courts of the
4 State of California. I am a partner with WOOD, SMITH, HENNING & BERMAN LLP,
5 attorneys of record for Defendant R4C0RP. I am the designated trial attorney for this
6 matter, and am the primary handling attorney. I know the following facts to be true of my
7 own knowledge, and if called to testify, I could competently do so
8 2 This Declaration is made in support of Defendant R4C0RP'S Motion to
9 Sever the issue of its alleged liability to Plaintiffs. The Motion is brought on the grounds
10 that Defendant's alleged liability to Plaintiffs must be tried separately because the
11 resolution ofthis issue is dependant on whether liability is found, and a judgment issued,
z 12 against the other defendants in the case. It is also dependant on the damages award, if
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13 any, entered against these other defendants. Finally, Defendant's potential liability rests
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LEGAL 05936-0065/1579619 1 -8-
DEFENDANTS NOTICE OF MOTION AND MOTION TO SEVER ISSUE OF SUCCESSOR LIABILITY,
DECLARATION IN SUPPORT THEREOF
PROOF OF SERVICE
STATE OF CALIFORNIA, COUNTY OF CONTRA COSTA
I am employed in the County of Contra Costa, State of California I am over the
age of eighteen years and not a party to the within action; my business address is 1401
Willow Pass Road, Suite 700, Concord, California 94520-7982.
5 On January 10, 2011, I sen/ed the following document(s) descnbed as
DEFENDANT'S NOTICE OF MOTION AND MOTION TO SEVER ISSUE OF
6 SUCCESSOR LIABILITY; DECLARATION IN SUPPORT THEREOF on the interested
parties in this action as follows:
7
SEE ATTACHED UST
8
BY MAIL: I placed true copies of the foregoing document(s) enclosed in sealed
9 envelopes addressed as shown on the Service List. I am "readily familiar" with Wood,
Smith, Henning & Berman's practice for collecting and processing correspondence for
10 mailing with the United States Postal Service. Under that practice, it would be deposited
with the United States Postal Service that same day in the ordinary course of business.
11 Such envelope(s) were placed for collection and mailing with postage thereon fully
z prepaid at Concord, California, on that same day following ordinary business practices.
< 12 (Code Civ. Proc §1013, subd. (a) and 1013a(3).)
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1 SERVICE LIST
Abbott V. Britschgi, et al.
2 Case No. SACSC - 07AS04450
3 Stephanie J, Finelli, Esq. Gregory K. Federico, Esq.
Law Office of Stephanie J. Finelli Archer Norris, APLC
4 1007-7*''Street 301 University Avenue
Suite 500 Suite 110
5 Sacramento, CA 95814 Sacramento, CA 95825-5537
Tel.: (916) 443-2144/Fax: (916)443-1511 Tel.: (916) 646-2480/Fax: (916) 646-5696
6 Attorneys for PLAINTIFFS Attorneys for Cross-Defendant/Cross-
Complainants RICHARD KIRK
7 RUYBALID dba CA CONSTRUCTION
8 Richard D. Sopp
Maloney, Wheatley, Sopp & Brooks
9 1004 River Rock Drive
Suite 245
10 Folsom, CA 95630
Tel.: (916) 988-3857/Fax: (916) 988-5296
11 Attorneys for Cross-Defendant CADRE
DESIGN GROUP, INC.
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Preview
FILED/ENDORSED 1 Richard W Freeman, Jr. (State Bar No 50533) Scott 8 Brooks (State Bar No. 267320) 2 WOOD, SMITH, HENNING & BERMAN LLP 1401 Willow Pass Road, Suite 700 JAN 1 1 2011 3 Concord, California 94520-7982 Phone 925 356 8200 • Fax 925 356 8250 A IVlAClAS 4 By. Deputy Clerk Attorneys for Defendant, R4C0RP, a California Corporatiofr 5 6 7 8 SUPERIOR COURT OF THE STATE OF CALIFORNIA 9 COUNTY OF SACRAMENTO - UNUMITED JURISDICTION 10 11 FLORENTINE AND RODNEY ABBOTT, CASE NO. 07AS04450 12 Plaintiffs, DEFENDANT'S NOTICE OF MOTION t o " AND MOTION TO SEVER ISSUE OF 13 V. SUCCESSOR LIABILITY; •0 » Q « ^^ 2 • DECLARATION IN SUPPORT THEREOF ^5i Z _ ra K a: o Z M CO o o 14 R4C0RP, a California Corporation, et al., z|^tS Complaint Filed November 8, 2007 15 Defendant i_ - { Q: o> DATE: January 14, 2011 £ 4o ^ 16 TIME, 9:00 am <«. 5 § | Q JOB AND RELATED CROSS-ACTIONS DEPT,: 43 O ^ 17 o Trial Date January 17, 2011 18 19 TO ALL PARTIES AND THEIR ATTORNEYS OF RECORD: 20 PLEASE TAKE NOTICE that on January 14, 2011 at 9:00 am or as soon 21 thereafter as the matter may be heard in Department 43 of the above-entitled Court, 22 Defendant R4C0RP ("Defendant") will and hereby does move this Court for an order, 23 pursuant to section 1048(b) of the Code of Civil Procedure, that the issues of successor 24 liability to Plaintiffs FLORENTINE AND RODNEY ABBOTT ("Plaintiffs") be severed and 25 that this issue be tried, if necessary, after all others. 26 This motion is brought on the grounds that Defendant's alleged liability to Plaintiffs 27 as a successor must be tned separately because the resolution of this issue is dependant 28 on whether-liability is found, and a judgment entered, against the other defendants in the LEGAL 05936-0065/1579619 1 _-j. DEFENDANTS NOTICE OF MOTION AND MOTION TO SEVER ISSUE OF SUCCESSOR LIABILITY, DECLARATION IN SUPPORT THEREOF 1 case It is also dependant on a damages award being entered against these other 2 defendants, as well as a subsequent failure on their part to satisfy that judgment to 3 Plaintiffs. Finally, since Defendant's potential liability rests on a "successor liability" 4 theory, which is equitable in nature, this issue must be determined by a judge in a 5 separate proceeding, since the other matters require a jury trial, while the successor 6 liability issue does not. 7 This Motion is based on this Notice of Motion and Motion, the attached 8 Memorandum of Points and Authorities, the attached Declaration of Richard W. Freeman 9 all documents and pleadings on file with this Court, and upon such oral and documentary 10 evidence as may be presented at the hearing of this Motion 11 z 12 < a: UJS! 13 DATED: January 10, 2011 WOOD, S M I T A VHENNING & BERMAN LLP 111 PS! Z 1* c/) O o 14 15 By: c^4-j^^ RICHARD W FREEMAN, JR. 16 SCOTT S. BROOKS oO ? Attorneys for Defendant, R4C0RP, a California 17 o e Corporation o 18 5 19 20 21 22 23 24 25 26 27 28 LEGAL 05936-0065/1579619 1 -2- DEFENDANT'S NOTICE OF MOTION AND MOTION TO SEVER ISSUE OF SUCCESSOR LIABILITY, DECLARATION IN SUPPORT THEREOF 1 MEMORANDUM OF POINTS AND AUTHORITIES 2 I. INTRODUCTION 3 Plaintiffs claim that on or about October 1, 2005, they entered into an oral contract 4 with Defendant Britschgi, whereby Britschgi agreed to help them build their home 5 Plaintiffs further claim that on or about October 25, 2005, they entered into a written 6 contract with Defendant Ruybali dba CA Construction, to perform construction on the 7 subject home. Thereafter, Plaintiffs claimed their home suffered from construction 8 defects related to soil, foundation, and elevation issues 9 Plaintiffs filed their originai Complaint on November 8, 2007. On November 5, 10 2010, Plaintlffs filed a Third Amended Complaint, naming Defendant R4Corp as "the 11 successor to Richard Ruybalid dba CA Construction " Plaintiffs allege that Defendant "is 2 o S 12 thus liable for the acts of said defendant, as alleged herein, as a successor thereto, and OL UJ i- 5 K « J . 13 not for any acts committed by defendant R4Corp on its own " 14 Plaintiffs' claims against Defendant are based solely on a theory of "successor 5 ra Q: (K _ Z CW O o 15 liability." This is an equitable issue, which is dependant on their being a judgment of 2§a 16 liability, and resultant damages, entered against defendants Ruybalid dba CA w d O ill 17 Construction Therefore, the issue of Defendant's liability should be determined, if O 5 18 necessary, after the resolution of the other, foundational issues in this case. 19 II. LEGAL STANDARD OF THE COURT'S POWER TO SEVER LIABILITY 20 ISSUES. 21 A trial judge has broad authority to sever specific issues from a lawsuit, and 22 appellate courts will not disturb an order of severance absence a clear abuse of 23 discretion. {McLetlan v. McLellan (1972) 23 Cal App.3d 343, 353 ) The authority is 24 rooted in several statutes, pnmarily. Code of Civil Procedure § 1048(b) ("section 1048"), 25 which provides the following: 26 The court, in furtherance of convenience or to avoid prejudice, or when separate trials will be conducive to expedition and economy, may order a 27 separate tnal of any cause of action . . . or of any separate issue or of any number of causes of action or issues. 28 LEGAL 05936-0065/1579519 1 -3- DEFENDANTS NOTICE OF MOTION AND MOTION TO SEVER ISSUE OF SUCCESSOR LIABILITY, DECLARATION IN SUPPORT THEREOF 1 The overriding objective of the doctrine of severance is to avoid wasting time and 2 money on the trial of one cause of action or issue, when they would be better resolved in 3 an independent action, or if the resolution of one set of issues will render moot the 4 resolution of others. (See, e g , Horten v. Joties (1972) 26 Cal. App. 3d 952, 955 ) 5 Section 1048 provides ample authority to this Court to order that the issue of Defendant's 6 liability be tried independently, following resolution of the other issues in this case. 7 A Motion to Sever can be raised at any time, since section 1048 contains no 8 statutory deadlines. (See Code Civ Proc §1048). Therefore, "theoretically at least, 9 motions to sever or bifurcate can be made at any time " (Cal. Prac. Guide Civ Trials & 10 Ev. Ch. 4-G, § 4:398.) Furthermore, the court has discretion to sever issues sua sponte 11 at any time. (Buran Equipment Co v. H. & C. Investment Co. (1983) 142 Cal.App.3d 338, 12 343 [The Legislature, in the year prior to this trial, amended [this bifurcation statute] to LU • J . f^ 13 encourage the tnal court, on its own motion, to make orders to try any issue or any part m = 58! y do <. I 14 thereof prior to the tnal of any other issue in the interest of "the economy and efficiency of z « g§ -; fM« 2 " <2 U. 15 handling the litigation."]) Buran Equipment concemed bifurcation, a specific type of liJ EStfrn CO 0^ cn O UJ 16 severance, but the rule applies equally to any form of severance action, due to the O 2 w Q" o 81 17 overarching legislative goals and policy concerns regarding efficiency and fairness. o 18 III. THE ISSUE OF DEFENDANT'S LIABILITY SHOULD BE SEVERED BECAUSE IT IS DEPENDANT ON A PREEXISTING JUDGMENT AGAINST OTHER 19 DEFENDANTS IN THE CASE, AND INVOLVES PURELY EQUITABLE ISSUES THAT SHOULD BE TRIED BY A JUDGE, NOT A JURY. 20 21 The alleged liability against Defendant is based exclusively on a theory that 22 Defendant is "successively liable" for any debts or obligations imposed on defendant 23 Ruybalid dba CA Construction There are two broad reasons for why such an issue must 24 be tried separately, and secondanly, to the other issues in this case First, as a practical 25 and legal matter, a company cannot be successively liable unless and until another entity 26 or individual is shown to be liable in the first instance Further, before successive entities 27 can be looked to, the pnmanly liable defendants must have failed to respond to a 28 damages award entered against them. Second, the concept of "successor liability" is LEGAL 05936-0065/1579619 1 ^ . DEFENDANTS NOTICE OF MOTION AND MOTION TO SEVER ISSUE OF SUCCESSOR LIABILITY, DECLARATION IN SUPPORT THEREOF 1 purely equitable, which means it must be tned exclusively by a judge, not a jury. 2 THE ISSUE OF DEFENDANT'S LIABILITY SHOULD BE SEVERED 3 BECAUSE IT PRESUPPOSES A FINDING OF LIABILITY AND DAMAGES AGAINST DEFENDANT'S PREDECESSORS. 4 5 The claim asserted against Defendant is explicitly predicated on a preliminary 6 finding of liability against Defendant Richard Ruybalid dba CA Construction (See 7 Plaintiffs Third Amended Complaint, page 3 ["R4Corp is thus named as a defendant 8 solely as a successor to defendant Ruybalid dba CA Construction."].) Plaintiffs own 9 pleading, therefore, acknowledges the necessity of first finding liability against other 10 individuals and entities before any liability could possibly be imposed on Defendant. 11 Furtftermore, before Plaintiffs could recover from Defendant, they would have to 12 prove the amount of damages they were owed by defendant Ruybalid dba CA UJ D <^ ^ 13 Construction. Next, Plaintiffs would have to show that they were unable to recover those CQ 08 o: O — 14 damages Only then, could Plaintiff assert successor liability against Defendant, in efforts Zrag S o Z CW O 5 15 to recover those theoretically-imposed damages owed, first and foremost, by defendant •dg» 99^ 16 Ruybalid dba CA Construction w f 8s ? zo Q O o O f 1 0 Si 17 O B. THE ISSUE OF DEFENDANT'S UABILITY SHOULD BE SEVERED 18 BECAUSE IT INVOLVES A PURELY EQUITABLE CLAIM THAT MUST BE TRIED BY THE JUDGE, AND WOULD THUS BE IMPROPER TO 19 INCLUDE IN THE UPCOMING JURY TRIAL. 20 The general rule of successor liability provides that when "one corporation sells or 21 transfers all of its assets to another corporation, the latter is not liable for the debts and 22 liabilities of the former unless" one of four exceptions are satisfied {Ortiz v South Bend 23 Lathe (1975) 46 Cal App.3d 842, 846 [disapproved of in part on other grounds]) The 24 determination of successor liability involves "broad equitable considerations" and "is 25 exclusively for the tnal court." (Rosales v Thermex-Thermatron, Inc. (1998) 67 26 Cal App.4th 187, 196.) The court's job is ultimately to make a "determination of fairness." 27 (Id) Therefore, it would be improper to permit this issue to proceed in the current action, 28 in which a jury will be impaneled, and which will consume nine court days of tnal on LEGAL 05936-006,5/15796191 .5. DEFENDANT'S NOTICE OF MOTION AND MOTION TO SEVER ISSUE OF SUCCESSOR LIABILITY DECLARATION IN SUPPORT THEREOF 1 issues not directly involving Defendant 2 IV. CONCLUSION 3 The severing of this matter is required in the interests of justice, because 4 Defendant cannot legally be held liable to Plaintiff unless and until liability is found on the 5 part of defendant Ruybalid dba CA Construction It is also dependant on a damages 6 award being entered against defendant Ruybalid dba CA Construction, as well as a 7 showing that Ruybalid dba CA Construction is unable to compensate Plaintiff 8 Furthermore, the question of Defendant's alleged "successor liability," if indeed it 9 ever needs to be examined, is a purely equitable determination for the trial judge, not a 10 jury Since a jury will be used in the present action, it would be improper to consolidate 11 this equitable issue with the other legal determinations. z o 8 12 Finally, granting this Motion to Sever will also result in greater convenience for all < gS" 13 parties involved, as well as the Court. Specifically, absent an order of severance. 14 Defendant will be forced to file various motions challenging Plaintiffs legal nght to 5 IStEo: o ^ « W O o UJ i a ^ S ! 15 recover against it This will create additional costs for all parties, as well as a greater 16 drain on judicial resources. In sum, sevenng this case will benefit all parties and this Q O •» o S 17 Court Therefore, Defendant respectfully requests that this Court GRANT its Motion to O 5 18 Sever the issue of its alleged liability to Plaintiff 19 20 21 DATED: January 10, 2011 WOOD, SMIT>4r1\IENNING & BERMAN LLP 22 / j yi c 23 24 By. i i^.J^' RICHARD W FREEMAN, JR SCOTT S. BROOKS Attorneys for Defendant, R4C0RP, a California 25 Corporation 26 27 28 LEGAL 05936-0065/1579619 1 -6- DEFENDANTS NOTICE OF MOTION AND MOTION TO SEVER ISSUE OF SUCCESSOR LIABILITY, DECLARATION IN SUPPORT THEREOF 1 DECLARATION OF RICHARD W. FREEMAN 2 I, Richard W. Freeman, do hereby declare as follows" 3 1. I am an attorney at law duly admitted to practice before the courts of the 4 State of California. I am a partner with WOOD, SMITH, HENNING & BERMAN LLP, 5 attorneys of record for Defendant R4C0RP. I am the designated trial attorney for this 6 matter, and am the primary handling attorney. I know the following facts to be true of my 7 own knowledge, and if called to testify, I could competently do so 8 2 This Declaration is made in support of Defendant R4C0RP'S Motion to 9 Sever the issue of its alleged liability to Plaintiffs. The Motion is brought on the grounds 10 that Defendant's alleged liability to Plaintiffs must be tried separately because the 11 resolution ofthis issue is dependant on whether liability is found, and a judgment issued, z 12 against the other defendants in the case. It is also dependant on the damages award, if < s UJ =; S m 13 any, entered against these other defendants. Finally, Defendant's potential liability rests m 14 on a "successor liability" theory, which is equitable in nature, which means it must be z Ti D: a: o Z i» w O o UJ E £ ^ CO 15 determined by a judge in a separate proceeding, since the present action involves a jury x||oS X 29S 16 tnal b do" 5o L 2 Q SoO zul • O Cl t 2gs 16 5 w i8s ^ 2g Q' oO J 17 O i 18 19 20 21 22 23 24 25 26 27 28 LEGAL 05936-0065/1579619 1 -8- DEFENDANTS NOTICE OF MOTION AND MOTION TO SEVER ISSUE OF SUCCESSOR LIABILITY, DECLARATION IN SUPPORT THEREOF PROOF OF SERVICE STATE OF CALIFORNIA, COUNTY OF CONTRA COSTA I am employed in the County of Contra Costa, State of California I am over the age of eighteen years and not a party to the within action; my business address is 1401 Willow Pass Road, Suite 700, Concord, California 94520-7982. 5 On January 10, 2011, I sen/ed the following document(s) descnbed as DEFENDANT'S NOTICE OF MOTION AND MOTION TO SEVER ISSUE OF 6 SUCCESSOR LIABILITY; DECLARATION IN SUPPORT THEREOF on the interested parties in this action as follows: 7 SEE ATTACHED UST 8 BY MAIL: I placed true copies of the foregoing document(s) enclosed in sealed 9 envelopes addressed as shown on the Service List. I am "readily familiar" with Wood, Smith, Henning & Berman's practice for collecting and processing correspondence for 10 mailing with the United States Postal Service. Under that practice, it would be deposited with the United States Postal Service that same day in the ordinary course of business. 11 Such envelope(s) were placed for collection and mailing with postage thereon fully z prepaid at Concord, California, on that same day following ordinary business practices. < 12 (Code Civ. Proc §1013, subd. (a) and 1013a(3).) a: Ul m w 13 I declare under penalty of perjury under the laws ofthe State of California that the iQ x * 9 8s 16 o 8| o 17 o Hi 18 19 20 21 22 23 24 25 26 27 28 -1- 1 SERVICE LIST Abbott V. Britschgi, et al. 2 Case No. SACSC - 07AS04450 3 Stephanie J, Finelli, Esq. Gregory K. Federico, Esq. Law Office of Stephanie J. Finelli Archer Norris, APLC 4 1007-7*''Street 301 University Avenue Suite 500 Suite 110 5 Sacramento, CA 95814 Sacramento, CA 95825-5537 Tel.: (916) 443-2144/Fax: (916)443-1511 Tel.: (916) 646-2480/Fax: (916) 646-5696 6 Attorneys for PLAINTIFFS Attorneys for Cross-Defendant/Cross- Complainants RICHARD KIRK 7 RUYBALID dba CA CONSTRUCTION 8 Richard D. Sopp Maloney, Wheatley, Sopp & Brooks 9 1004 River Rock Drive Suite 245 10 Folsom, CA 95630 Tel.: (916) 988-3857/Fax: (916) 988-5296 11 Attorneys for Cross-Defendant CADRE DESIGN GROUP, INC. z 12 < s LU i t 3 LLI t ci " 13 T S ^rt m j2 K CN - I9rf5 14 5 oc c _ Z wwO 5 UJ g S ^ I O 15 != d o " 16 <^. 5 § i Q O J " a IS 17 o 18 19 20 21 22 23 24 25 26 27 28