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Ruling
THE HILD CORPORATION DBA INDUSTRIAL HIGH VOLTAGE, A CALIFORNIA CORPORATION VS JASON P GUILLEN, ET AL.
Jul 16, 2024 |
22TRCV00100
Case Number:
22TRCV00100
Hearing Date:
July 16, 2024
Dept:
P I. Defendants Motion for Attorneys Fees II. Plaintiffs Motion to Tax Costs The court considered the moving papers, oppositions, and replies related to each motion. RULING Defendants motion for attorneys fees is denied. Plaintiffs motion to strike or tax costs is granted in part. BACKGROUND Plaintiff The Hild Corporation dba Industrial High Voltage sued defendants Jason Paul Guillen, Tyson B. Schilz, Industrial Line Voltage LLC, and Gectwo, Inc. on February 9, 2022 for (1) conversion, (2) intentional interference with contractual relations, (3) intentional interference with prospective economic advantage, (4) negligent interference with prospective economic advantage, and (5) unfair competition. On September 11, 2023, the Court entered summary judgment in favor of defendants Schilz and Gectwo, Inc. (Defendants). On January 5, 2024, Defendants moved for attorneys fees. On the same date, they filed their first memorandum of costs. On January 22, 2024, Plaintiff moved to strike or tax Defendants costs. On February 21, 2024, Defendants opposed, and on February 27, 2024, Plaintiff replied. On March 5, 2024, the Court continued the hearing on the motion to tax to June 14, 2024, and set Defendants fees motion to be heard concurrently. The two motions were later continued again and set to be heard on this date. On April 24, 2024, Defendants filed a second memorandum of costs On May 14, 2024, Plaintiff filed a second motion to strike or tax costs. After a continuance, the Court set the second motion to tax for hearing on this date also. On July 2, 2024, Defendants filed their opposition to Plaintiffs second motion to tax costs. On July 7, 2024, Plaintiff filed its reply. On July 9, 2024, Defendants filed their reply in support of their motion for attorneys fees. LEGAL AUTHORITY Recovery of Attorneys Fees Code of Civil Procedure section 1021 codifies the American Rule, that each party to litigation presumptively bears its own fees: Except as attorney's fees are specifically provided for by statute, the measure and mode of compensation of attorneys and counselors at law is left to the agreement, express or implied, of the parties; but parties to actions or proceedings are entitled to their costs, as hereinafter provided. Notwithstanding the American Rule, the Code of Civil Procedure and Civil Code both permit recovery of fees by statute or contract. Code of Civil Procedure section 1033.5 includes attorneys fees among recoverable costs when authorized by ... (A) Contract. (B) Statute. [or] (C) Law. (Code Civ. Proc., § 1033.5(a)(10).) And Civil Code section 1717(a) states that [i]n any action on a contract, where the contract specifically provides that attorney's fees and costs, which are incurred to enforce that contract, shall be awarded either to one of the parties or to the prevailing party, then the party who is determined to be the party prevailing on the contract, whether he or she is the party specified in the contract or not, shall be entitled to reasonable attorney's fees in addition to other costs. [¶] ... [¶] Reasonable attorney's fees shall be fixed by the court, and shall be an element of the costs of suit. Recovery of Costs The rule for cost-shifting turns the rule for fee-shifting on its head: Except as otherwise expressly provided by statute, a prevailing party is entitled as a matter of right to recover costs in any action or proceeding. (Code Civ. Proc., § 1032, subd. (b), emphasis added.) A party claiming costs must serve and file a memorandum of costs. (Cal. Rules of Court, rule 3.1700(a).) The opposing party may then contest the costs by filing a motion to tax costs. (Code Civ. Proc., § 1034; Cal. Rules of Court, rule 3.1700(b).) If the items appearing in a cost bill appear to be proper charges, the burden is on the party seeking to tax costs to show that they were not reasonable or necessary. On the other hand, if the items are properly objected to, they are put in issue and the burden of proof is on the party claiming them as costs. (Ladas v. California State Auto. Assn. (1993) 19 Cal.App.4th 761, 774.) TIMELINESS Defendants argue Plaintiffs opposition to their motion for fees should be disregarded as untimely. The Court declines to disregard Defendants filing. (See Code Civ. Proc., § 128(a)(8) [discretion to amend procedures to conform to justice].) Plaintiff was able to file a substantive reply, and after several continuances had ample opportunity to sur-reply as necessary. DISCUSSION The parties have filed cross-motions. Defendants move to recover attorneys fees, which they have also included in their post-judgment memorandum of costs. Plaintiff has opposed Defendants fees claim and independently moved to strike Defendants cost memorandum. The Court discusses the overlapping motions in turn. Attorneys Fees Defendants argue they are entitled to recover costs based on Code of Civil Procedure section 1033.5 and Civil Code section 1717. They point to no contract between Plaintiff and Defendants that might authorize the Court to award fees in this instance. Instead, they argue [t]he court may[] in its discretion award all costs and attorneys fees to [an] injured person ... . (Mot., 4:3-4, citing Chinn v. KMR Property Management (2008) 166 Caql.App.4th 175, 194 (Chinn).) Defendants also propose a broad reading of the phrase on the contract in Civil Code section 1717, suggesting that Plaintiffs suit is on a contract because the action involves a contract . (Mot., 4:10-16, citing Dell Merk, Inc. v. Franzia (2005) 132 Cal.App.4th 443, 455.) In their Reply, Defendants also raise the argument that they are entitled to fees under Code of Civil Procedure section 1021.5, which allows the Court to award fees to a party who litigates in the public interest. (See Reply, 3:1-6.) As to Defendants first argument: Defendants case law does not suggest the Court has discretion to award fees whenever it wants. The case discusses the Courts well-established discretion to determine who is a prevailing party in order to shift fees or costs. (Chinn, supra, at p. 194.) Defendants do not show the Court has discretion to depart from the American Rule at will, nor does the Court believe it has such discretion. As to Civil Code section 1717: this action is not on a contract. Although the complaint refers to several contracts with third parties, none of Plaintiffs claims rely on any contract with Defendants. Apparently Plaintiff produced some of these third-party contracts in discovery, and those contracts contain fee provisions. But none of those contracts are agreements between Plaintiff and Defendants, and none applies to this case. Defendants misstate the law when they suggest an action is on a contract whenever it involves the contract. Rather, [a]n action is on the contract when it is brought to enforce the provisions of the contract. (MBNA America Bank, N.A. v. Gorman (2006) 147 Cal.App.4th Supp. 1, 7.) That was the case in Dell Merk, Inc. v. Franzia (2005) 132 Cal.App.4th 443, the only case Defendants cite in support of their argument. It is not the case here. Plaintiffs own (mistaken) prayer for fees in its complaint does not amount to any waiver or concession on this point. The question for purposes of Civil Code 1717 is not whether either party demands fees, but whether [either] party would have been liable for the fees of the opposing party if the opposing party had prevailed. (Real Property Services Corp. v. City of Pasadena (1994) 25 Cal.App.4th 375, 382.) Whether or not Plaintiff prayed for fees, they couldnt recover them on any apparent contract. Neither can Defendants. Defendants raise their section 1021.5 argument only in Reply, but given the continuances of the motion Plaintiff has had an opportunity respond, and the Court considers the point. It is not persuasive. [E]ligibility for section 1021.5 attorney fees is established when (1) plaintiffs action has resulted in the enforcement of an important right affecting the public interest, (2) a significant benefit, whether pecuniary or nonpecuniary has been conferred on the general public or a large class of persons and (3) the necessity and financial burden of private enforcement are such as to make the award appropriate. [Citation.] (Conservatorship of Whitley (2010) 50 Cal.4th 1206, 1214.) Defendants argue their defense was in the public interest because by successfully defending themselves, they have thwarted Plaintiffs hypothetical attempts to thwart third parties rights to contract. Even accepted as true, this hypothetical benefit to a small subset of third parties satisfies none of the requirements for fee-shifting under Code of Civil Procedure section 1021.5. Defendants motion for attorneys fees is denied. Motion to Tax Costs A prevailing party who claims costs must serve and file a memorandum of costs within 15 days after the date of service of the notice of entry of judgment or dismissal by the clerk under Code of Civil Procedure section 664.5 or the date of service of written notice of entry of judgment or dismissal ... . (Cal. Rules of Court, rule 3.1700(a)(1).) The Court entered judgment for Defendants on April 11, 2024. The Court did not mail formal notice to the parties; the Court mailed its order to Defendants counsel and ordered Defendants to give notice of the ruling. (See 09-11-2024 Minute Order, p. 8.) On April 16, 2024, Defendants filed their Notice of entry of judgment with the Court with proof of electronic service and service by mail. (11-20-2023 Notice of Ruling.) While Defendants had previously filed a memorandum of costs on January 5, 2024, the court disregards it as it was premature. This ruling is predicated upon the memorandum of costs timely filed on April 24, 2024. Having considered that memorandum as well as the motion to tax costs, the court awards the following costs: Filing and motion fees in the amount of $1830.74, Jury Fees in the amount of $164.76, and Document retrieval fees in the amount of $131.33. The total costs awarded are: $2,126.83. RULING Defendants motion for attorneys fees is denied. Plaintiffs motion to tax costs is granted in part.
Ruling
WOOLSEY vs STATE FARM GENERAL INSURANCE COMPANY
Jul 21, 2024 |
CVSW2206963
WOOLSEY VS STATE FARM
CVSW2206963 GENERAL INSURANCE MOTION FOR SUMMARY JUDGMENT
COMPANY
Tentative Ruling:
The hearing has been continued on the court’s own motion due to Crowdstrike
shutdown issues.
Ruling
LUNZER vs WHITE, et al.
Jul 18, 2024 |
Civil Unlimited (Insurance Coverage (not complex)) |
23CV046127
23CV046127: LUNZER vs WHITE, et al.
07/18/2024 Hearing on Motion to Strike Plaintiff Thomas Lunzer's Second Amended
Complaint; filed by Tom Pettygrove (Defendant) in Department 518
Tentative Ruling - 07/16/2024 Victoria Kolakowski
The Motion to Strike (not initial pleading) Notice of Motion and Motion to Strike Plaintiff's
second amended complaint filed by Tom Pettygrove on 04/23/2024 is Denied.
The motion is moot in light of the Court's ruling on Pettygrove's demurrer.
PLEASE NOTE: Pursuant to California Rule of Court 3.1308, subdivision (a)(1), this tentative
ruling will become the order of the Court unless it is contested before 4:00 PM on the court day
preceding the noticed hearing.
To contest a tentative ruling, a party should do the following:
First, the party must notify Department 518, by email at Dept518@alameda.courts.ca.gov and
copy all counsel of record and self-represented parties. The contesting party must state in the
subject line of the email the case name, case number and motion.
Second, the party shall log into the eCourt Public Portal, search for this case (e.g., by case
number), select the case name, select the "Tentative Rulings" tab, click the "Click to Contest this
Ruling" button, enter the party's name and a brief statement of the party's reason for contesting
the tentative, and click "Proceed."
Parties may appear via videoconference, using the Zoom.com website or application.
TO CONNECT TO ZOOM:
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Topic: Department 518's Personal Meeting Room
Join ZoomGov Meeting
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SUPERIOR COURT OF CALIFORNIA
COUNTY OF ALAMEDA
23CV046127: LUNZER vs WHITE, et al.
07/18/2024 Hearing on Motion to Strike Plaintiff Thomas Lunzer's Second Amended
Complaint; filed by Tom Pettygrove (Defendant) in Department 518
• +1 669 254 5252 US (San Jose)
Ruling
JOKAKE CONSTRUCTION SERVICES, INC., AN ARIZONA CORPORATION VS PASADENA OAKS LIFE PROPERTIES, LLC, A CALIFORNIA LIMITED LIABILITY COMPANY, ET AL.
Jul 22, 2024 |
22AHCV00484
Case Number:
22AHCV00484
Hearing Date:
July 22, 2024
Dept:
P
[TENTATIVE] ORDER GRANTING TRAVELERS CASUALTY AND SURETY COMPANY OF AMERICAS MOTION TO CONSOLIDATE TRAVELERS ACTION WITH CONSOLIDATED ACTION FOR ALL PURPOSES
Cross-Defendant and Cross-Complainant TRAVELERS CASUALTY AND SURETY COMPANY OF AMERICAS (Travelers) Motion to Consolidate its case with this consolidated action came on regularly for hearing on July 22, 2024 at 8:30 a.m. in Department P of the above-referenced Court. The parties appeared as noted in the record.
After considering the moving and opposing papers, arguments of counsel, and all matters presented to the Court, and good cause appearing therefor, the Court orders as follows:
1.
That the instant consolidated action entitled Jokake Construction services, Inc. v. Pasadena Oaks Life Properties, LLC, et al., Lead Case No. 22AHCV00484 and the related case entitled Travelers Casualty and Surety Company of America v. Kincaid Industries, Inc., et al., Case No. 24NNCV00440 be consolidated for all purposes, including trial.
2.
That all documents filed hereinafter must be filed in the lead case, bearing Case No. 22AHCV00484, and must include the caption and case number of the lead case, followed by the case numbers of all other consolidated matters.
IT IS SO ORDERED.
DATED: July 22, 2024
JARED D. MOSES
JUDGE OF THE SUPERIOR COURT
Ruling
GARY N. NEIL ET AL VS. BAMBOO INSURANCE SERVICES, INC. ET AL
Jul 17, 2024 |
CGC24612762
Matter on the Law & Motion Calendar for Wednesday, July 17, 2024, Line 12. 2 - DEFENDANT SUTTON NATIONAL INSURANCE's COMPANY DEMURRER to COMPLAINT. Off calendar. The Peters declaration indicates counsel did not meet and confer in person, by telephone, or by video conference, as required by CCP 430.41. Responsive pleadings are now due by August 19, 2024. For the 9:30 a.m. Law & Motion calendar, all attorneys and parties may appear in Department 302 remotely. Remote hearings will be conducted by videoconference using Zoom. To appear remotely at the hearing, go to the court's website at sfsuperiorcourt.org under "Online Services," navigate to "Tentative Rulings," and click on the appropriate link, or dial the corresponding phone number. Any party who contests a tentative ruling must send an email to contestdept302tr@sftc.org with a copy to all other parties by 4pm stating, without argument, the portion(s) of the tentative ruling that the party contests. The subject line of the email shall include the line number, case name and case number. The text of the email shall include the name and contact information, including email address, of the attorney or party who will appear at the hearing. The court no longer provides a court reporter in the Law & Motion Department. Parties may retain their own reporter, who may appear in the courtroom or remotely. A retained reporter must be a California certified court reporter (CSR), for only a CSR's transcript may be used in California courts. If a CSR is being retained, include in your email all of the following: their name, CSR and telephone numbers, and their individual work email address. =(302/CK)
Ruling
ADR INC. VS KAIO CONSTRUCTION GROUP, INC.
Jul 17, 2024 |
23VECV00218
Case Number:
23VECV00218
Hearing Date:
July 17, 2024
Dept:
T
23VECV00218 ADR v KAIO
[TENTATIVE] ORDER: Cross-Defendants ADR Design, Inc. and Gabriel Ebaiovs Demurrer to the Cross-Complaint is SUSTAINED WITH 20 DAYS LEAVE TO AMEND as to the second, third, and fourth causes of action and is OVERRULED as to the fifth cause of action. Leave to amend is not to add new causes of action but to address the deficiencies set forth in this decision.
Cross-Defendants ADR Design, Inc. and Gabriel Ebaiovs Motion to Strike is GRANTED WITH 20 DAYS LEAVE TO AMEND.
Introduction
Cross-Defendants ADR Design, Inc. (ADR) and Gabriel Ebaiov (Ebaiov) (collectively, Cross-Defendants) demurred to Cross-Complainant Kaio Construction Group, Inc.s (Cross-Complainant) Cross-Complaint. The demurrer placed into issue the second cause of action (COA) for intentional misrepresentation, the third COA for negligent misrepresentation, the fourth COA for unfair business practices, and the fifth cause of action for recovery on contractors bond.
Additionally, Cross-Defendants moved to strike the attorneys fees request from the Cross-Complaint, the punitive damages allegations in the Cross-Complaint, and the claim for damages for the fourth COA for unfair business practices.
Procedural
The demurrer and motion to strike were not signed by counsel for Cross-Defendants. The failure of counsel for Cross-Defendants to sign the demurrer and motion to strike is in violation of Code of Civil Procedure section 128.7(a). Cross-Complainant did not move to strike either the demurrer or motion to strike on the grounds that such motions are unsigned. The Court therefore considered the merits of the demurrer and motion to strike, but reminds counsel that this is a procedural error.
Discussion
Second and Third Causes of Action Intentional Misrepresentation and Negligent Misrepresentation
To state a cause of action for intentional misrepresentation, a party must allege: (1) a misrepresentation; (2) knowledge of falsity; (3) intent to induce reliance; (4) actual and justifiable reliance; and (5) resulting damage. (Chapman v. Skype Inc. (2013) 220 Cal.App.4th 217, 230-31.) A negligent misrepresentation cause of action requires a showing of the same elements except no knowledge of falsity is required but rather there must be a misrepresentation of fact by a person who has no reasonable grounds for believing it to be true. (Id. at p. 231.) Allegations of fraud must be alleged with particularity which necessitates pleading facts which show how, when, where, to whom, and by what means the representations were tendered. (Stansfield v. Starkey (1990) 220 Cal.App.3d 59, 73.)
Cross-Defendants argued that the intentional misrepresentation COA and negligent misrepresentation COA are insufficient because such causes of action are not alleged with the required particularity. The Court finds such argument persuasive. While Cross-Complainant alleges a series of alleged misrepresentations by Cross-Defendant Ebaiov, the Cross-Complaint does not set forth such alleged misrepresentations with the required specificity. (Cross-Complaint pars. 33-58.) The Cross-Complaint does not articulate how, where, and by what means the purported fraudulent misrepresentations were tendered. Moreover, the Cross-Complaint only pleads the element of justifiable reliance in a conclusory manner. (Cross-Complaint, pars. 43, 54.) Cross-Complainant was required to plead such causes of action with specificity. (Chapman v. Skype Inc., supra, 220 Cal.App.4th 217, 231.) The Court finds the second and third causes of action to be too conclusory.
The Demurrer to the Second and Third causes of action is SUSTAINED WITH LEAVE TO AMEND.
Fourth Cause of ActionUnfair Business Practices
To set forth a claim for a violation of Business and Professions Code section 17200 (UCL), Cross-Complainant must establish that Cross-Defendants were engaged in an unlawful, unfair or fraudulent business act or practice and unfair, deceptive, untrue or misleading advertising and certain specific acts. (Bus. & Prof. Code sec. 17200.) A cause of action for unfair competition is not an all-purpose substitute for a tort or contract action. (Cortez v. Purolator Air Filtration Products Co. (2000) 23 Cal.4th 163, 173.) A cross-complainant alleging unfair business practices must state with reasonable particularity the facts supporting the statutory elements of the violation. (Khoury v. Malys of California, Inc. (1993) 14 Cal.App.4th 612, 619.)
Cross-Defendants argued that Cross-Complainant has failed to allege its unfair business practices cause of action with the required specificity. A violation of Business and Professions Code section 17200 occurs if a business practice is unlawful, unfair, or deceptive. (Byars v. SCME Mortgage Bankers, Inc. (2003) 109 Cal.App.4th 1134, 1147.) Given that Cross-Complainant alleges unfair business practices, Cross-Complainant was required to allege that Cross-Defendants conduct threatens an incipient violation of an anti-trust law, or violates the policy or spirit of one of those laws because its effects are comparable to or the same as a violation of the law, or otherwise significantly threatens or harms competition. (Ibid.)
The Court finds that Cross-Complainant has not stated a sufficient cause of action for unfair business practices. (Cross-Complaint, pars. 59-79.) There are no factual allegations that the conduct of Cross-Defendants threatens an incipient violation of an anti-trust law or violates the policy or spirit of one of those laws. Cross-Complainant has not pleaded the fourth cause of action with the required specificity.
The demurrer to the Fourth cause of action is SUSTAINED WITH LEAVE TO AMEND.
Fifth Cause of ActionRecovery on Contractors Bond
Cross-Defendants argued that the fifth cause of action for recovery on contractors bond fails because the agreement at issue does not require Cross-Defendants to perform contracting services. The Court does not find Cross-Defendants contention to be persuasive. Here, the Cross-Complaint alleges that Cross-Defendant ADR was a contractor and retained Cross-Complainant pursuant to a subcontracting agreement to do concrete and demolition work on a property. (Cross-Complaint, paras. 1, 5, 13-15.) Cross-Complainant alleges that Cross-Defendants failed to pay monies owed to Cross-Complainant for the work on the property. (Cross-Complainant, paras. 83-85.) A contractors bond is for the benefit of [a] person damaged as a result of a willful and deliberate violation . . . by the licensee, or by the fraud of the licensee in the execution or performance of a construction contract. (Bus. & Prof. Code sec. 7071.5(c).) A subcontractor may pursue a claim against a general contractor for recovery on a bond. (Nelson Supply Co. v. Surety Co. of Pacific (1984) 161 Cal.App.3d 490, 491-92.)
Accordingly, the demurrer to the fifth cause of action is OVERRULED.
Motion to Strike
Cross-Defendants argued to strike the request for attorneys fees in the Cross-Complaint. The Court notes that the Cross-Complaint does not indicate whether attorneys fees are allowed by statute or agreement of the parties. Cross-Complainant seeks attorneys fees pursuant to the second, third, and fourth causes of action which, as indicated above, are insufficiently alleged.
The Court therefore finds it appropriate to strike the request for attorneys fees.
Cross-Defendants also moved to strike punitive damages allegations from the Cross-Complaint. Cross-Defendants argued that the Cross-Complaint fails to plead the necessary facts for any punitive damages claim and fails to plead the necessary facts to support punitive damages against a corporation. The Court finds such argument persuasive. Based upon its review of the Cross-Complaint, the Court finds that the Cross-Complaint does not state sufficient facts showing malice, fraud, or oppression to warrant the imposition of punitive damages. (Civ. Code sec. 3294.) Additionally, the sole basis for punitive damages is the insufficiently alleged second and fourth causes of action.
The Court therefore finds it proper to strike punitive damages allegations from the Cross-Complaint.
Lastly, Cross-Defendants argued that damages are not available for the unfair business practices claim. (Cross-Complaint, par. 79.) The opposition brief does not contest such argument. Where a cause of action for unfair business practices is alleged, monetary damages are not available as a remedy. (Korea Supply Co. v. Lockheed Martin Corp. (2003) 29 Cal.4th 1134, 1148.) [R]emedies are limited to injunctive relief and restitution. (Prakashpalan v. Engstrom, Lipscomb & Lack (2014) 223 Cal.App.4th 1105, 1133.) As such, the Court finds it proper to strike damages from the fourth cause of action.
The motion to strike is GRANTED WITH LEAVE TO AMEND.
IT IS SO ORDERED, CLERK TO GIVE NOTICE.
Ruling
NORMS RESTAURANTS, LLC, A DELAWARE LIMITED LIABILITY COMPANY VS BRANDON TYERMAN, AN INDIVIDUAL, ET AL.
Jul 16, 2024 |
23STCV31075
Case Number:
23STCV31075
Hearing Date:
July 16, 2024
Dept:
61
NORMS RESTAURANTS, LLC, A DELAWARE LIMITED LIABILITY COMPANY vs BRANDON TYERMAN, AN INDIVIDUAL, et al.
TENTATIVE
Defendant Eisenberg & Associates Motion for Attorney Fees is DENIED. Plaintiff to provide notice.
DISCUSSION I. ATTORNEY FEES Defendant Eisenberg & Associate (Eisenberg) seeks $63,441.00 in attorney fees associated with Eisenbergs anti-SLAPP motion, during the pendency of which Plaintiff Norms Restaurant, LLCs (Plaintiff) claims against it were dismissed. Eisenbergs counsel, Bryan W. Edgar of the Edgar Legal Group, offers a declaration attesting to 39.9 hours of attorney work at a rate of $795
per hour, yielding a total of $31,720, or $63,441 with a requested 200% multiplier. (Edgar Decl. ¶¶ 46.)
Code of Civil Procedure § 425.16, subd. (c)(1) states that a prevailing defendant on a special motion to strike shall be entitled to recover his or her attorney's fees and costs. The party prevailing on a special motion to strike may seek an attorney fee award through three different avenues: simultaneously with litigating the special motion to strike; by a subsequent noticed motion, . . . or as part of a cost memorandum. (Carpenter v. Jack In The Box Corp. (2007) 151 Cal.App.4th 454, 461.) Eisenberg is arguably a prevailing defendant under the anti-SLAPP statue, even though the court denied its motion as moot. Even upon voluntary dismissal of a claim under a pending anti-SLAPP challenge, the trial court continued to have jurisdiction over the case only for the limited purpose of ruling on the defendants' motion for attorney fees and costs. (Law Offices of Andrew L. Ellis v. Yang (2009) 178 Cal.App.4th 869, 879.) A court may thus award attorney fees under the anti-SLAPP statute on a dismissed claim and a denied motion if it determines that a defendant would have prevailed on its motion to strike. (Tourgeman v. Nelson & Kennard (2014) 222 Cal.App.4th 1447, 1457.) Eisenberg argues that it would have prevailed on its anti-SLAPP motion because the conduct alleged against it was litigation-related activity protected by both the anti-SLAPP statute and the litigation privilege of Civil Code § 47. (Motion at pp. 67.) Specifically, Eisenberg argues that Plaintiff sued it for assisting its client in the breach of confidentiality, non-disparagement and non-cooperation clauses in an employment settlement agreement by encouraging other employees to file suit against Plaintiff. (Ibid.) Plaintiff and its former counsel, in separate oppositions, object to Eisenbergs assumed status as a prevailing party (Norms Opposition at pp. 1415; Fisher Opposition at pp. 812.) Both opposition parties argue that the fees sought are unreasonable and excessive. (Norms Opposition at pp. 1618; Fisher Opposition at pp. 1214.) And Plaintiffs former attorneys argue that they are not permissible targets for an anti-SLAPP attorney fees motion. (Fisher Opposition at pp. 78.) However, it is unnecessary to address these arguments, as Eisenbergs request for fees is squarely barred by authority preventing an award of fees to a self-represented party. [S]elf-represented attorneys are not eligible to have their fees compensated even when prevailing on an anti-SLAPP motion. (Ellis Law Group, LLP v. Nevada City Sugar Loaf Properties, LLC (2014) 230 Cal.App.4th 244, 253.) A firm defending itself through its own partners, members, or associates would not be entitled to attorney fees, as this would enable a double recovery of fees on services already presumptively performed for the attorneys own benefit, and create an imbalance of privilege in favor of attorneys over non-attorneys, who cannot recover fees for their own . (See Sands & Associates v. Juknavorian (2012) 209 Cal.App.4th 1269, 1297.) This authority applies here because it is undisputed that Eisenbergs counsel, Bryan W. Edgar, though appearing nominally as part of Edgar Legal Group, is of counsel to Defendant Eisenberg, the client he is representing. Edgar maintains a profile on the LinkedIn website indicating that he has been Of Counsel for Eisenberg since 2016. (Goldstein Decl. ¶ 11, Exh.
3.) Although Edgar used an Edgar Law Group email address through most of this litigation, in April 2024 he began using an email address associated with Eisenberg to receive emails from an Eisenberg legal assistant, which were forwarded to opposing counsel. (Goldstein Decl. ¶ 10, Exh. 2, 47.) Plaintiff presents complaints, dating from 2019 to December 2023, brought by Eisenberg, listing Edgar as among the attorneys in the caption. (RJN Exhs. 15.) Edgar Law Groups address listed on the California State Bar website is the same as the address of Eisenberg. (Goldstein Decl. ¶ 15.)
Applicable case authority squarely bars the recovery of prevailing-party fees nominally incurred by its of counsel attorney. The court in Sands & Associates, supra, 209 Cal.app.4th at pp. 12721273, held as follows: The question on appeal is whether a law firm can recover attorney fees under a prevailing party clause when the firm is a successful litigant represented by of counsel. Our analysis is based on two well-settled principles. First, when a law firm is the prevailing party in a lawsuit and is represented by one of its partners, members, or associates, it cannot recover attorney fees even though the litigation is based on a contract with a prevailing party clause. (See Carpenter & Zuckerman, LLP v. Cohen (2011) 195 Cal.App.4th 373, 375, 385, 124 Cal.Rptr.3d 598 (Carpenter ); see also Trope v. Katz (1995) 11 Cal.4th 274, 277, 292, 45 Cal.Rptr.2d 241, 902 P.2d 259 (Trope ).) Second, the relationship between a law firm and of counsel is close, personal, continuous, and regular. (People ex rel. Dept. of Corporations v. SpeeDee Oil Change Systems, Inc. (1999) 20 Cal.4th 1135, 1153, 86 Cal.Rptr.2d 816, 980 P.2d 371 (SpeeDee Oil ), italics omitted.) [T]o the extent the relationship between [an attorney] or law firm and another [attorney] or law firm is sufficiently close, personal, regular and continuous, such that one is held out to the public as of counsel for the other, the ... relationship must be considered a single, de facto firm for purposes of [avoiding the representation of adverse interests]. (Id. at p. 1154, 86 Cal.Rptr.2d 816, 980 P.2d 371, italics added, citing State Bar Rules Prof. Conduct, rule 3310.) Similarly, because the relationship between a law firm and of counsel is close, personal, regular, and continuous, we conclude that a law firm and of counsel constitute a single, de facto firm, and thus a law firm cannot recover attorney fees under a prevailing party clause when, as a successful litigant, it is represented by of counsel. (Sands, supra, 209 Cal.App.4th at pp. 12721273.) Edgar here is of counsel to Eisenberg, a fact not contested here. (Reply at p. 2.) He is held out to the public as such, and this relationship is close, personal, continuous, and regular, as evidenced by the sharing of staff, office space, and continuing appearance of Edgar as an Eisenberg attorney in various cases. Per the bright-line rule of the Sands court to the effect that attorneys of counsel to a law firm are sufficiently integral to a law firm as to disallow fees for defense of the firm (Ellis Law Group, LLP v. Nevada City Sugar Loaf Properties, LLC (2014) 230 Cal.App.4th 244, 255) Eisenberg is barred from recovering the fees sought here by these facts alone. Eisenbergs attempt to distinguish this case is unavailing. It attempts to argue, not that the closeness of the of-counsel relationship is not present here, but that the independent existence of the Edgar Law Group somehow compels a different conclusion. (Reply at pp. 25.) Yet the existence of an of counsel attorneys separate practice is immaterial: [I]t does not matter that they may have represented clients obtained through their own efforts, that they had what they call a separate practice, or that they were not on the firm's payroll. (Ellis Law Group, LLP v. Nevada City Sugar Loaf Properties, LLC (2014) 230 Cal.App.4th 244, 256.) The evidence that Eisenberg presents is in accord with that presented in Sands. There, the court noted as follows: [N]o evidence supports the conclusion that the firm incurred an obligation to pay $25,235what the trial court awardedor any other amount to Of Counsel, whether determined by the hours spent on the case or as a percentage of the recovery. Of Counsel did not offer any evidence indicating how they would be or were compensated by the
firm. In moving for attorney fees, Of Counsel did not submit any billing statements or time recordsdocuments that would suggest the Sands firm had incurred attorney fees; nor did Of Counsel provide a breakdown or description of their services. For all we know, the firm paid Of Counsel in accordance with a permanent status in between those of partner and associate. (ABA Com. on Prof. Ethics, formal opn. No. 90-357, supra, p. 3.) And Of Counsel had offices at the same address as the Sands firm, were assisted by the firm's associates and support staff, and had the same telephone and telefacsimile numbers as the firm.
Ruling
THOMAS LIBBY VS. STATE FARM INSURANCE CO. ET AL
Jul 15, 2024 |
CGC22603068
Matter on the Discovery Calendar for Monday, Jul-15-2024, Line 2, 1-DEFENDANT STATE FARM GENERAL INSURANCE COMPANY'S MOTION TO COMPEL RESPONSES TO ADMISSION/INTERROGATORIES. Continued to August 13, 2024, on the court's motion. No JPT available. (D302)
Ruling
RITZ SYSTEMS, INC., A CALIFORNIA CORPORATION VS SGIB INSURANCE SERVICES, INC., A CALIFORNIA CORPORATION, ET AL.
Jul 16, 2024 |
23STCV26878
Case Number:
23STCV26878
Hearing Date:
July 16, 2024
Dept:
68
Dept. 68
Date: 7-16-24 a/f 9-25-24 (via 5-30-24 ex parte order)
Case: 23STCV26878
ARBITRATION/APPRAISAL
MOVING PARTY: Plaintiff, Ritz Systems, Inc.
RESPONDING PARTY: Defendant, Ascot Insurance Company
RELIEF REQUESTED
Motion to Compel Arbitration and Stay Action
SUMMARY OF ACTION
Plaintiff Ritz Systems, Inc. acquired commercial premises insurance for the period of July21, 2022 to July 21, 2023, with defendant Ascot Insurance Company. The policy included $15,000,000 in Business Personal Property and $3,000,000 for Business and Extra Expense. Plaintiff operated a business involving the distribution of tobacco and nicotine products in Anaheim until moving to 3121 E. 12
th
St., Los Angeles. Upon the change in location, policy coverage was reduced from $15,000,000 to $10,000,000 without the request or approval of Plaintiff.
On November 24, 2022, a fire caused by a neighbor destroyed the entire warehouse, thereby leading to the submission of a claim for $16,808.284. Ascot agreed to a claim amount of $2,000,000.
On November 1, 2023, Plaintiff filed a complaint for Reformation, Negligence (Ascot Insurance Company), and Agent Negligence. On February 26, 2024, Plaintiff filed a first amended complaint for (1) Reformation (2) Negligence (Against Ascot Insurance Company) (3) Agent Negligence (4) Breach of Contract (5) Breach of The Implied Covenant of Good Faith and Fair Dealing (6) Violations of Business & Professions Code Section 17200, Et Seq. and, (7) Civil Conspiracy. SGIB Insurance Services, Inc. answered the operative complaint on March 29, 2024. On April 5, 2024, Plaintiff dismissed Meaden and Moore, LLP from the Civil Conspiracy cause of action. On April 15, 2024, William Seide Agency, answered the first amended complaint.
RULING
: Granted.
Plaintiff Ritz Systems, Inc. moves to compel arbitration and invocation of the appraisal process. Ascot Insurance Company (Ascot) in opposition counters Plaintiff lacks unilateral authority to compel arbitration and arbitration remains improper given the dispute over coverage rather than an appraised amount under Insurance Code section 2071, subdivision (c). Plaintiff in reply emphasizes the mandatory nature of the appraisal process, and the lack of authority barring a party from seeking arbitration. Plaintiff secondarily contends the panel can conduct an appraisal even if a coverage dispute exists. Finally, Plaintiff concludes with a challenge over the conduct of the insurer in the adjustment process as well as a denial of the motion.
The motion is only brought as to Ascot Insurance Company. The other served defendants submit no opposition to the motion While an appraisal is treated like an arbitration motion, and the court would otherwise address the non-joinder of the other co-defendants, the court finds the limited nature of the appraisal process in no way invokes the concerns of an order constituting a conflict impacting the other parties. (See Code Civ. Proc., § 1281.2, subd. (c).) The court therefore considers the motion as to Plaintiffs and Ascot only.
An appraisal provision in an insurance policy constitutes an agreement for contractual arbitration. (
Alexander v. Farmers Ins. Co., Inc.
(2013) 219 Cal.App.4th 1183, 1186;
Kirkwood v. California State Automobile Assn. Inter-Ins. Bureau
(2011) 193 Cal.App.4th 49, 57.) A written agreement to submit to arbitration an existing controversy or a controversy thereafter arising is valid, enforceable and irrevocable, save upon such grounds as exist for the revocation of any contract. (Code Civ. Proc., § 1281.) On petition of a party to an arbitration agreement alleging the existence of a written agreement to arbitrate a controversy and that a party thereto refuses to arbitrate such controversy, the court shall order the petitioner and the respondent to arbitrate the controversy if it determines that an agreement to arbitrate the controversy exists, unless it determines that: (a) The right to compel arbitration has been waived by the petitioner; or (b) Grounds exist for the revocation of the agreement. (Code Civ. Proc., § 1281.2.)
The law creates a general presumption in favor of arbitration.
In a motion to compel arbitration, the moving party must prove by a preponderance of evidence the existence of the arbitration agreement and that the dispute is covered by the agreement. The burden then shifts to the resisting party to prove by a preponderance of evidence a ground for denial (e.g., fraud, unconscionability, etc.). (
Rosenthal v. Great Western Fin'l Securities Corp.
(1996) 14 Cal.4th 394, 413-414;
Hotels Nevada v. L.A. Pacific Ctr., Inc.
(2006) 144 Cal.App.4th 754, 758
.)
The court interprets the arbitration clause like any other contract, including determination of the intent of the parties and ambiguities. (
Gravillis v. Coldwell Banker Residential Brokerage Co.
(2006) 143 Cal.App.4th 761, 772.)
A contract must be so interpreted as to give effect to the mutual intention of the parties as it existed at the time of contracting, so far as the same is ascertainable and lawful. (Civ. Code, § 1636.) The language of a contract is to govern its interpretation, if the language is clear and explicit, and does not involve an absurdity. (Civ. Code, § 1638.) When a contract is reduced to writing, the intention of the parties is to be ascertained from the writing alone, if possible; subject, however, to the other provisions of this Title. (Civ. Code, § 1639.) The whole of a contract is to be taken together, so as to give effect to every part, if reasonably practicable, each clause helping to interpret the other. (Civ. Code, § 1641.) A contract must receive such an interpretation as will make it lawful, operative, definite, reasonable, and capable of being carried into effect, if it can be done without violating the intention of the parties. (Civ. Code, § 1643.) The words of a contract are to be understood in their ordinary and popular sense, rather than according to their strict legal meaning; unless used by the parties in a technical sense, or unless a special meaning is given to them by usage, in which case the latter must be followed. (Civ. Code, § 1644.) However broad may be the terms of a contract, it extends only to those things concerning which it appears that the parties intended to contract. (Civ. Code, § 1648.) Repugnancy in a contract must be reconciled, if possible, by such an interpretation as will give some effect to the repugnant clauses, subordinate to the general intent and purpose of the whole contract. (Civ. Code, § 1652.) Stipulations which are necessary to make a contract reasonable, or conformable to usage, are implied, in respect to matters concerning which the contract manifests no contrary intention. (Civ. Code, § 1655.) (
Siligo v. Castellucci
(1994) 21 Cal.App.4th 873, 880881.)
A contract term should not be construed to render some of its provisions meaningless or irrelevant. (
Estate of Petersen
(1994) 28 Cal.App.4th 1742, 1754 (footnote 4).) A well-settled maxim states the general rule that ambiguities in a form contract are resolved against the drafter. (Citations.) But that is a general rule; it does not operate to the exclusion of all other rules of contract interpretation. It is used when none of the canons of construction succeed in dispelling the uncertainty. (
Oceanside 84, Ltd. v. Fidelity Federal Bank
(1997) 56 Cal.App.4th 1441, 1448.)
While insurance contracts have special features, they are still contracts to which the ordinary rules of contractual interpretation apply. (
Citation
.) The principles governing the interpretation of insurance policies in California are well settled. Our goal in construing insurance contracts, as with contracts generally, is to give effect to the parties' mutual intentions. (Citation.) Such intent is to be inferred, if possible, solely from the written provisions of the contract. (Citation.) The clear and explicit meaning of these provisions, interpreted in their ordinary and popular sense, unless used by the parties in a technical sense or a special meaning is given to them by usage (Citation), controls judicial interpretation. (Citation.) (
Citation
) If contractual language is clear and explicit, it governs.
If the terms are ambiguous [i.e., susceptible of more than one reasonable interpretation], we interpret them to protect the objectively reasonable expectations of the insured. (
Citation
.) This rule stems from the principle that [i]f the terms of a promise are in any respect ambiguous or uncertain, it must be interpreted in the sense in which the promisor believed, at the time of making it, that the promisee understood it. (
Citation
.) Only if these rules do not resolve a claimed ambiguity do we resort to the rule that ambiguities are to be resolved
against
the insurer.... The tie-breaker rule of construction against the insurer stems from the recognition that the insurer generally drafted the policy and received premiums to provide the agreed protection. (
Citation
.) [L]anguage in a contract must be interpreted as a whole, and in the circumstances of the case, and cannot be found to be ambiguous in the abstract.... Courts will not strain to create an ambiguity where none exists. [¶] The insured has the burden of establishing that a claim, unless specifically excluded, is within basic coverage, while the insurer has the burden of establishing that a specific exclusion applies. (
Citation
.) The principles of contractual interpretation, as applied to insurance policies do
not
include using public policy to redefine the scope of coverage.
(
Inns-by-the-Sea v. California Mutual Ins. Co.
(2021) 71 Cal.App.5th 688, 697698.)
The undisputed arbitration clause states:
Appraisal -- If you and we do not agree on the amount of the loss or the actual cash value of covered property, either party may request that these amounts be determined by appraisal. If either makes a written request for appraisal and the request is accepted, each will select a competent, independent appraiser and notify the other of the appraiser's identity within 20 days of receipt of the written demand. The two appraisers will then select a competent, impartial umpire. If the two appraisers are unable to agree upon an umpire within 15 days, you or we can ask a judge of a court of record in the state where the property is located to select an umpire. Appraisal proceedings are informal unless you and we" mutually agree otherwise. This means that no formal discovery will be conducted, including depositions, interrogatories, requests for admission, or other forms of formal civil discovery, no formal rules of evidence will be applied, and no court reporter will be used for the proceedings. The appraisers will then determine and state separately the amount of each loss. The appraisers will also determine the value of covered property items at the time of the loss. If the appraisers submit a written report of any agreement to "us", the amount agreed upon will be the amount of the loss. If the appraisers fail to agree within a reasonable time, they will submit only their differences to the umpire. Written agreement so itemized and signed by any two will determine the amount of actual cash value and loss. Each appraiser will be paid by the party selecting that appraiser. Other expenses of the appraisal and the compensation of the umpire will be paid equally by you and us. In the event of a government-declared disaster, as defined in the Government Code, appraisal may be requested by either you or us but cannot be compelled. [Declaration of Derek Chaiken, Ex. 1.]
Plaintiff specifically relies on the plain language of the policy a conclusive basis for requiring mandatory appraisal. (See
Community Assisting Recovery, Inc. v. Aegis Security Ins. Co.
(2001) 92 Cal.App.4th 886, 892.) Ascot counters that the plain language of the contract prevents unilateral invocation of arbitration, and a coverage dispute further precludes appraisal without the scope of the legal claim first established.
Ascot relies on the language If either makes a written request for appraisal and the request is accepted as a requirement of acceptance by both sides for appraisal. Ascot only cites to Federal District Court Authorityone uncitable unpublished opinion, and the other a slip opinion from March 2024, without any indication of publication. While the court is not barred from considering unpublished district court opinion (
Coleman v. Medtronic, Inc.
(2014) 223 Cal.App.4th 413, 432 (footnote 6)), the court declines to rely on unpublished authority even on a persuasive level (
Walker v. Apple, Inc.
(2016) 4 Cal.App.5th 1098, 1108 (footnote 3)) given the court finds published California arbitration law allows for a single party to invoke arbitration. (
Kirkwood v. California State Automobile Assn. Inter-Ins. Bureau
,
supra
, 193 Cal.App.4th at pp. 57-58.) The court therefore finds Plaintiff properly brings the motion to compel arbitration under procedural standards. Nothing in the language establishes required mutuality.
As for the propriety of any appraisal, Ascot cites to both an ongoing investigation and coverage dispute as the basis for denying the appraisal. [S]ection 2071 constrains the role of the appraiser to that of appraising the loss, stating separately actual cash value and loss to each item.... Appraisers have no power to interpret the insurance contract or the governing statutes. The function of appraisers is to determine the amount of damage resulting to various items submitted for their consideration. It is certainly not their function to resolve questions of coverage and interpret provisions of the policy. (
Id
. at pp. 5859 (internal quotation marks omitted);
Devonwood Condominium Owners Assn. v. Farmers Ins. Exchange
(2008) 162 Cal.App.4th 1498, 1504-1505;
Lee v. California Capital Ins. Co.
(2015) 237 Cal.App.4th 1154, 1175.)
The item(s) in dispute at least in part arise from a California ban on flavored tobacco and nicotine containing products. (See
Cal. Health & Safety Code § 104559.5.) Neither party cites to th
e contract terms denying or allowing coverage as to the disputed inventory, though Plaintiff in reply implicitly concedes to the potential exclusion in accepting the coverage dispute.
Notwithstanding, Plaintiff strenuously emphasizes the ability of the appraisal process to occur on the covered items. The court agrees Plaintiff correctly establishes the right to arbitration on said items, but the court remains mindful of the limitation to covered inventory. One court found that the assessment of non-covered property may improperly introduce qualitative distinctions to the appraiser, which constitutes an activity beyond the scope of the appraisal process. (
Safeco Ins. Co. v. Sharma
(1984) 160 Cal.App.3d 1060, 1065-1066.) Any award subsequently rendered would be subject to reversal, and therefore contrary to the purpose of efficiently resolving claims.
On the other hand, the most recent case on the subject specifically distinguished the coverage limitation by allowing the appraisal to happen with any later resolved coverage distinctions allowing for the striking of said uncovered items upon completion of the adjustment process. (
Lee v. California Capital Ins. Co.
(2015) 237 Cal.App.4th 1154, 1170-1171.) The process constitutes a potential suggested path, which the court finds persuasive. The court finds no greater efficiency in deferring an appraisal for purposes of further investigation given coverage either exists for the flavored tobacco and nicotine products exists or not. The court also accepts the ability of the parties, and potentially the court if requested, to resolve the coverage issues if necessary, thereby allowing for any potential striking of the identified inventory. The court finds no inextricable relationship between the two areas functionally supporting further delay in a compelled right to seek an appraisal under Insurance Code section 2071 as part of the claim for benefits under the policy. Further delays in adjusting the claim between covered and non-covered inventory instead only arguably contributes to further argument for the bad faith claimwrongful withholding of insurance contract benefits. The court therefore orders Plaintiffs and Ascot into an appraisal.
The motion is therefore GRANTED.
Motion for trial preference on calendar for August 15, 2024.
Plaintiff to provide notice.