Preview
Case Number: 19-CIV-02595
SUPERIOR COURT OF SAN MATEO COUNTY
400 County Center 1050 Mission Road
Redwood City, CA 94063 South San Francisco, CA
94080
www.sanmateocourt.org
Minute Order
LOUIS PAYCHECK vs. PUNIT K. SARNA, et al 19-CIV-02595
12/07/2021 2:00 PM
Motion for Order
Hearing Result: Held
Judicial Officer: Fineman, Nancy L. Location: Courtroom N
Courtroom Clerk: Ashmika Segran-Teo Courtroom Reporter: Valerie Cathey
Minutes
Journals
- At 2:19 pm - Matter was called.
Counsel Richard Kelly for and with Plaintiff / Cross Defendant Louis Paycheck appeared via
Zoom.
Counsel Jose Herrera for Defendants appeared via Zoom.
No notice of contest was received by the court in regards to Motion for Attorney's Fees. No
arguments was presented by Counsel Kelly. Tentative ruling was adopted on the Motion for
Attorney's fees.
Notice of contest was received by the court in regards to Motion for Credit.
Argument presented by counsel. Matter submitted.
Having considered the submitted matter, the court rules as follows: Tentative ruling was adopted.
Formal order to be prepared by the Counsel for Defendants for both motions.
At 2:26 pm - Hearing concluded.
Case Events
- Party appeared by audio and/or video; above noted counsels and party
- Tentative ruling adopted and becomes order:
MOTION FOR CREDIT OF SETTLING SURETY PARTY AND CROSS-DEF. PREVAILING
PARTY ATTORNEYS FEES BY LOUIS PAYCHECK dba EUROPEAN ENTERPRISES
Motion for Attorney’s Fees
Plaintiff/Cross-Defendant Louis Paycheck’s Motion for Attorney’s Fees is DENIED for the
reasons set forth below.
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Case Number: 19-CIV-02595
Plaintiff contends that, as a result of Defendants’ voluntary dismissal of their claim for false or
fraudulent misrepresentation under Bus. & Prof. Code § 7160, he is entitled to attorney’s fees as
the “prevailing party.”
The Court, however, has previously rejected this argument, asserted in Mr. Paycheck’s
opposition to Defendants’ motion for attorney’s fees. (9/30/21 Opposition, p.4) As noted in the
Court’s October 26, 2021 tentative ruling, which was incorporated in the Court’s November 16
Order:
Only one of Paycheck’s four asserted claims (the Fourth Cause of Action—Civ. Code
8800) provides a basis for attorney's fees to the prevailing party. A court may not award
fees for legal work that is unrelated to a cause of action for which fees are authorized.
Reynolds Metals Co. v. Alpersori (1979) 25 Cal.3d 124, 130.
11/16/21 Order. As indicated in the Court’s prior Order, Cal. Bus. & Prof. Code § 7160
contains no provision authorizing attorney’s fees to a “prevailing party.” As a result, the
Court rejects Mr. Paycheck’s claim for attorney’s fees.
Mr. Paycheck’s request for judicial notice is GRANTED pursuant to Evid. Code 452(d).
Judicial notice is taken of the document’s filing/recording, contents, and legal effect, but not
the truth of allegations therein.
Motion for Credit
Plaintiff/Cross-Defendant Louis Paycheck’s Motion for Credit is GRANTED for the reasons set
forth below.
In its First Amended Cross-Complaint filed October 10, 2019, Defendant/Cross-Complainant
Puja Sarna sued Mr. Paycheck and Cross-Defendant Suretec Indemnity Co. for damages.
Suretec was sued in the Ninth Cause of Action for a license bond claim. The Ninth Cause of
Action incorporated by reference all the previous paragraphs of the cross-complaint, which
included paragraphs 47-49, the Sixth Cause of Action for Disgorgement under Business &
Professions Code § 7031. Mr. Paycheck seeks a credit of $40,000 against the disgorgement
award entered against him, representing the amount of the settlement between Mr. Sarna and
Suretec. Mr. Sarna and Suretec entered into this agreement without any input from Mr.
Paycheck and without seeking any order from the Court.
Suretec can only be liable if its principal, Mr. Paycheck, is liable. Mr. Sarna argues that his
claims against Suretec were separate from his disgorgement claim against Mr. Paycheck and that
the causes of action were based on separate legal injuries and primary rights. However, there has
been no adjudication by the Court to support that conclusion and the contention is contrary to the
allegations of the Ninth Cause of Action, which incorporate the disgorgement allegations.
Accordingly, Mr. Paycheck is entitled to a credit for this amount. Otherwise, Mr. Sarna may
receive a double recovery and Mr. Paycheck may be forced to pay this $40,000 amount twice,
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Case Number: 19-CIV-02595
once to Mr. Sarna and once to Suretec.
Mr. Sarna also claims that Business & Profession Code § 7031 "prohibits off-sets or credits
based 'equitable' considerations." Opp, p.4. Defendants rely on Judicial Council of California v.
Jacobs Facilities, Inc. (2015) 239 Cal.App.4th 882, 896–897 for this proposition. In that case,
however, the court did not address any offset or credit. Rather, the court noted the general rule
that unlicensed contractors are "prohibited from asserting equitable defenses, such as estoppel, to
forfeiture" under Section 7031. The court further noted that "As a result, an unlicensed contractor
is subject to forfeiture even if the other contracting party was aware of the contractor's lack of a
license, and the other party's bad faith or unjust enrichment cannot be asserted by the contractor
as a defense to forfeiture.” Id. There is nothing in Judicial Council of California v. Jacobs
Facilities, Inc. to indicate that the Court is prohibited from granting a credit against a
disgorgement award for amounts paid by a surety to satisfy a claim against the bond required by
Business & Professions Code § 7071.6.
Mr. Paycheck’s request for judicial notice is GRANTED pursuant to Evid. Code 452(d). Judicial
notice is taken of the document’s filing/recording, contents, and legal effect, but not the truth of
allegations therein.
Counsel for Defendants to prepare a written order consistent with the Court’s ruling for the
Court’s signature, pursuant to California Rules of Court, Rule 3.1312, and provide written notice
of the ruling to all parties who have appeared in the action, as required by law and the California
Rules of Court.
Others
Comments:
Future Hearings and Vacated Hearings
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Preview
Case Number: 19-CIV-02595 SUPERIOR COURT OF SAN MATEO COUNTY 400 County Center 1050 Mission Road Redwood City, CA 94063 South San Francisco, CA 94080 www.sanmateocourt.org Minute Order LOUIS PAYCHECK vs. PUNIT K. SARNA, et al 19-CIV-02595 12/07/2021 2:00 PM Motion for Order Hearing Result: Held Judicial Officer: Fineman, Nancy L. Location: Courtroom N Courtroom Clerk: Ashmika Segran-Teo Courtroom Reporter: Valerie Cathey Minutes Journals - At 2:19 pm - Matter was called. Counsel Richard Kelly for and with Plaintiff / Cross Defendant Louis Paycheck appeared via Zoom. Counsel Jose Herrera for Defendants appeared via Zoom. No notice of contest was received by the court in regards to Motion for Attorney's Fees. No arguments was presented by Counsel Kelly. Tentative ruling was adopted on the Motion for Attorney's fees. Notice of contest was received by the court in regards to Motion for Credit. Argument presented by counsel. Matter submitted. Having considered the submitted matter, the court rules as follows: Tentative ruling was adopted. Formal order to be prepared by the Counsel for Defendants for both motions. At 2:26 pm - Hearing concluded. Case Events - Party appeared by audio and/or video; above noted counsels and party - Tentative ruling adopted and becomes order: MOTION FOR CREDIT OF SETTLING SURETY PARTY AND CROSS-DEF. PREVAILING PARTY ATTORNEYS FEES BY LOUIS PAYCHECK dba EUROPEAN ENTERPRISES Motion for Attorney’s Fees Plaintiff/Cross-Defendant Louis Paycheck’s Motion for Attorney’s Fees is DENIED for the reasons set forth below. 1 Case Number: 19-CIV-02595 Plaintiff contends that, as a result of Defendants’ voluntary dismissal of their claim for false or fraudulent misrepresentation under Bus. & Prof. Code § 7160, he is entitled to attorney’s fees as the “prevailing party.” The Court, however, has previously rejected this argument, asserted in Mr. Paycheck’s opposition to Defendants’ motion for attorney’s fees. (9/30/21 Opposition, p.4) As noted in the Court’s October 26, 2021 tentative ruling, which was incorporated in the Court’s November 16 Order: Only one of Paycheck’s four asserted claims (the Fourth Cause of Action—Civ. Code 8800) provides a basis for attorney's fees to the prevailing party. A court may not award fees for legal work that is unrelated to a cause of action for which fees are authorized. Reynolds Metals Co. v. Alpersori (1979) 25 Cal.3d 124, 130. 11/16/21 Order. As indicated in the Court’s prior Order, Cal. Bus. & Prof. Code § 7160 contains no provision authorizing attorney’s fees to a “prevailing party.” As a result, the Court rejects Mr. Paycheck’s claim for attorney’s fees. Mr. Paycheck’s request for judicial notice is GRANTED pursuant to Evid. Code 452(d). Judicial notice is taken of the document’s filing/recording, contents, and legal effect, but not the truth of allegations therein. Motion for Credit Plaintiff/Cross-Defendant Louis Paycheck’s Motion for Credit is GRANTED for the reasons set forth below. In its First Amended Cross-Complaint filed October 10, 2019, Defendant/Cross-Complainant Puja Sarna sued Mr. Paycheck and Cross-Defendant Suretec Indemnity Co. for damages. Suretec was sued in the Ninth Cause of Action for a license bond claim. The Ninth Cause of Action incorporated by reference all the previous paragraphs of the cross-complaint, which included paragraphs 47-49, the Sixth Cause of Action for Disgorgement under Business & Professions Code § 7031. Mr. Paycheck seeks a credit of $40,000 against the disgorgement award entered against him, representing the amount of the settlement between Mr. Sarna and Suretec. Mr. Sarna and Suretec entered into this agreement without any input from Mr. Paycheck and without seeking any order from the Court. Suretec can only be liable if its principal, Mr. Paycheck, is liable. Mr. Sarna argues that his claims against Suretec were separate from his disgorgement claim against Mr. Paycheck and that the causes of action were based on separate legal injuries and primary rights. However, there has been no adjudication by the Court to support that conclusion and the contention is contrary to the allegations of the Ninth Cause of Action, which incorporate the disgorgement allegations. Accordingly, Mr. Paycheck is entitled to a credit for this amount. Otherwise, Mr. Sarna may receive a double recovery and Mr. Paycheck may be forced to pay this $40,000 amount twice, 2 Case Number: 19-CIV-02595 once to Mr. Sarna and once to Suretec. Mr. Sarna also claims that Business & Profession Code § 7031 "prohibits off-sets or credits based 'equitable' considerations." Opp, p.4. Defendants rely on Judicial Council of California v. Jacobs Facilities, Inc. (2015) 239 Cal.App.4th 882, 896–897 for this proposition. In that case, however, the court did not address any offset or credit. Rather, the court noted the general rule that unlicensed contractors are "prohibited from asserting equitable defenses, such as estoppel, to forfeiture" under Section 7031. The court further noted that "As a result, an unlicensed contractor is subject to forfeiture even if the other contracting party was aware of the contractor's lack of a license, and the other party's bad faith or unjust enrichment cannot be asserted by the contractor as a defense to forfeiture.” Id. There is nothing in Judicial Council of California v. Jacobs Facilities, Inc. to indicate that the Court is prohibited from granting a credit against a disgorgement award for amounts paid by a surety to satisfy a claim against the bond required by Business & Professions Code § 7071.6. Mr. Paycheck’s request for judicial notice is GRANTED pursuant to Evid. Code 452(d). Judicial notice is taken of the document’s filing/recording, contents, and legal effect, but not the truth of allegations therein. Counsel for Defendants to prepare a written order consistent with the Court’s ruling for the Court’s signature, pursuant to California Rules of Court, Rule 3.1312, and provide written notice of the ruling to all parties who have appeared in the action, as required by law and the California Rules of Court. Others Comments: Future Hearings and Vacated Hearings 3