tentative rulings for february 27, 2018 departments 402 ... · tentative rulings for february 27,...

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Tentative Rulings for February 27, 2018

Departments 402, 501, 502, 503

There are no tentative rulings for the following cases. The hearing will go forward on

these matters. If a person is under a court order to appear, he/she must do so.

Otherwise, parties should appear unless they have notified the court that they will

submit the matter without an appearance. (See California Rules of Court, rule 3.1304(c).)

14CECG01653 Marilyn Mikow v. Carlos Juarez, M.D. (Dept. 501)

The court has continued the following cases. The deadlines for opposition and reply

papers will remain the same as for the original hearing date.

________________________________________________________________

(Tentative Rulings begin at the next page)

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Tentative Rulings for Department 402

(20) Tentative Ruling

Re: Itria Ventures LLC v. The Fort Fresno LLC et al., Superior Court

Case No. 18CECG00095

Hearing Date: None. See below.

Motion: The Fort Fresno LLC’s Motion to Vacate Judgment

Tentative Ruling:

To deny.

Explanation:

The motion is procedurally defective. Defendant moves to set aside a sister-

court judgment, but fails file a notice of motion (Cal. Rules of Court, Rule 3.1110,

3.1112(a)) or memorandum of points and authorities (Cal. Rules of Court, Rule

3.1112(a)), provide a statutory basis for the motion, cite to any legal authority or provide

any evidence supporting the contentions made. In law and motion practice, factual

evidence is supplied to the court by way of declarations. (Calcor Space Facility, Inc. v.

Superior Court (1997) 53 Cal.App.4th 216, 224.) The court must disregard facts stated in

unverified memo of points and authorities, unless supported by reference to evidence

presented in declarations or otherwise. (Smith, Smith & Kring v. Superior Court (1997) 60

Cal.App.4th 573, 578.)

Pursuant to Cal. Rules of Court, Rule 3.1312(a) and Code Civ. Proc. § 1019.5(a),

no further written order is necessary. The minute order adopting this tentative ruling will

serve as the order of the court and service by the clerk will constitute notice of the

order.

Tentative Ruling

Issued By: JYH on 02/26/18

(Judge’s initials) (Date)

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Tentative Rulings for Department 501 (29) Tentative Ruling

Re: Shew v. Sierra Pacific Enterprises, Inc.

Court Case no. 17CECG01004

Hearing Date: February 27, 2018 (Dept. 501)

Motion: Default Prove Up – Court Judgment

Tentative Ruling:

To continue to March 20, 2018, to allow Plaintiff to dismiss the Doe defendants,

and submit a revised proposed order.

Explanation:

Plaintiff has not dismissed the Doe defendants, so default judgment cannot be

entered at this time. (See Calif. Rules of Court, rule 3.1800(a)(7).) The Court notes also

that the proposed judgment submitted by Plaintiff lists at item 1 $56,025.00, which

amount includes costs and attorney’s fees; however at item 2, Plaintiff lists as “further”

recovery, costs and fees again. Plaintiff to resubmit a proposed order that reflects a

judgment of $50,000 principal, $4,750 in attorney’s fees, and $1,275 in costs.

Pursuant to California Rules of Court, rule 3.1312(a) and Code of Civil Procedure

section 1019.5, subdivision (a), no further written order is necessary. The minute order

adopting this tentative ruling will serve as the order of the court and service by the clerk

will constitute notice of the order.

Tentative Ruling

Issued By: MWS on 02/26/18


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Tentative Ruling

Re: Amezcua v. Vita-Pakt Citrus Products Co.

Case No. 16 CE CG 03798

Hearing Date: February 27th, 2018 (Dept. 501)

Motion: Plaintiff’s Motions for Certification of Class Action and for

Preliminary Approval of Class Action Settlement

Tentative Ruling:

To grant plaintiff’s motions for certification of class action and for preliminary

approval of class action settlement.

Explanation:

Plaintiffs seek to certify the class for the purposes of approving the settlement,

and also seek an order preliminarily approving the settlement itself. Therefore, the

court must first determine whether the class should be certified before deciding

whether the settlement should be preliminarily approved.

1. Class Certification

Where certification of a class is sought in conjunction with settlement, the

motion is treated the same as if it were a motion solely for certification but for one

factor – the proponent need not prove the case is manageable for trial. Everything

else has to be proven, with admissible evidence, in order for due process concerns to

be met. The Due Process Clause of course requires that the named plaintiff at all

times adequately represent the interests of the absent class members. (Phillips

Petroleum Co. v. Shutts (1985) 472 U.S. 797, 812.) The certification process ensures that

is the case. This is a basic constitutional requirement which applies to all class actions,

federal and state.

"Confronted with a request for settlement-only class certification, a district court

need not inquire whether the case, if tried, would present intractable management

problems [citation omitted] for the proposal is that there will be no trial. But other

specifications of the rule -- those designed to protect absentees by blocking

unwarranted or overbroad class definitions -- demand undiluted, even heightened,

attention in the settlement context." (Amchem Products v. Windsor (1997) 521 U.S.

591, 620.)

“Code of Civil Procedure section 382 authorizes class actions when the

question is one of a common or general interest, of many persons, or when the

parties are numerous, and it is impracticable to bring them all before the court.

The party seeking certification has the burden to establish the existence of both

an ascertainable class and a well-defined community of interest among class

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members. The ‘community of interest’ requirement embodies three factors: (1)

predominant common questions of law or fact; (2) class representatives with

claims or defenses typical of the class; and (3) class representatives who can

adequately represent the class.” (Medrazo v. Honda of North Hollywood

(2008) 166 Cal. App. 4th 89, 96-97.)

“Trial courts are accorded great discretion in granting or denying

certification . . . As the focus in a certification dispute is on what type of

questions - common or individual - arise in the action, rather than on the merits

of the case, in determining whether there is substantial evidence to support a

trial court's certification order, we consider whether the theory of recovery

advanced by the proponents of certification is, as an analytical matter, likely

to prove amenable to class treatment.” (Ibid.)

In his renewed motion, plaintiff has presented the new, more detailed

declarations from the plaintiff’s attorneys, Gregg Farley and Sahag Majarian, as well as

a new declaration of plaintiff and class representative Cruz Amezcua. Plaintiff’s

declaration now offers more details showing that he suffered the same type of Labor

Code violations as the other putative class members. For example, he had his work

hours reduced because of defendant’s practice of rounding time for employees in the

electronic timekeeping system. (Amezcua decl., ¶ 4.) He was also subject to the same

meal and rest break policies as the other employees. (Ibid.) He and other employees

were frequently denied meal breaks during the first five hours of a work shift. (Id. at ¶ 5.)

He and other employees were also required to sign blanket waivers of their right to a

second meal break if they worked more than 10 hours but less than 12 hours in a day.

(Ibid.) When he was terminated from his employment, plaintiff did not receive any

compensation for the missed meal and rest breaks, or any compensation for

defendant’s time-rounding practice, and his understanding is that other employees did

not receive such compensation either. (Id. at ¶ 7.) Furthermore, plaintiff claims that he

is unaware of any claim or defense that is unique to him or that is substantially different

from the other class members. He also claims that he is aware of his obligation to

pursue the action on behalf of the other class members and look out for their best

interests. (Id. at ¶ 9.)

Thus, plaintiff’s declaration now establishes that he suffered the same type of

injuries that he has alleged in the complaint, and that the harm that he may have

suffered is similar to the harm that may have been inflicted on the other employees. As

such, his new declaration is now sufficient to establish that the class has common types

of claims, that he suffered the same violations as the other class members, and that he

would be an adequate class representative.

Plaintiff has also presented a declaration from an accountant, Peter Banos, who

testifies as to the basis for his valuation of the damages from the various alleged Labor

Code violations. He discusses in some detail how he calculated damages, including for

defendant’s practice of rounding off time worked by its employees when they clocked

in and out of their shifts, as well as violations due to failure to provide meal and rest

breaks, overtime wages, accurate wage statements, and full final wages upon

termination. In addition, he states that he concluded that plaintiff and virtually all of

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the other class members experienced the alleged violations, particularly time rounding

that resulted in underpayment of their wages and denial of meal and rest breaks.

Thus, plaintiff has now adequately shown that there is a community of interest

between the class members, that the class members share similar claims and that the

named plaintiff suffered the same types of violations as the other class members, and

that the named plaintiff would be an adequate class representative. As a result, the

court intends to grant the motion for certification of the class for the purpose of

settlement.

2. Preliminary Approval of Class Settlement

“The trial court has broad discretion to determine whether the settlement is fair.

It should consider relevant factors, such as the strength of plaintiffs' case, the risk,

expense, complexity and likely duration of further litigation, the risk of maintaining

class action status through trial, the amount offered in settlement, the extent of

discovery completed and the stage of the proceedings, the experience and views of

counsel, the presence of a governmental participant, and the reaction of the class

members to the proposed settlement.” (Dunk v. Ford Motor Company (1996) 48 Cal.

App. 4th 1794, 1801, citation omitted.)

“[I]n the final analysis it is the Court that bears the responsibility to ensure that

the recovery represents a reasonable compromise, given the magnitude and

apparent merit of the claims being released, discounted by the risks and expenses of

attempting to establish and collect on those claims by pursuing litigation. The court

has a fiduciary responsibility as guardians of the rights of the absentee class members

when deciding whether to approve a settlement agreement.” (Kullar v. Foot Locker

Retail (2008) 168 Cal. App. 4th 116, 129.)

Here, plaintiff has now submitted several new or amended declarations to

support the motion to approve the settlement. In particular, plaintiff has submitted the

declaration of his accountant, Peter Banos, who opines as to the value of the various

claims. He concludes that the potential damages are as much as $2,040.248.

Obviously, the proposed settlement of $775,000 is considerably less than the full

potential damages, which suggests that the settlement may not be fair or reasonable.

However, plaintiff’s counsel opines that the settlement amount is reasonable

under the circumstances, particular since several of the claims will be difficult to prove,

either because defendant did not keep complete records of some events such as rest

breaks, or because some of the claimed violations were arguably not actually violations

of the Labor Code. Also, defendant has taken the position that plaintiff has less than a

50% chance of prevailing if the case went to trial, and therefore defendant is unwilling

to pay more than $775,000 to settle the case. Plaintiff’s counsel states that, in his

experience, defendants in these types of wage and hour cases frequently refuse to

settle for more than 35% or 40% of the total potential damages, and that they usually

prefer to go to trial rather than pay more. Plaintiff’s counsel also admits that some of

the claims may be difficult to prove and trial and thus have little or no value. Thus, it

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does appear that the amount of the settlement is reasonable and fair under the

circumstances.

Plaintiff’s counsels’ declarations also establish that the attorneys are highly

experienced and qualified to act as class counsel. It also appears that there was fairly

extensive discovery in the case. The fact that the settlement was reached with the

assistance of a mediator after arm’s length negotiations also supports the idea that the

settlement was fair and reasonable.

It is also reasonable that the settlement does not require the class members to fill

out a claim form or do anything else to receive the settlement money. In fact, they

must affirmatively opt out if they do not wish to be part of the settlement. In addition,

any amounts that are not paid out to the class members will not revert back to

defendant, but instead will escheat to the State Department of Industrial Relations

Unpaid Wages Fund. The release of claims language in the settlement also seems

reasonable, since only the claims being released are those alleged in the lawsuit, not

other potential claims that the class members may have based on other facts. These

elements all weigh in favor of the reasonableness of the settlement. Therefore, the

court intends to find that the amount of the proposed settlement is fair and reasonable.

On the other hand, the payment of $15,000 as an enhancement award to

plaintiff is excessive. Plaintiff states that he worked about 30 hours on the case,

including phone conferences, answering discovery, producing documents, and

attending his deposition. If we simply divide the enhancement award by the number of

hours plaintiff worked on the case, plaintiff’s time would be worth $500 per hour. By

contrast, the other class members will only receive $0.24 per hour that they worked

during the class period, which results in an average payment to the class members of

$359.10 per member. In other words, the class representative will receive over 41 times

as much money as the average class member simply because of the enhancement

award.

Plaintiff has not presented any evidence that would tend to show that he did so

much work or that the quality of his work was so extraordinary that he deserves this type

of windfall for being the class representative. Therefore, the court intends to reduce the

requested enhancement significantly. The court finds that a payment of $7,500 to the

class representative will adequately compensate him for his time spent on the case.

Attorney’s Fees and Costs

Plaintiff’s counsel seeks a fee award based on one-third of the gross settlement.

There has been considerable debate in the Courts of Appeal as to whether a

percentage fee should be permitted in class action settlements, or whether the courts

should employ the lodestar fee calculation method. However, the California Supreme

Court recently determined that a percentage fee method is allowable where there is a

common fund settlement.

“Whatever doubts may have been created by Serrano III [citation], or the Court

of Appeal cases that followed, we clarify today that use of the percentage method to

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calculate a fee in a common fund case, where the award serves to spread the

attorney fee among all the beneficiaries of the fund, does not in itself constitute an

abuse of discretion. We join the overwhelming majority of federal and state courts in

holding that when class action litigation establishes a monetary fund for the benefit of

the class members, and the trial court in its equitable powers awards class counsel a

fee out of that fund, the court may determine the amount of a reasonable fee by

choosing an appropriate percentage of the fund created.” (Laffitte v. Robert Half

Intern. Inc. (2016) 1 Cal.5th 480, 503.)

However, the Supreme Court also observed that the trial court has discretion to

double-check a proposed fee percentage award by using the lodestar method. “Nor

do we perceive an abuse of discretion in the court's decision to double check the

reasonableness of the percentage fee through a lodestar calculation. As noted earlier,

‘[t]he lodestar method better accounts for the amount of work done, while the

percentage of the fund method more accurately reflects the results achieved.’

[Citation.] A lodestar cross-check thus provides a mechanism for bringing an objective

measure of the work performed into the calculation of a reasonable attorney fee. If a

comparison between the percentage and lodestar calculations produces an imputed

multiplier far outside the normal range, indicating that the percentage fee will reward

counsel for their services at an extraordinary rate even accounting for the factors

customarily used to enhance a lodestar fee, the trial court will have reason to

reexamine its choice of a percentage. [Citation.]” (Id. at p. 504.)

Here, plaintiff’s counsel seeks fees equivalent to one-third of the total gross

settlement. Also, plaintiff’s counsel has now provided information about their hourly

rates and time spent on the case so that the court can perform a lodestar calculation

in order to double-check the reasonableness of the requested fees. Mr. Farley

estimates that the lodestar value of his firm’s work on the case is $192,000, based on 320

hours of work billed at $600 per hour. (Farley decl., ¶ 53.) The firm also incurred actual,

out-of-pocket costs of $14,862.12. (Ibid.) Mr. Majarian also billed $16,240 in fees based

on 23.20 hours billed at $700 per hour, plus costs of $5,989.57. (Majarian decl., ¶ 8.)

Thus, the total lodestar fees for plaintiff’s counsel are $208,240, plus combined costs of

$20,851.69. (Ibid.) Co-counsel will split the award of fees 60/40, with Farley receiving

60% of the fees and Majarian receiving the remaining 40%. (Id. at ¶ 9.)

The court finds that the requested fees of $258,333.33 are reasonable and should

be approved. While the requested amount is somewhat higher than the basic lodestar

amount incurred by plaintiff’s counsel, it is not so much higher as to be unreasonable on

its face, and in fact it is probably fair to allow plaintiff’s counsel to recover somewhat

more than the base lodestar amount to compensate them for the risks and

uncertainties of taking the case on a contingent fee basis. As a result, the court intends

to approve the requested fees, as well as the request for an award of counsel’s actual,

out-of-pocket costs of up to $30,000.

Pursuant to CRC 3.1312 and CCP §1019.5(a), no further written order is necessary.

The minute order adopting this tentative ruling will serve as the order of the court and

service by the clerk will constitute notice of the order.

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Tentative Ruling



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Re: Meyers v. Hanks



Motion: By Plaintiff Theresa Meyers for an order appointing referee to sell

real property and apportion costs.

Tentative Ruling:

To grant the motion. Mr. Greg Kosareff is appointed as referee with the authority

detailed below.

Plaintiff will submit an order to the Court consistent with this ruling within five days

of this order. Parties are ordered to cooperate with Mr. Kosareff in the fulfillment of his

duties.

To reserve the issue of damages to a more appropriate legal setting.

Explanation:

The Court has the inherent power to appoint a referee in a partition action (CCP

§§ 873.010, et al.; See Richmond v. Dofflemyer (1980) 105 Cal.App.3d 745, 755 (section

873.010 is not mandatory, but a referee is to be appointed “only where it is determined

that a referee is necessary or would be desirable or helpful” in a partition action.)

Here, it does appear that there is evidence that the parties have irreconcilable

differences and that the appointment of a referee would be helpful. Further, the cost

for the referee does not appear to be prohibitive since the declarations indicate that it

will be paid out of the already agreed-to commissions. The referee is willing to take the

task on.

The Court will reserve any decision on damages incurred by movant for a later

date.

Therefore, Mr. Kosareff is hereby appointed referee pursuant to Code of Civil

Procedure §§638-645.1, with authority to sell the property at public auction to the

highest bidder for cash on notice duly given in the manner required for the sale of real

property on execution, or a private sale in the event the referee shall determine that a

private sale will be the most beneficial to all parties having interests therein, in which

event the private sale shall be conducted in the manner and as required in private

sales of real property estates of deceased persons as required by law.

The referee need not obtain the consent of the parties to list the real property or

accept offers for its sale, or do any other act necessary to sell the real property. Any

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party with keys to the property shall give them to the receiver within 5 days of being

served with this order. The referee, after making the sale of the real property, is hereby

directed to report to this court his or her proceedings thereon, and, on confirmation of

the sale of the real property by this court and the payment of the purchase price

thereof, the referee is hereby authorized and directed to execute and deliver a deed

of the real property sold to the purchaser thereof.

Unless modified by any order confirming sales hereafter entered herein, the

proceeds from the sale shall be applied after the confirmation of the sale as follows:

a. To pay expenses connected with the sale of the property;

b. To pay the costs of reference, including fees and disbursements of the referee.

c. Unless the Court orders otherwise in the interim, the residue is to be deposited

with the Court pending a judgment or other mechanism for apportionment among the

parties.

Pursuant to California Rules of Court, rule 3.1312, subdivision (a), and Code of

Civil Procedure section 1019.5, subdivision (a), no further written order is necessary. The

minute order adopting this tentative ruling will serve as the order of the court and


Tentative Ruling



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Tentative Rulings for Department 502 (30)

Tentative Ruling

Re: Marcelo Rivas v. Robert Gonzalez

Superior Court No. 17CECG03597

Hearing Date: Tuesday February 27, 2018 (Dept. 502)

Motion: Defendants’ Demurrer and Motion to Strike

Tentative Ruling:

To deny Defendants’ request that Plaintiff’s Complaint be deemed a First

Amended Complaint.

To overrule the demurrer in its entirety.

To deny the motion to strike

Defendants are granted 10 days leave to file an answer. The time in which the answer

may be filed will run from service by the clerk of the minute order. (Code Civ. Proc., §

472b.)

Explanation:

Demurrer

Code Civ. Proc., § 430.10, subd. (f) – failure to separately state causes of action

A complaint that combines multiple, “novel” causes of action into a single cause of

action is defective and subject to special demurrer for uncertainty. (Zumbrun v.

University of Southern California (1972) 25 Cal.App.3d 1, 9 emphasis added.) The first

cause of action does not suffer from this infirmity as it pleads only a claim for

declaratory relief.

Code Civ. Proc., § 430.10, subd. (f) – failure to attach written agreement

Plaintiff has now filed the agreement.

Code Civ. Proc., § 430.10, subd. (g) – failure to allege whether contract is oral/written

Plaintiff has alleged the agreement is partly written and partly oral.

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Motion to Strike

Code Civ. Proc., § 436, subd. (b) – Code of Civ. Proc., § 761.020

The complaint is verified.

Code Civ. Proc., § 436, subd. (a)- Attorney’s fees

The written agreement clearly sets forth the basis for recovery of attorneys’ fees

Pursuant to California Rules of Court, rule 3.1312(a), and Code of Civil Procedure




Tentative Ruling

Issued By: DSB on 02/26/18


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Re: In re California Management Company, Inc. Cases

Court Case No. 17JCCP04915


Motions: 1. Colligere Farm Management Company’s Demurrer to Complaint

2. Calif. Farm Management Co., Inc.’s Demurrer to Marcos Rentaria

Ag. Services, Inc.’s Amended Answer

3. Calif. Farm Management Co., Inc.’s Demurrer to Tapestry

Vineyards, Inc., dba Frey Farming Vineyard Management’s

Amended Answer

4. Calif. Farm Management Co., Inc.’s Demurrer to Roseann R.

Maravilla’s Answer

5. Calif. Farm Management Co., Inc.’s Demurrer to Precision Hay

Co.’s, Mike McCurdy’s, and Desmond Wilson’s Amended Answer

Tentative Ruling:

To overrule Colligere Farm Management Company’s Demurrer to Complaint.

Colligere shall file and serve its answer within 10 days of the clerk’s service of this minute

order.

With respect to the demurrers to the Answer and Amended Answer to overrule

the demurrers to the first, second, sixth, seventh, ninth, fifteenth, sixteenth, nineteenth,

twenty-third and twenty-seventh affirmative defenses; to sustain the demurrers with

leave to amend as to the tenth, twelfth and seventeenth affirmative defenses; and to

sustain without leave to amend as to the third, fourth, fifth, eighth, eleventh, eighteenth,

twentieth, twenty-first, twenty-fourth, and twenty-eighth affirmative defenses.

Amended answers shall be filed and served within 10 days of the clerk’s service of this

minute order. All new allegations shall be in boldface typefont.

Explanation:

Colligere’s Demurrer to Complaint

First Cause of Action:

A demurrer to a complaint may be general or special. A general demurrer

challenges the legal sufficiency of the complaint on the ground it fails to state facts

sufficient to constitute a cause of action. (Code Civ. Proc., § 430.10, subd. (e).) A

special demurrer challenges other defects in the complaint, including whether a

pleading is uncertain. (Code Civ. Proc., § 430.10, subd. (f).) The term uncertain includes

the issue of whether the pleading is “ambiguous and unintelligible.” (Ibid.) A demurrer

for uncertainty should be sustained if the complaint is drafted in such a manner that the

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defendant cannot reasonably respond, i.e., the defendant cannot determine what

issues must be admitted or denied, or what counts are directed against the defendant.

(Khoury v. Maly's of California, Inc. (1993) 14 Cal.App.4th 612, 616.)

Colligere raises both general and special demurrers to the first cause of action.

The first cause of action is not uncertain. It is perfectly clear that Cal. Farm is pleading

breach of written contract and the basis of its claim. The special demurrer is overruled.

Contract:

The elements of a cause of action for breach of contract are (1) the existence of

the contract, (2) plaintiff's performance or excuse for nonperformance, (3) defendant's

breach, and (4) the resulting damages to the plaintiff. (Oasis West Realty, LLC v.

Goldman (2011) 51 Cal.4th 811, 821.) Initially, Colligere challenges the adequacy of

Cal. Farm’s allegation of the contractual obligation to pay the assessment. A plaintiff

may plead the existence of a written contract by alleging its terms verbatim, by

alleging its making and attaching and incorporating a copy of the contract, or by

alleging the substance of its material terms. (Scolinos v. Kolts (1995) 37 Cal.App.4th 635,

640; Construction Protective Services, Inc. v. TIG Specialty Ins. Co. (2002) 29 Cal.4th 189,

198-199.)

Cal. Farm has done both. It has attached a variety of documents which it

alleges form a written contract and alleged specifically that it and Colligere “entered

into a written contract whereby [Cal. Farm] would provide workers compensation

coverage to Colligere and whereby Colligere would pay its contributions and

assessments.” (Complaint at ¶ 29.) Colligere however, focuses only on one document

as the basis for the written contract claim, Exhibit C, the Indemnity Agreement and

Power of Attorney, Form A4-8. Colligere claims nothing in Exhibit C obligates it to pay

the sum demanded in the complaint, or any assessment at all.

It is true that to the extent the factual allegations conflict with the content of the

exhibits to the complaint, the court relies on and accepts as true the contents of the

exhibits and treats as surplusage the pleader's allegations as to the legal effect of the

exhibits. (Barnett v. Fireman's Fund Ins. Co. (2001) 90 Cal.App.4th 500, 505.) And in ruling

on a demurrer the plain meaning of an attached contract controls unless (1) the

plaintiff alleges the existence of “specified parol evidence” contrary to that meaning

and (2) the contract is reasonably susceptible of the plaintiff's claimed interpretation.

(George v. Automobile Club of Southern California (2011) 201 Cal.App.4th 1112, 1122,

1127–28.)

Colligere claims that Exhibit C lacks necessary terms, asserting that that Exhibit C

lacks an expiration date, contains no method of determining breach, does not provide

for terms of payment, collection, and is silent on how damages shall be calculated –

thus, is too vague to be enforced. Nevertheless, “[n]either law nor equity requires that

every term and condition be set forth in a contract.” (Frankel v. Board of Dental

Examiners (1996) 46 Cal.App.4th 534, 545.) Thus, “usual and reasonable terms found in

similar contracts may be considered, unexpressed provisions of the contract may be

inferred from the writing, external facts may be relied upon, and custom and usage

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may be resorted to in an effort to supply a deficiency if it does not alter or vary the

terms of the agreement.” (Ibid.; Midwest Television, Inc. v. Scott, Lancaster, Mills & Atha,

Inc. (1988) 205 Cal.App.3d 442, 451.) A court may find an implied contract provision

only if (1) the implication either arises from the contract's express language or is

indispensable to effectuating the parties' intentions; (2) it appears that the implied term

was so clearly within the parties' contemplation when they drafted the contract that

they did not feel the need to express it; (3) legal necessity justifies the implication; (4)

the implication would have been expressed if the need to do so had been called to

the parties' attention; and (5) the contract does not already address completely the

subject of the implication. (Civ. Code, § 1655.)

Here, the contract at issue, Exhibit C, is a state-drafted contract and Cal. Farm is

not permitted to vary the terms. Moreover, the existence of self-insured workers’

compensation insurance groups is statutory, and their existence is highly regulated.

Thus, each law and regulation applying to self-insured groups must be read into each

contract and can supply the missing terms, as each party to the self-insurance contract

is bound to know the applicable law.

The law provides that current and former group members in a given plan year

may be subject to special assessments in subsequent years on approval of OSIP. (See

Cal. Code Regs., tit. 8, § 15477, subd. (b)(3); see also § 15479 [CALDIR may enforce “the

liability of group members for any unpaid contributions and assessments”].) A contract

that leaves an amount to be paid to future determination or agreement is not too

vague to be enforced, particularly where applicable statutes and rules set forth a

procedure for determining the amount. (Elite Show Services, Inc. v. Staffpro, Inc. (2004)

119 Cal.App.4th 263, 268-269 [agreement to pay prevailing party’s attorney’s fees].)

“ ‘When reviewing whether a plaintiff has properly stated a cause of action for

breach of contract, we must determine whether the alleged agreement is ‘reasonably

susceptible’ to the meaning ascribed to it in the complaint. [Citation.] “ ‘So long as the

pleading does not place a clearly erroneous construction upon the provisions of the

contract, in passing upon the sufficiency of the complaint, we must accept as correct

plaintiff's allegations as to the meaning of the agreement.’ ” ' ” (Marzec v. Public

Employees' Retirement System (2015) 236 Cal.App.4th 889, 909.)

Exhibit C, read along with the relevant law, and given the interpretation alleged

in the Complaint is susceptible of the interpretation given it by Cal. Farm, that it is an

agreement that Colligere agreed to pay lawful special assessments by Cal. Farm in

exchange for the provision of workers’ compensation coverage.

Damages:

Colligere asserts Cal. Farm has failed to allege the existence of any damages

caused by Colligere’s breach. Colligere is wrong. Cal. Farm has alleged the existence

of a contract to pay assessments, an assessment of $257,205.36, and that Colligere has

failed to pay the assessed sum of $257,205.36. (Complaint at ¶¶ 26, 27, 29, 31.) There is

no requirement under the law that the reason for the assessment be a worker’s

compensation claim of Colligere’s.

17

Statute of Limitations:

“A demurrer may be sustained on statute of limitations grounds if the time bar

clearly and affirmatively appears on the face of the complaint.” (Doe v. Roman

Catholic Archbishop of Los Angeles (2016) 247 Cal.App.4th 953, 960.) Colligere claims

that the first cause of action is time-barred because Cal. Farm’s Board of Trustees knew

of the financial deficits prompting the assessment no later than 2012, but this action was

filed in 2017. Indeed, the shortfalls began to occur in 2006. Thus, Colligere argues, this

action is barred by the four year statute of limitations imposed on actions for breach of

written contracts by Code of Civil Procedure section 337(1).

However, Colligere is not being sued for causing the financial deficits suffered by

Cal. Farm. It is being sued for refusing to pay the particular assessment issued on August

8, 2016, and due on October 1, 2016. (See Exhibit F) This complaint filed, October 12,

2017, is timely.

Second Cause of Action:

The terms of an express contract “are stated in words” (Civ. Code, § 1620), while

the terms and the existence of an implied contract “are manifested by conduct.” (Civ.

Code, § 1621.) The second cause of action alleges the existence of an implied

contract whereby Cal. Farm provided workers’ compensation coverage to Colligere in

exchange for Colligere’s promise to pay its contributions and assessments. (Complaint

at ¶ 34.) Given that the Complaint alleges that Colligere applied for and was granted

consent to self-insure and became a paying member of Cal. Farm. In 2008, an implied

contract to pay special assessments has been clearly alleged. The demurrer for

uncertainty is overruled.

The second cause of action is not barred by the two year statute of limitations

provided by Code of Civil Procedure 339(1), because the suit was filed within 13 months

of Colligere’s refusal to pay its assessment.

Demurrers to Answers

The determination whether an answer states a defense is governed by the same

principles which are applicable in determining if a complaint states a cause of action.

(South Shore Land Co. v. Petersen (1964) 226 Cal.App.2d 725, 732.) A general demurrer

to the answer raises the objection that the answer does not state facts sufficient to

constitute a defense. (Code Civ. Proc., § 430.20, subd. (a).) Here, Cal. Farm demurs to

the 1st-12th, 15th – 24th, and 26th – 28th affirmative defenses. The court has reviewed each

Answer and Amended Answer and each Demurrer. As they appear word for word

identical, the Court treats them as one motion.

“Under Code of Civil Procedure section 431.30, subdivision (b)(2), the answer to a

complaint must include ‘[a] statement of any new matter constituting a defense.’ The

phrase ‘new matter’ refers to something relied on by a defendant which is not put in

issue by the plaintiff. [Citation.] Thus, where matters are not responsive to essential

18

allegations of the complaint, they must be raised in the answer as ‘new matter.’

[Citation.] Where, however, the answer sets forth facts showing some essential

allegation of the complaint is not true, such facts are not ‘new matter,’ but only a

traverse. [Citation.]” (State Farm Mut. Auto. Ins. Co. v. Superior Court (1991) 228 Cal.

App. 3d 721, 725.)

The general rule is that the same pleading of “ultimate facts” rather than

evidentiary matter or legal conclusions is required in pleading an answer as in pleading

a complaint. The answer must aver facts “as carefully and in as much detail as the

facts which constitute the cause of action and which are alleged in the complaint.”

Conclusions of law are not sufficient to state a valid defense, and will not withstand a

general demurrer. (See In re Quantification Settlement Agreement Cases (2011) 201

Cal.App.4th 758, 812–13, quoting FPI Dev., Inc. v. Nakashima (1991) 231 Cal.App.3d 367,

384.)

First Affirmative Defense

The first affirmative defense provides that Cal. Farm’s complaint fails to state

facts sufficient to constitute a cause of action. Defendants’ assertion that the

complaint fails to allege sufficient facts to state a claim is not a statement of new

matter; it is a challenge to the legal sufficiency of the complaint. (Code Civ. Proc., §

431.30, subd. (b)(2).) This objection is never waived (See Code Civ. Proc., § 430.80,

subd. (a)) and may be raised in an answer, as well as a demurrer. (See Code Civ. Proc.,

§ 430.10, subd. (e).)

The demurrer is overruled.

Second Affirmative Defense

Cal. Farm argues that the second affirmative defense based on the statute of

limitations fails because (1) the facts alleged in the complaint demonstrate that its

claims are not barred by the statute of limitations, and (2) Code of Civil Procedure

sections 337, subdivision (3) and 339, subdivision (2) do not apply given the facts

alleged in the complaint.

Code of Civil Procedure section 458 provides that a party need not allege facts

supporting a statute of limitations defense, but must only state “that the cause of action

is barred by the provisions of Section ___ (giving the number of the section and

subdivision thereof, if it is so divided, relied upon).” The second affirmative defense is in

this format and is adequately alleged. The demurrer is overruled.

Third, Fourth, Fifth, Eighth, Ninth, Eleventh, Eighteenth, Twenty-Fourth, and Twenty-

Eighth Affirmative Defenses

Cal. Farm argues that the third, fourth, fifth, eighth, ninth, eleventh, eighteenth,

twenty-fourth, and twenty-eighth affirmative defenses fail to allege facts sufficient to

constitute a defense because they are based in tort and the complaint alleges causes

of action for breach of contract. Cal. Farm further contends that even if the tort-based

19

affirmative defenses applied to its claims, defendants have not pled sufficient facts

supporting the elements of the defenses.

Defendants assert that they may properly allege tort-based defenses in this case,

citing Kransco v. American Empire Surplus Lines Ins. Co. (2000) 23 Cal.4th 390 (Kransco).

Kransco does not help defendants. Kransco involved an action for breach of the

covenant of good faith and fair dealing brought by an insured against an insurer. (Id.

at p. 393-400.) On appeal, the court held that the insurer’s comparative negligence

and bad faith defenses were not viable affirmative defenses. (Id., at pp. 410-12.) The

Court opined that an insurer’s breach of the covenant of good faith and fair dealing is

governed by tort principles, but an insured’s breach of the covenant is not a tort. (Id., at

p. 404.) Because an insured’s breach of the covenant does not sound in tort, the

insured’s contractual breach of an express policy provision cannot be raised by the

insurer as a defense in a bad faith action brought against it by the insured. (Id., at p.

405.) Thus, Kransco does not stand for the proposition that defendants may assert tort-

based defenses to Cal. Farm’s claims for breach of contract.

The third affirmative defense of comparative fault, the fourth affirmative defense

of negligence of third parties, the fifth affirmative defense of third party fault, the eighth

affirmative defense of willful or intentional acts of third parties, the eleventh affirmative

defense of assumption of the risk, the eighteenth affirmative defense of proximate

cause, the twenty-fourth affirmative defense of alternate cause, and the twenty-eighth

defense of indemnity from third parties, as pleaded, sound in tort. Because the

complaint pleads only breach of contract claims, these tort-based defenses are not

appropriate. The demurrers to these affirmative defenses are sustained without leave

to amend.

The ninth affirmative defense – despite its name: “no violation of duty” – alleges

that defendants performed all of the obligations under the alleged agreements such

that they have not committed any breach of contract. Accordingly, the ninth

affirmative defense only challenges Cal. Farm’s ability to prove an element of its

breach of contract claims, and is a traverse. (Oasis West Realty, LLC v. Goldman,

supra, 51 Cal.4th at p. 821.) Accordingly, the demurrer to the ninth affirmative defense

is overruled.

Sixth Affirmative Defense

Cal. Farm argues that the Court should sustain its demurrer to the sixth affirmative

defense of failure to mitigate because defendants do not plead facts describing how it

could have mitigated its damages.

“‘It is generally held to be the duty of the defendant to plead the facts in

mitigation of damages if he would rely thereon.’” (Steelduct Co. v. Henger-Seltzer Co.

(1945) 26 Cal.2d 634, 655.) Here, defendants allege that Cal. Farm failed to mitigate its

damages because it was aware, as early as 2012, that a financial deficit existed, but it

did not take any corrective action for four years. Accordingly, defendants have pled

facts describing how Cal. Farm failed to mitigate its damages.

20

The demurrer is overruled.

Seventh, Fifteenth, Sixteenth, Twenty-Third, and Twenty-Seventh Affirmative

Defenses

Cal. Farm argues that the Court should sustain its demurrer to these affirmative

defenses because the defenses are mere denials of its claims and defendants do not

plead facts supporting their denials.

The seventh affirmative defense of full performance, the fifteenth affirmative

defense of speculative damages, sixteenth affirmative defense of lack of standing, the

twenty-third affirmative defense of no breach, and the twenty-seventh affirmative

defense of no resulting damages challenge Cal. Farm’s ability to prove elements of its

breach of contract claims. (Oasis West Realty, LLC v. Goldman, supra, 51 Cal.4th at p.

821.) The defenses are mere traverses and the demurrers are overruled.

Tenth Affirmative Defense

Cal. Farm argues that the tenth affirmative defense of offset fails because

defendants do not allege any facts showing that the parties had cross-demands for

money. The affirmative defense of offset requires “cross-demands for money [to] have

existed between persons at any point in time when neither demand was barred by the

statute of limitations.” (Code Civ. Proc., § 431.70.) The tenth affirmative defense does

not include any facts showing that cross-demands for money existed between the

parties at any point in time. Consequently, the demurrer to the tenth affirmative

defense for failure to allege a defense is sustained with leave to amend.

Twelfth Affirmative Defense

Cal. Farm argues that the Court should sustain its demurrer to the twelfth

affirmative defense because defendants do not allege facts showing that it

intentionally relinquished a known right.

Defendants allege that Cal. Farm’s claims are barred by the doctrine of release

because Cal. Farm’s Board of Trustees became aware of the deficit prior to 2012, but it

failed to take timely action to resolve the deficit. Defendants contend that Cal Farm

thereby intentionally relinquished a known right such that it is barred from recovering

damages.

Based on these allegations, the twelfth affirmative defense is based on waiver,

not on an executed release of claims. “Waiver is the intentional relinquishment of a

known right after full knowledge of the facts” (DRG/Beverly Hills, Ltd. v. Chopstix Dim

Sum Cafe & Takeout III, Ltd. (1994) 30 Cal.App.4th 54, 59.) Here, defendants allege

sufficient facts showing that Cal. Farm had knowledge of the deficit and, thereafter,

failed to timely resolve it. However, defendants do not plead facts demonstrating that

Cal. Farm’s failure to timely resolve the deficit constituted an intentional relinquishment

of a known right.

21

Thus, the demurrer to the twelfth affirmative defense on the ground of failure to

allege sufficient facts to state a defense is sustained with leave to amend.

Seventeenth Affirmative Defense

Cal. Farm alleges that the seventeenth affirmative defense fails because the

alleged agreements do not set out perpetual liability; even if the alleged contracts

were in perpetuity, such an agreement is not void under California law; and the

defense is pled as a terse legal conclusion.

The seventeenth affirmative defense alleges that the contract alleged in the

complaint is void or unenforceable because the contract sets out liability into

perpetuity. The seventeenth affirmative defense, as alleged, fails to state sufficient facts

showing that the alleged contract is void for lack of a duration clause. The contract

provision referenced by defendants simply provides that defendants are jointly and

severally liable for paying the liabilities of group members resulting from an occurrence

with a date of injury period their period of membership. (Complaint, Ex. C.) Nothing

pled, or judicially noticeable, suggests that the membership in a self-insured group is

perpetual, thus the duration of the contract does not continue in perpetuity.

Accordingly, the demurrer to the seventeenth affirmative defense on the ground of

failure to state a defense is sustained with leave to amend.

Nineteenth Affirmative Defense

Cal. Farm argues that the Court should sustain its demurrer to the nineteenth

affirmative defense of unclean hands because defendants do not: identify the

representatives on the Board of Trustees that purportedly favored other group

members; state the timeframe of the alleged actions; describe how the representatives

favored other group members; explain how the favoritism prejudiced them; or show

that the favoritism has any bearing on the alleged breach of contract.

Affirmative defenses need only be pled in “ultimate facts” rather than

evidentiary matter or legal conclusions. The answer must aver facts “as carefully and in

as much detail as the facts which constitute the cause of action and which are alleged

in the complaint.” (See In re Quantification Settlement Agreement Cases, supra, 201

Cal.App.4th at pp. 812–13.) Defendants have met that standard here by alleging that

members of Cal. Farm’s Board of Trustees, who are representatives of members of the

self-insured group, influenced assessment rate distributions in a manner that favored

those members that had representatives on the Board of Trustees. These acts and

others allegedly substantially contributed to Cal. Farm’s deficit. The identities of the

Board Members and the time frame involved are evidentiary matter which can be

found out in discovery. Accordingly, the demurrer to the nineteenth affirmative defense

is overruled.

Twentieth Affirmative Defense

Cal. Farm argues that the twentieth affirmative defense of laches is unavailable

because the claims for breach of contract are actions in law for which laches is not a

22

defense. This is correct. In Abbott v. City of Los Angeles (1958) 50 Cal.2d 438, the high

court held that the equitable doctrine of laches was not available as an affirmative

defense to a contract action for money damages. (Id. p. 498.) The demurrer to this

affirmative defense is sustained without leave to amend.

Twenty-First Affirmative Defense

Cal. Farm argues that the twenty-first affirmative defense fails because unjust

enrichment is a cause of action, not a defense.

Unjust enrichment is not a cause of action, nor a defense. (Melchior v. New Line

Productions, Inc. (2003) 106 Cal.App.4th 779, 793 [Unjust enrichment is not a cause of

action, however, or even a remedy, but rather “ ‘ “a general principle, underlying

various legal doctrines and remedies” ’ .... [Citation.] It is synonymous with restitution.

[Citation.]”].) Defendants cite no legal authority, and the Court is aware of none,

providing that unjust enrichment is an affirmative defense.

Therefore, the demurrer to the twenty-first affirmative defense is sustained without

leave to amend.





Tentative Ruling

Issued By: DSB on 02/26/18


23

Tentative Rulings for Department 503

(2)

Tentative Ruling

Re: Soto et al. v. Rocha

Superior Court Case No. 17CECG00261


Motion: Petition to Compromise a Minor’s Claim

Tentative Ruling:

To deny without prejudice. Petitioner must file an amended petition, with

appropriate supporting papers and proposed orders, and obtain a new hearing date

for consideration of the amended petition. (Super. Ct. Fresno County, Local Rules, rule

2.8.4.)

Explanation:

The attorney seeks fees in the amount of 25% of gross. The attorney is entitled to

25% of the net settlement (gross settlement minus costs).

The distribution of the proceeds is not properly supported. The proceeds may be

delivered to the petitioner/mother to be held in trust for the minor if the requirements of

Probate Code §3401(c) have been satisfied. However, the requirements of Probate

Code §3401(c) have not been satisfied. There is no evidence that the petitioner/parent

has provided a written assurance, verified by oath that the total estate of the minor,

including the money or other property to be paid or delivered to the parent, does not

exceed five thousand dollars ($5,000) in value. Nor is there an attachment 19(5) as

required by the petition.

Pursuant to California Rules of Court, rule 3.1312 and Code of Civil Procedure

section 1019.5(a), no further written order is necessary. The minute order adopting this

tentative ruling will serve as the order of the court and service by the clerk will constitute

notice of the order.

Tentative Ruling

Issued By: KAG on 02/26/18


24

03

Tentative Ruling

Re: Taylor v. Community Regional Medical Center Fresno



Motion: Defendant Fresno Community Hospital and Medical

Center’s Motion for Summary Judgment

Tentative Ruling:

To grant defendant Fresno Community Hospital and Medical Center’s motion for

summary judgment. (Code Civ. Proc. § 437c.)

Explanation:

“The standard of care in a medical malpractice case requires that physicians

exercise in diagnosis and treatment that reasonable degree of skill, knowledge and

care ordinarily possessed and exercised by members of the medical profession under

similar circumstances. [Citations.] ‘“The standard of care against which the acts of a

physician are to be measured is a matter peculiarly within the knowledge of experts; it

presents the basic issue in a malpractice action and can only be proved by their

testimony [citations], unless the conduct required by the particular circumstances is

within the common knowledge of the layman.” [Citations.]’ [Citation.]” (Munro v.

Regents of University of California (1989) 215 Cal.App.3d 977, 983–984.)

“California courts have incorporated the expert evidence requirement into their

standard for summary judgment in medical malpractice cases. When a defendant

moves for summary judgment and supports his motion with expert declarations that his

conduct fell within the community standard of care, he is entitled to summary judgment

unless the plaintiff comes forward with conflicting expert evidence.” (Hutchinson v.

United States (9th Cir. 1988) 838 F.2d 390, 392.)

Here, defendant Fresno Community Hospital and Medical Center has presented

the declaration of its expert in hospital and nursing care, Deborah Mills, R.N., who

opines that defendant’s care and treatment of plaintiff did not fall below the standard

of care and did not cause plaintiff’s injuries. (Mills decl., ¶¶ 9, 10.) Therefore, defendant

has met its burden of showing that plaintiff cannot prevail on her negligence claim

against it, and the burden shifts to plaintiff to submit her own expert declaration

indicating that defendant did breach the standard of care and that the breach

caused plaintiff’s injuries. However, plaintiff has not submitted any opposition or

evidence to raise a triable issue of material fact as to defendant’s breach of the

standard of care. As a result, the court intends to grant summary judgment in favor of

defendant Fresno Community Hospital and Medical Center.

25

Pursuant to CRC 3.1312 and CCP §1019.5(a), no further written order is necessary.

The minute order adopting this tentative ruling will serve as the order of the court and


Tentative Ruling



26


Re: The Diocese of San Joaquin v. The Rev. James Snell, et al.

Court Case No. 10CECG00908


Motion: Defendants’ Motion to Dismiss Complaints for Failure to Bring to Trial

Within Five Years [C.C.P. § 583.310]

Tentative Ruling:

To deny the motion to dismiss.

Explanation:

Code of Civil Procedure section 583.310 requires an action “be brought to trial

within five years after the action is commenced against the defendant.” Otherwise,

dismissal of the action is “mandatory and . . . not subject to extension, excuse, or

exception except as expressly provided by statute.” (Code Civ. Proc., § 583.360, subd.

(b).) In computing the time within which an action must be brought to trial, courts must

exclude the time during which “[p]rosecution or trial of the action was stayed or

enjoined.” (Code Civ. Proc., § 583.340(b).) Courts must also exclude the time during

which “[b]ringing the action to trial, for any other reason, was impossible,

impracticable, or futile,” in computing the time within which an action must be brought

to trial. (Code Civ. Proc., § 583.340(c); Bruns v. E–Commerce Exchange, Inc. (2011) 51

Cal.4th 717, 726.) Thus, subdivisions (b) and (c) of section 583.340 represent two

separate tolling conditions. (Gaines v. Fidelity National Title Ins. Co. (2016) 62 Cal.4th

1081, 1087 (Gaines).)

On November 7, 2013, this court issued the following order:

On November 5, 2013 this matter came on for hearing regarding the issue

of whether or not a stay of the proceedings should be imposed until the

case Diocese of San Joaquin et. al., v. John-David Schofield, case No.

08CECG01425 is resolved. After submission of briefs and argument, the

Court STAYS the instant action until the resolution of the case referenced

above. This stay applies to all proceedings in this case. The parties may, if

they wish, stipulate that certain depositions taken in case no.

08CECG01425 will not have to be retaken in this case, but the court leaves

that decision up to the parties.

As to the five year statute, an action must be brought to trial within five

years after it is commenced against the defendant. If not, dismissal is

mandatory on motion of any party, or on the court's own motion. (CCP

583.310, 583.360). The five year statute begins to run when the action is

“commenced against the defendant.” It continues to run until the action

27

is “brought to trial.” (Id.) The parties may extend the five year period by

either written stipulation, or oral agreement entered into in open court

and recorded in the minutes or a transcript of the proceedings. (CCP

583.330). If, as here, the parties fail to stipulate to extend the five year

deadline, the court may still extend the deadline by staying the action

completely. Bruns v. E-Commerce Exch., Inc. (2011) 51 Cal.4th 716. “If a

complete stay is in effect, bringing the action to trial is impossible” and

therefore, that time is excluded from the calculation pursuant to CCP

section 583.340(b) and (c). Id. The “clock” will not begin to run again until

the stay is lifted and the case placed back on the court's active docket.

(Emphasis added.)

Defendants argue that the stay expired when the main action ended in July of

2016 when the California Supreme Court denied certiorari and the Fifth District Court of

Appeal issued the remittitur, focusing on the language of the first paragraph of the

Court’s order (“the Court STAYS the instant action until the resolution of the case

referenced above”). Defendants argue that, because a plaintiff always has the

burden of prosecuting his or her case, plaintiffs here were required to act diligently in

ending the stay. Plaintiffs counter that subdivisions (b) and (c) of section 583.340 are

separate; once a complete stay has been imposed, a plaintiff need not act diligently

to seek relief from the stay. Plaintiffs rely on the last paragraph of the order and

emphasize that this court intended the stay to toll the five-year statute until the case

was restored to the civil active list, which did not occur until December of 2017.

Plaintiffs are correct.

Ocean Services Corp. v. Ventura Port Dist. (1993) 15 Cal.App.4th 1762, is directly

on point. In that matter, the defendant moved to dismiss for failure to bring the case to

trial within five years. However, the trial court found that an order of the Court of

Appeal staying the case tolled the five-year period under Code of Civil Procedure

section 583.340, subdivision (b), and denied the motion. (Id., at pp. 1773-1774.) On

appeal, the defendant argued that the motion should have been granted because,

with reasonable diligence, the plaintiff could have had the stay vacated six months

earlier, and subtracting those six months from the tolling period would have brought the

case past the five-year limit. (Id. at pp. 1773-1774.)

The Court of Appeal rejected this argument. “Code of Civil Procedure section

583.340, subdivision (b), provides that the five-year period ‘shall be’ tolled if

‘[p]rosecution or trial of the action was stayed or enjoined.’ The statute is unconditional

and is intended to have uniform application. ‘“This is consistent with the treatment

given other statutory excuses; it increases certainty and minimizes the need for a

judicial hearing to ascertain whether or not the statutory period has run.” [Citation.] It

also is consistent with the general policy favoring trial over dismissal. (§ 583.130.)’

(Holland v. Dave Altman's R.V. Center (1990) 222 Cal.App.3d 477, 484.)” (Ocean

Services Corp. v. Ventura Port Dist., supra, 15 Cal.App.4th at p. 1774.)

Defendants argue that reliance on Ocean Services is misplaced because the

basis of the Ocean Services decision was lack of jurisdiction, not reasonable diligence.

28

However, the language from the case contradicts this argument: “The five-year statute

was also tolled because the trial court lacked jurisdiction to try the action.” (Ocean

Services Corp. v. Ventura Port Dist., supra, 15 Cal.App.4th at p. 1774 (emphasis added).)

The use of the word “also” demonstrates that the Ocean Services court considered lack

of jurisdiction a secondary argument to the stay argument, and not the sole justification

for the tolling.

Defendants argue that the stay was not “complete” and thus not effective to toll

the five-year statute because plaintiffs could have sought relief from the stay and set a

trial date once the main action ended. But this is generally true of all stays – parties are

always free to seek court relief. Even if this stay was wrongly issued, plaintiffs had no

obligation to seek relief in court. (Ocean Services, supra, 15 Cal.App.4th at 1775.)

In Gaines, supra, 62 Cal.4th 1081, the California Supreme Court held that the

legal effect of the event triggering a stay is what matters: “[t]he label the trial court

uses is not dispositive of the inquiry[,]” and what “matters is whether the order is

functionally in the nature of a stay . . . .” (Gaines, supra, 62 Cal.4th at p. 1092.) The high

court in Gaines examined the nature of the continuance orders before it to determine

whether they were, in fact, continuances the parties could control, or stays they had no

control over, but at no time did the Supreme Court engraft a diligence requirement

onto the “bright-line” stay tolling. Gaines requires that a stay “be functionally in the

nature of a stay.” (Gaines, supra, 62 Cal.4th at p. 1092.) It must be “extrinsic to the

litigation and beyond the plaintiff’s control.” (Ibid.) A stay of the prosecution of the

action qualifies under Code of Civil Procedure section 583.340, subdivision (b), “only

when the stay encompasses all proceedings in the action.” (Id. at p. 1094 (italics in

original).) It is clear that a stay of the entire instant action issued on November 7, 2013

and that stay was not lifted until December 7, 2017. (“This stay applies to all

proceedings in this case[,]” Order dated November 7, 2013.) The five-year statute was

tolled between those two dates.





Tentative Ruling



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