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LAW & MOTION TENTATIVE RULINGS
TUESDAY, JANUARY 20, 2015 - 8:30 a.m.
COURTROOM 19 –Judge Arthur A. Wick
3055 Cleveland Avenue, Santa Rosa, CA 95403
Court Call is now available for all Law and Motion appearances, EXCEPT parties in small claims cases and motions for claims of exemption which are mandatory appearances. ** To set up Court Call- Please call CourtCall directly at (888) 882-6878.
The following Tentative Rulings will become the ruling of the Court unless a party desires to be heard. If you desire to appear and present oral argument as to any motion, it will be necessary for you to contact Judge Wick’s Judicial Assistant by telephone at (707) 521-6730 by 4:00 p.m., FRIDAY, JANUARY 16, 2015. Any party requesting an appearance must notify all other parties of their intent to appear.
1. SCV-234700 State Farm v. Wier:
This hearing was incorrectly set in Department 19. The hearing on the motion for summary judgment will be heard on Department 18’s Law and Motion calendar on January 21st at 3:30pm. A tentative ruling on the motion will be posted on the court’s website under Department 18’s Law and Motion tentatives on January 20, 2015.
In addition, the 3/5/15 Case Management Conference was also incorrectly set on Department 19’s calendar. It will be heard on the CMC calendar in Department 18 on 3/5/15 at 9:00am.
2. SCV-254978 Leisy v. Safeway:
This matter has been removed from calendar as the issue has been resolved based upon the stipulation of the parties.
3. SCV-255542 California Capital v. Rogers:
This is on calendar for Plaintiff/Cross-Defendant California Capital Insurance Co.’s (the Plaintiff/Cross-Defendant) demurrer to the Cross-Complaint. The Plaintiff/Cross-Defendant contends that as a third-party liability insurer the Cross-Complainants cannot hold them responsible for the torts of their insured, Cross-Defendant John Lissberger Revocable Trust. Further, the Plaintiff/Cross-Defendant contends that the Cross-Complaint is devoid of facts that state a cause of action, and that any claims based on asbestos exposure are barred by the applicable statute of limitations.
The Defendants/Cross-Complainants Harold and Nancy Rodgers have not filed an opposition to the demurrer.
The underlying action is premised on the Plaintiff/Cross-Defendant’s allegations that the Defendants/Cross-Complainants caused damage to certain real property that the Plaintiff/Cross-Defendant’s insured. The Plaintiff/Cross-Defendant had to paid for the damages, and now seeks subrogation from the Defendants/Cross-Complainants—who the Plaintiff/Cross-Defendant claims is responsible for the fire. In response to the underlying action, the Defendants/Cross-Complainants filed the instant Cross-Complaint alleging that the property, which they remodeled, contained asbestos which has made them ill, and increased the cost of repairing the fire damage. They also claim unspecified indemnification rights, and claim that the Plaintiff/Cross-Defendants were responsible for the damages.
The Plaintiff/Cross-Defendant contend that all of the asserted causes of action are improper against them as the insurer of the alleged property owner. It is well-settled that: “Generally an insurer may not be joined as a party-defendant in the underlying action against the insured by the injured third party. The fact that an insurer has agreed to indemnify the insured for any judgment rendered in the action does not make the insurer a proper party. Liability insurance is not a contract for the benefit of the injured party so as to allow it to sue the insurer directly.” (Royal Surplus Lines Ins. Co., Inc. v. Ranger Ins. Co. (2002) 100 Cal.App.4th 193, 200; and Royal Indem. Co. v. United Enterprises, Inc.(2008) 162 Cal.App.4th 194, 205.)
Here, the Defendants/Cross-Complainants admit in their answer to the underlying action that the Plaintiff/Cross-Defendant acted as the insurer of the subject property and of the Cross-Defendant John Lissberger Revocable Trust. (See Defendants/Cross-Complainants Attachment to Answer.) As a result, the Defendants/Cross-Complainants’ assertions of claims arising out of premises liability and general negligence are improper against the Plaintiff/Cross-Defendant. Moreover, the Cross-Complaint fails to allege that the Plaintiff/Cross-Defendant has an interest in the real property in question—it only alleges that the Plaintiff/Cross-Defendant knew about the asbestos in the building.
Additionally, the causes of action for indemnity and comparative fault are more properly alleged as affirmative defenses in an answer. The court in Jaffe v. Huxley Architecture [(1988) 200 Cal.App.3d 1188, 1190] held that a cross-complaint for indemnity and comparative fault are inappropriate where: (1) there is the availability of equivalent relief in the main action; and (2) a “special relationship” between the cross-defendant and plaintiff which would be jeopardized by the cross-complaint's effect of creating a potential conflict of interest. Here, the Defendants/Cross-Complainants have recourse to indemnity and apportionment of fault through affirmative defense, and there is a special, fiduciary, relationship between the Plaintiff/Cross-Defendant Cal. Insurance, and Cross-Defendant John Lissberger Revocable Trust.
Accordingly, Plaintiff/Cross-Defendant’s demurrer is sustained in its entirety, with leave to amend. Plaintiff/Cross-Defendant is to draft an order consistent with this ruling.
4. MCV-232002 Portfolio v. Hernandez:
This is a collections action arising from the Defendant’s alleged default on a credit card.
On June 13, 2014, the Plaintiff served Requests for Admission. The Defendant failed to respond. In response, the Plaintiff filed this motion, seeking to have the requests for admissions deemed admitted, and for monetary sanctions. (CCP § 2033.280.) No opposition to the motion has been filed.
Plaintiff's motion is GRANTED and discovery sanctions are ordered in the amount of $362.50.
The Plaintiff is to draft an order consistent with this ruling.
5. SCV-252353 Gumper v. Castle Construction:
This is on calendar for the Plaintiffs/Judgment-Creditors’ motion to amend judgment to added dismissed party Mr. Joseph Ozzie Ozsvath to the judgment. The Plaintiffs argue that under CCP § 187 the court may add a nonparty alter ego as a judgment debtor. (Citing Misik v. D'Arco (2011) 197 Cal.App.4th 1065.) Plaintiffs contend that Mr. Ozsvath is personally liable for the actions of the corporate Judgment Debtor and, therefore, was the alter ego of same. In support of the motion, Plaintiffs attach an excerpt of Mr. Ozsvath’s deposition in which he indicates that he is the only officer of the Judgment Debtor. Further, Plaintiffs contend that failure to add Mr. Ozsvath to the judgment will result in an unequitable result. Plaintiffs contend that the Judgment Debtor is insolvent based on a telephone conversation Plaintiffs’ attorney had with an attorney purporting to represent the Judgment Debtor in an impending bankruptcy. The motion is unopposed.
A court has inherent power to use “all the means necessary” to carry its jurisdiction into effect. (CCP § 187.) This includes amending a judgment against a corporation to add a non-party alter ego as a judgment debtor. (See Tokio Marine & Fire Ins. Corp. v. Western Pac. Roofing Corp. (1999) 75 Cal.App.4th 110, 116.) The ordinary “preponderance of the evidence” standard applies in determining whether to grant a post-trial motion to add an alleged alter ego as a judgment debtor. (See Wollersheim v. Church of Scientology (1999) 69 Cal.App.4th 1012, 1014.)
There are two requirements for disregarding the corporate entity: first, that there is a sufficient unity of interest and ownership between the corporation and the individual or organization controlling it that the separate personalities of the individual and the corporation no longer exist; and second, that treating the acts as those of the corporation alone will sanction a fraud, promote injustice, or cause an inequitable result. (Webber v. Inland Empire Investments, Inc. (1999) 74 Cal.App.4th 884, 900; and Alexander v. Abbey of the Chimes (1980) 104 Cal.App.3d 39, 47; NEC Electronics, Inc. v. Hurt (1989) 208 Cal.App.3d 772, 777.)
The first requirement for disregarding the corporate entity under the alter ego doctrine—whether there is sufficient unity of interest and ownership that the separate personalities of the individual and the corporation no longer exist—encompasses a series of factors. Among the many factors to be considered in applying the doctrine are one individual's ownership of all stock in a corporation; use of the same office or business location; commingling of funds and other assets of the individual and the corporation; an individual holding out that he is personally liable for debts of the corporation; identical directors and officers; failure to maintain minutes or adequate corporate records; disregard of corporate formalities; absence of corporate assets and inadequate capitalization; and the use of a corporation as a mere shell, instrumentality or conduit for the business of an individual. (Zoran Corp. v. Chen (2010) 185 Cal.App.4th 799, 811–812.)
Here, the deposition excerpt from Mr. Ozsvath indicates that he was the president of the Judgment Debtor, and the only officer of the Judgment Debtor. The deposition does not touch on any of the other factors; nor do the Plaintiffs present any further evidence on any of the other factors.
The second requirement for application of the alter ego doctrine is a finding that the facts are such that adherence to the fiction of the separate existence of the corporation would sanction a fraud or promote injustice. (Wood v. Elling Corp. (1977) 20 Cal.3d 353, 365, fn. 9.) The test for this requirement is that if the acts are treated as those of the corporation alone, it will produce an unjust or inequitable result. (Mesler v. Bragg Management Co. (1985) 39 Cal.3d 290, 300.)
Here, Plaintiffs contend that the Judgment Debtor is insolvent due to the “actions of an alter ego; proof of wrongful intent is not required.” Plaintiffs provide no legal authority in support of their position. Further, Plaintiffs note that Mr. Myles Dresslove, an attorney, suggested that the Judgment Debtor was going to file bankruptcy. (Dec. Cobb ¶ 3.) However, the Plaintiffs present no evidence of their attempts to satisfy their judgment, or evidence that the Judgment Debtor is, in fact, insolvent. (See Sonora Diamond Corp. v. Superior Court (2000) 83 Cal.App.4th 523, 539 citing Associated Vendors, Inc. v. Oakland Meat Co. (1962) 210 Cal.App.2d 825, 842 [“The alter ego doctrine does not guard every unsatisfied creditor of a corporation but instead affords protection where some conduct amounting to bad faith makes it inequitable for the corporate owner to hide behind the corporate form. Difficulty in enforcing a judgment or collecting a debt does not satisfy this standard.”].)
The Plaintiffs have not met their burden to show that Mr. Ozsvath is the alter ego of the Judgment Debtor. The evidence submitted by the Plaintiffs simply recognizes that Mr. Ozsvath was the president and officer of the Judgment Debtor. Further, the Plaintiffs have not established that an injustice will result unless the corporate form is disregarded.
Accordingly, the motion is denied without prejudice. The Plaintiffs are to draft an order consistent with this ruling.
6. SCV-252583 Deering v. Warren:
At the request of the moving party, the hearing in this matter is continued to the law and motion calendar on March 24, 2015 at 8:30am in Department 19.
7. SCV-254120 Abraham v. West Cal Tractor:
This is on calendar for Defendants’ motion to be relieved from their waiver of objections for failing to serve timely responses to the Plaintiff’s requests for production of documents. The Defendants contend that the waiver was a result of an administrative mistake, which caused the responses to be served one day late. The Defendants contend that the untimely responses (by one day) caused no prejudice.
The Plaintiff opposes, arguing that the responses were not in substantial compliance with CCP § 2031.230, and therefore the Defendants are not entitled to the relief they seek. In particular, the Plaintiff notes that the Defendants failed to provide a statement of compliance, inability to comply, or an objections—nor do the responses contain a statement of diligence. Further, the Plaintiff contends that the Defendants are objecting on the basis of attorney-client privilege, but failed to provide a privilege log.
Here, the Plaintiff only argues that the responses were not in substantial compliance. The court disagrees—substantial compliance does not mean full compliance. (See Southern Pac. Transportation Co. v. State Bd. of Equalization (1985) 175 Cal.App.3d 438, 442; see also Western States Petroleum Assn. v. Board of Equalization (2013) 57 Cal.4th 401, 426.) “[S]ubstantial compliance … cannot properly be understood to require ‘actual compliance’ with every specific statutory requirement.” (Costa v. Superior Court (2006) 37 Cal.4th 986, 1017, fn. 24,.) An appellate court in a more recent case succinctly observed: “Substantial compliance with a statute is dependent on the meaning and purpose of the statute.” (Freeman v. Vista de Santa Barbara Associates, LP (2012) 207 Cal.App.4th 791, 793.)
The responses provided by the Defendants were in substantial compliance, in that they informed the Plaintiff that no responsive documents existed, and provided an objection on the grounds that the request may impinge on the attorney client privilege. To have required a complete response, as argued by the Plaintiff, would elevate form over substance, and would render the term “substantial compliance” equivalent with “actual compliance.” Further, the Defendants were not required to produce a privilege log. (Best Products, Inc. v. Superior Court (2004) 119 Cal.App.4th 1181, 1189.)
That being said, the court will conditionally grant the motion, on the condition that the Defendants re-serve their responses that fully comply with the relevant statutes, and serve a privilege log with respect to any documents they contend fall under the attorney client privilege. The Defendants shall serve this amended response within 15 days of this hearing. The Defendants shall draft an order consistent with this ruling.
8. MCV-186899 LVNV Funding v. Landrum:
Judgment debtor to appear and produce documentation of last 6 months of earnings.
9. MSC-181877 Minton v. Prescott:
Defendant’s Motion to Vacate Default Judgment is granted. Parties may appear and argue their respective positions, with proper notice to the other side and to the court.
10. MSC-184274 Wiggins v King:
It appears from the court’s records that defendant Jacqueline King was present in court on August 1, 2014 when the case was continued by the judge pro tem to September 10, 2014 at 8:30am in Department 19. Thereafter, the court records indicate that defendant King was served with notice of the new court date on August 2, 2014. Defendant King failed to attend the trial, after proper notice of trial. Accordingly, defendant’s Motion to Vacate (Cancel) Judgment is denied.