Jul 29, 2014

LAW & MOTION TENTATIVE RULINGS

TUESDAY, JULY 29, 2014 - 8:30 a.m.

COURTROOM 19 – Judge Arthur A. Wick

3055 Cleveland Avenue, Santa Rosa, CA  95403

 

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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., MONDAY, JULY 28, 2014.  Any party requesting an appearance must notify all other parties of their intent to appear.

1.  SCV-253801 Hurley v. Comcast:

            Defendants Comcast of California/Colorado/Texas/Washington, Inc. (Comcast or Defendants) have moved for summary judgment/adjudication on the Plaintiff’s claim that they improperly and illegally withheld payment of certain sales commissions. 

The Plaintiff contends that the Defendants withheld payments of commissions, contrary to the Agreement, when the customer did not pay the invoice within 90 or 120 days. The Plaintiff relies on the definition of an “Earned Commission” which provides that: A Commission is earned when payment from a customer is received and cleared following procurement of orders for Comcast products, the broadcast of the advertising schedule , and after the AEs have successfully performed all other functions associated with the placement of the advertising schedule with the account such as, but not limited to , account management and responsibilities as identified [elsewhere in the Agreement].”

The Defendants argue that the “Earned Commission” was only deemed “earned” and therefore payable for invoices paid by the customer within 90 or 120 days. For this contention, the Defendants rely on the definition of “Advances” which provides, in pertinent part, that: “Unearned commission associated with customer non-payment or the like, which have been previously advanced to an AE, will be credited (advance true-up) against the AE’s future commissions if customer payment is not received within 90 days (direct & promotion) or 120 days (agency) of the calendar month-end of the invoice issue date.” The Defendants also rely on the definition of the “Responsibilities of Account Executives” which provides in pertinent part, that” “AEs are responsible for maintaining relationships with customers to ensure that orders are maintained and invoices are paid when due. It is not enough to procure an order and make sure the advertisement runs. Rather, the AE must make sure that the invoice is paid and the AE will not earn the commission until this final step is completed.” The Defendants contend that this language, in particular “AEs are responsible … to ensure that … invoices are paid when due[ ]” creates a condition precedent that for a commission to be “earned” the invoice must be paid when due, or within 90/120 days. Defendants also rely on the parties’ conduct in interpreting the Agreement. The Defendants argue that the parties performed the Agreement as if all “earned commissions” had to be paid within 90 or 120 days. Further, the Defendants contend that the Agreement is lawful pursuant to controlling case law.

The Plaintiff opposes, contending that the “Advances” and the “Earned Commission” are two separate concepts that the Defendants are improperly conflating. The Plaintiff points out that the definition of “Earned Commission” does not include any time frame—simply that the commission is earned when payment is “received and cleared.” The Plaintiff further contends that the Agreement only indicates a 90/120 deadline in the “Advances” section—importantly, not in the “Earned Commissions” definition, nor in the “AE Responsibilities.” The Plaintiff further argues that the “chargebacks” in the “Advances” are not irrevocable. Further, the Plaintiff contends that the Defendants’ interpretation of the Agreement results in illegal and unwarranted forfeitures, and as a result is an unenforceable penalty. (Citing CC § 1671(d).) The Plaintiff further contends that the Agreement is unconscionable and, therefore, unenforceable.

The Defendants point out that the Plaintiff has failed to file and serve a separate statement of disputed facts in opposition to the instant motion. The Defendants contend that under CCP § 437c(b)(3) the failure to file the separate statement provides grounds to grant the instant motion.

When a moving party makes the required prima facie showing, failure to comply with the separate statement requirement may, in the court's discretion, constitute a sufficient ground for granting the motion. (CCP § 437c(b)(3); see also Batarse v. Service Employees Int'l Union Local 1000 (2012) 209 Cal.App.4th 820, 831–833.) However, the court may not grant the motion unless it first determines that the moving party has met its initial burden of proof. (Thatcher v. Lucky Stores, Inc. (2000) 79 Cal.App.4th 1081, 1085–1086; Teselle v. McLoughlin (2009) 173 Cal.App.4th 156, 160 .)

Here, the Plaintiff has failed to present a separate statement in opposition. However, this oversight does not relieve the Defendants of meeting their initial burden, i.e., that they are entitled to summary judgment as a matter of law based on the undisputed facts. As discussed below, the Defendants have not met their burden as the Agreement does not support their interpretation of the “Earned Commission” clause.

The Agreement clearly defines “Earned Commissions” as those commissions “earned when payment from a customer is received and cleared….” Notably, the definition does not include a time frame. The Defendants reliance on an “Earned Commission[ ]” being earned only when an AE has successfully performed their responsibilities as explain in the Agreement does not add a time frame to the concept of the “Earned Commissions.” The Responsibilities include that the AE “maintain[ ] working relationships with customers to ensure that … invoices are paid when due….” After this statement, the Agreement notes that “the AE must make sure that the invoice is paid and the AE will not earn the commission until this final step is completed.” For the Defendants to be entitled to summary judgment, the court would have to add the 90/120 day timeframe which is not included in the language of either the “Responsibilities” or the “Earned Commissions” clause.  Indeed, the 90/120 day timeframe only appears to affect “chargebacks” and does not indicate that such a chargeback is irrevocable. The Defendants argue that the language in the “Responsibilities” section refers to “invoices … paid when due;” however, that statement explains the purpose of maintaining a customer relationship.  Nowhere in the Agreement does it unambiguously state that the failure to pay an invoice when due (or within 90/120 days) results in the AE’s inability to earn said commission.

Further, the Defendants’ cited authority is distinguishable. In those cases cited by the Defendants the condition precedent for earning commissions was clear and not at issue—only the legality of the chargebacks. 

The Defendants have not met their initial burden and, therefore, summary judgment is not warranted. Since the Defendants have not met their burden, the court need not analyze whether the contract is unconscionable. Further, the Defendants’ summary adjudication is premised on the “Earned Commissions” having a 90/120 day shelf-life.  Since the Agreement does not support the Defendants’ arguments, summary adjudication is not warranted either.

Accordingly, the Defendants’ motion is denied in its entirety. The Plaintiff shall draft an order consistent with this ruling.

  

2.  SCV-255148 Redwood Health v. Anthem Blue Cross:

This is on calendar for the Defendants demurrer, motion to strike, and motion to seal. 

Demurrer

The Defendants demur generally and specially to the Complaint, contending that the Complaint fails to allege facts that support the anti-trust cause of action. Further, the Defendants contend that the § 17200 claim fails because it is predicated on the anti-trust allegations. The Defendants also argue that the Complaint fails to properly allege intentional or negligent interference with business advantage as there are no allegations of independent wrongdoing or that the Defendants owed a duty to the Plaintiff. Lastly, the Defendants argue that this court should abstain from asserting jurisdiction over the claims, and allow the regulators to sort out the issues between the parties.

The Plaintiff opposes, contending that the Complaint adequately alleges facts that support the causes of action.  Each of the causes of action is dealt with below.

As an initial matter, all of the respective requests for judicial notice are denied.  The hearing on demurrer may not be turned into a contested evidentiary hearing through the guise of having the court take judicial notice of documents whose truthfulness or proper interpretation are disputable. (See Del E. Webb Corp. v. Structural Materials Co. (1981) 123 Cal.App.3d 593, 605.)

Here, the complaint alleges that Defendants coerced its authorized brokers into agreeing not to sell the “Plus” product by threatening to deny brokers’ commissions and terminate the agency relationship of any brokers who sold “Basic” policies in conjunction with the “Plus” policy. Defendants were able to do this because they have the largest hospital network in California and sell more major medical policies than any other California provider. The threats succeeded in causing authorized brokers to stop offering the “Plus” product.  Plaintiff has alleged more than a generalized claim of threats, coercion, intimidation or unlawful conduct.

Anti-Trust Injury:

The exact parameters of “antitrust injury” under section 16750 have not yet been established through either court decisions or legislation. The Kolling Court generally defined “antitrust injury” as the “type of injury the antitrust laws were intended to prevent, and which flows from the invidious conduct which renders defendants’ acts unlawful.” Excessive prices paid by consumers is an antitrust injury. (Ibid.)

Plaintiff alleges that the “Plus” products cost consumers less than equivalent products offered by Defendants. This is sufficient to allege an injury. (Kolling v. Dow Jones & Co. (1982) 137 Cal.App.3d 709, 723.)

The Defendants contend that this court should abstain.  Here, it is appropriate for the court to exercise its jurisdiction. The Plaintiff has alleged that the Defendants are engaged in illegal anti-trust activities. The Defendants have not presented any cogent argument as to why this court cannot adjudicate the alleged anti-competitive activities of the Defendants.  The Plaintiff  is not asking the trial court to assume or interfere with the regulatory bodies’ functions, but rather “to perform an ordinary judicial function, namely, to grant relief … for business practices that are made unlawful by statute.” (Blue Cross of California, Inc. v. Superior Court (2009) 180 Cal.App.4th 1237, 1258; see generally Arce v. Kaiser Foundation Health Plan, Inc. (2010) 181 Cal.App.4th 471.)

Further, Plaintiff’s cause of action under Business Code § 17200 et seq. alleges, in part, a violation of the Cartwright Act.

Defendants contend that the intentional interference claim fails because the Plaintiff has failed to allege an independent wrong, i.e. a violation of the Cartwright Act or the Unfair Competition Law. As explained above, the Plaintiff has properly alleged such wrongs. The Defendants also claim that the Plaintiff has adequately failed to allege a duty. The Complaint adequately alleges the elements for both negligent and intentional interference. The Defendants further claim that the Complaint does not allege that their alleged interference was “directed at” the Plaintiff. The Complaint does allege that the Defendants intended to disrupt the Plaintiff’s economic relationships. (Complaint ¶¶ 53-56.) This is sufficient to survive demurrer.

Accordingly, and for the foregoing reasons, the Defendants’ demurrer is overruled in its entirety.

Motion to Strike

The Defendants seek to strike certain portions of the Complaint on the basis that they are barred by the statute of limitations, that the UCL claim improperly seeks “damages,” and that the Complaint does not allege facts sufficient to support the punitive damages claims. The Plaintiff opposes, arguing that the claims are timely under Pace Industries, Inc. v. Three Phoenix Co. (1987) 813 F.2d 234 and Aryeh v. Canon Business Solutions, Inc. (2013) 55 Cal.4th 1185.  With respect to the UCL damages claim, the Plaintiff seeks leave to amend to more properly allege restitutionary disgorgement. Lastly, the Plaintiff contends that the Complaint adequately supports a prayer for punitive damages.

First, the court questions whether a motion to strike is the correct procedure to assert a statute of limitations bar. (See Saliter v. Pierce Bros. Mortuaries (1978) 81 Cal.App.3d 292, 300 fn. 2; Vaca v. Wachovia Mortg. Corp. (2011) 198 Cal.App.4th 737, 746.) Assuming, arguendo, that the statute of limitations may be raised by a motion to strike, it would follow that the same analysis that is performed for a demurrer which raises the statute of limitations would apply. As a result, the running of the statute must appear “clearly and affirmatively” from the face of the complaint. It is not enough that the complaint might be time-barred. (Committee for Green Foothills v. Santa Clara County Bd. of Supervisors (2010) 48 C4th 32, 42.) Here, the dates do not appear on the face of the Complaint. Further, the Defendants would have this court infer from an incomplete excerpt of testimony that all of these claims are barred. The court is not taking judicial notice of that testimony.

The Plaintiff has seemingly conceded the point regarding the Unfair Competition Law damages and, therefore, the court will grant the motion with leave to amend as to that portion of the Complaint.

The Defendants argue that the Plaintiff has not pled sufficient facts to support a claim for punitive damages. The court disagrees. The Complaint adequately pleads facts to support the punitive damages claim.

Motion to Seal

The Defendants have moved to seal portions of their request for judicial notice, in particular a settlement and release agreement between the parties that was executed on or about December 6, 2010. The motion to seal is not opposed.

CRC Rule 2.550 and Rule 2.551 provide a standard and procedures for courts to use when a request is made to seal a record. The standard is based on NBC Subsidiary (KNBC-TV), Inc. v. Superior Court (1999) 20 Cal.4th 1178. That decision contains the requirements that the court, before closing a hearing or sealing a transcript, must find an “overriding interest” that supports the closure or sealing, and must make certain express findings. Id. at 217-1218. The decision notes that the First Amendment right of access applies to records filed in both civil and criminal cases as a basis for adjudication. Id. at 1208-1209, fn. 25. Thus, the NBC Subsidiary test applies to the sealing of records.

NBC Subsidiary provides examples of various interests that courts have acknowledged may constitute “overriding interests.” (See Id. at1222, fn. 46.) Courts have found that, under appropriate circumstances, various statutory privileges, trade secrets, and privacy interests, when properly asserted and not waived, may constitute “overriding interests.”

Here, the settlement agreement at issue is covered by a confidentiality provision, and the request is narrowly tailored to preserve the confidential information. The material sought to be sealed can be characterized as confidential financial and business strategy information, which certainly creates and “overriding interest” in preserving its confidentiality.  (See Gordon v. Sup. Ct. (1997) 55 Cal.App4th 1546, 1557-1558.)

 Accordingly, and for the foregoing reasons, the Defendants’ demurrer is overruled in its entirety. The Defendants motion to strike is granted, with leave to amend with respect to the Unfair Competition Law damage allegations. Lastly, the Defendants unopposed motion to seal is granted. The Plaintiff shall draft an order on the demurrer and motion to strike consistent with this ruling, and the Defendants shall draft an order on the motion to seal consistent with this ruling.

 

3.  SCV-251043 Messer v. Austin Creek:

This is a putative class action brought by the Plaintiffs Dervin Guttierrez and Paul Murasko, who seek to be a class representatives for drivers who have worked for the Defendant Austin Creek Ready Mix Inc.   The Second Amended Complaint (SAC) alleges that the Defendant failed to provide off-duty meal and rest periods to its drivers.  The SAC alleges that the Defendant’s failure to provide these meal and rest periods was a violation of numerous Labor Code statutes, and constitutes an unfair business practice under BP § 17200.

On September 3, 2013, this court denied the Plaintiffs first attempt to certify a class against Defendant Austin Creek without prejudice, and on February 4, 2014 denied the Plaintiffs’ second attempt. This motion is the Plaintiffs third attempt to qualify class representatives. The only relevant issue at bar is whether the Plaintiffs can qualify as class representatives—the court has already found that there is a well-defined community of interest and an ascertainable class.

The motion is opposed. The Defendants contend that the proposed Representatives do not fully understand their obligations as class representatives.  Further, the Defendants argue that Plaintiffs have credibility issues. The respective requests for judicial notice are granted, the Defendants’ evidentiary objections are overruled.

The credibility issues that the Defendants raise are based on equivocal questions asked at their depositions. The issue related to Mr. Gutierrez having been involved in litigation—the question asked was whether he ever sued someone—does not disqualify him. The print-out attached to the Declaration of Mr. Fitzgerald is difficult to decipher, and it appears that Mr. Gutierrez was involved in a family law matter, and was actually a defendant in another matter. Whether he ever “sued” someone seems to depend on the definition of “sue.” These are not “substantial” inconsistencies.

The Defendants also argue that the class representatives do not understand their fiduciary duties  as class representatives. Defendants do not seem to challenge Mr. Gutierrez on this point. The court is not satisfied that Mr. Murasko fully understands his duties as a class representative. (See Jones v. Farmers Insurance Exchange (2013) 221 Cal.App.4th 986, 998.)

The court finds that Mr. Guttierrez has established that he would be an adequate representative. Accordingly the motion is granted in its entirety, except as to Mr. Murasko acting as a class representative. The Plaintiffs shall draft an order consistent with this ruling.

 

4.  SCV-254373 National Collegiate v. Hann:          

            This is on calendar for Plaintiff’s motion for reconsideration from this court’s granting the Defendants’ motion for summary judgment. The Plaintiff contends that it failed to present all of its evidence in opposition to the Defendants’ summary judgment motion. The Plaintiff argues that this “new” evidence warrants the court to reconsider its granting the Defendants’ motion for summary judgment. In the alternative, the Plaintiff seeks relief from the judgment under CCP § 473. 

The Defendants oppose arguing that the so-called “new” evidence is not new at all, in that the Plaintiff admits that it had the evidence all along and simply failed to present it at the hearing. Further, the Defendants point out that § 473 mandatory relief is not available to the Plaintiff in this situation, because Plaintiff is not seeking relief from a default judgment. The Defendants further contend discretionary relief is not available to the Plaintiff either, in that her mistake was not “excusable.” The Defendants also raise several evidentiary objections, and request judicial notice of several documents. Defendants’ evidentiary objections are overruled, and the request for judicial notice is granted.

A party seeking reconsideration of prior ruling upon alleged different set of facts must provide both newly discovered evidence and explanation for failure to have produced such evidence earlier. (See In re Marriage of Drake (1997) 53 Cal.App.4th 1139.) It is well settled that facts of which a party seeking reconsideration was aware at the time of the original ruling are not “new or different facts,” as would support a trial court's grant of reconsideration. (In re Marriage of Herr (2009) 174 Cal.App.4th 1463; see also Garcia v. Hejmadi (1997) 58 Cal.App.4th 674 [Movant was not entitled to vacation of summary judgment as matter of law, on claim that there was evidence showing triable issues of fact not presented in initial opposition to summary judgment motion.].) To merit reconsideration, a party must provide a satisfactory reason why it was unable to present its “new” evidence in a timely manner. (McPherson v. City of Manhattan Beach (2000) 78 Cal.App.4th 1252.)

Plaintiff’s motion for reconsideration is denied. The “new” evidence that the Plaintiff seeks to put in front of the court is not “new.” It is evidence that the Plaintiff had in its possession all along. (Dec. Boone ¶ 3.) Plaintiff’s counsel’s oversight of potentially relevant and dispositive evidence does not transmute the evidence into a “new” fact, and certainly does not satisfy the diligence requirement built into CCP § 1008.

A court may relieve a party from judgment in summary proceeding to determine title to property if judgment is taken against him through his mistake, inadvertence, surprise or excusable neglect. (Dingwall v. Anderson (1969) 76 Cal.Rptr. 827.) The mandatory (affidavit of attorney fault) provisions of Code of Civil Procedure § 473(b), however, relate only to dismissals, defaults, and default judgments.  Relief relating to other judgments, orders, or proceedings is discretionary. (See Huh v. Wang (2007) 158 Cal. App. 4th 1406.). Where relief is discretionary and the party seeking relief has the burden of proving mistake, inadvertence, surprise or excusable neglect justifying relief - i.e. moving party must present competent evidence which preponderates as to the claimed mistake, inadvertence, surprise or excusable neglect and must show diligence in seeking relief.  (Luz v Lopes (1960) 55 Cal.2d 54, 62; Kendell v Allied Investigations, Inc.  (1988) 197 Cal.App.3d 619, 624.)

Here, the Plaintiff is not seeking relief from default or dismissal, so the mandatory relief in CCP § 473(b) is not available. (See English v. IKON Business Solutions, Inc. (2001) 94 Cal.App.4th 130, 138; and Henderson v. Pacific Gas and Elec. Co. (2010) 187 Cal.App.4th 215, 226.)  The court notes that the Plaintiff does not seek discretionary relief under CCP § 473(b) and, therefore, the denial of the mandatory relief is dispositive. (See English, supra, at 149.) The court notes, however, discretionary relief is not appropriate as the Plaintiff’s counsel’s failure to present competent evidence in opposition to the motion for summary judgment is not encompassed in the statutes language of “mistake, inadvertence or excusable neglect.”

To be entitled to discretionary relief, the Plaintiff must demonstrate that the inadvertence, mistake, surprise or neglect of counsel was “excusable because the negligence of the attorney is imputed to his client and may not be offered by the latter as a basis for relief.” (Zamora v. Clayborn Contracting Group, Inc. (2002) 28 Cal.4th 249, 258.) In determining whether the attorney's mistake or inadvertence was excusable, the court inquires whether a reasonably prudent person might have made the same mistake under the same or similar circumstances. (Ibid.). Thus, discretionary relief is available only from attorney error that is “ ‘fairly imputable to the client, i.e., mistakes anyone could have made.’ [Citation.] ‘Conduct falling below the professional standard of care, such as failure to timely object or to properly advance an argument, is not therefore excusable. To hold otherwise would be to eliminate the express statutory requirement of excusability and effectively eviscerate the concept of attorney malpractice.’ ” (Ibid. [emphasis added].) The case of Garcia v. Hejmadi [(1997) 58 Cal.App.4th 674] is instructive. In Garcia, the plaintiff moved to vacate a summary judgment on the ground “that his original opposition papers, through inadvertence and time pressure, had not correctly identified all evidence creating triable issues....” (Id. at 679.) The trial court denied the motion, and the appellate court affirmed, holding section 473 was not meant to apply “where there was no complete failure to oppose, but rather an opposition which was, though apparently timely and procedurally adequate, inadequate in substance.” (Id. at 683.)

The Plaintiff’s citation to Avila v. Chua [(1997) 57 Cal.App.4th 860] is factually distinguishable. As the Garcia court points out:

In Avila v. Chua [Citatio], the plaintiff was a week late in filing opposition to a motion for summary judgment. Plaintiff tried and failed to obtain an ex parte order continuing the hearing and later filed a motion for relief under section 473. The attorney's affidavit in support of the 473 motion stated the attorney had mistakenly calendared the date the response was due. The  trial judge found this was not “good cause” and denied the motion. The Court of Appeal concluded the situation was “directly analogous to a default judgment” because “the court decided the matter on the other parties' pleadings [and] [t]here was no litigation on the merits” (id. at p. 868, 67 Cal.Rptr.2d 373) and thus sidestepped the question of excusability. We conclude there was no need for the court in Avila to resort to the mandatory portion of section 473 since the facts would have permitted the same result under Bettencourt, discussed above. Moreover the case supplies little guidance in a case such as ours where opposition is filed but is insufficient on the merits.

 

(Garcia, supra, at 683 [Emphasis added].)

Here, the Plaintiff presented an inadequate opposition which did not identify all evidence that would potentially create a triable issue of fact. As explained above, CCP § 473(b) relief is not available for the Plaintiff’s failure to properly oppose the summary judgment motion.

Accordingly, the Plaintiff’s motion is denied in its entirety. The Defendants’ motion to compel is dropped as moot.  The Defendants shall draft an order consistent with this ruling.

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