Judge: Anne Richardson, Case: 23STCV12948, Date: 2023-11-06 Tentative Ruling

Case Number: 23STCV12948    Hearing Date: January 22, 2024    Dept: 40

Superior Court of California

County of Los Angeles

Department 40

Background

Plaintiff Wawanesa General Insurance Company sues Defendants Cheryl Lyn Martinez, Joyce Robles, and Does 1 through 30 pursuant to a June 7, 2023 Complaint alleging a single claim for declaratory relief.

Wawanesa seeks a declaration of rights and duties between the parties in relation to insurance coverage bargained for by Defendants with Wawanesa and pursuant to which Defendants seek a payout connected to a January 10, 2022 accident involving Defendant Martinez and an uninsured motorist. Specifically, Wawanesa seeks a judgment declaring that no rights, duties, or obligations arose, exist, or may in the future arise or exist under and by virtue of the provisions of the Wawanesa policy and with respect to the claims for benefits and/or coverage under the Wawanesa policy made by Defendants and Does 1 through 30, that arose out of the alleged January 10, 2022 accident.

On August 30, 2023, Defendants filed a demurrer to the Complaint’s declaratory relief claim based on res judicata, insufficiency of pleading, the existence of an agreement to arbitrate, and the failure to comply with court orders requiring the parties to submit to arbitration. The res judicata claims are premised on the existence of orders by Department 53 in Los Angeles Superior Court action 22STCP03407 (the Underlying Action).

On October 19, 2023, Wawanesa opposed the demurrer.

On November 2, 2023, Defendants replied to the opposition.

On November 5, 2023, the Court continued the hearing on Defendants’ demurrer to give the parties an opportunity to file a notice of related case in this and in the Underlying Action.

On November 7, 2023, Wawanesa filed notices of related case in this and in the Underlying Action.

On January 13, 2023, Department 53 denied relation of this action to the Underlying Action.

Defendants’ demurrer is now before the Court.

Request for Judicial Notice

Per the request of Defendants, the Court takes judicial notice of the papers filed by the parties and the rulings made by Department 53 in relation to motions to compel arbitration (granted) and for reconsideration (denied) in the Underlying Action. (Demurrer, RJN, Exs. A-B; see Julian Volunteer Fire Co. Assn. v. Julian-Cuyamaca Fire Protection Dist. (2021) 62 Cal.App.5th 583, 600 [judicial notice may be taken as to existence of document and legal effects deriving therefrom].)

The Court notes that on January 13, 2024, Department 53 denied relation of this action to the Underlying Action.

Demurrer

Legal Standard

A defendant can file a special demurrer to a complaint under Code of Civil Procedure section 430.10, subdivision (c) on the ground that there is another action pending between the same parties on the same cause of action. (Code Civ. Proc., § 430.10, subd. (c); see Bescos v. Bank of Am. (2003) 105 Cal.App.4th 378, 396-97.) A demurrer filed on this ground is sometimes referred to as a plea in abatement. (See Plant Insulation Co. v. Fibreboard Corp. (1992) 224 Cal.App.3d 781, 787 (Plant Insulation).) If a demurrer is sustained on this ground, the second action should be stayed, but not dismissed, pending the termination of the first action. (Id. at p. 788.) To success on a plea in abatement demurrer, the movant must show three things: (1) there are multiple actions pending in California courts (Leadford v. Leadford (1992) 6 Cal.App.4th 571, 574 (Leadford)); (2) the parties in both actions are the same and stand in the same relative position as plaintiff and defendant (see Plant Insulation, supra, at p. 787); and (3) both actions are based on substantially the same cause of action, i.e., judgment in the first action would bar recovery in the second action (Lord v. Garland (1946) 27 Cal.2d 840, 848 (Lord)).

Order Sustaining Demurrer: SUSTAINED; ACTION STAYED.

Here, Defendants’ demurrer relies on various arguments for the relief sought: res judicata rooted in the Underlying Action and rulings there; insufficiency of pleading in the Complaint in this action; the existence of an agreement to arbitrate pursuant to the insurance coverage issued by Wawanesa to Defendants; and the failure to comply with court orders in the Underlying Action requiring the parties to submit to arbitration. (Demurrer, pp. 6-12.)

In opposition, Plaintiff Wawanesa argues that Defendants enlarge the actual scope of the arbitration ordered in the Underlying Action. Plaintiff also argues that res judicata does not apply based on the terms of the insurance coverage Defendants had with Wawanesa and based on the lack of similar issues with, and lack of actual litigation or a final ruling in, the Underlying Action. Plaintiff Wawanesa last argues that judicial economy supports its request for declaratory relief because “[i]f th[is] Court ultimately rules that no rights, duties, or obligations exist for Defendants’ claims under the provisions of the Wawanesa policy, whether or not Defendants have a right to collect damages from the uninsured motorist becomes moot[,] such that allowing arbitration to proceed would constitute a waste of resources for the parties, the arbitrator and the Court. (Opp’n, pp. 1-6.)

In reply, Defendants rebut the argument that the scope of the arbitration order in the Underlying Action was not so comprehensive as to encompass the relief in this action, that res judicata applies in both its forms, and that judicial economy supports resolving the disputes in arbitration. (Reply, pp. 2-5.)

The Court finds in favor of Defendants for reasons differing from those in the demurrer.

The Court first notes that a trial court may construe a motion bearing one label as a different type of motion. (Austin v. Los Angeles Unified School Dist. (2016) 244 Cal.App.4th 918, 930.) “‘The nature of a motion is determined by the nature of the relief sought, not by the label attached to it. The law is not a mere game of words. … The principle that a trial court may consider a motion regardless of the label placed on it by a party is consistent with the court’s inherent authority to manage and control its docket.’ [Citation.]” (Ibid.)

Here, a review of the demurrer shows that, in essence, it advances the argument that another action is pending between the parties (the Underlying Action), in which the parties stand in relative position to one another, and where judgment in the first action (the Underlying Action) would bar recovery in this action. Such a motion involves a plea in abatement demurrer pursuant to Code of Civil Procedure section 430.10, subdivision (c).

Res judicata in the form of claim preclusion relies on a final judgment on the merits in the first suit, and res judicata in the form issue preclusion (collateral estoppel) relies on final adjudication of an identical issue actually litigated and necessarily decided in the first suit and asserted in the second suit. (Samara v. Matar (2017) 8 Cal.App.5th 796, 803-804). Here, Defendants Martinez and Robles do not allege that the claims in the Underlying Action have been resolved or that the issue raised in this action involves an issue actually litigated and determined in the Underlying Action. Rather, Defendants seek relief based on the pendency of, and arbitration orders made, in the Underlying Action—i.e., the first action to be instituted. Moreover, the fact that Department 53 has made some rulings in the underlying action—e.g., ruling on the existence of an enforceable arbitration agreement between the parties and ordering arbitration of the dispute there—does not trigger issue preclusion because the issue before the Court at this moment is not whether, for example, arbitration is appropriate as to the claim in this action, but rather, whether a demurrer should be sustained to Wawanesa’s Complaint. The demurrer here is therefore one that more properly arises from a plea in abatement.

The Court next determines that sustaining the demurrer on these grounds is proper.

A plea in abatement results in the second action being stayed, but not dismissed, pending the resolution of the first action. (Plant Insulation, supra, 224 Cal.App.3d at p. 788.) To succeed on a plea in abatement demurrer, the movant must show that (1) there are multiple actions pending in California courts (Leadford, supra, 6 Cal.App.4th at p. 574), (2) the parties in both actions are the same and stand in the same relative position as plaintiff and defendant (see Plant Insulation, supra, at p. 787), and (3) both actions are based on substantially the same cause of action, i.e., judgment in the first action would bar recovery in the second action (Lord, supra, 27 Cal.2d at p. 848).

Here, there is an earlier-filed and currently pending Underlying Action. (See 22STCP03407.) This meets the first element of a plea in abatement demurrer: multiple pending actions in California courts. (Leadford, supra, 6 Cal.App.4th at p. 574.).

Moreover, the Underlying Action involves the same parties as this action, who stand in the same relative position to one another in both actions as to insurance coverage from the uninsured motorist accident. (Compare, e.g., 22STCP03407 Petition, pp. 1-5, with Complaint, ¶¶ 1-36.) This satisfies the second element of a plea in abatement demurrer: that the parties in both actions are the same and stand in the same relative position as plaintiff and defendant. (Plant Insulation, supra, at p. 787.)

Last, the Court determines that the two actions are based on substantially the same cause of action, i.e., judgment in the first action would bar recovery in the second action (Lord, supra, 27 Cal.2d at p. 848.) The issue in the earlier-filed and currently pending Underlying Action is whether “[Defendants] [are] legally entitled to collect damages from the owner or operator of the uninsured motor vehicle [in the January 10, 2022 auto collision] and/or the amount of those damages.” (22STCP03407 Petition, ¶ 8.) The Underlying Action dispute arose after Defendants Martinez and Robles filed “a claim with [Wawanesa] for [Martinez’s] bodily injury and property damage claims” under the Defendants’ uninsured motorist coverage with Wawanesa. (22STCP03407 Petition, ¶ 7, Crissman Decl., Exs. A [policy at issue], B [copy of Defendants’ Jul. 1, 2022 demand for arbitration in relation to uninsured motorist coverage].) On December 8, 2022, Department 53 ordered this issue to arbitration, and on April 18, 2023, Department 53 denied a motion for reconsideration of its December 8th order. (Demurrer, RJN, Exs. A, B; see Request for Judicial Notice discussion supra.) If the issue before the arbitrator in the Underlying Action is resolved in favor of Wawanesa, then Defendants Martinez and/or Robles are not legally entitled to receive damages from the uninsured motorist, and thus, are not entitled to receive compensation pursuant to Defendants’ Wawanesa uninsured motorist coverage. Such a determination would clearly undercut any need for this Court to make “a judgment declaring that no rights, duties, or obligations arose, exist, or may in the future arise or exist under and by virtue of the provisions of the Wawanesa policy and with respect to the claims for benefits and/or coverage under the Wawanesa policy made by Defendants and Does 1 through 30 which have arisen out of the alleged January 10, 2022 accident.” (Complaint, ¶ 36.) As stated by the opposition, “[i]f th[is] Court ultimately rules that no rights, duties, or obligations exist for Defendants’ claims under the provisions of the Wawanesa policy, [the question of] whether or not Defendants have a right to collect damages from the uninsured motorist becomes moot.” (Opp’n, p. 6.)

Equally true is that, if the result in the Underlying Action is that Defendants are not entitled to damages from the uninsured motorist based on the January 10, 2022 accident, then Defendants may not be entitled to coverage under the uninsured motorist coverage with Wawanesa, and this action becomes moot. For example, the arbitrator may determine that Defendant Martinez was at fault or in some other way cannot recover damages from the uninsured motorist, triggering non-coverage on Wawanesa’s part, and resolving the declaration of rights sought in this action.

Defendant Martinez and Robles’s demurrer is thus SUSTAINED, and this action is STAYED. (Code Civ. Proc., § 430.10, subd. (c).) 

Conclusion

Defendants Cheryl Lyn Martinez and Joyce Robles’s Demurrer to Complaint of Wawanesa General Insurance Company is SUSTAINED.

The Court STAYS this action pending a final resolution in the Underlying Action. (Code Civ. Proc., § 430.10, subd. (c).)