Judge: Cherol J. Nellon, Case: 20STCV15993, Date: 2023-11-27 Tentative Ruling

Case Number: 20STCV15993    Hearing Date: April 15, 2024    Dept: 14

Williams Vs. Wells Fargo 

Case Background

            This is the second of four related cases, all arising out of the management of a set of medical clinics. The individual Plaintiff alleges that he set up these medical clinics and hired Defendants to manage them. He further claims that Defendants then embezzled millions of dollars from the clinics.

On March 24, 2021, Plaintiffs Wilbur A. Williams, Jr. M.D (“Williams”) and Wilbur Williams, M.D., Inc. (“Practice”) filed their Second Amended Complaint for (1) Breach of Contract, (2) Declaratory Relief, (3) Conspiracy to Convert/Embezzle Funds, (4) Negligence, (5) Breach of the Implied Covenant, (6) Financial Elder Abuse, and (7) Unfair Competition against Defendants Wells Fargo Bank, N.A. (“Bank”), Hovanes Tonoyan (“Tonoyan”) (collectively “Wells Fargo Defendants”), Sevana Petrosian (“Petrosian”), Salina Ranjbar (“Ranjbar”), Vana Mehrabian (“Mehrabian”), Staforde Palmer (“Palmer”) (collectively “Petrosian Defendants”), and DOES 1-100.

On June 30, 2021, Judge Barbara M. Scheper, sitting in Department 30 of this courthouse, sustained the demurrer of the Wells Fargo Defendants, without leave to amend. On July 8, 2021, Judge Scheper ordered the claims against the Petrosian Defendants to arbitration.

Appeal

            Plaintiffs appealed the dismissal of the Wells Fargo Defendants. The Court of Appeal affirmed in part, reversed in part, and remanded with directions. The dismissal of the second, fourth, and sixth causes of action was affirmed. The dismissal of the third and seventh causes of action was reversed. The trial court was additionally instructed to (1) hear a motion for leave to amend related to the first and fifth causes of action should Plaintiffs choose to bring it, (2) hear a motion to strike portions of the SAC should defense choose to renew it.

            On October 14, 2022, Judge Scheper issued a minute order acknowledging receipt of the remittitur from the Court of Appeal and conforming her prior ruling to its instructions. She also accepted a peremptory challenge filed by Plaintiffs.

            The case, along with all the related cases, was then assigned to this department.

Arbitration

            Plaintiffs did not appeal the order compelling his claims against the Petrosian Defendants to arbitration. The arbitration has not yet taken place.

Current Status

Plaintiffs’ claims against the Petrosian Defendants were compelled to arbitration by Judge Scheper. They will not be tried in this court. On March 21, 2023, this court ordered the court proceedings against the Petrosian Defendants dismissed for lack of prosecution. Plaintiffs appealed that order. On April 2, 2024, this court received an opinion from the Court of Appeal which reverses that order and directs the Petrosian Defendants to open arbitration proceedings and seek dismissal from the arbitrator. No remittitur has yet been issued.

Plaintiffs’ case against the Wells Fargo Defendants remains pending in court and has been narrowed to the third and seventh causes of action. On December 13, 2022, this court ordered certain factual allegations stricken from the SAC but did not remove any causes of action or claims for damages. On December 22, 2022, the Wells Fargo Defendants filed their Answer to the SAC. Plaintiff did file a motion for leave to amend, as permitted by the Court of Appeal. This court denied that motion on July 20, 2023.

On May 2, 2023, this court granted leave to substitute Gail Dee Lew-Williams (“Lew-Williams”) as successor-in-interest to Plaintiff Williams, who is now deceased.

            Jury Trial is presently set for April 29, 2024.

Instant Motion

The Wells Fargo Defendants now move this court for an order bifurcating the trial of the seventh cause of action for Unfair Competition, as well as trial on the amount of punitive damages.

Decision

            The motion is GRANTED. Plaintiff’s seventh cause of action for unfair competition will be tried first to the court. After conclusion of that matter, if any issues of fact remain to be resolved, Plaintiff’s third cause of action will be tried to the jury. If the jury returns the verdict required by Civil Code § 3295(d), only then will there be a trial on the amount of punitive damages.

Governing Statutes

Code of Civil Procedure § 598 states, in pertinent part, as follows:

            “The court may, when the convenience of witnesses, the ends of justice,

or the economy and efficiency of handling the litigation would be

promoted thereby, on motion of a party, after notice and hearing, make

an order, no later than the close of pretrial conference in cases in which

such pretrial conference is to be held, or, in other cases, no later than 30

days before the trial date, that the trial of any issue or any part thereof

shall precede the trial of any other issue or any part thereof in the case…”

(emphasis added).

Section 1048(b) states, in relevant part, as follows:

            “The court, in furtherance of convenience or to avoid prejudice, or when

separate trials will be conducive to expedition and economy, may order a

separate trial of any cause of action, including a cause of action asserted

in a cross-complaint, or of any separate issue or of any number of causes

of action or issues…”

Discussion

The California Supreme Court has decided that Unfair Competition claims are tried to the court, not to a jury. Nationwide Biweekly Administration, Inc. v. Superior Court (2020) 9 Cal.5^th 279, 305 (“a cause of action under the UCL…is to be tried by the court rather than by a jury”). And where a complaint includes bench issues and jury issues, the court tries the bench issues first. Hoopes v. Dolan (2008) 168 Cal.App.4^th 146, 156-157. Therefore, the Unfair Competition claim must be tried first.

If there is any factual issue left for a jury to decide after the court makes its rulings on the Unfair Competition claim, the third cause of action will be tried to a jury. However, Civil Code § 3295(d) provides that the court “shall” bifurcate the issue of the amount of punitive damages from the rest of the trial. Only if the jury returns “a verdict for plaintiff awarding actual damages and finds that a defendant is guilty of malice, oppression, or fraud” may the court proceed to trial on the amount of punitive damages. Id.

Conclusion

            The order of trial is determined by statute and case law as set forth above. The Wells Fargo Defendants have asked that this court follow those rules, and Plaintiffs have not opposed the motion. Therefore, the motion is GRANTED.