Judge: Christopher K. Lui, Case: 21STCV19443, Date: 2025-02-21 Tentative Ruling
Case Number: 21STCV19443 Hearing Date: February 21, 2025 Dept: 76
DEFENDANTS’ MOTION IN LIMINE NO. 1:
In their motion in limine no. 1, Defendants seek an order of the Court excluding evidence relating to summarily adjudicated claims. The motion is based on Evidence Code sections 350 and 352, and argues that evidence relating to claims for which the Court granted summary adjudication is both irrelevant (Evid. C. § 350) and likely to lead to jury confusion, undue consumption of time, and undue prejudice. (Evid. C. § 352.)
The claims that are the subject of the motion are the tenth cause of action (rescission for economic duress), ninth and eleventh causes of action (damages and rescission based on fraud), first cause of action for breach of CBC’s operating agreement, second cause of action for breach of the implied covenant of good faith and fair dealing, third cause of action for common counts, fourth and fifth causes of action for intentional and negligent interference with prospective economic advantage, sixth cause of action for interference with contract, seventh cause of action for constructive trust, and eighth cause of action for breach of contract.
Code of Civil Procedure section 437c, which governs motions for summary judgment or summary adjudication, provides as follows:
If a motion for summary adjudication is granted, at the trial of the action, the cause or causes of action within the action, affirmative defense or defenses, claim for damages, or issue or issues of duty as to the motion that has been granted shall be deemed to be established and the action shall proceed as to the cause or causes of action, affirmative defense or defenses, claim for damages, or issue or issues of duty remaining.
(Code Civ. Proc. § 473c(n)(1).)
Unfortunately, the scope of evidence potentially implicated by this motion, as framed, is too broad for the Court to issue a meaningful ruling. A typical in limine order regarding the exclusion of evidence will identify the specific evidence at issue, so that counsel can instruct witnesses regarding the prohibited evidence, and also allowing the Court to enforce the order through sanctions. In this case, evidence that relates to a summarily adjudicated claim or theory might also be relevant to claims that are the subject of the trial. Since the only remaining claim alleges a breach of a settlement agreement, some evidence regarding the underlying dispute must necessarily be allowed. If the Court were to simply grant the motion in its current form, the order would not be a clear and readily enforceable order precluding specific evidence. Therefore, the motion is denied without prejudice to objections at the time of trial.
However, the motion raises a valid and natural concern: the Court has summarily adjudicated several claims, and those claims cannot be relitigated before the jury. The presentation of evidence relating principally to the summarily adjudicated claims would raise significant risks of unfair prejudice, jury confusion and unnecessary consumption of time.
To provide the parties with some guidance concerning the presentation of evidence at trial, the Court’s inclination is to find that any testimony or exhibits intended to show that the settlement agreement was invalid, or that it was obtained by duress or fraud, would not be admissible, and argument on those points would not be permitted. On the other hand, evidence regarding the parties’ underlying business relationship, and the development of the disputes that led to the settlement agreement, would be relevant and will provide the jury with a coherent narrative. However, such contextual evidence would be subject to limitation under Evidence Code section 352, especially if its presentation is attempted in a cumulative or overly detailed form.
DEFENDANTS’ MOTION IN LIMINE NO. 2
With their motion in limine no. 2, Defendants seek an order
of the Court excluding the testimony of Dr. Barbara Luna, Plaintiffs’ proposed
witness on damages. Defendants argue
that Dr. Luna’s testimony is directed entirely at Plaintiff’s claimed damages on
the causes of action that the Court has summarily adjudicated in Defendants’
favor, and as a result the testimony would not be relevant. Plaintiffs’ opposition brief argues that if
the jury finds the Settlement Agreement is rescinded as a result of Defendants’
material breach of the Settlement Agreement, the damages testimony would be
proper.
In reply, Defendants argue that Plaintiffs’ scenario of
relevance is not possible, because (1) the claims for which Dr. Luna has proposed
opinions were summarily adjudicated, and (2) the jury cannot and will not make
any finding of rescission, because the question of whether Defendants’ alleged
breach of the Settlement Agreement terminates its release provisions is an
issue for the Court, not for the jury.
The latter argument is based on Defendants’ contention that a determination
of whether the Settlement Agreement’s payment provisions and release provisions
are dependent or independent covenants is a judicial function of contract
interpretation.
The Court agrees with Defendants that Dr. Luna’s proposed
testimony relates to claims that are no longer part of the trial. To the extent that Plaintiffs contend Dr.
Luna’s testimony may be conditionally relevant upon a finding of rescission by
the jury, there are two insurmountable problems with that theory: first, the rescission claims have been
summarily adjudicated. Second, in a
somewhat academic point (given the summary adjudication), the rescission claim
pled by Plaintiffs is an equitable claim that has no right to jury trial.
In Nmsbpcsldhb v. County of Fresno (2007) 152
Cal.App.4th 954 (hereinafter, “NMS”), the Court of Appeal addressed the circumstances
in which rescission claims carry a right to jury trial, providing a lengthy historical
analysis. NMS began its analysis by
explaining that the “inviolate” right to jury trial set forth in Article 1,
section 16 of the California Constitution has been held to apply in a civil
action at law, but not an action in equity.
(Id. at 958.) Next, NMS
noted that prior to 1961, the Civil Code provided for two forms of
rescission: (1) the legal claim of unilateral
rescission, in which a party to a contract gave notice to its counterparty of
the rescission, offered to restore everything of value received, and brought
suit to enforce the extrajudicial rescission; and (2) the equitable claim of judicial
rescission, where a party to a contract brought an action to have a rescission
adjudged on specific statutory grounds.
(Id. at 962.) These historical
forms of rescission were “fused” in 1961 by changes in the Civil Code, leaving courts
to decide whether a rescission claim is legal or equitable based on the relief
sought. (Id.) NMS concluded that “if a rescission
action seeking to recover something other than the consideration paid was an
equitable action prior to the 1961 amendments, then it is an equitable action
today. And that is our conclusion in this case.” (Id.)
Claims for damages suffered as a result of the breach of the
Settlement Agreement (beyond consideration paid thereunder), or for damages from
the underlying settled claims, are “something other than the consideration paid,”
(NMS, supra, 152 Cal.App.4th at 965) making Plaintiffs’
rescission claim an equitable one, where there would be no occasion to present Dr.
Luna’s damages evidence to a jury. Due
to the summary adjudication of the rescission claims, there is no basis for such
evidence to be presented to the Court on a non-jury basis.
The motion is GRANTED.