Judge: David B. Gelfound, Case: 23CHCV02469, Date: 2024-08-01 Tentative Ruling

Counsel wishing to submit on a tentative ruling may inform the clerk or courtroom assistant in North Valley Department F49, 9425 Penfield Ave., Chatsworth, CA 91311, at (818) 407-2249.  Please be aware that unless all parties submit, the matter will still be called for hearing and may be argued by any appearing/non-submitting parties. If the matter is submitted on the court's tentative ruling by all parties, counsel for moving party shall give notice of ruling. This may be done by incorporating verbatim the court's tentative ruling. The tentative ruling may be extracted verbatim by copying and pasting, as unformatted text, from the Los Angeles Superior Court’s website, http://www.lasuperiorcourt.org.
All hearings on law and motion and other calendar matters are generally NOT transcribed by a court reporter unless one is provided by the party(ies). 

Case Number: 23CHCV02469    Hearing Date: August 1, 2024    Dept: F49

LOS ANGELES SUPERIOR COURT

NORTH VALLEY DISTRICT

DEPARTMENT F49

MOTION TO RECLASSIFY

Motion filed: 5/2/24

MOVING PARTY: Defendant Schmidt Industries, Inc. d/b/a Prime Plating (“Defendant”)

RESPONDING PARTY: Plaintiff 3-D Engineering & Manufacturing, Inc. (“Plaintiff”)

NOTICE: OK.

RELIEF REQUESTED: An order reclassifying this unlimited case as a limited civil case and transferring the matter to limited jurisdiction.

TENTATIVE RULING: The motion is DENIED.

BACKGROUND

This case is a breach of contract action.

On August 16, 2023, Plaintiff initiated this action. Subsequently, Plaintiff filed its First Amended Complaint (“FAC”) and the operative Second Amended Complaint (“SAC”) on November 13, 2023, and April 9, 2024, respectively. The operative SAC alleges two causes of action: (1) Breach of Contract, and (2) Breach of Covenant of Good Faith and Fair Dealing. Defendant filed its Answer to the SAC on May 2, 2024.  

On the same day, May 2, 2024, Defendant filed the instant Motion to Reclassify (the “Motion”). Subsequently, Plaintiff filed its Opposition to the Motion on July 24, 2024.

No reply papers have been received by the Court.

ANALYSIS

“Whether an action qualifies as a limited or unlimited civil action is determined initially from the prayer or demand for relief in the plaintiff's complaint. Once classified as limited or unlimited that classification normally continues throughout the litigation. If, however, a matter has been designated as an unlimited action, and yet the amount of controversy is $25,000 or less [the limit at the time of the Ytuarte case, which has been increased to $35,000 effective January 1, 2024], the statutory scheme authorizes ‘reclassification’ of the case as a ‘limited’ action and transfer of the matter to a superior court presiding over such actions.” (Ytuarte v. Superior Court (2005) 129 Cal. App.4th 266, 274 (Ytuarte), citing Code Civ. Proc., § 403.040, subd. (a).)

A.    Timeliness of the Motion

Code of Civil Procedure section 403.040, subdivision (a), provides in pertinent part, “The defendant or cross-defendant may file a motion for reclassification within the time allowed for that party to respond to the initial pleading.”

Here, the case records indicate that Plaintiff served its operative SAC and Summons upon Defendant on April 15, 2024, establishing the deadline for Defendant to respond as May 15, 2024, excluding any extensions applicable due to the method of service.

The Motion was filed on May 2, 2024, within the time allowed for Defendant to respond to the SAC, thereby satisfying the timeliness criteria set forth by Code of Civil Procedure section 403.040, subdivision (a).

B.     Motion to Reclassify

If a party files a motion for reclassification of an action within the time allowed for that party to amend the initial pleading, the court shall grant the motion and order the case reclassified, regardless of fault or lack of fault, if the case has been classified in an incorrect jurisdictional classification. Ytuarte, supra, 129 Cal. App.4th at p. 275, citing Code Civ. Proc., § 403.040, subd. (a).)

In Walker v. Superior Court (1991) 53 Cal.3d 257 (Walker), our Supreme Court held that a matter may be reclassified as a limited civil action “when (i) the absence of jurisdiction is apparent before trial from the complaint, petition, or related documents, or (ii) during the course of pretrial litigation, it becomes clear that the matter will ‘necessarily’ result in a verdict below the superior court's jurisdictional amount....” (Id. at p. 262.) This standard involves an evaluation of the amount fairly in controversy, not an adjudication of the merits of the claim, and according to Walker, requires a “high level of certainty that [the] damage award will not exceed $25,000.” (Walker, supra, 53 Cal.3d at p. 269.) The Supreme Court explained: “The [trial] court may believe it highly unlikely that plaintiff will recover the amount demanded, but this is not enough to defeat jurisdiction, unless it appears to a legal certainty that plaintiff cannot recover the amount [of the] demand[. ]” (Id. at p. 270.)

The Court “must deny the motion to reclassify the case as limited (and thus keep the matter in the unlimited civil court) unless it appears to a legal certainty that the plaintiff's damages will necessarily be less than $25,000.” (Ytuarte, supra, 129 Cal.App.4th at p. 277.) (Italics in original.) This standard of “legal certainty” is not met when it appears a verdict within the unlimited court's jurisdiction is “possible.” (See Maldonado v. Superior Court (1996) 45 Cal.App.4th 397, 402.)

In its Motion, Defendant relies on the purported Statement of Policy signed by both parties on June 21, 2018. The terms of the Statement of Policy limit Defendant’s liability “to the cost of direct labor and material of the product directly damaged by our processing or three times our processing charges on such material, whichever is lesser. Charges for our services are based on this policy which limits our liability.” (Schmidt Decl. Ex. “A.”) Defendant argues that, pursuant to the terms of the Statement of Policy, Plaintiff can recover from Defendant, for any cause, only $1,321.63, the amount billed under the contract in dispute, thereby making a verdict “necessarily” fall short of the limit required for an unlimited civil case. (Mot. at pp. 4-5.)

Conversely, Plaintiff contends that its SAC alleges an amount in controversy in excess of $80,000, surpassing the minimal jurisdiction of this court. (Opp’n. at p. 7.) Furthermore, Plaintiff argues that there is no clear or unequivocal reference to, or incorporation of, the Statement of Policy in the subject contract, noting that the Statement of Policy predates the subject contract by nearly five years. (Id. at p. 8.) Additionally, Plaintiff maintains that the Statement of Policy is unenforceable on the grounds of unconscionability. (Ibid.)

Following the standards set in the Walker case for reviewing a motion to reclassify, the Court does not adjudicate the merits of the issue regarding the enforceability of the Statement of Policy at this stage. However, based on the arguments and evidence presented in the moving and opposing papers, the Court finds that Defendant has not met its burden to establish that the matter will ‘necessarily’ result in a verdict below this Court’s jurisdictional amount. Instead, the Court concludes that a verdict within the unlimited court’s jurisdiction is possible, leading to the denial of the Motion.

Based on the foregoing, the Court DENIES the Motion.

CONCLUSION

Defendant’s Motion to Reclassify is DENIED.

Moving part to give notice.