Judge: Frank M. Tavelman, Case: 21BBCV00321, Date: 2024-12-27 Tentative Ruling

REQUESTING ORAL ARGUMENT PER CRC 3.1308

The Court will attempt to post all Tentative Rulings at least the day prior to the hearing by 3:00 p.m.; however, the Court does not post Tentative Rulings for all matters.  

The Court will indicate in the Tentative Ruling whether the Court is requesting oral argument.  For cases where the Court is not requesting argument, then the Court is guided by California Rules of Court, Rule 3.1308(a)(1) where the Court requests notice of intent to appear.  Unless the Court directs argument in the Tentative Ruling, a party seeking argument should notify all other parties and the court by 4:00 p.m. on the court day before the hearing of the party’s intention to appear and argue.  The tentative ruling will become the ruling of the court if no argument is received.   

Notice may be given either by email at BurDeptA@LACourt.org or by telephone at (818) 260-8412.

Notice of the ruling must be served as indicated in the tentative.  Remote appearances are permitted for all law and motion unless otherwise indicated by the Court.  

Case Number: 21BBCV00321    Hearing Date: December 27, 2024    Dept: A

MOTION TO ENTER JUDGMENT

NOTICE:

The Court is not requesting oral argument on this matter.  The Court is guided by California Rules of Court, Rule 3.1308(a)(1) whereby notice of intent to appear is requested.  Unless the Court directs argument in the Tentative Ruling, no argument is required and any party seeking argument should notify all other parties and the court by 4:00 p.m. on the court day before the hearing of the party’s intention to appear and argue.  The tentative ruling will become the ruling of the court if no argument is received.  

Notice may be given either by email at BurDeptA@LACourt.org or by telephone at (818) 260-8412.

ALLEGATIONS: 

Commodity Trucking Acquisition, LLC (Plaintiff) filed suit against Peña Construction Services, Inc. (Defendant) alleging that Peña entered into an agreement on August 5, 2020 to perform construction work at 777 N. Front Street, Burbank, California 91502. Plaintiff alleged that Peña then entered into an agreement with Plaintiff for Plaintiff to provide trucking, transportation, and leasing services for the Project. Plaintiff alleges that it performed such work but remained uncompensated by Defendant.

On November 11, 2024, jury trial in this matter was concluded and a jury verdict was rendered. The jury found in favor of Plaintiff and that their damages were $1,750,000.

Plaintiff now moves for the following:

·         An award of prejudgment interest under section 3287 of the California Civil Code,

·         An award of prompt payment Peñalties fixed in amount by the Court under Section 7108.6 of the California Business & Professions Code, and

·         Judgment on the reserved issue of Commodity Trucking’s cause of action on the Mechanics Lien Release Bond under and pursuant to sections 8400-8424 of the California Civil Code and/or California’s Bond and Undertaking law codified at section 996.440, et seq. of the Code of Civil Procedure.

Defendant opposes the motion and Plaintiff replies.

ANALYSIS: 

Prejudgment Interest

Prejudgment is generally awarded on one of three bases. First, prejudgment interest is available on liquated claims, that is, on those claims in which damages are certain or capable of being made certain by calculation. (Civ. Code § 3287(a).) The court must award prejudgment interest upon request from the first day there exists both a breach and a liquidated claim. (North Oakland Medical Clinic v. Rogers (1998) 65 Cal.App.4th 824, 828; Howard v. American Nat’l Fire Ins. Co. (2010) 187 Cal.App.4th 498, 535.) Second, prejudgment interest is available on unliquidated contract claims, that is, on claims in which damages based on a contract claim are not certain. (Civ. Code § 3287(b).) The court has discretion to decide whether interest should be awarded on an unliquidated claim arising from contract and to decide the date from which such interest should be awarded (but no earlier than the filing of the action). (Civ. Code § 3287(b); North Oakland, supra, 65 Cal.App.4th at 829.) Lastly, prejudgment interest is available on unliquidated tort claims “in the discretion of the jury” or by the court in nonjury trials. (Civ. Code § 3288; Bullis v. Security Pacific Nat’l Bank (1978) 21 Cal.3d 801, 814.)

Here, Plaintiff does not specify whether it seeks mandatory interest under Civ. Code § 3287(a) or discretionary under Civ Code § 3287(b), though it appears though their argument that they contend they are entitled to mandatory interest. As such the Court must address each basis for relief in turn.

Mandatory Interest

Whether a defendant is liable for prejudgment interest under Civil Code § 3287(a) depends on whether “defendant actually know[s] the amount owed or from reasonably available information could the defendant have computed that amount.” (Duale v. Mercedes-Benz USA, LLC (2007) 148 Cal.App.4th 718, 729.) “The statute . . . does not authorize prejudgment interest where the amount of damage, as opposed to the determination of liability, depends upon a judicial determination based upon conflicting evidence, and it is not ascertainable from truthful data supplied by the claimant to his debtor. Thus, where the amount of damages cannot be resolved except by verdict or judgment, prejudgment interest is not appropriate.” (Id. [citations, quotations, and emphasis omitted].)

The test for determining certainty under Civil Code § 3287(a) is whether the defendant knew the amount of damages owed to the claimant or could have computed that amount from reasonably available information. (Id.) Uncertainty as to liability is irrelevant and a dispute concerning liability does not preclude prejudgment interest in a civil action. (Id.) The certainty required by Civil Code § 3287(a) is not lost when the existence of liability turns on disputed facts but only when the amount of damages turns on disputed facts. (Id.)

Damages will be deemed “capable of being made certain by calculation” if the amount due can be determined by reference to a fixed standard, e.g., a payment schedule, a readily ascertainable market value, or data supplied by plaintiff to defendant. (Marine Terminals Corp. v. Paceco (1983) 145 Cal. App. 3d 991, 996.) In Marine Terminals, the Court found that when the plaintiff submitted invoices to the defendant, the plaintiff made its damages known to defendant and rendered them “certain” for the purposes of section 3287. (Id.)

Plaintiff argues that damages in this case are all liquidated in that, “Peña Construction knew the amount owed or easily could have computed that amount based on its simple review of the number of loads or the tonnage of material hauled multiplied by the applicable rate for Commodity’s services.” (Mot. p. 5.).  The initial issue for trial was whether the loads transported by Plaintiff were contaminate soil or uncontaminated soil.  The information relied upon by Plaintiff was information that was in the possession of Defendant Peña Construction.  In fact, it was generated as part of Peña Construction’s overall contact with the project’s owner and applicable laws.  These were not documents that were generated by Plaintiff shortly before or subsequent to litigation.  In addition, the soil status for loads hauled by others for which the jury concluded that Plaintiff was entitled to of hauled and earned a profit were not in dispute.

The Court believes that the gravamen of the issue was one of liability under the contract.   If the soil was not contaminated then Plaintiff would have been in breach and Peña Construction would not have been liable; however, if the soil was contaminated then Peña Construction was in breach, as the jury ultimately found that Peña Construction was in breach.  The amount of damages was known or reasonably able to have been calculated using basic arithmetic. 

Accordingly, Plaintiff’s motion is GRANTED as to mandatory prejudgment interest pursuant to Civ. Code §3287(a) in the amount of $536,431.95, as set forth in Plaintiff’s Exhibit 2.

Discretionary Interest

Despite finding interest appropriate under Civil Code §3287(a) in the event that the Court’s application of that subdivision was misplaced the Court would award discretionary interest damages pursuant to Civil Code §3287(b). 

“A plaintiff that is entitled to recover damages on a contract claim that was unliquidated until the judgment was rendered may recover prejudgment interest on these damages at the judge’s discretion. (Civ. Code § 3287(b).) Because the intent of Civ. Code § 3287(b) is to enable judges to award prejudgment interest despite the uncertain amount owed on a contract claim for unliquidated damages, it is contrary to the statutory scheme for a judge to refuse prejudgment interest for the sole reason that the amount of damages is highly uncertain. (Hewlitt-Packard Co v. Oracle Corp. (2021) 65 CA 5th 506, 575-581.)

Balancing the equities, to the extent that Plaintiff would not be entitled to pre-judgment interest under Civil Code §3287(a), this court finds that Plaintiff would be entitled to prejudgment interest pursuant to Civil Code §3287(b) at the statutory rate from the date the action was filed.  The Court believes that the amount of damages were instantly calculable from the filing of the Complaint as the documents necessary for the determination were in the custody or control of the Pina Construction.  (Carmel Development Co., Inc. v. Anderson (2020) 48 Cal.App.5th 492 (when damages are not instantly discoverable upon filing the complaint trial court may delay imposition of pre-judgment interest.)

Accordingly, in the event that pre-judgment interest under Civil Code §3287(a) is misplaced, Plaintiff’s motion is GRANTED as to discretionary prejudgment interest pursuant to Civ. Code § 3287(b).   However, this is not in addition to any pre-judgment interest under Civ. Code §3287(a), but only if such an award is erroneous.

Prompt Payment

Cal. Bus. & Prof. Code § 7108.6 provides in relevant part:

A licensed contractor is required to pay all transportation charges submitted by a duly authorized motor carrier of property in dump truck equipment by the 20th day following the last day of the calendar month in which the transportation was performed, if the charges, including all necessary documentation, are submitted by the fifth day following the last day of the calendar month in which the transportation was performed. The payment shall be made unless otherwise agreed to in writing by the contractor and by the duly authorized motor carrier of property in dump truck equipment. In the event that there is a good faith dispute over a portion of the charges claimed, the contractor may withhold payment of up to 150 percent of the disputed amount or an amount otherwise agreed to by the parties. A violation of this section constitutes a cause for disciplinary action under Section 7120 and shall also subject the contractor licensee to a Peñalty, payable to the carrier, of 2 percent of the amount due per month for every month that payment is outstanding. In an action for the collection of moneys not paid in accordance with this section, the prevailing party shall be entitled to his or her attorney’s fees and costs.

Here, Plaintiff’s claims under B&P Code § 7108.6 were explicitly placed before the jury and decided. The jury verdict reflects that (1) Plaintiff submitted all necessary documents by the fifth day of the calendar month in which the transportation was performed, (2) Defendant failed to make payment by the 25th day of the last calendar month in which the transportation was performed, and (3) Defendant did not prove a good faith dispute as a reason for withholding payment. In other words, the jury found all the statutory elements required to support an award B&P Code § 7108.6 were present.

Defendant’s arguments in opposing this motion are that (1) Plaintiff’s evidence did not establish they timely sent the necessary documents and (2) Defendant’s evidence proved a good faith dispute. Both arguments essentially ask the Court to completely circumvent the factual findings of the jury and the Court declines to do so. Defendant has not provided the Court any compelling reason to disturb the finding of the jury, nor have they pursued any of their statutory grounds for doing so (i.e. judgment notwithstanding the verdict, motion for new trial.)

Cumulative Recovery under B&P §7108.6 and Civil Code §3287

The Court initially had concern that collection under both B&P §7108.6 and Civil Code §3287 may result in a windfall for Plaintiff; however, the Court of Appeal does not share that conclusion. 

In Morton Engineering & Construction, Inc. v. Patscheck the Court of Appeal concluded that allowing recovery of prejudgment interest (Civ. Code, § 3287) and the 2 percent Peñalty does not result in a double recovery for the subcontractor. The Morton Engineering Court viewed the distinct purposes of the two items of recovery. Prejudgment interest is intended to compensate the subcontractor for loss of use of the funds. (Wisper Corp. v. California Commerce Bank (1996) 49 Cal. App. 4th 948, 960) while the 2 percent Peñalty is intended to Peñalize the contractor for failing to comply with statutory requirements. The Appellate Court went on to opine that “to preclude recovery of both the 2 percent Peñalty and prejudgment interest would defeat the purpose of the statute and reduce the impact of the 2 percent Peñalty. If the Legislature had intended this result, it would have so stated. (See, e.g., Pub. Contract Code, § 7107.)”  (Morton Engineering & Construction, Inc. v. Patscheck (2001) 87 Cal.App.4th 712, 717-718.)

Accordingly, Plaintiff’s motion is GRANTED as to the award of prompt payment Peñalties pursuant to B&P Code § 7108.6 in the amount of 2% per month for the invoices issued September 12, 2020 and October 5, 2020. (See Mot. Exh. 3.)

Mechanics Lien

Lastly, Plaintiff moves for “Judgment on the reserved issue of Commodity Trucking’s cause of action on the Mechanics Lien Release Bond under and pursuant to sections 8400-8424 of the California Civil Code and/or California’s Bond and Undertaking law codified at section 996.440, et seq. of the Code of Civil Procedure.”

While the issue of the mechanics lien was reserved from trial, the Court disagrees that its adjudication is proper within the context of this motion. Plaintiff essentially seeks a judgment on its second cause of action without adhering to the requirement for such a motion. The result is that the Court is essentially without guidance as to the discreet legal issues to be adjudged and the evidence speaking to each of those issues.

For example, Civil Code §§ 8410 and 8200(a) require that a lienholder must give notice to (1) the owner, (2) the direct contractor, and (3) the construction lender before it records and forecloses its lien. Here, the Court has been presented with no evidence or sworn testimony as to any notice prior to recordation.

As another example, a mechanic’s lien claimant has the burden of establishing the validity of the lien, including that the labor, services and/or materials were actually used, the reasonable value of the work and/or materials, and the date of completion or cessation of work. (Basic Modular Facilities, Inc. v. Ehsanipour (1999) 70 Cal.App.4th 1480, 1485.) Here, most of the information required to make the above determination was presented to the Court during the jury trial, but not all.  For example, the notices as discussed above have not been.   This can be presented during a subsequent Court trial on that issue or by written declaration upon stipulation.

Lastly, Plaintiff’s evidentiary submissions in reply are improper. New evidence is not generally permitted with reply papers. (Jay v. Mahaffey (2013) 218 Cal.App.4th 1522, 1537-1538.) A court may exercise its discretion to accept new evidence in reply papers as long as the opposing party is given the opportunity to respond. (Alliant Ins. Services, Inc. v. Gaddy (2008) 159 Cal.App.4th 1292, 1307-1308.) While Exhibits B & C attached to the supplemental briefing appear to address the reasonable value of Plaintiff’s services, they remain improperly submitted as Defendant has functionally had no opportunity to respond. Further, even in Exhibits B & C were properly presented, the Court remains with any evidence of notice for the lien and other statutory elements required in bringing a foreclosure action.

Given the foregoing, Plaintiff’s motion to enter judgment on the second cause of action is DENIED without prejudice. If Plaintiff wishes to enter judgment on this cause of action, they are free to do so by proceeding pursuant to C.C.P. 996.440, et seq.

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RULING:

In the event the parties submit on this tentative ruling, or a party requests a signed order or the court in its discretion elects to sign a formal order, the following form will be either electronically signed or signed in hard copy and entered into the court’s records. 

ORDER 

Commodity Trucking Acquisition, LLC’s motion for Judgment came on regularly for hearing on December 27, 2024, with appearances/submissions as noted in the minute order for said hearing, and the court, being fully advised in the premises, did then and there rule as follows: 

PLAINTIFF’S MOTION IS AS TO MANDATORY PREJUDGMENT INTEREST PURSUANT TO CIV. CODE §3287(A) IN THE AMOUNT OF $583,677.73 IS GRANTED.

IN THE ALTERNATIVE, PLAINTIFF’S MOTION AS TO DISCRETIONARY PREJUDGMENT INTEREST PURSUANT TO CIV. CODE § 3287(B) IS MOOT GIVEN THE GRANTING UNDER CIV. CODE §3287(A).  HOWEVER, IF THE AWARD UNDER CIVIL CODE §3287(A) IS SET ASIDE, THE COURT WOULD GRANT INTEREST PURSUANT TO CIV. CODE §3287(B).

PLAINTIFF’S MOTION AS TO THE AWARD OF PROMPT PAYMENT PENALTIES PURSUANT TO CAL. BUS. & PROF. CODE § 7108.6 IN THE AMOUNT OF $102,791.69 IS GRANTED.

PLAINTIFF’S MOTION TO ENTER JUDGMENT ON THE SECOND CAUSE OF ACTION IS DENIED WITHOUT PREJUDICE.

PLAINTIFF TO GIVE NOTICE.

IT IS SO ORDERED.