Judge Gary Y. Tanaka, Case YC071798 2023-03-08 Tentative Ruling

LOS ANGELES SUPERIOR COURT – SOUTHWEST DISTRICT

Honorable Gary Y. Tanaka Wednesday, March 8, 2023

Department B Calendar No. 11

Plaintiffs filed their initial Complaint on January 11, 2017. The First Amended Complaint was filed on March 3, 2017. A Cross-Complaint was filed on May 4, 2017. Plaintiffs filed this lawsuit against Defendants Mike Horusicky Construction, Inc. (“HCI”) and Mike Horusicky personally, alleging each entered into the contract for the construction of the Project. Plaintiffs contend that the pool, spa, waterfall, barbeque area, and deck were not constructed properly and that there were delays in construction. HCI and Mr. Horusicky denied these allegations. Plaintiffs alleged the following causes of action: 1. Negligence; 2. Breach of Contract; 3. Fraud; 4. Negligent Misrepresentation; 5. Breach of Implied Warranty; 6. Breach of Implied Covenant of Good Faith and Fair Dealing; 7. Violation of Bus. & Prof. Code 17500.

HCI contends the Brands did not pay, in full, for the construction of the pool, and that HCI was not allowed to complete the pool. Mr. Horusicky denies that he was personally a party to the contract with the Brands to build the pool, spa and waterfall, barbeque area, and deck, and was acting in his capacity as President of HCI during this dispute. The Brands deny that they owe HCI anything. The Cross-Complaint set forth the following causes of action: 1. Breach of Contract; 2. Work, Labor, and Materials/Agreed Price; 3. Open Book Account; 4. Account Stated; 5. Reasonable Value/Work Labor and Services.

Following a nine-day jury trial, the jury rendered a verdict in favor of Defendants and against the Brands. The jury dismissed all of the Brands’ causes of action against Defendants. The jury awarded $18,107.39 on the cause of action for common count for Goods and Services Rendered in the Cross-Complaint.

The grounds for a motion for new trial are entirely statutory. Therefore, a motion for new trial must be based on the statutory grounds set forth in CCP § 657. Fomco, Inc. v. Joe Maggio, Inc. (1961) 55 Cal.2d 162, 166. CCP § 657 states that a motion for new trial may be granted based on the following causes:

“1. Irregularity in the proceedings of the court, jury or adverse party, or any order of the court or abuse of discretion by which either party was prevented from having a fair trial.

2. Misconduct of the jury; and whenever any one or more of the jurors have been induced to assent to any general or special verdict, or to a finding on any question submitted to them by the court, by a resort to the determination of chance, such misconduct may be proved by the affidavit of any one of the jurors.

3. Accident or surprise, which ordinary prudence could not have guarded against.

4. Newly discovered evidence, material for the party making the application, which he could not, with reasonable diligence, have discovered and produced at the trial.

6. Insufficiency of the evidence to justify the verdict or other decision, or the verdict or other decision is against law.

7. Error in law, occurring at the trial and excepted to by the party making the application.”

“(a) The party intending to move for a new trial shall file with the clerk and serve upon each adverse party a notice of his or her intention to move for a new trial, designating the grounds upon which the motion will be made and whether the same will be made upon affidavits or the minutes of the court, or both, either:

(2) Within 15 days of the date of mailing notice of entry of judgment by the clerk of the court pursuant to Section 664.5, or service upon him or her by any party of written notice of entry of judgment, or within 180 days after the entry of judgment, whichever is earliest; provided, that upon the filing of the first notice of intention to move for a new trial by a party, each other party shall have 15 days after the service of that notice upon him or her to file and serve a notice of intention to move for a new trial.

(b) That notice of intention to move for a new trial shall be deemed to be a motion for a new trial on all the grounds stated in the notice. The times specified in paragraphs (1) and (2) of subdivision (a) shall not be extended by order or stipulation or by those provisions of Section 1013 that extend the time for exercising a right or doing an act where service is by mail.”

The above time limits are jurisdictional and cannot be extended by stipulation or court order. Marriage of Herr (2009) 174 Cal.App.4th 1463, 1469.

“(a) On the hearing of the motion, reference may be had in all cases to the pleadings and orders of the court on file, and when the motion is made on the minutes, reference may also be had to any depositions and documentary evidence offered at the trial and to the report of the proceedings on the trial taken by the phonographic reporter, or to any certified transcript of the report or if there be no such report or certified transcript, to proceedings occurring at the trial that are within the recollection of the judge; when the proceedings at the trial have been phonographically reported, but the reporter's notes have not been transcribed, the reporter shall, upon request of the court or either party, attend the hearing of the motion and read his or her notes, or such parts thereof as the court, or either party, may require.

(b) The hearing and determination of the motion for a new trial shall have precedence over all other matters except criminal cases, probate matters, and cases actually on trial, and it shall be the duty of the court to determine the motion at the earliest possible moment.

(c) Except as otherwise provided in Section 12a of this code, the power of the court to rule on a motion for a new trial shall expire 75 days after the mailing of notice of entry of judgment by the clerk of the court pursuant to Section 664.5 or 75 days after service on the moving party by any party of written notice of entry of judgment, whichever is earlier, or if that notice has not been given, 75 days after the filing of the first notice of intention to move for a new trial. If the motion is not determined within the 75-day period, or within that period as extended, the effect shall be a denial of the motion without further order of the court. A motion for a new trial is not determined within the meaning of this section until an order ruling on the motion is entered in the permanent minutes of the court or signed by the judge and filed with the clerk. The entry of a new trial order in the permanent minutes of the court shall constitute a determination of the motion even though that minute order, as entered, expressly directs that a written order be prepared, signed, and filed. The minute entry shall in all cases show the date on which the order is entered in the permanent minutes, but failure to comply with this direction shall not impair the validity or effectiveness of the order.”

The instant motion is timely filed and served as there is no showing that a notice of entry of judgment was served upon Plaintiffs/Cross-Defendants and the notice of intent to move for new trial was filed and served within 180 days of the judgment.

Plaintiffs/Cross-Defendants’ motion for new trial is made on the following grounds:

“1. Excessive damages appear to have been awarded as shown by the verdict and entry of judgment given the jury’s failure to considerate the offset created by the Brands’ expenditures to finish construction on the pool. (Code Civ. Proc., § 657, subd. (5).) 2. The evidence is insufficient to justify the verdict and the verdict is against the law, as shown by the verdict and entry of judgment given the jury’s irreconcilably inconsistent verdict. (Code Civ. Proc., § 657, subd. (6).) 3. There was an error in the law, occurring at trial and excepted to by the moving party, as shown by the verdict and entry of judgment given the jury’s irreconcilably inconsistent verdict. (Code Civ. Proc., § 657, subd. (7).)” (Notice of Intent to Move for New Trial, page 2, lines 7-16).

Plaintiffs/Cross-Defendants contend that Cross-Complainants are not entitled to any recovery on the cause of action for quantum meruit – goods and services rendered – because the parties have an enforceable contract on the same subject matter. Klein v. Chevron U.S.A., Inc. (2012) 202 Cal.App.4th 1342, 1388–89. Cross-Defendants argue that the jury rendered a special verdict finding that the Brands were obligated to pay fees for services rendered under a contract. Thus, Cross-Defendants contend that the award for reasonable value in quantum meruit awarded to HCI was an error and irreconcilably inconsistent. Plaintiffs/Cross-Defendants also argue that the jury award was excessive because the jury failed to factor and account for the Brands’ out of pocket costs.

The following legal principle outlined in Klein v. Chevron U.S.A., Inc. (2012) 202 Cal.App.4th 1342, 1388 is relevant to the Court’s analysis:

“A plaintiff may not, however, pursue or recover on a quasi-contract claim if the parties have an enforceable agreement regarding a particular subject matter. For example, in Hedging Concepts, Inc. v. First Alliance Mortgage Co. (1996) 41 Cal.App.4th 1410, 49 Cal.Rptr.2d 191 (Hedging Concepts), the trial court determined that although the parties had “formed a contract,” the plaintiff had failed to perform a required contingency and was therefore ineligible to recover for breach of contract. (Id. at pp. 1418–1419, 49 Cal.Rptr.2d 191.) Despite this finding, the trial “went on to award [plaintiff] a quantum meruit recovery for the reasonable value of services performed plus costs.” (Id. at p. 1418, 49 Cal.Rptr.2d 191.) [¶] The appellate court reversed the award, explaining that “[a] quantum meruit or quasi-contractual recovery rests upon the equitable theory that a contract to pay for services rendered is implied by law for reasons of justice. [Citations.] However, it is well settled that there is no equitable basis for an implied-in-law promise to pay reasonable value when the parties have an actual agreement covering compensation[.]” Id.

Cross-Complainant argues that the jury award is not in conflict because evidence was presented of additional services requested by the Brands that were not included within the original written contract. Cross-Complainant states that it performed additional services beyond the terms of the original contract to the benefit of the Brands (Cabal Dec. ¶13; Exhibits 8-10.) Cross-Complainant also argues that the jury award which did not credit the Brands for out-of-pocket costs does not constitute excessive damages because the Brands were awarded nothing on their Complaint, and, thus, the jury logically decided that there was nothing to offset.

The Court finds that the jury verdict is against the law, pursuant to CCP § 657(6), and, therefore, grants Cross-Defendants’ motion for new trial. The jury rendered a special verdict finding that Cross-Defendants and Cross-Complainant entered into a contract and that Cross-Defendants breached the contract. The jury, however, awarded zero damages on the contract. Instead, the jury award determined that Cross-Defendants were obligated to pay for goods and services rendered. The award for reasonable value for goods and services in quantum meruit, which was awarded to Cross-Complainant, is an error and irreconcilably inconsistent with the jury finding that the parties entered into a contract and that Cross-Defendants breached the contract. Once the jury found the existence of a valid contract, there could be no recovery in quantum meruit for goods and services rendered because the parties were deemed to have an enforceable contract on the same subject matter. Klein v. Chevron U.S.A., Inc. (2012) 202 Cal.App.4th 1342, 1388–89.

Cross-Complainant speculates that the jury must have found that the award on the cause of action for goods and services rendered were for goods and services rendered outside the terms of the contract. First, Cross-Complainant submits no evidence nor refers to any specific matters in the Court’s record which would establish this, or which would provide an inference of this contention. The reference to Exhibits 5, and 8-10 provide no such evidence. (Decl., Mac W. Cabal, ¶¶ 9, 13.) In addition, this argument is controverted by numerous references in the Court’s record which appears to demonstrate that Cross-Complainant argued for the same damages in both the contract and goods and services rendered causes of action.

In any event, this Court cannot rely on any purported inferences made by the jury. “With a special verdict, unlike a general verdict or a general verdict with special findings, a reviewing court will not infer findings to support the verdict. Where the findings are contradictory on material issues, and the correct determination of such issues is necessary to sustain the judgment, the inconsistency is reversible error. The appellate court is not permitted to choose between inconsistent answers. The proper remedy for an inconsistent special verdict is a new trial.” Singh v. Southland Stone, U.S.A., Inc. (2010) 186 Cal.App.4th 338, 358 (internal citations and quotations omitted).

Cross-Complainant argues that Cross-Defendants waived any objection to the inconsistency in the verdict. However, “[w]aiver is not found where the record indicates that the failure to object was not the result of a desire to reap a ‘technical advantage’ or engage in a ‘litigious strategy.’ Nor is an objection required when the verdict is fatally inconsistent.” Behr v. Redmond (2011) 193 Cal.App.4th 517, 530. Here, the special verdict is fatally inconsistent, and, therefore, no objection was required.

Finally, Cross-Complainant argues that any inconsistency constituted harmless error. In Taylor v. Nabors Drilling USA, LP (2014) 222 Cal.App.4th 1228, the Court of Appeal held that a defective special verdict could be saved by the harmless error rule. The Court of Appeal determined that any error was harmless to the employer, in a defective special verdict for the employee on a Fair Employment and Housing Act sexual harassment hostile work environment claim which was caused by a faulty verdict form. The verdict form failed to mandate findings as to essential elements of the claim. Taylor is distinguishable because the instant case does not involve defective verdict forms. The forms themselves are not defective nor against law. The forms do not omit essential elements of the causes of action. Instead, the instant action involves a verdict which is fatally inconsistent and irreconcilable, and, against the law.

Thus, Plaintiffs/Cross-Defendants’ motion for new trial is granted. A new trial is only granted as to the Cross-Complainant’s Cross-Complaint as no error or any other ground for a new trial was identified as to Plaintiffs’ case-in-chief with respect to their own Complaint.