Judge Holly J. Fujie, Case Number: 24STCV00208, Date: 2024-04-10 Tentative Ruling

DEPARTMENT 56 JUDGE HOLLY J. FUJIE, LAW AND MOTION RULINGS. The court makes every effort to post tentative rulings by 5.00 pm of the court day before the hearing. The tentative ruling will not become the final ruling until the hearing [see CRC 3.1308(a)(2)], and are also available in the courtroom on the day of the hearing [see CRC 3.1308(b)]. If the parties wish to submit on the tentative ruling and avoid a court appearance, all counsel must agree and choose which counsel will give notice. That counsel must 1) call Dept 56 by 8:30 a.m. on the day of the hearing (213/633-0656) and state that all parties will submit on the tentative ruling, and 2) serve notice of the ruling on all parties. If any party declines to submit on the tentative ruling, then no telephone call is necessary and all parties should appear at the hearing in person or by Court Call. Court reporters are not provided, and parties who want a record of motions and other proceedings must hire a privately retained certified court reporter.

RESPONDING PARTIES: Petitioner Susan Hoffman Hyman (Petitioner in related case 23STCP03185)

This action arises out of a dispute between a contractor and subcontractors for services in the construction of a project. The Complaint alleges: (1) implied contractual indemnity; (2) equitable indemnity; (3) express contractual indemnity; (4) breach of express warranty; (5) breach of implied warranty; (6) breach of written contract; (7) contribution; (8) declaratory relief (duty to defend); and (9) declaratory relief (duty to indemnify).

On February 23, 2024, Plaintiff filed a Motion to Consolidate Actions. On February 27, 2024, the Court deemed the cases 23STCP03185 and 24SMCV00208 related within the meaning of California Rules of Court, rule 3.300(a), where 23STCP03185 was the lead case. Said cases were assigned to Judge Holly J. Fujie in Department 56 at Stanley Mosk Courthouse for all purposes. All hearings in cases other than the lead case were placed off calendar.

On March 1, 2024, Plaintiff filed the instant Motion to Consolidate Actions. On March 8, 2024, Defendant Extreme Makeover Home Inc. filed a notice of joinder to Plaintiff’s Motion to Consolidate Actions. On April 3, 2024, Plaintiff filed a reply.

Plaintiff Shenon Construction’s Request for Judicial Notice filed in connection with the Consolidation Motion is GRANTED as to the existence of the documents, but not to the truth of the matters stated therein. (See Scott v. JP Morgan Chase Bank, N.A. (2013) 214 Cal.App.4th 743, 752-54.)

Under California Code of Civil Procedure (“CCP”) section 1048, subdivision (a), when actions involving a common question of law or fact are pending before the court, the court may order a joint hearing or trial of any or all the matters in issue in the actions, order all the actions consolidated, and make such orders concerning proceedings therein as may tend to avoid unnecessary costs or delay. (CCP § 1048, subd. (a).) ¿The purpose of consolidation is merely to promote trial convenience and economy by avoiding duplication of procedure, particularly in the proof of issues common to both actions.¿ (Estate of Baker¿(1982) 131 Cal.App.3d 471, 485.)¿ A consolidation of actions does not affect the rights of the parties.¿ (Id.)¿ Consolidation does not require identical causes of action in each case, absolute identity of the parties, or identical allegations.¿ (Id.)¿ In deciding whether to grant a motion to consolidate, the court should weigh whether the common issues predominate over the individual issues and whether any risks of jury confusion or prejudice to the parties outweighs the reduction in time and expense that would result from consolidation. (See Todd-Stenberq v. Shield (1996) 48 Cal.App.4th 976, 978.)¿ Actions may be thoroughly “related” in the sense of having common questions of law or fact, and still not be consolidated, if the trial court, in the sound exercise of its discretion, chooses not to do so.¿ (Askew v. Askew¿(1994) 22 Cal.App.4th 942, 964.)¿ It is not abuse of discretion to deny motion for consolidation of actions where parties in each action are different or issues are different.¿ (See¿Muller v. Robinson¿(1959) 174 Cal.App.2d 511, 515.) On the other hand, actions may be consolidated in the discretion of the trial court whenever it can be done without prejudice to a substantial right.¿ (Carpenson¿v.¿Najarian¿(1967) 254 Cal.App.2d 856, 862.)¿

On February 27, 2024, the Court issued an order deeming this matter and 23STCP03185 Consolidation Motion related. The Motion argues that consolidation is appropriate because this action and the related arbitration are based on the same operative facts and involve at least one party common to both cases. Plaintiff states that by consolidating the actions, all related claims (including any cross-claims) can proceed in a coordinated manner in one single action before the court.

The Opposition argues that Code of Civil Procedure section 1281.2(c) does not apply here because the related case was not filed until after the arbitration had been compelled, and this section only provides the Court discretion to deny or stay arbitration if a related court action was pending before the hearing on the petition to compel arbitration. Petitioner Susan Hoffman Hyman (“Hyman”), the petitioner in the case 23STCP03185 (related to Case No. 24SMCV00208) also argues that the Motion fails to demonstrate a specific and real possibility of conflicting rulings between the arbitration and the court action. Hyman also states that she could suffer prejudice from consolidation because it would undermine the benefits of arbitration and increase costs and delays for Petitioner. Finally, Hyman states that even if the Court were to find that section 1281.2(c) could potentially apply, the correct remedy would be to stay the court action pending the outcome of the arbitration, not to consolidate the cases as this would avoid undue delay and preserve the integrity of the arbitration.

In reply, Shenon Construction states that this case involves subcontractors whose work is implicated in the arbitration claims made by the claimants. These subcontractors were directly hired by the claimants for various construction tasks, yet are not part of the arbitration due to the absence of arbitration provisions in their agreements. Shenon Construction points out that separate arbitration could lead to conflicting rulings on common issues, which consolidation aims to prevent, aligning with the principles of judicial economy.

Having considered the moving, opposition and reply papers, the Court finds that these actions should not be consolidated. The Court finds that it does not have authority to consolidate the arbitration action as it is not pending before the Court, and Shenon Construction fails to show that the Court has jurisdiction over the arbitration proceeding. The Court also agrees with Hyman’s assertion that CCP § 1281.2(c) does not apply because that statute states that upon petition, a court will order parties to arbitrate unless “[a] party to the arbitration agreement is also a party to a pending court action or special proceeding with a third party, arising out of the same transaction or series of related transactions and there is a possibility of conflicting rulings on a common issue of law or fact. For purposes of this section, a pending court action or special proceeding includes an action or proceeding initiated by the party refusing to arbitrate after the petition to compel arbitration has been filed, but on or before the date of the hearing on the petition.” (emphasis added.) At the time of the petition to arbitrate in the 23STCP03185 case, the instant action was not pending. The Court finds the Bos Material Handling, Inc. v. Crown Controls Corp. (1982) 137 Cal.App.3d 99, case to be helpful in providing guidance as to considering claims following the hearing on petition to arbitration. In Bos Material Handling, the plaintiff sought to include certain third parties not bound by the contract’s arbitration clause after the court heard the petition to arbitrate and argued that the presence of claims against these parties negated the arbitration under section 1281.2. (Id. at 112.) The appellate court found that arbitration could not be denied by the “mere inclusion of unnamed third-party ‘does’” and that “a pending court action … as defined under section 1281.2, subdivision (c), does not include an action or proceeding initiated by the party refusing to arbitrate after the date of the hearing on the petition.” (Id.)

The Court recognizes that there are both the instant action and the arbitration proceeding have common issues of law and involve conflicts arising out of the same transaction or occurrence which involves the same parties. The Court finds that there may be a possibility of conflicting rulings. Thus, given the pending status of arbitration in the related case, the Court finds that staying the instant action pending the outcome of the arbitration proceeding in the related case is the most equitable result. The Court notes it has authority to do this pursuant to CCP § 1281.2(d), which states: “If the court determines that a party to the arbitration is also a party to litigation in a pending court action or special proceeding with a third party as set forth under subdivision (c), the court … (3) may order arbitration among the parties who have agreed to arbitration and stay the pending court action or special proceeding pending the outcome of the arbitration proceeding.” (Code Civ. Proc., § 1281.2.)

The Court STAYS the instant action pending the outcome of the arbitration proceeding in the related case 23STCP03185 and sets a Status Conference on October 10, 2024 at 8:30 a.m. with a joint status report due to be filed at least seven court days before that date.

Parties who intend to submit on this tentative must send an email to the Court at SMC_DEPT56@lacourt.org as directed by the instructions provided on the court website at www.lacourt.org. If the department does not receive an email and there are no appearances at the hearing, the motion will be placed off calendar.

Hon. Holly J. Fujie

Judge of the Superior Court