Judge: Jon R. Takasugi, Case: 24STCV12716, Date: 2024-08-14 Tentative Ruling

Case Number: 24STCV12716    Hearing Date: August 14, 2024    Dept: 17

Superior Court of California

County of Los Angeles

DEPARTMENT 17

TENTATIVE RULING

Defendant’s motion for a stay of proceedings is GRANTED.

            On 5/20/2024, Plaintiff Collection Solutions Software, Inc. (Plaintiff) filed suit against Solar Service Experts, LLC dba Energy Service Experts aka Spruce Power (Defendant) alleging breach of contracts.

            On 7/24/2024, Defendant moved for a stay of proceedings.

Discussion

            Defendant argues that a stay is warranted, arguing it “filed suit on April 3, 2024 (before Plaintiff commenced this action) in the United States District Court for the Southern District of Texas, Houston Division against Collection Solutions Software (“CSS”) concerning the same facts and circumstances at issue in this action. CSS, however, filed a motion to dismiss the Texas federal action, but that motion is not yet fully briefed and the court in Texas has not yet ruled on that motion.” (Motion, 1: 4-8.)

            Pursuant to the parties’ forum selection clause, which controls this action and the action filed in Texas, Texas law applies and either Texas or California is the appropriate jurisdiction/venue for this dispute, depending on which party files first:

21.2 Jurisdiction and Venue; Waiver of Jury Trial. This Agreement shall be construed under and governed by the laws of the State of Texas, without regard to Texas’s conflict or choice of law provisions. The United Nations Convention on Contracts for the International Sale of Goods and any legislation implementing such Convention, and the Uniform Computer Information Transactions Act, shall not be applicable to this Agreement. All disputes arising under, out of, or in any way connected with this Agreement shall be litigated exclusively in the following jurisdiction and venue and in no other court or jurisdiction. In the event that CSS brings any claim against Customer under this Agreement, exclusive jurisdiction and venue for such claim shall be in the state or federal courts located in California Los Angeles County, and in the event that Customer brings any claim against CSS under this Agreement, exclusive jurisdiction and venue for such claim shall be in the state or federal courts situated in the State of Texas, County of Harris, and in no other court or jurisdiction. The parties agree to have the court seal the file to prevent the disclosure of any proprietary information. The parties hereby waive trial by jury in respect of any legal action arising out of or relating to this Agreement or the transactions contemplated hereby.

(Exhibit 1, Exhibit A, pg. 27, § 21.2.

Because Defendant here was the first to file in Texas, the outcome of the motion to dismiss will determine which jurisdiction/venue is proper for this dispute.

The pendency of another earlier action growing out of the same transaction and between the same parties is a ground for abatement of the second action.” (Leadford v. Leadford (1992) 6 Cal.App.4th 571, 574.) Pursuant to the Court’s authority to stay or dismiss an action for inconvenient forum, a stay of a later-filed action may be appropriate where, as here, another action arising out of the same circumstances is pending between the same parties in another state. (Id. at 574-575.) The court must first make a threshold determination on whether the alternate forum is suitable for trial, which means the alternate forum has jurisdiction and no statute of limitations applies. (Chong v. Superior Court, (1997) 58 Cal.App.4th 1032, 1037.) From there, the court “balances the private interests of the litigants and the interests of the public in retaining the action in California.”

The private interest factors are those that make trial and the enforceability of the ensuing judgment expeditious and relatively inexpensive, such as the ease of access to sources of proof, the cost of obtaining attendance of witnesses, and the availability of compulsory process for attendance of unwilling witnesses. The public interest factors include avoidance of overburdening local courts with congested calendars, protecting the interests of potential jurors so that they are not called upon to decide cases in which the local community has little concern, and weighing the competing interests of California and the alternate jurisdiction in the litigation.

(Stangvik v. Shiley Inc. (1991) 54 Cal.3d 744, 751.)

The Court has discretion to grant or deny the stay based upon these factors. (Leadford, supra, 6 Cal.App.4th at 575.)

Here, Defendant’s Complaint is based on the same set of facts as CSS’s Complaint, but requests that the court determine whether Spruce had the right to terminate all services under the Agreement despite the addition of additional services throughout the Agreement’s three-year term. (Exhibit 2, ¶¶ 12-31; RJN.)

There is a motion to dismiss pending in the Southern District of Texas concerning the question of jurisdiction and venue. As such, the Court finds it prudent to stay this action so that there are not two actions pending between the same parties over the same facts and circumstances. This is especially true given that priority should be given to the court that first assumed jurisdiction over the case, and the stay will be brief as a ruling is forthcoming. (See Engle v. Superior Court In and For San Joaquin County (1956) 140 Cal.App.2d 71, 83.)

In opposition, Plaintiff argues that Defendant’s filing in Texas is not a “claim” because it only has one cause of action for declaratory relief. However, this is the very issue raised in an actively pending motion in the Texas case. As such, to determine here that Defendant’s filing is not a claim would create a serious risk of conflicting rulings, which could then lead to the exact same case proceeding in separate venues. 

The contract expressly provides: “in the event that Customer brings any claim against CSS under this Agreement, exclusive jurisdiction and venue for such claim shall be in the state or federal courts situated in the State of Texas, County of Harris, and in no other court or jurisdiction.” Defendant filed its claim against Plaintiff in Texas, consistent with the language of the agreement. To the extent that Plaintiff argues that Defendant has no actual claim and their dispute should properly be heard in Los Angeles County, this is a determination for the district Court in Houston to make. Given that this determination is actively pending and thus will definitively be made, the Court finds no prejudice will result by staying this action.  

Based on the foregoing, Defendant’s motion for a stay of proceedings is granted.

It is so ordered.

Dated:  August    , 2024

   Hon. Jon R. Takasugi
   Judge of the Superior Court

Parties who intend to submit on this tentative must send an email to the court at smcdept17@lacourt.org by 4 p.m. the day prior as directed by the instructions provided on the court website at www.lacourt.org.  If a party submits on the tentative, the party’s email must include the case number and must identify the party submitting on the tentative.  If all parties to a motion submit, the court will adopt this tentative as the final order.  If the department does not receive an email indicating the parties are submitting on the tentative and there are no appearances at the hearing, the motion may be placed off calendar.  For more information, please contact the court clerk at (213) 633-0517.