Judge Kerry Bensinger, Case Number: 19STCV21725, Date: 2025-02-07 Tentative Ruling

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**Tentative rulings on Motions for Summary Judgment will only be available for review in the courtroom on the day of the hearing.

CASE: SG Blocks, Inc. v. EDI International, LC Which Will Do Business In California As EDI International California, et al.

DEFENDANTS’ MOTION TO DISMISS FOR ENTRY OF JUDGMENT NOTWITHSTANDING THE VERDICT OR ALTERNATIVELY A NEW TRIAL

On June 21, 2019, Plaintiff, SG Blocks, Inc., filed a complaint against Defendants, EDI International, PC, DBA EDI International (“EDI”); PVE, LLC; and PVE Sheffler, LLC, for (1) Intentional Interference with Economic Advantage, (2) Negligent Interference with Economic Advantage, (3) Intentional Interference with Contractual Relations, (4) Professional Negligence, (5) Breach of Contract, (6) Express Indemnity, and (7) Implied Indemnity. Plaintiff filed the operative First Amended Complaint on January 22, 2021.

As alleged, the parties entered into a consulting agreement for architectural and design services for the construction of the Heart of Los Angeles Youth, Inc. (HOLA) Community Center in Los Angeles. During the project, disputes arose between Plaintiff and HOLA regarding delays and cost overruns. Plaintiff and HOLA eventually reached an agreement in principle to resolve their disputes whereby HOLA agreed to pay Plaintiff and to perform other terms and conditions. Thereafter, HOLA refused to finalize the agreement. Defendants were aware of the disputes between HOLA and Plaintiff and intentionally engaged in surreptitious communications with HOLA with the purpose of intentionally interfering with the negotiations.

The case proceeded to a jury trial on October 28, 2024. The jury returned a verdict on November 15, 2024. The jury found in favor of Plaintiff on the second cause of action for negligent interference with prospective economic relations, fourth cause of action for professional negligence, fifth cause of action for breach of contract, and sixth cause of action for express indemnity. Plaintiff was awarded damages in the total sum of $1,274,752.

On January 6, 2025, Defendants filed this motion for entry of judgment notwithstanding the verdict (JNOV) or alternatively a new trial.

Code of Civil Procedure section 629 states that “[t]he court, before the expiration of its power to rule on a motion for a new trial, either of its own motion, after five days’ notice, or on motion of a party against whom a verdict has been rendered, shall render judgment in favor of the aggrieved party notwithstanding the verdict whenever a motion for a directed verdict for the aggrieved party should have been granted had a previous motion been made.” (Code Civ. Proc., § 629.)¿

A JNOV motion ordinarily challenges whether the evidence was sufficient to prove the claims or defenses asserted by the opposing party and now embodied in the jury’s verdict. (Moore v. San Francisco (1970) 5 Cal.App.3d 728, 733-34; see Martin v. Ideal Packing Co. (1957) 156 Cal.App.2d 232, 235 [a JNOV motion is “in the nature of a demurrer to the evidence”].) It thus has the same function as a motion for nonsuit or directed verdict, the only difference being that the JNOV motion lies after a verdict for the opposing party has been rendered. (Beavers v. Allstate Ins. Co. (1990) 225 Cal.App.3d 310, 327; CC-California Plaza Assocs. v. Paller & Goldstein (1996) 51 Cal.App.4th 1042, 1050.)¿¿¿¿

All evidence supporting the verdict is presumed true, so the issue is whether the facts constitute a prima facie case or defense as a matter of law.¿ (Fountain Valley Chateau Blanc Homeowner's Ass’n v. Department of Veterans Affairs (1998) 67 Cal.App.4th 743, 750.) “The court may not weigh evidence, draw inferences contrary to the verdict, or assess the credibility of witnesses. The court must deny the motion if there is any substantial evidence to support the verdict.” (Begnal v. Canfield & Assocs., Inc. (2000) 78 Cal.App.4th 66, 72.)¿¿¿

A JNOV motion is governed by the same rules that govern a motion for directed verdict or nonsuit. (Hauter v. Zogarts (1975) 14 Cal.3d 104, 110; Rollenhagen v. City of Orange (1981) 116 Cal.App.3d 414, 417 [disapproved on other grounds in Brown v. Kelly Broadcasting Co. (1989) 48 Cal.3d 711, 738].) Further, a JNOV motion “may be granted only if it appears from the evidence, viewed in the light most favorable to the party securing the verdict, that there is no substantial evidence in support.” (Sweatman v. Department of Veterans Affairs (2001) 25 Cal.4th 62, 68; Wolf v. Walt Disney Pictures & Television (2008) 162 Cal.App.4th 1107, 1137-38.) A JNOV in favor of a defendant is proper “only where, disregarding conflicting evidence on behalf of the defendants and giving to plaintiff's evidence all the value to which it is legally entitled, therein indulging in every legitimate inference which may be drawn from that evidence, the result is a determination that there is no evidence of sufficient substantiality to support a verdict in favor of the plaintiff.” (See Reynolds v. Wilson (1958) 51 Cal.2d 94, 99.)¿¿¿

Defendants advance three arguments: (1) the verdict is not supported by substantial evidence because SG Blocks and HOLA could never have reached a deal, so Defendants’ interference could not have caused the deal to fall apart; (2) the award should be reduced by $501,709 because although it was part of the overall settlement amount, HOLA wanted to pay that amount directly to SG Blocks’ subcontractors; (3) the award should be capped at $303,975.44 by a contractual limitation of liability provision. The court addresses these arguments in turn.

Defendants argue the judgment should be vacated because Plaintiff’s damages are speculative. In other words, Defendants argue there is no substantial evidence to uphold the verdict. In support, Defendants provide a list of conflicting evidence which they contend is favorable to them. (See Mot., 2:15-5:13.) However, when ruling on a motion for JNOV, the court is expressly directed to disregard conflicting evidence on behalf of the defendants. (See Reynolds, supra, 51 Cal.2d at p. 99.) Shorn of their list, Defendants fail to demonstrate that the verdict is not supported by substantial evidence. Moreover, the court is satisfied that, upon consideration of the evidence in favor of Plaintiff, the verdict is undoubtedly supported by substantial evidence.

Defendants next argue the award should be reduced by $501,709. This sum refers to $501,709 in subcontractor liens which comprised a portion of the proposed settlement package of $1,274,752. Defendants argue the evidence shows HOLA paid off the subcontractor lien. Not so. The sole exhibit upon which HOLA relies is HOLA’s final offer to Plaintiff, dated February 7, 2019, which included a total compensation of $1,274,752, no charitable contribution, and indicated HOLA would pay $501,709 from the total compensation to Plaintiff’s subcontractor lienholders. (Exhibit J, pp. 187:16 - 188:26.) The glaring problem with this evidence is that there is no proof the payment was ever made. Even if there were such proof, it was not presented at trial. After all, and as Defendants concede, Plaintiff did not accept HOLA’s final offer. There is no basis to reduce the award by $501,709.

The parties dispute whether the contractual limitation-of-liability provision in the parties’ agreement applies. The provision states, in relevant part:

13. Limitation of Liability: . . . In light of the limited ability of the Architect to affect the risks inherent in the Project, and of the disparity between Architect’s fee and the potential liability exposure for problems or alleged problems with the Project, Client agrees that if Architect should be found liable for loss or damage due to a failure on the part of Architect, its liability shall be limited to the lesser of a) the amount the Architect received as compensation for the work (excluding any reimbursables and sub- consultant costs) or, 2) an amount equal to the Insurance proceeds, if any, resulting from the claim(s), as liquidated damages and not as a penalty, and this liability is exclusive. This paragraph shall apply in the event of loss or damage, directly or indirectly to person or property from the performance or non-performance of the obligations set forth by the terms of this Agreement, or from the negligence, active or passive, of Architect, its architects, agents[,] employees, or independent contractors.

Defendants argue the provision limits their liability to $303,975. Plaintiff disagrees and argues substantial evidence supports the jury’s interpretation of the contractual provision awarding the amount returned in the verdict. Plaintiff argues the provision applies only to “risks inherent in the Project.” Plaintiff wins this argument.

As Plaintiff notes, Defendants read this provision to the jury and submitted it for the jury’s consideration. (See Tr. 11/4/24, at 82:19-83:26.) Witness Stevan Armstrong was cross-examined on the limitation-of-liability provision. (Tr. 11/4/24, at 82:19-83:9.) The jury considered the provision along with the rest of the contract and contemporaneous documents and testimony about the scope of the project, the design scope, and Defendants’ role and obligations as the architect. Then, before deliberations, the court instructed the jury on CACI No. 315 (“Interpretation-Meaning of Ordinary Words”), CACI No. 316 (“Interpretation-Meaning of Technical Words”), CACI No. 317 (“Interpretation-Construction of Contract as a Whole”), CACI No. 318 (“Interpretation-Construction by Conduct”), and CACI No. 319 (“Interpretation-Reasonable Time”). (Jury Instructions, pp. 36-40.) By finding Defendants liable on Plaintiff’s second, fourth, fifth, and sixth causes of action in an amount exceeding $303,975.44, the jury found the limitation-of-liability clause did not cover Plaintiff’s claims because those claims were not risks inherent to the project. Substantial evidence supports that interpretation.

Moreover, the contractual limitation language does not apply to or limit damages associated with Defendants’ liability for negligent interference with prospective economic relations or professional negligence because those torts relate to Defendants interactions with the settlement discussions between HOLA and SG Blocks, not the Project. Plaintiff was terminated from the Project, and thereafter began settlement negotiations with HOLA. The jury could easily have found that Defendants negligently interfered with the settlement discussions and violated their professional responsibilities by so doing, which acts had nothing to do with the Project but everything to do with disrupting the settlement discussions in order to obtain their own contract.

“A motion for new trial is a creature of statute; . . . .” (Neal v. Montgomery Elevator Co.¿(1992) 7 Cal.App.4th 1194, 1198.) A movant must satisfy Code of Civil Procedure sections 657 and 659. Under Code of Civil Procedure section 657, a motion for new trial may be granted if there is any:¿

[¶] 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. [¶] 5. Excessive or inadequate damages. [¶] 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 motion for new trial must be filed within 15 days of the date of mailing of entry of judgment by the clerk of the court or within 180 days after entry of judgment, whichever is earliest. (Code Civ. Proc., § 659.)

When ruling on an application for a new trial, the court sits as an independent trier of fact. (Lane v. Hughes Aircraft Co. (2000) 22 Cal.4th 405, 412.) The court, therefore, has broad discretion to order new trials, limited only by the obligation to state its reasons for granting a new trial and the existence of substantial evidence in the record to support those reasons. (Ibid.) In assessing the need for a new trial, the court must rely on its view of the overall record, taking into account such factors, among others, as the nature and seriousness of the alleged misconduct, the general atmosphere, including the judge’s control, of the trial, the likelihood of prejudicing the jury, and the efficacy of objection or admonition under all the circumstances. (Dominguez v. Pantalone (1989) 212 Cal.App.3d 201, 211.)¿

“A new trial shall not be granted upon the ground of insufficiency of the evidence to justify the verdict or other decision, … unless after weighing the evidence the court is convinced from the entire record, including reasonable inferences therefrom, that the court or jury clearly should have reached a different verdict or decision.”¿ (Code Civ. Proc., section 657.)¿ “In weighing and evaluating the evidence, the court is a trier-of-fact and is not bound by factual resolutions made by the jury. The court may grant a new trial even though there be sufficient evidence to sustain the jury's verdict on appeal, so long as the court determines the weight of the evidence is against the verdict.”¿ (Candido v. Huitt¿(1984) 151 Cal.App.3d 918, 923.)¿

Here, Defendants alternatively move for a new trial on the same grounds as the motion for JNOV. Given the court’s ruling on the motion for JNOV, the motion for a new trial is denied.

Based on the foregoing, Defendants’ motion for judgment notwithstanding the verdict or alternatively a new trial is DENIED.

Kerry Bensinger

Judge of the Superior Court