Judge: Mark E. Windham, Case: 20CHLC15887, Date: 2022-08-30 Tentative Ruling
Case Number: 20CHLC15887 Hearing Date: August 30, 2022 Dept: 26
TENTATIVE RULING:
Cross-Complainant
Gerard Cosmetics, Inc.’s Motion to Reclassify Action is DENIED.
SERVICE:
[X] Proof of
Service Timely Filed (CRC 3.1300) OK
[X]
Correct Address (CCP 1013, 1013a) OK
[X] 16/21
Day Lapse (CCP 12c and 1005 (b)) OK
REQUEST FOR RELIEF: Reclassify action
to unlimited jurisdiction court based on the amount of Cross-Complainant’s
damages.
OPPOSITION:
Cross-Complainant has not shown that it incurred damages in excess of the
jurisdictional limit. As stated in its ex parte application, this Motion is
brought based on the costs Cross-Complainant has incurred in this litigation,
which are not part of the amount in controversy.
REPLY:
Cross-defendant has all but admitted its committed fraud based on the falsity
of the alleged debt. Cross-Complainant is not only entitled to general damages,
but punitive damages, which will be more than $25,000.00.
ANALYSIS:
On July 20, 2020, Technology
Insurance Company filed this action against Gerard Cosmetics, Inc. for breach
of contract and common counts. On August 31, 2021, Gerard Cosmetics, Inc.
(Cross-Complainant”) filed a Cross-Complaint against Technology Insurance
Company (“Cross-Defendant”) for breach of contract, breach of covenant of good
faith and fair dealing, and fraud. Cross-Defendant
answered the Cross-Complaint on September 23, 2021.
Cross-Complainant
filed the instant Motion to Reclassify the Action to a Court of Unlimited
Jurisdiction on January 28, 2022. Cross-Defendant filed an opposition on March
23, 2022 and Cross-Complainant replied on April 1, 2022.
Discussion
Code of Civil
Procedure section 403.040 allows a plaintiff to file a motion for
reclassification of an action within the time allowed for that party to amend
the initial pleading. (Code Civ. Proc., § 403.040, subd. (a).) If the motion is
made after the time for the plaintiff to amend the pleading, the motion may
only be granted if (1) the case is incorrectly classified; and (2) the
plaintiff shows good cause for not seeking reclassification earlier. (Code Civ.
Proc., § 403.040, subd. (b).)
The initial time to amend the Cross-Complaint has passed,
therefore, Cross-Complainant must demonstrate both that the case is incorrectly
classified and good cause for the timing of this Motion. In Walker v. Superior Court (1991) 53
Cal.3d 257, 262, the California Supreme Court held that a matter may be
reclassified from unlimited to limited only if it appears to a legal
certainty that the plaintiff's damages will necessarily be less than $25,000. (Walker
v. Superior Court (1991) 53 Cal.3d 257 [emphasis added].) In Ytuarte v.
Superior Court (2005) 129 Cal.App.4th 266, 278, the Court of Appeals
examined the principles it set forth in Walker and held that “the court should reject the plaintiff's effort to
reclassify the action as unlimited only when the lack of jurisdiction as an
“unlimited” case is certain and clear.” (Id. at 279.) Nevertheless, the plaintiff must present evidence to
demonstrate a possibility that the damages will exceed $25,000.00 and the trial
court must review the record to determine “whether a judgment in excess of
$25,000.00 is obtainable.” (Ibid.)
Cross-Complainant explains that it intended to reclassify
this action upon filing the Cross-Complaint, but inadvertently failed to comply
with the requirements of Code of Civil Procedure section 403.030. (Motion,
Pilikyan Decl., ¶4.) Under this statute, a cross-complainant may automatically
have an action reclassified by stating in the pleading that the action is to be
reclassified and by paying the reclassification fee to the Court clerk. (Code
Civ. Proc., § 403.030.) Cross-Complainant did not realize its failure to
reclassify the action until Cross-Defendant responded to discovery by objecting
that the number of requests as in excess of the number of requests allowed in a
limited jurisdiction court. (Id. at ¶6.) Cross-Complainant’s inadvertent
failure to reclassify the action when the Cross-Complaint was filed shows good
cause for the timing of the instant Motion.
The Motion, however, is not supported by evidence regarding
the damages incurred by Cross-Complainant. The prayer for damages in the
Cross-Complaint does not set forth the amount of principal damages. Instead it
seeks “damages according to proof for breach of
contract, including costs of defense incurred by the Cross-Complainant in its
defense against Plaintiff’s alleged claim for $21,135.00.” (Cross-Compl.,
Prayer, ¶a [emphasis added].) While the Prayer references the amount of damages
sought in the Complaint ($21,135.00), it only seeks damages on the
Cross-Complaint according to proof. It also seeks unspecified general, compensatory
damages and punitive damages. (Id. at ¶b.) The declarations in support
of the Motion and Reply are likewise devoid of evidence regarding the damages Cross-Complainant
contends it incurred and simply refers to the damages Cross-Defendant seeks in
the Complaint. (Motion, Milikyan Decl., ¶4.) The reply declaration refers to
evidence in support of Cross-Complainant’s fraud cause of action, but again,
does not indicate what damages resulted. (Id. at ¶6.) As Cross-Defendant
points out, the costs and attorney’s fees associated with litigating this
action are not counted towards the amount in controversy. (Code Civ. Proc., § 85,
subd. (a).)
Therefore, Cross-Complainant has not demonstrated a
possibility of obtaining damages in excess of the jurisdictional limit of this
Court.
Conclusion
Cross-Complainant
Gerard Cosmetics, Inc.’s Motion to Reclassify Action is DENIED.
Court clerk to give notice.