Judge: Michael P. Linfield, Case: 20STCV42627, Date: 2022-09-29 Tentative Ruling
Case Number: 20STCV42627 Hearing Date: September 29, 2022 Dept: 34
SUBJECT: Motion for New Trial
Moving
Party: Plaintiff
226 Central, LLC
Resp.
Party: Defendants Subway Real Estate, LLC,
Ajay Beri, and Rita Beri, a.k.a. Ritu Beri
The Court DENIES Plaintiff’s Motion
for New Trial. The Court AWARDS Defendants $4,760 in attorney fees and costs.
BACKGROUND:
Plaintiff 226 Central, LLC commenced this action on
November 6, 2020 against Defendants Subway Real Estate, LLC, Ajay Beri, and
Rita Beri. After a two-day bench trial from May 31 to June 1, 2022, the Court
found in favor of Plaintiff. (Minute Order dated June 1, 2022, p. 1.)
On September 19, 2022, Plaintiff filed its Motion for
New Trial (“Motion”). Plaintiff concurrently filed its Notice of Motion.
Plaintiff argues that a new trial should be granted on the grounds of: (1)
insufficient evidence; (2) error in law; (3) inadequate damages; and (4)
irregularity in the proceedings.
On September 19, 2022, Defendants filed their
Opposition to Plaintiff’s Motion for New Trial (“Opposition”). Defendant
concurrently filed Declaration of David Dunlap, and shortly thereafter filed
its Notice of Errata to the Declaration. Defendant argues that Plaintiff is not
entitled to a new trial on any of those grounds. Defendant requests $4,760 in
attorney fees and costs for defending against the Motion.
On September 22, 2022, Plaintiff filed its Reply.
Plaintiff reiterates the same arguments as in its Motion.
ANALYSIS:
I.
Legal Standard
“A new trial is a re-examination of an issue of fact in the same court
after a trial and decision by a jury, court, or referee.” (Code Civ. Proc., §
656.)
“The verdict may
be vacated and any other decision may be modified or vacated, in whole or in
part, and a new or further trial granted on all or part of the issues, on the
application of the party aggrieved, for any of the following causes, materially
affecting the substantial rights of such party:
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.
“When a new trial
is granted, on all or part of the issues, the court shall specify the ground or
grounds upon which it is granted and the court’s reason or reasons for granting
the new trial upon each ground stated.
“A new trial shall
not be granted upon the ground of insufficiency of the evidence to justify the
verdict or other decision, nor upon the ground of excessive or inadequate
damages, 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.
“The order passing
upon and determining the motion must be made and entered as provided in Section
660 and if the motion is granted must state the ground or grounds relied upon
by the court, and may contain the specification of reasons.”
(Code Civ. Proc.,
§ 657.)
II.
Discussion
A. Insufficiency
of the Evidence
Plaintiff argues that the evidence was insufficient because: (1) the
Court’s determination that Defendants Ajay and Rita Beri should benefit from
the liability provision of the Master Lease was not supported by substantial
evidence; and (2) the Court found that the Master Lease terms were ambiguous
and yet ruled that Defendants Ajay and Rita Beri should be benefit from the
liability provision. (Mot., p. 2:5–9.)
Defendants argue that the evidence was sufficient, discussing the
testimony of all three Defendants as to “their understanding of the duties and
obligations under the lease agreement and the events that took place during
lease negotiations.” (Opp’n, p. 13–16.)
The Court agrees with Defendants. The Court heard evidence regarding the
lease, including the negotiations and understandings of the lease’s terms at
the time the lease was undertaken. The Court used that evidence as the basis
for its decision on the meaning of the liability provision in the lease. The
Court finds that its decision was not made on insufficient evidence and denies
relief on this basis.
B. Error
in Law
1. Legal
Standard
“A contract must be so interpreted
as to give effect to the mutual intention of the parties as it existed at the
time of contracting, so far as the same is ascertainable and lawful.” (Civ.
Code, § 1636.)
“A contract may be explained by
reference to the circumstances under which it was made, and the matter to which
it relates.” (Civ. Code, § 1647.)
“If the terms of a promise are in
any respect ambiguous or uncertain, it must be interpreted in the sense in
which the promisor believed, at the time of making it, that the promisee
understood it.” (Civ. Code, § 1649.)
“In
cases of uncertainty not removed by the preceding rules, the language of a
contract should be interpreted most strongly against the party who caused the
uncertainty to exist.” (Civ. Code, § 1654.)
The canon of contract construction
in Civil Code section 1654 “applies only as a tie breaker, when other canons
fail to dispel uncertainty.” (Pacific Gas & Elec. Co. v. Superior Court
(1993) 15 Cal.App.4th 576, 596.)
“Commercial entities . . . are entitled
to contract to limit the liability of one to the other, or otherwise allocate
the risk of doing business. However, contractual clauses seeking to limit
liability will be strictly construed and any ambiguities resolved against the
party seeking to limit its liability for negligence.” (Philippine Airlines
v. McDonnell Douglas Corp. (1987) 189 Cal.App.3d 234, 237.)
2. Discussion
Plaintiff argues that the Court made an error of law by concluding that
Defendants Ajay and Rita Beri were “tenants” as that term is defined by the
contract at issue. Plaintiff cites Pacific Gas & Electric Company, Philippine
Airlines and Civil Code section 1654 in support of his argument.
Defendants argue that the Court did not make an error of law. Defendants
cite Civil Code sections 1636, 1647, and 1649 in support of their argument.
The Court agrees with Defendants. Using the testimonial evidence from
Defendants, who were present at the time of contracting and understood the
circumstances under which it was made, the Court interpreted the contract to
conform with the shared understanding of the contract. (Civ. Code, §§ 1636 and
1647.) Given this interpretation based upon the evidence provided, the Court saw
no ambiguity in the contract, meaning there was no need to interpret the
provision in favor of the promise or against the party who caused any
uncertainty to exist. (Civ. Code, §§ 1649 and 1654.) Civil Code section 1654
did not apply here because the preceding canons resolved any uncertainty and
there was no tie breaker needed. (Pacific Gas & Elec. Co, supra,
at 596.) The Court notes that Plaintiff’s citation to Philippine Airlines is
misplaced as that case only relates to contractual limits on negligence.
C. Inadequate
Damages
1. Legal
Standard
“Consequential damages may be
limited or excluded unless the limitation or exclusion is unconscionable.
Limitation of consequential damages for injury to the person in the case of
consumer goods is invalid unless it is proved that the limitation is not
unconscionable. Limitation of consequential damages where the loss is
commercial is valid unless it is proved that the limitation is unconscionable.”
(Com. Code, § 2719, subd. (3).)
2. Discussion
Plaintiff argues that because there were damages approaching $300,000,
the contractual limitation of $40,000 is unconscionable and thus in violation
of Commercial Code section 2719, subdivision (3). (Mot., p. 9:21–28.)
Defendants argue that Plaintiff’s unconscionability argument has no legal
or factual basis and that Plaintiff fails to explain why the limitation is
unconscionable.
The Court again agrees with Defendants.
The damages were limited by the contracting parties, not by the Court. A new
trial would not change the Court’s inability to award judgment larger than that
allowed by the contract. Thus, while it is conceivable that Plaintiff could
have made some traction with this argument about the contract itself during the
trial, it is not appropriate for requesting a new trial based on the grounds of
inadequate damages. The Court denies relief on this basis.
D. Irregularity
in the Proceedings
1. Legal
Standard
“When the jury has
been sworn, the trial must proceed in the following order, unless the court,
for special reasons otherwise directs:
1. The plaintiff may
state the issue and his case;
2. The defendant may
then state his defense, if he so wishes, or wait until after plaintiff has
produced his evidence;
3. The plaintiff must
then produce the evidence on his part;
4. The defendant may
then open his defense, if he has not done so previously;
5. The defendant may
then produce the evidence on his part;
6. The parties may then
respectively offer rebutting evidence only, unless the court, for good reason,
in furtherance of justice, permit them to offer evidence upon their original
case;
7. When the evidence is concluded,
unless the case is submitted to the jury on either side or on both sides
without argument, the plaintiff must commence and may conclude the argument;
8. If several defendants
having separate defenses, appear by different counsel, the court must determine
their relative order in the evidence and argument;
9. The court may then
charge the jury.
(Code Civ. Proc., §
607, subds. (1–7).)
“Ordinarily, unless the court
otherwise directs, the trial of a civil action tried by the court without a
jury shall proceed in the order specified in Section 607.” (Code Civ. Proc., §
631.7.)
2. Discussion
Plaintiff argues that the following three irregularities occurred during
the trial proceeding: (1) the Court “surprised” the parties “by asking for a
closing statement which was to be drafted over a one-hour lunch break”; (2)
“the Court concluded the bench trial prior to the Plaintiff having an
opportunity to present its rebuttal case, and before the Defendants had
concluded presenting their case”; and (3) “Plaintiff was not afforded the
opportunity to present a rebuttal brief, or appropriate time to prepare for
closing arguments and/or a closing brief.” (Mot., p. 2:23–27.) Plaintiff does
not cite any authorities for why these alleged “irregularities” are either
irregular or meet the statutory standard for an irregularity that would
necessitate a new trial.
Defendants argue that there were no irregularities in the proceeding.
Defendants cite case law and the California Practice Guide to argue that the
term “irregularity” refers to “conduct other than orders and rulings and
reaches matters that may have to be proved by affidavit rather than by
exceptions on the record during trial.” (Opp’n, p. 3:11–14, emphasis omitted,
citing Gay v. Torrance (1904) 145 Cal 144, 149, Montoya v. Barragan (2013)
220 Cal.4th 1215, 1226, 1229–30, and Cal. Prac. Guide Civ. Trials & Ev. Ch.
18-B.) Defendants argue that the Court’s action does not constitute an
irregularity because Plaintiff had already rested its case in chief, Defendants
had only one more witness at the time the Court asked for arguments, and
Plaintiff had not indicated that it would have any rebuttal witnesses.
In its Reply, Plaintiff cites Gay,
Montoya, and Code of Civil Procedure section 657(1) to argue that there were
irregularities in the proceedings that prejudiced Plaintiff. (Reply, p.
2:1–15.)
For the following reasons, the Court agrees with Defendants. The Court is
allowed to control the order of proceedings in a bench trial. (Code Civ. Proc.,
§ 631.7.) After a day and a half of trial, when Plaintiff had already rested its
case and Defendant only had one more witness, the Court changed the order of
the proceedings in order to save time. Specifically, the Court heard closing
arguments on the specific issue of the parties’ contract provision on
liability, which ended up being an outcome-determinative legal issue. Rebuttal
on a factual issue would not have changed the outcome on this legal issue,
which is why the Court used its discretion to take the proceedings out of their
normal order. Moreover, any lack of preparation by Plaintiff’s counsel for a
slightly earlier closing argument on a narrow legal issue that was outcome determinative
is not a violation of Plaintiff’s rights or prejudicial to Plaintiff in a way
that would be the basis for a new trial. The Court finds that this was not an
irregularity and denies relief on this basis.
E. Attorney
Fees and Costs
Plaintiff requests $4,760 in fees and costs for the time Defendants spent
defending against the Motion. Plaintiff has not addressed the adequacy or reasonableness
of the attorney's fees in its reply. The
Court finds that these attorney's fees were reasonable. The Court grants Plaintiff’s request for fees
and costs in the amount requested.
III.
Conclusion
The Court DENIES Plaintiff’s Motion
for New Trial. The Court AWARDS Defendants $4,760 in attorney fees and costs.