Judge Michael P. Linfield, Case 21STCV46412 2022-09-27 Tentative Ruling

Judge: Michael P. Linfield, Case: 21STCV46412, Date: 2022-09-27 Tentative Ruling

Case Number: 21STCV46412 Hearing Date: September 27, 2022 Dept: 34

SUBJECT: Motion for Order to Sever General Star Indemnity Company’s Cross-Complaint and Walston’s First Amended Cross-Complaint

Moving Party: Cross Defendant and Cross-Complainant General-Star Indemnity Company (“General Star”)

Resp. Party: None

Cross Defendant and Cross-Complainant General-Star Indemnity Company’s Motion for Order to Sever General Star Indemnity Company’s Cross-Complaint and Walston’s First Amended Cross-Complaint is GRANTED.

I. BACKGROUND

On December 21, 2021, Plaintiffs Noah Meiner, Lennifer Hilliard, and Sandra Wilson filed a complaint against Defendants Robin Amelia Sheehan, Brian Morgan Heit, Matthew Jacob Feaver and Heit Law Group alleging the following causes of action:

1. Professional Negligence (Legal Malpractice)

2. Promissory Estoppel

3. Conversion (Civil Code §§ 1712-1713.)

4. Fraud (Civil Code § 1572.)

5. Negligent Misrepresentation (Civil Code §§ 1573, 1577.)

6. Unfair Competition Law (Business & Professions Code § 17200.)

7. Unjust Enrichment

On January 25, 2022, Defendants and Cross-Complainants Robin Amelia Sheehan, Matthew Jacob Feaver, Brian Morgan Heit, and Heit Law Group filed a cross-complaint against Cross Defendants Gregory Walston and Walston & Associates dba The Walston Law Group alleging the following causes of action:

1. Declaratory Relief – Express Indemnity

2. Implied Indemnity

3. Contribution

On April 21, 2022, Cross Defendants/ Cross-Complainants Gregory Walston and Walston and Associates dba the Walston Law Group filed a cross-complaint against Cross Defendants General Star Insurance Company, Robin Amelia Sheehan, Jay Fink, Noah Meiner, Lennifer Hilliard, and Sandra Wilson alleging the following causes of action:

1. Breach of Contract

2. Contractual and Tortious Breach of the Implied Covenant of Good Faith and Fair Dealing

3. Unfair Business Practices under Business and Professions Code §§ 17200 et seq.

4. Declaratory Relief

5. Equitable Indemnity

6. Express Breach of Contractual Duty to Defend and/or to Pay Defense Costs from the Outset

On April 29, 2022, the Walston Cross-Complainants filed a First Amended Cross-Complaint against Cross Defendants General Star Insurance Company, Robin Amelia Sheehan, Joel Steven Fink aka Jay Fink, Noah Meiner, Lennifer Hilliard and Sandra Wilson alleging the same causes of action.

On June 9, 2022, the Court denied Meiner’s Special Motion to Strike Walston’s First Amended Cross-Complaint.

On August 3, 2022, the Court sustained without leave to amend Plaintiffs/Cross-Defendants Noah Meiner, Lennifer Hilliard, and Sandra Wilson’s Demurrer to the Sixth Cause of Action for Express Breach of Contractual Duty to Defend and/or to Pay Defense Costs from the Outset in Cross-Complainants/ Defendants Gregory Walston, and Walston and Associates dba The Walston Law Group’s First Amended Cross-Complaint.

On August 29, 2022, Cross-Defendant and Cross-Complainant General Star Indemnity Company (improperly named as General Star Insurance Company) (hereinafter, “General Star”), moved the Court “an Order to sever General Star's Cross-Complaint and Gregory Walston and Walston & Associates' First Amended Cross-Complaint against General Star pursuant to California Code of Civil Procedure § 1048(b) . . . on the grounds that severance is required to avoid prejudice and promote judicial expediency and economy.” (Motion, p. 2:7-12.) No opposition has been filed.

II. ANALYSIS

A. Legal Standard

Pursuant to Code of Civil Procedure section 378, “[a]ll persons may join in one action as plaintiffs if: (1) They assert any right to relief jointly, severally, or in the alternative, in respect of or arising out of the same transaction, occurrence, or series of transactions or occurrences and if any question of law or fact common to all these persons will arise in the action; or (2) They have a claim, right, or interest adverse to the defendant in the property or controversy which is the subject of the action.” “The purpose of section 378 is to permit the joinder in one action of several causes arising out of identical or related transactions and involving common issues. The statute should be liberally construed so as to permit joinder whenever possible in furtherance of this purpose.” (Coleman v. Twin Coast Newspaper, Inc.¿(1959) 175 Cal.App.2d 650, 653.)

Code of Civil Procedure section 598 provides in pertinent part:

“The court may, when the convenience of witnesses, the ends of justice, or the economy and efficiency of handling the litigation would be promoted thereby, on motion of a party, after notice and hearing, make an order, no later than the close of pretrial conference in cases in which such pretrial conference is to be held, or, in other cases, no later than 30 days before the trial date, that the trial of any issue or any part thereof shall precede the trial of any other issue or any part thereof in the case, except for special defenses which may be tried first pursuant to Sections 597 and 597.5. The court, on its own motion, may make such an order at any time.” (CCP, § 598.)

Code Civil Procedure section 598 was enacted by the legislature to avoid “the waste of time and money caused by the unnecessary trial of damage questions in cases where the liability issue is resolved against the plaintiff.” (Horton v. Jones (1972) 26 Cal.App.3d 952, 955.)

Code of Civil Procedure section 1048, subdivision (b) states:

“The court, in furtherance of convenience or to avoid prejudice, or when separate trials will be conducive to expedition and economy, may order a separate trial of any cause of action, including a cause of action asserted in a cross-complaint, or of any separate issue or of any number of causes of action or issues, preserving the right of trial by jury required by the Constitution or a statute of this state or of the United States.” (CCP, § 1048, subd. (b).)

B. Discussion

General Star identifies four relevant pleadings to the present action:

1. Plaintiffs’ original Malpractice Lawsuit against Claimants that “arises from the alleged negligence of Claimants in connection with the spam email lawsuits” (Motion, MPA, p. 5:5, 9-10.);

2. Claimants’ Contribution Cross-Complaint against Walston Insureds that “seeks contribution and indemnification from the Walston Insureds for the Malpractice Lawsuit and asserts that the Walston Insureds are responsible for the underlying malpractice.” (Motion, MPA, p. 5:10-12.);

3. Walston Cross-Complaint against General Star and Plaintiffs that “seeks insurance coverage in connection with the professional negligence alleged in the Malpractice Lawsuit and Contribution Cross-Complaint” (Motion, MPA, p. 5:14-16.); and

4. General Star’s Cross-Complaint seeking a declaration regarding the unavailability of the aforementioned insurance coverage. (Motion, MPA, p. 5:16-17.)

General Star suggests that Evidence Code § 1155 demands severance of the professional liability claims (the Malpractice Lawsuit and the Contribution Cross-Complaint) from the insurance claims (the Walston Cross-Complaint and General Star’s Cross-Complaint). (Motion, MPA, p. 4:11-13, 7:1-8.)

The Court agrees. “A joint trial against the insured for negligence and against the insurer for violating its duties under subdivision (h) would obviously violate both the letter and spirit of the section.” (Royal Globe Ins. Co. v. Superior Court (1979) 23 Cal.3d 880, 891, overruled on different issues by Moradi-Shalal v. Fireman's Fund Ins. Companies (1988) 46 Cal.3d 287; Smith v. Interinsurance Exchange (1985) 167 Cal.App.3d 301, 304; Johnson v. Threats (1983) 140 Cal.App.3d 287, 290.)

This motion is unopposed.

The Court finds severance justified under CCP § 1048(b) in this action.

III. CONCLUSION