Judge: Michael P. Linfield, Case: 23STCV06825, Date: 2023-05-10 Tentative Ruling

Case Number: 23STCV06825    Hearing Date: September 15, 2023    Dept: 34

SUBJECT:        Motion to Correct the Record and Issue an Amended Order Nunc Pro Tunc Dismissing Case

Moving Party: Defendants Focus Financial Partners, LLC and Goldman Sachs & Co. LLC

Resp. Party:    Plaintiff KSFB Management, LLC

The Motion for Amended Order is DENIED.

BACKGROUND:

On March 28, 2023, Plaintiffs KSFB Management, LLC and Mark Segal filed their Complaint against Defendants Focus Financial Partners, LLC and Goldman Sachs & Co. LLC (“Defendants”) on causes of action arising from the Parties’ business relationship.

On March 29, 2023, Plaintiffs KSFB Management, LLC and Mark Segal filed their First Amended Complaint (“FAC”).

On August 2, 2023, the Court granted Defendants’ Motion to Dismiss and dismissed the FAC, conditional on the Parties jointly submitting to the Court by the time of the hearing a stipulation signed by all Parties that explicitly waives the pre-dispute jury waiver.

On August 3, 2023, Defendants (but not Plaintiffs) filed their Stipulation Re: Defendants’ Waiver of Right to Enforce Pre-Dispute Waiver-of-Jury-Trial Clause, and the Court entered the Stipulation on that date as an Order of the Court.

On August 18, 2023, Defendants filed their Motion to Correct the Record and Issue an Amended Order Nunc Pro Tunc Dismissing Case (“Motion for Amended Order”). Defendants concurrently filed their Proposed Order.

On September 1, 2023, Plaintiff KSFB Management, LLC (“Plaintiff”) filed its Opposition to the Motion for Amended Order. Plaintiff concurrently filed its Proof of Service.

On September 8, 2023, Defendants filed their Reply.

ANALYSIS:

I.          Legal Standard

“The court may, upon motion of the injured party, or its own motion, correct clerical mistakes in its judgment or orders as entered, so as to conform to the judgment or order directed, and may, on motion of either party after notice to the other party, set aside any void judgment or order.” (Code Civ. Proc., § 473, subd. (d).)

II.       Discussion

A.      The Issues and the Parties’ Arguments

On August 2, 2023, the Court granted Defendants’ Motion to Dismiss and dismissed the FAC, conditional on the Parties jointly submitting to the Court by the time of the hearing a stipulation signed by all Parties that explicitly waives the pre-dispute jury waiver.

On August 3, 2023, Defendants (but not Plaintiffs) filed their Stipulation Re: Defendants’ Waiver of Right to Enforce Pre-Dispute Waiver-of-Jury-Trial Clause, and the Court entered the Stipulation on that date as an Order of the Court.

Defendants now move the Court to issue an order amending the Minute Order dated August 2, 2023. (Motion for Amended Order, p. 7:2–4.) Notably, while Defendants provide a bare Proposed Order as a separate document, they actually wish the Court to issue a more comprehensively amended order, attached as Exhibit B to the Motion for Amended Order, with red lines shown in Exhibit C to the Motion for Amended Order. The primary effects of this amended order would appear to be: (1) considering a different forum selection clause than the one that was considered; and (2) correcting minor scrivener’s errors, such as a paragraph on page 14 where the terms “Defendants” and “Plaintiffs” were incorrectly switched.

Defendants argue that these are clerical errors that the Court may correct pursuant to Code of Civil Procedure section 473, subdivision (d). (Motion for Amended Order, p. 6:5–26.)

Plaintiff disagrees, arguing: (1) that consideration of a different forum selection clause (as well as inclusion of an additional substantive passage) is a not a clerical error but a judicial error, which means it cannot be correct pursuant to Code of Civil Procedure section 473, subdivision (d); (2) that the proper procedural avenue for the Court to correct judicial errors would have been a motion to vacate judgment pursuant to Code of Civil Procedure section 663; and (3) that Defendants are not injured parties here, and thus they cannot invoke Code of Civil Procedure section 473, subdivision (d). (Opposition, pp. 7:3–4, 7:10–12, 9:5–9.)

In their Reply, Defendants argue: (1) that the Court should correct this clerical error because Code of Civil Procedure section 473, subdivision (d) includes judicial errors; (2) that it is irrelevant that Defendants did not attach the document with the relevant forum selection clause (i.e., the Engagement Letter) to their Motion to Dismiss because that document was attached to the FAC; (3) that it is irrelevant whether the Parties now agree the Court referenced the wrong agreement because the Court’s intent is what matters; (4) that Defendants did not mislead the Court regarding which forum selection clause applies; (5) Plaintiff is the party attempting to make the issue of jury waiver an issue in New York; and (6) that Defendants are injured within the meaning of the statute because the errors diverge from the Court’s expressed intent in ruling for Defendants. (Reply, pp. 2:14–23, 3:17–22, 3:23–27, 4:5–12, 4:25–27, 5:1–8, 5:13–17.)

B.      Discussion

Code of Civil Procedure section 473, subdivision (d) is comprised of two distinct avenues of relief. The first avenue involves the Court’s correction of “clerical mistakes in its judgment or orders as entered, so as to conform to the judgment or order directed,” and that relief must be initiated “upon motion of the injured party, or [the Court’s] own motion”. The second avenue involves the Court “set[ting] aside any void judgment or order,” and that relief must be initiated “on motion of either party after notice to the other party”. Notably, the Legislature’s use of the word “may” for both of these clauses indicates the discretionary nature of this relief.

The second avenue does not apply here because neither Plaintiff nor Defendants have asked the Court to set aside a judgment or order as void. Further, the Court does not have jurisdiction under the second clause of Code of Civil Procedure section 473, subdivision (d) to set aside the judgment or order as void upon its own motion.

The first avenue does not apply here because Defendants are not “the injured party” as it relates to this issue. Regarding the Motion to Dismiss, Plaintiff is the party that argued the pre-dispute jury waiver made the forum selection clause unenforceable, and Defendants are the parties that conceded that issue. Thus, Defendants could not be injured in a situation where the pre-dispute jury waiver is theoretically incomplete, inapplicable, or irrelevant. Even if, in the alternative Defendants were an injured party, the Court declines to grant this relief. Defendants should have noticed this issue (1) at the time of the hearing on the Motion to Dismiss or (2) by the time the Stipulation was signed and entered by the Court — not more than 15 days after the Stipulation was entered and the case was dismissed. In addition, the Court declines to move sua sponte to correct the Minute Order dated August 2, 2023.

III.     Conclusion

The Motion for Amended Order is DENIED.