Judge: Michelle Williams Court, Case: 20STCV09612, Date: 2022-09-14 Tentative Ruling

Case Number: 20STCV09612    Hearing Date: September 14, 2022    Dept: 74

20STCV09612           GLENN FELDMAN vs FRASER ROSS

Defendants’ Motion to Bifurcate Liability and Damages

TENTATIVE RULING:  The motion is DENIED.

Background

On March 9, 2020, Plaintiff Glenn Feldman, as an individual and derivatively as a member of and on behalf of Kitross Apparel Los Angeles, LLC, filed this action against Defendants Fraser Ross, Ali Mir Khan, A-List Inc., Kitross Apparel Los Angeles, LLC, and Christopher Lee. Plaintiff alleges Defendant Fraiser Ross promised to share proceeds from their partnership and two lawsuits Ross was involved in. After the parties created a successful business, Ross allegedly looted Kitross Apparel Los Angeles, LLC and secretly settled the portions of the lawsuits to avoid paying Plaintiff. On November 18, 2020, Plaintiff filed the operative First Amended Complaint, (“FAC”), asserting causes of action for: (1) intentional misrepresentation; (2) negligent misrepresentation; (3) breach of fiduciary duty; (4) breach of contract; (5) breach of implied covenant of good faith and fair dealing; (6) breach of fiduciary duty; (7) constructive trust; (8) accounting; and (9) fraudulent conversion. Plaintiff dismissed Ali Mir Khan on December 28, 2020. The Court entered an order dismissing Christopher Lee on February 24, 2021.

On February 24, 2021, Ross filed a cross-complaint against Feldman asserting claims for: (1) intentional misrepresentation; (2) negligent misrepresentation; (3) breach of fiduciary duty; (4) accounting; and (5) declaratory relief.

Motion

On July 5, 2022, Defendant Kitross Apparel Los Angeles, LLC and Defendant/Cross-Complainant Fraser Ross filed the instant motion seeking to bifurcate trial regarding liability and damages.

Opposition

In opposition, Plaintiff contends Defendants have not met their burden to demonstrate separate trials are warranted, separate trials do not serve judicial economy, and Plaintiff will be prejudiced because jurors are biased against bifurcated trials.

Reply

In reply, Defendants contend bifurcation would allow percipient witnesses to testify at the liability phase and experts to testify at the damages stage, a determination regarding the enforceability of the parties’ alleged agreement could render a damage determination unnecessary, and Plaintiff is not prejudiced.

Motion

Standard

Pursuant to Code of Civil Procedure section 1048(b), “[t]he 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.” 

Similarly, pursuant to Code of Civil Procedure section 598, “[t]he 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.”

“Under these provisions, trial courts have broad discretion to determine the order of proof in the interests of judicial economy.” (Grappo v. Coventry Financial Corp. (1991) 235 Cal.App.3d 496, 504.) “The major objective of bifurcated trials is to expedite and simplify the presentation of evidence.” (Foreman & Clark Corp. v. Fallon (1971) 3 Cal.3d 875, 888). This objective is thwarted if the proposed separate trial requires a duplication of effort, such as the reintroduction of evidence during the second phase. (Ibid.)

Discussion

Defendants request that the Court bifurcate the issues of liability and damages for trial. As the moving party, Defendants bear the burden to demonstrate such bifurcation is warranted. Defendants’ motion is not supported by any evidence, other than Plaintiff’s refusal to stipulate to bifurcation. (Smith Decl. ¶¶ 2-3.)

Defendants contend “[t]here is no point in poring through Kitross’s financial records or litigating the issue of damages – the amount of salary Feldman is allegedly owed from Kitross, the value of Feldman’s alleged 25% stake in Kitross, or the value of Feldman’s alleged 50% share in Ross’s litigation proceeds – unless and until Feldman establishes that the purported contracts entitling him to these funds are enforceable.” (Mot. at 5:6-10.) The Court notes Defendants’ arguments are limited to the breach of contract claim and enforceability of the contracts is immaterial to the fraud causes of action.

Defendants also cite prejudice regarding the disclosure of its finances, without authority or evidence. (Mot. at 6:1-7.) In opposition, Plaintiff contends the request to bifurcate “is a misguided attempt by Defendants to continue their prohibition of Plaintiff’s access to critical Kitross financial information.” (Opp. at 2:1-2.) However, bifurcation of the trial does not affect discovery.

In reply, Defendants contend, without evidence or authority, that the liability phase of trial will involve percipient witnesses and the damages phase will involve experts. (Reply at 3:1-10.) The Court believes it is highly likely that the proposed damages phase will require more than expert testimony and involve overlapping witnesses from the proposed liability phase. Defendants have not demonstrated bifurcation will avoid duplication of effort, resources, and evidence. Proceeding separately will necessarily result in a longer trial should Plaintiff prevail.

Based upon the arguments before the Court, Defendants failed to demonstrate that a bifurcated trial on the issues of liability and damages will be in “furtherance of convenience or . . . avoid prejudice, or . . .  be conducive to expedition and economy,” (Code Civ. Proc. § 1048(b)), or promote the “convenience of witnesses, the ends of justice, or the economy and efficiency of handling the litigation.” (Code Civ. Proc. § 598.) Judicial economy and convenience are promoted by having all the issues a unified trial. Additionally, the Court finds no prejudice to either party if trial proceeds on all issues and is not bifurcated.