Judge: Michelle Williams Court, Case: 20STCV33931, Date: 2023-03-16 Tentative Ruling

Please notify Dept. 1’s courtroom staff by email (SMCDept1@lacourt.org) or by telephone (213-633-0601) no later than 8:30 a.m. the day of the hearing if you wish to submit on the tentative ruling rather than argue the motion.  If you submit on the tentative, you must immediately notify the other side that you will not appear at the hearing.  If you submit on the tentative and elect not to appear at the hearing, the opposing party may nevertheless appear at the hearing and argue the motion.  Please keep in mind that appearing at the hearing and simply repeating the arguments set forth in the papers is not a good use of the court’s time or the parties’ time.

 

Case Number: 20STCV33931    Hearing Date: March 16, 2023    Dept: 1

20STCV33931           PRO INSTALLATIONS, INC., vs EQUINOX HOLDINGS, INC.

Motion for Coordination, Transfer and Consolidation of Non-Complex Cases by Pro Installations Inc. d/b/a ProSpectra Contract Flooring

TENTATIVE RULING:  The motion is DENIED.  Moving party to give notice.

Background of the Los Angeles Action

On September 4, 2020, Plaintiff Pro Installations, Inc. dba ProSpectra Contract Flooring filed this action against Equinox Holdings, Inc., Eclipse Development, Inc., and Atlantic Specialty Insurance Company asserting causes of action for: (1) breach of written contract; (2) common count – open book account; (3) common count – account stated; (4) common count – work and materials; and (5) recovery on mechanic’s lien release bond. The complaint alleges Plaintiff and Defendants Equinox and Eclipse entered into a contract for Plaintiff “to furnish labor and materials for the installation of floor coverings and related materials for a work of improvement located at 320 Mission Street, San Francisco, CA 94105.” (Compl. ¶ 7.) Plaintiff alleges it performed the contract work as well as additional change orders and Defendants have an outstanding balance of $673,319.54 before interest.

On November 5, 2020, Equinox and Eclipse filed a cross-complaint against ProSpectra asserting claims for: (1) breach of contract; (2) quasi-contract – unjust enrichment/restitution; (3) promissory fraud; (4) negligent misrepresentation; (5) negligence; and (6) declaratory relief. The cross-complaint alleges ProSpectra failed to timely perform its obligations, failed to complete its work in a workmanlike manner free of defects, failed to deliver appropriate materials, equipment, and labor, and caused Equinox and Eclipse to hire another subcontractor to complete the work. The cross-complaint further alleges ProSpectra misrepresented the size and capabilities of its Union City office in San Francisco, which was actually a small satellite office run by ProSpectra’s southern California offices.

On April 22, 2022, ProSpectra filed a cross-complaint against California United Mechanical, Inc., DeFrancesca Group, Inc. dba DTS Company, Matrix HG, Inc., MGC, Inc. dba Mission Glass Company asserting claims for: (1) negligence; (2) equitable indemnity; (3) contribution/apportionment; (4) comparative fault; and (5) declaratory relief. ProSpectra’s cross-complaint alleges these cross-defendants acted negligently and either damaged ProSpectra’s work or provided defective waterproofing systems.

On July 7, 2022, the court filed ProSpectra’s request for dismissal as to Cross-Defendants DeFrancesca Group, Inc. dba DTS Company and the court filed its request for dismissal as to Matrix HG, Inc. on July 20, 2022.

Background of the San Francisco Action

On December 30, 2020, California United Mechanical, Inc. dba United Mechanical, Inc. filed a complaint in San Francisco Superior Court case CGC-20-588791 United Mechanical, Inc. dba United Mechanical, Inc. v. Equinox Fitness Beale, Inc. against Equinox Fitness Beale, Inc., Equinox Holdings, Inc., and Eclipse Development, Inc. alleging a single cause of action for breach of contract based upon a settlement agreement between the parties related to United Mechanical’s unpaid work at 320 Mission Street, San Francisco, CA 94105.

On March 11, 2021, Equinox Fitness Beale, Inc., Equinox Holdings, Inc., and Eclipse Development, Inc. filed a cross-complaint against United Mechanical asserting claims for: (1) breach of contract as a third-party beneficiary; (2) breach of express warranty; (3) negligence; (4) violation of Business and Professions Code section 17200; (5) quasi-contract – unjust enrichment/restitution; (6) declaratory relief; and (7) recission and restitution. This cross-complaint alleges United Mechanical “damaged base building pipes over the main electrical room that caused massive flooding in the ground floor and base building, which required the entire building at the Property to be shut down, stopping all work on the jobsite and causing a one week delay at the Project,” failed to timely obtain the correct shower drains, and failed to deliver appropriate materials, equipment, and labor causing Equinox and Eclipse to hire another subcontractor to complete the work. (Cross-Compl. ¶ 14.)

On April 12, 2021, United Mechanical filed a cross-complaint against Michilli, Inc., Equinox Fitness Beale, Inc., Equinox Holdings, Inc., and Eclipse Development, Inc. asserting claims for: (1) breach of contract; (2) quantum meruit / unjust enrichment; (3) equitable indemnity; (4) comparative contribution; (5) comparative fault; and (6) account stated. This cross-complaint alleges United Mechanical finished its scope of work and was not fully compensated under the terms of its contract with the general contractor, Michilli. On April 19, 2022, United Mechanical substituted ProSpectra and Mission Glass as Moe cross-defendants.

On June 27, 2022, ProSpectra filed a cross-complaint against United Mechanical, DeFrancesca Group, Inc. dba DTS Company, Matrix HG, Inc., MGC, Inc. dba Mission Glass Company asserting claims for: (1) negligence; (2) equitable indemnity; (3) contribution/apportionment; (4) comparative fault; and (5) declaratory relief. This cross-complaint is largely identical to the one filed in 20STCV33931.

Motion

On February 15, 2023, ProSpectra filed the instant motion seeking to transfer San Francisco Superior Court case CGC-20-588791 to the Los Angeles Superior Court for coordination and consolidation with Los Angeles Superior Court case 20STCV33931.

On March 3, 2023, Defendants/Cross-Complainants Equinox Holdings, Inc. Holdings and Eclipse Development, Inc. and Defendant Atlantic Specialty Insurance Company filed their joinder to the motion.

Opposition

In opposition, United Mechanical argues there are substantial claims made against it that are separate from the other subcontractors that involve the day-to-day construction of the project. Both United Mechanical and MGC argue convenience of witnesses and to United Mechanical would be promoted by a transfer to San Francisco County, not Los Angeles County.

Reply

In reply, ProSpectra notes the parties agree transfer and consolidation is appropriate but disagree as to the proper court location and reiterates its contention that Los Angeles County is the more appropriate venue.

Request for Judicial Notice

MGC, Inc, and United Mechanical separately request the Court take judicial notice of the complaints and cross-complaints filed in both actions and United requests the Court take judicial notice of its coordination motion filed in the San Francisco action, which is set for hearing on March 27, 2023. These requests are GRANTED. (Evid. Code § 452(d).)

United Mechanical’s requests for judicial notice of two meet and confer letters, (United Ex. H and I), is DENIED as they are not the proper subject of judicial notice. (Evid. Code §§ 451 et seq.)

Motion to Coordinate Non-Complex Cases

Standard

Los Angeles Superior Court Local Rule 3.3(h) provides: “[a] civil case which is not complex as defined by Standard 3.10 of the Standards of Judicial Administration may be transferred to the court from a superior court in another county, if it involves a common question of fact or law within the meaning of Code of Civil Procedure section 403. The coordination motion shall be made in compliance with the procedures established by California Rules of Court, rule 3.500. Coordination motions seeking to transfer a case or cases to the Central District shall be filed and heard in Department 1. Coordination motions seeking to transfer a case or cases to a district other than the Central District shall be heard by the Supervising Judge in that district.”

Coordination motions are governed by Code of Civil Procedure section 403, which states, in relevant part:

A judge may, on motion, transfer an action or actions from another court to that judge's court for coordination with an action involving a common question of fact or law within the meaning of Section 404. The motion shall be supported by a declaration stating facts showing that the actions meet the standards specified in Section 404.1, are not complex as defined by the Judicial Council and that the moving party has made a good faith effort to obtain agreement to the transfer from all parties to each action. Notice of the motion shall be served on all parties to each action and on each court in which an action is pending. Any party to that action may file papers opposing the motion within the time permitted by rule of the Judicial Council. The court to which a case is transferred may order the cases consolidated for trial pursuant to Section 1048 without any further motion or hearing.

(Code Civ. Proc. § 403.)

California Rules of Court, rule 3.500(c) requires that the motion “must be supported by a declaration stating facts showing that:  (1) The actions are not complex; (2) The moving party has made a good-faith effort to obtain agreement to the transfer and consolidation from all parties to the actions; and (3) The moving party has notified all parties of their obligation to disclose to the court any information they may have concerning any other motions requesting transfer of any case that would be affected by the granting of the motion before the court.” 

To grant the motion, California Rules of Court, rule 3.500(d) requires the Court to “specify the reasons supporting a finding that the transfer will promote the ends of justice, with reference to the following standards:

(1) The actions are not complex;

(2) Whether the common question of fact or law is predominating and significant to the litigation;

(3) The convenience of the parties, witnesses, and counsel;

(4) The relative development of the actions and the work product of counsel;

(5) The efficient utilization of judicial facilities and staff resources;

(6) The calendar of the courts;

(7) The disadvantages of duplicative and inconsistent rulings, orders, or judgments; and

(8) The likelihood of settlement of the actions without further litigation should coordination be denied.”

(See also Code Civ. Proc. § 404.1.) 

Procedural Requirements

The motion is supported by the declaration of Plaintiffs’ counsel, Arthur S. Moreau, which describes the relevant pleadings demonstrating the cases are not complex, (Moreau Decl. ¶¶ 8-13), states ProSpectra made a good faith effort to obtain the parties’ agreement to the transfer, (Id. ¶¶ 15-17), and the parties were notified of their obligation to disclose information concerning other motions to transfer. (Id. ¶ 21.) The declaration addresses the requirements of California Rules of Court, rule 3.500(c).

The Actions Are Not Complex

The Court finds the actions are not complex within the meaning of California Rules of Court, rule 3.400, which the parties do not contest. (United Opp. at 2:18; Cal. R. Ct., rule 3.500(d)(1).) The two cases will not require “exceptional judicial management to avoid placing unnecessary burdens on the court or the litigants and to expedite the case, keep costs reasonable, and promote effective decision making by the court, the parties, and counsel,” (Cal. R. Ct., rule 3.400(a)), as they are not likely to require numerous pretrial motions raising difficult or novel legal issues, do not involve a large number of witnesses, documentary evidence, or separately represented parties, and are not likely to require substantial postjudgment judicial supervision. (Cal. R. Ct., rule 3.400(b).)

Predominating and Significant Common Questions of Law and Fact

The Court finds the two actions involve predominating and significant common questions of law and fact. (Cal. R. Ct., rule 3.400(c).) The parties do not appear to dispute this factor either. Rather, the parties dispute whether the cases should be transferred and consolidated in the Los Angeles Superior Court or the San Francisco Superior Court, with MCG and United Mechanical arguing for San Francisco, (MCG Opp. at 6:22-23; United Opp. at 2:18-28), and ProSpectra, Equinox, Eclipse, and Atlantic Specialty Insurance arguing for Los Angeles. Both cases arise out of the same construction project in San Francisco. Each complaint alleges Equinox and Eclipse failed to pay for contract work performed by the plaintiffs ProSpectra and United. In each action, Equinox and Eclipse filed cross-complaints asserting many of the same causes of action and allegations. Both cross-complaints claim the same $152,601.52 in clean-up costs and $809,358.85 for “lost free rents and lost revenue” against both ProSpectra and United Mechanical. (Cross-Compls. ¶¶ 14(e), 15; Jones Decl. Ex. B, F.) ProSpectra filed largely identical cross-complaints in both actions. (Jones Decl. Ex. C, G.) This factor weighs in favor of transfer and consolidation of the actions and is neutral as to whether Los Angeles County or San Francisco County is a more appropriate court location.

Convenience of Parties, Witnesses, and Counsel

The parties dispute whether the convenience of the parties, witnesses, and counsel is better promoted by transfer to Los Angeles County or San Francisco County. (Cal. R. Ct., rule 3.300(d)(3).) It is undisputed that the building project at issue is in San Francisco. The pleadings include allegations that the building flooded, (Jones Decl. Ex. B ¶ 14(a)), ProSpectra and United Mechanical failed to “supply necessary manpower” to complete the work, (Jones Decl. Ex. B, F ¶ 14(c)), and performed defective work. (Jones Decl. Ex. B ¶ 19, Ex. F ¶ 21.) These allegations suggest San Francisco, not Los Angeles, is a more appropriate location for both cases.

ProSpectra fails to provide any evidence regarding the convenience of witnesses or parties in support of its motion or indicate why Los Angeles is a preferable location for them over San Francisco. (Moreau Decl. ¶¶ 2-27.) ProSpectra states in its memoranda “[w]itnesses for the parties are not necessarily located in the San Francisco Bay area and would be equally inconvenienced, no matter where they must travel.” (Mot. at 11:20-21. But see Smith, Smith & Kring v. Superior Court (Oliver) (1997) 60 Cal.App.4th 573, 578 (“The matters set forth in the unverified Statement of Facts and in memoranda of points and authorities are not evidence.”); Cole v. Town of Los Gatos (2012) 205 Cal.App.4th 749, 767 n.8 (“It goes without saying that statements in a memorandum of points and authorities are not evidence.”).) ProSpectra also cites the “proliferation of remote depositions,” (Mot. at 11:21-22), which the Court does not find particularly relevant. The Court of Appeal has, in similar contexts, advised against discounting the residence of parties or witnesses. (See Rycz v. Superior Court of San Francisco County (2022) 81 Cal.App.5th 824, 843, 849 (“the availability of remote testimony is a circumstance that may ease the inconvenience for any witnesses that live in a location distant from the site of trial, but it is not a proper basis for denying a motion to transfer a case to the county where most witnesses are located. . . . we reject the Superior Court’s conclusion that the availability of remote testimony means section 397 motions based on the convenience of witnesses are a relic of the past.”).)

United Mechanical’s “principal place of business and its employees are located in the San Francisco/Bay Area.” (Jones Decl. ¶ 17.) United Mechanical further contends that “San Francisco Building Department inspectors and plan checkers, who will undoubtably be witnesses, are located in San Francisco/Bay Area. PG&E management involved with the gas service are located in the San Francisco/Bay Area. . . . there are key witnesses involving the day to day construction and delay issues who reside in the San Francisco/Bay Area than in Los Angeles which would make San Francisco Action a more proper venue.” (Ibid.)

Counsel for Equinox states “Equinox's former employees. Spencer Collins and Jarone Ashkenazi, who were key representatives involved in the construction of the Project, reside and work in Los Angeles . . . Lorenzo Piccini, one of Michilli’s key Project representatives, works at Michilli’s office in Los Angeles . . . Several key employees of Pro Spectra, including Steve Landreth and Tom Peascreta, work in Southern California. Representatives of DTS, who perforned remedial work at the Equinox club, are located in Southern California.” (Teitelbaum Decl. at 13 n.5.) Teitelbaum cites other witnesses who are located out of state and are therefore equally inconvenienced by either location. (Ibid.) Equinox Holdings, Equinox Fitness Beale, Inc., and Eclipse have their principal place of business in New York. (Moreau Decl. ¶ 4.) Atlantic is a “New York based surety company.” (Id. ¶ 6.)

United Mechanical’s counsel states “three of the firms involved in the case are located in the greater San Francisco Bay Area (Walnut Creek, Concord, and Pleasanton), two are in Los Angeles, one is in San Diego and one in New York.” (Jones Decl. ¶ 17.)As stated on their pleadings, counsel for United Mechanical’s office is located in Sacramento, California, counsel for MGC’s office is located in Walnut Creek, California, which are significantly closer to San Francisco than Los Angeles. Counsel for Equinox’s office is in Los Angeles and Counsel for ProSpectra’s office is in San Diego. The overall convenience of counsel appears neutral as to either court location as either location will be inconvenient for some.

Based upon the evidence provided by the parties and the allegations at issue, the Court finds that the convenience of the parties, witnesses, and counsel would be better served by having both cases in San Francisco County rather than Los Angeles County.

Development of Actions, Work Product, Use of Judicial Facilities and Staff Resources, and Apparent Court Calendars

The relative development of the actions and the work product of counsel, (Cal. R. Ct., rule 3.300(d)(4)), the efficient utilization of judicial facilities and staff resources, (Cal. R. Ct., rule 3.300(d)(5)), and the apparent court calendars, (Cal. R. Ct., rule 3.300(d)(6)), weigh

in favor of transfer and consolidation and are neutral as to whether Los Angeles County or San Francisco County is a more appropriate court location.

ProSpectra notes “[b]oth matters are early in the written discovery process and exchanging documents.” (Moreau Decl. ¶ 24.) The Los Angeles County case currently has a trial date set for August 28, 2023 and a trial date has not been set in the San Francisco County case. (Id. ¶¶ 26-27.) The parties have not taken depositions in either action. (Teitelbaum Decl. ¶¶ 17, 22.) As noted above, the two cases involve predominating common issues of law and fact related to the same building project and the same parties. Efficient utilization of judicial facilities and staff resources is promoted by having both cases in a single superior court. Counsel for Equinox states “[t]here are extensive delays in the San Francisco Superior Court with respect to civil cases that are not present in this Court” without elaboration. (Teitelbaum Decl. ¶ 25.) While a trial date has been set in the Los Angeles County case, trial would likely be continued if the San Francisco County case were transferred and consolidated with it. Transfer would appear to have an equal impact on either court’s calendar.

Inconsistent and Duplicative Rulings

As noted above, both cases involve many of the same parties and same causes of action. Both cases seek to apportion liability amongst the parties related to defects and delays to the same building project. The parties will likely be conducting similar discovery in both cases and filing similar motions for the assigned judicial officers to resolve. Given the substantial overlap between the cases, there is a substantial risk of inconsistent and duplicative orders. Duplicate proceedings waste judicial resources and inconsistent rulings, particularly regarding discovery, could result in significant confusion and protracted motion practice. Moreover, inconsistent judgments regarding the parties’ relative fault for the damages at issue must be avoided.  While this factor weighs in favor of coordination, it is neutral as to whether the actions should be coordinated in Los Angeles County or San Francisco County. (Cal. R. Ct., rule 3.500(d)(7).)

Likelihood of Settlement

California Rules of Court, rule 3.500(d)(8) requires the Court to consider “[t]he likelihood of settlement of the actions without further litigation should coordination be denied.” ProSpectra argues “[t]ransfer and consolidation of the actions will encourage settlement. Litigants will be less inclined to settle their cases if common issues are being litigated in other courts, in front of separate judges, and with the very real possibility of different outcomes.” (Mot. at 13:1-3.) Counsel for United Mechanical and Equinox agree with this sentiment. (Jones Decl. ¶ 21 (“consolidation would avoid duplicate inconsistent rulings, and would prompt meaningful settlement discussions.”): Teitelbaum Decl. ¶ 24 (“it will enhance the parties’ efforts to settle both matters if heard together.”).) The parties were unable to settle ProSpectra’s claims prior to litigation. (Teitelbaum Decl. ¶ 17.) Accordingly, the likelihood of settlement is not increased if coordination is denied. The Court finds this factor weighs slightly in favor of coordination and is neutral as to whether the cases should be transferred to Los Angeles over San Francisco.

On balance, the Court finds the relevant factors demonstrate the ends of justice will be promoted by transfer and consolidation of two actions. However, the Court finds San Francisco County, not Los Angeles County, is the more appropriate court location. The building project at issue is in San Francisco County and the overall convenience of witnesses would be best supported by transfer to San Francisco County over Los Angeles County. Accordingly, the motion seeking to transfer San Francisco Superior Court case CGC-20-588791 United Mechanical, Inc. dba United Mechanical, Inc. v. Equinox Fitness Beale, Inc. to the Los Angeles Superior Court is DENIED.

Pursuant to California Rules of Court, rule 3.500(h), “[i]f after considering the motion the judge determines that the action or actions pending in another court should not be transferred to the judge’s court but instead all the actions that are subject to the motion to transfer should be transferred and consolidated in another court, the judge may order the parties to prepare, serve, and file a motion to have the actions transferred to the appropriate court.” The Court need not make this order as United Mechanical already filed a motion to transfer in the San Francisco County Superior Court, which is set for hearing on March 27, 2023. (Jones Decl. ¶ 22.)