Judge: Michelle Williams Court, Case: 21STCV33416, Date: 2024-01-11 Tentative Ruling
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Case Number: 21STCV33416 Hearing Date: January 11, 2024 Dept: 1
21STCV33416 THE HERRICK CORPORATION vs
BERKSHIRE HATHAWAY
Skanska USA Building Inc., Zurich American
Insurance Company, Liberty Mutual Insurance Company, Federal Insurance Company,
Berkshire Hathaway Specialty Insurance Company, and Continental Casualty
Company’s Motion to Relate Cases
TENTATIVE RULING: Skanska USA Building Inc., Zurich American
Insurance Company, Liberty Mutual Insurance Company, Federal Insurance Company,
Berkshire Hathaway Specialty Insurance Company, and Continental Casualty
Company’s Motion to Relate Cases is GRANTED.
Department 1 finds the following cases are related and orders each
reassigned to Department 78 of the Stanley Mosk Courthouse for all purposes:
(1) Performance Contracting v. Skanska USA Building
(23STCV17718);
(2) Stice Company v. Skanska USA Building
(23STCV18554);
(3) Safe Scaffolding v. CHA Hollywood Medical Center
(23STCV18781);
(4) J.T. Wimsatt Contracting v. Skanska USA Building
(23STCV19392);
(5) Giroux Glass v. Skanska USA Building
(23STCV19479);
(6) McKinley Equipment v. CHA Hollywood Medical Center
(23STCV19769);
(7) EBERHARD v. Skanska USA Building (23STCV19679);
(8) Xcel Mechanical Systems v. CHA Hollywood Medical
Center (23STCV19773);
(9) CHA Hollywood Medical Center v. ACCO Engineered
Systems (23STCV20130);
(10) International Line Builders v. Skanska USA
Building (23STCV20311);
(11) Best Contracting Services v. Skanska USA Building
(23STCV21534); and
(12) Robertson’s Ready Mix v, Hym Engineering
(23STLC05081).
All hearings currently set in each of the cases listed
above are hereby advanced and vacated. Counsel
for moving parties to give notice.
On September 10, 2021, Plaintiff The Herrick
Corporation filed Los Angeles Superior Court case 21STCV33416 against Skanska
USA Building Inc., CHA Hollywood Medical Center L.P., Zurich American Insurance
Company, Liberty Mutual Insurance Company, Federal Insurance Company, Berkshire
Hathaway Specialty Insurance Company, and Continental Casualty Company arising
out of Plaintiff’s steel fabrication and installation services performed as a
subcontractor for Skanska USA Building Inc. on the Acute Care Services Replacement
Hospital Building project.
On November 29, 2021, American Stair Corporation filed
a complaint in Los Angeles Superior Court case 21STCV43561 American Stair
Corporation v. The Herrick Corporation, et al based upon allegations that
American Stair served as The Herrick Corporation’s subcontractor.
On December 14, 2021, The Herrick Corporation filed
its First Amended Complaint asserting causes of action for: (1) breach of
written contract; (2) to enforce claim on stop payment notice release bond; (3)
for recovery on mechanic’s lien release bond; (4) for claim on payment bond;
(5) for account stated; (6) for goods sold and delivered and services rendered;
and (7) on open book account. The Herrick Corporation dismissed CHA Hollywood
Medical Center without prejudice on December 20, 2021.
On December 28, 2021, the court issued an order
finding 21STCV33416 and 21STCV43561 related within the meaning of California
Rules of Court, rule 3.300 and consolidated the two cases for all purposes.
On January 18, 2022, Skanska USA Building Inc. filed a
cross-complaint against The Herrick Corporation and CHA Hollywood Medical
Center, L.P. asserting causes of action for: (1) breach of contract; (2) breach
of implied covenant of good faith and fair dealing; (3) breach of contract; (4)
equitable indemnity; and (5) violation of Prompt Payment Act.
On March 11, 2022, the court entered the parties’
stipulation and order to stay the entire action pending arbitration. On June
14, 2023, the court dismissed the complaint filed by American Stair Corporation
with prejudice pursuant to an oral request.
On August 9, 2023, Judge Jill Feeney issued an order
finding 21STCV33416 and 23STCV17718 Performance Contracting, Inc. v. Skanska
USA Building, Inc. are not related within the meaning of California Rules of
Court, rule 3.300(a). On August 14, 2023, Judge Feeney issued an order finding
21STCV33416 and 23STCV18989 Skanska USA Building, Inc. v. MIK Construction,
Inc. were also not related.
On September 18, 2023, Judge Feeney issued a detailed
order finding 21STCV33416, 21STCV43561, 23STCV17718, 23STCV18554, 23STCV18781,
23STCV19392, 23STCV19479, 23STCV19769, 23STCV19679, 23STCV19773, 23STCV20130,
23STCV20311, and 23STCV21534 were not related to the tow previously related
cases, 21STCV33416 and 21STCV43561.
On October 6, 2023, the court entered the parties’
stipulation to temporarily lift the stay solely to allow Skanska USA Building
to file a First Amended Cross-Complaint. On October 9, 2023, Skanska USA
Building filed the First Amended Cross-Complaint for: (1) breach of contract;
(2) breach of implied covenant of good faith and fair dealing; (3) breach of
contract; (4) equitable indemnity; (5) violation of Prompt Payment Act; (6)
breach of implied warranty of correctness of plans and specifications; (7) abandonment
of contract; (8) reasonable value; and (9) foreclosure of mechanics lien. The
First Amended Cross-Complaint named The Herrick Corporation, CHA Hollywood
Medical Center, L.P., Wells Fargo Bank, N.A. Acco Engineered Systems, Inc.,
Best Contracting Services, Inc., Chino Steel Inc., Eberhard, Giroux Glass,
Inc., Given Design Group, Inc., International Line Builders Inc., J.T. Wimsatt
Contracting Co., Inc., Kamran and Company, LLC, McKinley Equipment Corporation,
Murray Plumbing and Heating Corporation, Performance Contracting, Inc.,
Robertson’s Ready Mix Ltd., Safe Scaffolding, Stice Company, Inc., Superior
Contracting Corporation d/b/a Coast Building Products, and Xcel Mechanical
Systems, Inc. as cross-defendants.
Motion
On November 15, 2023, Skanska USA Building Inc.,
Zurich American Insurance Company, Liberty Mutual Insurance Company, Federal
Insurance Company, Berkshire Hathaway Specialty Insurance Company, and
Continental Casualty Company filed the instant motion seeking to relate the
following cases to the consolidated action, 21STCV33416:
(1) Performance Contracting v. Skanska USA Building
(23STCV17718);
(2) Stice Company v. Skanska USA Building
(23STCV18554);
(3) Safe Scaffolding v. CHA Hollywood Medical Center
(23STCV18781);
(4) J.T. Wimsatt Contracting v. Skanska USA Building
(23STCV19392);
(5) Giroux Glass v. Skanska USA Building
(23STCV19479);
(6) McKinley Equipment v. CHA Hollywood Medical Center
(23STCV19769);
(7) EBERHARD v. Skanska USA Building (23STCV19679);
(8) Xcel Mechanical Systems v. CHA Hollywood Medical
Center (23STCV19773);
(9) CHA Hollywood Medical Center v. ACCO Engineered
Systems (23STCV20130);
(10) International Line Builders v. Skanska USA
Building (23STCV20311);
(11) Best Contracting Services v. Skanska USA Building
(23STCV21534); and
(12) Robertson’s Ready Mix v, Hym Engineering
(23STLC05081).
On January 4, 2024, the moving Defendants filed a
notice of non-receipt of opposition. The motion is unopposed. (Code Civ. Proc.
§ 1005.)
Motion to Relate Cases
Standard
In the event that the pertinent judge under California
Rules of Court, rule 3.300(h)(1) does not relate any of the cases set forth in
a Notice of Related Case, Department 1 may relate the matters on noticed
motion. (Cal. R. Ct., rule 3.300(h)(1)(D); LASC Local Rules, rule 3.3(f)(3).)
Discussion
On September 12, 2023, Defendant CHA Hollywood Medical
Center, L.P. filed a Notice of Related Case involving 21STCV33416 and each of
the twelve cases listed in Defendants’ motion to relate. On September 18, 2023,
Judge Feeney issued a detailed order finding the cases were not related
stating, in relevant part:
Although there is overlap in some cases with respect
to some parties, these 11 additional cases do not involve the same parties.
The 11 additional cases do not arise from the same or
substantially identical transactions, incidents or events requiring the
determination of the same or substantially identical questions of law or fact.
These cases involve a series of mechanics liens on a hospital property.
However, that is where the similarity ends. Each of these cases involve
separate issues of liability and damages with respect to different
subcontractors and sub-subcontractors and the work they performed.
The 11 additional cases do not involve claims against,
title to, possession of, or damages to the same property. Although the cases
all involve mechanic’s liens against the hospital property, it is not alleged
that the various mechanics’ liens taken in their totality come close to the
value of the property at issue. Thus, this situation does not have the danger
that this related case provision is meant to address.
The 11 additional cases are not likely for other
reasons to require substantial duplication of judicial resources if heard by
different judges. Any challenges to liability will be different based upon the
particular situation of each subcontractor and sub-subcontractor. For example,
in 23STCV18781, Safe Scaffolding has sued CHA Hollywood Medical Center, L.P. in
quantum meruit and for foreclosure of mechanic’s lien. Safe Scaffolding has
contended that it was not paid for scaffolding it provided for the construction
project. In 23STCV19479, Giroux Glass Inc. has sued Skanska USA Building, CHA
and others claiming that it was not paid for metal work provided. These cases
contain separate claims based on different facts, to include different
contracts. Any defenses will also be based on the individual set of facts
applicable to each subcontractor and sub-subcontractor.
(21STCV33416 Sept. 18, 2023 Min. Order.) Accordingly,
the instant motion is properly brought in Department 1. (Cal. R. Ct., rule
3.300(h)(1)(D); LASC Local Rules, rule 3.3(f)(3).)
Cases are related when they (1) involve the same
parties and are based on the same or similar claims, (2) arise from the same or
substantially identical transactions, incidents, or events requiring the
determination of the same or substantially identical questions of law or fact,
(3) involve claims against, title to, possession of, or damages to the same
property, or (4) are likely for other reasons to require substantial
duplication of judicial resources if heard by different judges. (Cal. R. Ct.,
rule 3.300(a).)
The moving Defendants contend the cases are related
based upon every ground enumerated in Rule 3.300(a). (Mot. at 11:11-14:2.) As
acknowledged by the moving Defendants, the cases do not involve the same
parties. (Id. at 11:21-22; Howard Decl. Ex. 1.) That the “nearly all of [the
plaintiffs] are “similarly situated” does not render the cases related under
Rule 3.300(a)(1). Similarly, the chart provided by the moving Defendants
further demonstrates the cases are not based on the same or similar claims. (Howard
Decl. Ex. 1.) In addition to involving different enumerated causes of action,
the cases are also largely based upon dissimilar claims for relief. For
example, in 23STCV18781 Safe Scaffolding seeks the reasonable value of
services, material, labor, and equipment related to the provision of
scaffolding from CHA Hollywood Medical Center, L.P., whereas the Plaintiff J.T.
Wimsatt Contracting in 23STCV19392 seeks to recover for structural concrete
work from CHA Hollywood Medical Center and Skanska USA Building. In
23STLC05081, Robertson’s Ready Mix seeks to recover the value of concrete,
rock, and sand and enforce a guaranty.
The cases also do not arise from the same or
substantially identical transactions, incidents, or events requiring the
determination of the same or substantially identical questions of law or fact.
(Cal. R. Ct., rule 3.300(a)(2).) The moving Defendants contend Skanska’s
subcontracts with each subcontractor are the same form contracts and
attachments and “[t]he events and circumstances causing the disputes on the
Project are the same or at least substantially similar in each of the Actions.”
(Mot. at 12:12-16; Howard Decl. ¶ 8.) However, these limited similarities are
insufficient to render the cases related under Rule 3.300(a)(2), as they
involve separate issues of liability and damages for each subcontract and
sub-subcontract and relate to the provision of different services.
However, the cases all now involve claims against the
same property. (Cal. R. Ct., rule 3.300(a)(3).) “A mechanic’s lien is a claim
against real property, which may be filed if a claimant has provided labor or
furnished materials for the property and has not been paid.” (Brewer Corp. v.
Point Center Financial, Inc. (2014) 223 Cal.App.4th 831, 839.) Prior to the
September 18, 2023 ruling, neither 21STCV33416 nor 23STCV20130 included a claim
seeking to foreclose upon a mechanic’s lien. As noted by the moving Defendants,
the parties have subsequently filed cross-complaints and every case listed in
the motion now asserts a claim for foreclosure on the mechanic’s liens
associated with the same building project. (Howard Decl. Ex. 1.)
The cases are now also likely for other reasons to
require substantial duplication of judicial resources if heard by different
judges. (Cal. R. Ct., rule 3.300(a)(4).) The moving Defendants’ counsel
represents “[t]he subcontracts Skanska entered into with its various
subcontractors for work performed and materials provided on the Project are
based upon the same form subcontract and attachments.” (Howard Decl. ¶ 8.)
There will be a substantial duplication of judicial resources if different
judges must decide the same contractual issues related to these form contracts.
The Court notes parties in several of these cases have filed motions to compel
arbitration based upon the contracts. Furthermore, if the claims to foreclose
are resolved in favor of the claimants and sale of the property is ordered,
having a single judicial officer entering orders related to any sale promotes
judicial efficiency and safeguards against inconsistent rulings. As noted by
the moving Defendants, a leading legal treatise suggests consolidation of some
or all of these cases may be appropriate. (See Miller & Starr,
Consolidation of several foreclosure complaints, 9 Cal. Real Est. § 32:60 (4th
ed.) (“In practice the courts almost always will order multiple lien
foreclosure actions affecting the same property consolidated. Since each of the
mechanics liens has equal priority and is entitled to a pro rata distribution
of the sale proceeds,2 conduct of the sale and distribution of the proceeds
would be inefficient and chaotic if the claims were not consolidated and a
single judgment rendered.”).) Department 1 does not make consolidation orders
and expresses no opinion as to whether consolidation is appropriate here.
However, consolidation cannot be considered absent relation. (LASC Local Rules,
rule 3.3(g)(1) (“Cases may not be consolidated unless they are in the same
department. A motion to consolidate two or more cases may be noticed and heard
after the cases, initially filed in different departments, have been related
into a single department . . .”).)
The Court finds the cases are now related within the
meaning of California Rules of Court, rule 3.300(a) and the motion is GRANTED.