Judge Olivia Rosales, Case BC629958 2022-08-02 Tentative Ruling

Judge: Olivia Rosales, Case: BC629958, Date: 2022-08-02 Tentative Ruling

Case Number: BC629958 Hearing Date: August 2, 2022 Dept: SEC

OH v. TEACHERS INSURANCE AND ANNUITY, et al.

CASE NO.: BC629958

HEARING: 8/2/22 @ 9:30 AM

JUDGE: MARGARET M. BERNAL

TENTATIVE RULING

Intervenor Mesa Underwriters Specialty Insurance Company’s motion to intervene is CONTINUED to Tuesday, August 30, 2022 at 1:30 pm in Dept. C.

Moving Party to give NOTICE.

Intervenor Mesa Underwriters Specialty Insurance Company moves for leave to intervene on behalf of Cross-Defendant IBS Beauty, Inc. pursuant to CCP § 387, and for leave to file the proposed motion to set aside default.

[The court notes that Mesa did not file a motion to set aside IBS’s default. Instead, Mesa attached the proposed motion to set aside as Exhibit A to its motion to intervene. That motion is not before the court.]

Procedural Background

This is a wrongful death action commenced on August 12, 2016 by Decedent Ji Oh’s survivors against Teachers Insurance and Annuity Association of America (“TIAA”) and its property managers. The Complaint alleges that on March 7, 2016, Decedent Oh was dispensing a hair care product IBS sold, when the drum exploded and a fire engulfed decedent. IBS is wholly owned by CEO, Daniel Kim.

On January 18, 2018, TIAA cross-complained against Kim, IBS, and Prosys.

On May 17, 2018, the Court entered default against IBS and Prosys.

TIAA and Kim reached a settlement, and the court entered Judgment pursuant to the parties’ settlement on December 22, 2021.

Merits

“(1) The court shall, upon timely application, permit a nonparty to intervene in the action or proceeding if either of the following conditions is satisfied: (A) A provision of law confers an unconditional right to intervene. (B) The person seeking intervention claims an interest relating to the property or transaction that is the subject of the action and that person is so situated that the disposition of the action may impair or impede that person’s ability to protect that interest, unless that person’s interest is adequately represented by one or more of the existing parties. (2) The court may, upon timely application, permit a nonparty to intervene in the action or proceeding if the person has an interest in the matter in litigation, or in the success of either of the parties, or an interest against both.” (CCP § 387(d).)

Intervenor contends it is entitled to mandatory and permissive intervention. Under both provisions, the motion must be made “upon timely application.”

“Timeliness is measured from ‘the date the proposed interveners knew or should have known their interests in the litigation were not being adequately represented.’” (Lofton v. Wells Fargo Home Mortgage (2018) 27 Cal.App.5th 1001, 1013, quoting Ziani Homeowners Assn. v. Brookfield Ziani LLC (2015) 243 Cal.App.4th 274, 282.) Generally, an insurer may properly intervene where the insurer has not denied coverage nor refused to provide a defense. (Reliance
Ins. Co. v. Super. Ct. (2000) 84 Cal.App.4th 383, 386–387; W. Heritage Ins. Co. v. Super. Ct. (2011) 199 Cal. App. 4th 1196, 1205.) In cases of timely intervention, the intervening insurer would be entitled to litigate liability and damages issues that their insureds are barred from litigating. (Western Heritage Ins. Co. v. Superior Court (2011) 199 Cal.App.4th 1196, 1207-08.)

After final judgment, intervention cannot be allowed. (Laugenour v. Shanklin (1880) 57 Cal. 70; Carey v. Brown (1881) 58 Cal. 180; Cunningham v. Shanklin (1882) 60 Cal. 118; Owens v. Colgan (1893) 97 Cal. 454; Braun v. Brown (1939) 13 Cal. 2d 130.) A claimant of interest with knowledge of a pending action may not await the outcome and, if unfavorable, come in and move to vacate the judgment and order a retrial with leave to intervene. (Mack v. Eummelen (1916) 31 Cal. App. 506.)

Mesa relies on Western Heritage Ins. Co. v. Superior Court (2011) 199 Cal.App.4th 1196, 1210 for the proposition that its motion to intervene is timely even when a default had been entered on behalf of its insured.

However, Western Heritage involved a situation where Western Heritage had already been providing a defense to not only the insured, but also to the employee who negligently caused the accident. During pretrial proceedings, the employee failed to provide discovery or appear for her deposition, which resulted in a default entered against her. The issue in Western Heritage was not whether its application was timely. The court found that the application was timely. The issue there was whether Western Heritage was bound by the employee’s procedural default.

Western Heritage noted, “Clearly, if there are no other parties still litigating the action, an insurer cannot intervene in an action after a default judgment has been entered against its insured, as there will be no pending action in which to intervene. In contrast, if the action is still pending against a party which may be jointly liable with the defaulting insured, it is improper to enter judgment against the defaulting defendant while the action remains pending against the other defendant. [citation omitted.] Thus, intervention would be possible.” (W. Heritage, supra, 199 Cal.App.4th at 1210, n. 18.)

There are no other parties still litigating this action, and there is no pending action in which to intervene. Default judgment was entered against IBS on May 17, 2018, and final judgment was entered on December 22, 2021.

Accordingly, the motion appears to be untimely.

However, the court notes that in Johnson v. Hayes Cal Builders, Inc. (1963) 60 Cal. 2d 572, intervention was deemed timely after default judgment had been entered against defendant where intervener asserted invalidity of default judgment on its face and thus questioned authenticity of default hearing and placed in issue whether valid default hearing actually occurred.

The court requests further briefing on the issue of timeliness when there are no pending claims or parties litigating the action, but where a default is asserted to be void on its face.

Further, the motion to set aside default is not before this court, and the court has not made any determination regarding the validity of the default judgment.

Finally, Intervenor’s motion to intervene is not supported by any declaration. The motion references Joanne McGovern’s declaration, but no such declaration was attached.

Accordingly, the motion is CONTINUED to Tuesday, August 30, 2022 at 1:30 pm in Dept. C.

The court will hear from Mesa regarding whether it intends to file the proposed motion to set aside the default and hear both motions on the same continued hearing date. If so, Mesa is ordered to pay the appropriate filing fees. The court notes that TIAA has already filed an Opposition. Mesa’ Reply is due per Code.

Both parties are to file supplemental briefs (no longer than three pages) by August 16, 2022 regarding the limited issue of timeliness when there are no pending claims or parties litigating the action, but where a default is asserted to be void on its face.