Judge Peter A. Hernandez, Case Number: 21STCV21298, Date: 2024-09-04 Tentative Ruling

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The Motion for Leave to File First Amended Complaint is GRANTED. State Farm is granted fourteen days leave to file its proposed First Amended Complaint.

On June 8, 2021, Lisa Labrador, Luis Labrador, Shelby Lane, Maryam Motamed, Candace Saville, Emilee Saville, Kirsten Renner (erroneously sued as “Kristen Renner”), and Sophia Wilson (“the Labrador Parties”) filed their Complaint (“Labrador Complaint”) against Windrose Place, LLC, Cathy O’Conner, Marty Matyseck, and Alan Matyseck on a cause of action for negligence. The Labrador Complaint was assigned Case No. 21STCV21298.

On August 25, 2021, Cathy O’Conner and Windrose Place, LLC filed their Answer to the Labrador Complaint.

On August 27, 2021, Mary Matyseck and Alan Matyseck (“the Matysecks”) filed their Answer to the Labrador Complaint.

On May 17, 2022, State Farm General Insurance Company (“State Farm”) filed its Subrogation Complaint (“State Farm Complaint”) against the Matysecks, Shenzhen Unit Pack Power Co. Ltd, DHGate.com, and Wilson Industry I, LLC on causes of action for negligence, breach of contract, and strict products liability. The State Farm Complaint was assigned Case No. 22AHCV00281.

On June 20, 2022, Wilson Industry I, LLC filed: (1) Answer to the State Farm Complaint; and (2) Cross-Complaint (“Wilson Cross-Complaint”) solely against Does 1 to 25.

On August 1, 2022, the Matysecks filed their Answer to the State Farm Complaint.

On September 8, 2022, the Labrador Parties filed their Complaint in Intervention (“Labrador Intervening Complaint”) against the Matysecks, Shenzhen Unit Pack Power Company, Ltd., DHGate.com, and Wilson Industry I, LLC.

On October 7, 2022, the Matysecks filed: (1) Answer to the Labrador Intervening Complaint; and (2) Cross-Complaint (“Matyseck Cross-Complaint”) against Windrose Place, LLC, Cathy O’Conner, Shenzhen Unit Pack Power Company, Ltd., DHGate.com, and Wilson Industry I, LLC.

On November 3, 2022, the Court found related cases 21STCV21298 and 22AHCV00281, and designated 21STCV21298 as the lead case.

On November 29, 2022, State Farm amended the State Farm Complaint to substitute Does 1 and 2 with Win.It America, Inc. and WinIt America Trade Company Limited, respectively.

On December 5, 2022, the Matysecks amended the Matyseck Cross-Complaint to substitute Roes 1 and 2 with Win.It America, Inc. and WinIt America Trade Company Limited, respectively.

On December 7, 2022, Wilson Industry I, LLC filed its Answer to the Matyseck Cross-Complaint.

On December 7, 2022, Wilson Industry I, LLC amended the Wilson Cross-Complaint to substitute Does 1 and 2 with Mary Matyseck and Alan Matyseck, respectively.

On December 8, 2022, the Labrador Parties amended the Labrador Intervening Complaint to substitute Does 1 and 2 with Win.It America, Inc. and WinIt America Trade Company Limited, respectively.

On January 17, 2023, Windrose Place, LLC filed: (1) Answer to the Matyseck Cross-Complaint; and (2) Cross-Complaint (“Windrose Cross-Complaint”) against Wilson Industry I, LLC, Win.It America, Inc., DHGate.com, and Shenzhen Unit Pack Power Co., Ltd.

On April 3, 2023, Win.It America, Inc. and WinIt America Trade Company Limited filed: (1) Answer to the State Farm Complaint; and (2) Cross-Complaint (“Win.It Cross-Complaint”) against Wilson Industry I, LLC, Windrose Place, LLC, Cathy O’Conner, Shenzhen Unit Pack Power Co., Ltd., the Matysecks, and DHGate.com.

On April 5, 2023, by request of the Labrador Parties, the Clerk’s Office dismissed without prejudice Wilson Industry I, LLC from the Labrador Intervening Complaint.

On April 5, 2023, by request of State Farm, the Clerk’s Office dismissed without prejudice Wilson Industry I, LLC from the State Farm Complaint.

On April 5, 2023, Windrose Place, LLC amended the Windrose Cross-Complaint to substitute Zoe 1 with WinIt America Trade Company Limited.

On April 24, 2023, by request of Windrose Place, LLC, the Clerk’s Office dismissed without prejudice Wilson Industry I, LLC from the Windrose Cross-Complaint.

On April 27, 2023, by request of the Matysecks, the Clerk’s Office dismissed without prejudice Wilson Industry I, LLC from the Matyseck Cross-Complaint.

On May 17, 2023, Win.It America, Inc. and WinIt America Trade Company Limited filed their Answer to the Windrose Cross-Complaint.

On May 31, 2023, the Matysecks filed their Answer to the Win.It Cross-Complaint.

On May 31, 2023, Win.It America, Inc. and WinIt America Trade Company Limited filed their Answer to the Matyseck Cross-Complaint.

On June 30, 2023, Win.It America, Inc. and WinIt America Trade Company Limited filed their Answer to the Labrador Intervening Complaint.

On July 25, 2023, Win.It America, Inc. and WinIt America Trade Company Limited amended the Win.It Cross-Complaint to substitute Does 1 and 2 with Shiji Fuxuan Technology Development (Beijing) Limited and Digitrading Hongkong Limited, respectively.

On March 1, 2024, Win.It America, Inc. and WinIt America Trade Company Limited amended the Win.It Cross-Complaint to substitute Roes 3 and 4 with Heguang International Group Limited and Heguang International, LLC, respectively.

On April 10, 2024, Win.It America, Inc. and WinIt America Trade Company Limited filed their Notice of Errata, indicating that they inadvertently included Wilson Industry I, LLC among the Cross-Defendants in the Win.It Cross-Complaint.

On April 23, 2024, Win.It America, Inc. and WinIt America Trade Company Limited filed their Motion for Summary Judgment/Adjudication (“Win.It-Labrador MSJ”) regarding the Labrador Intervening Complaint, the Matyseck Cross-Complaint, and the Windrose Cross-Complaint. In support of the Win.It-Labrador MSJ, they concurrently filed: (1) Evidence; and (2) Separate Statement.

On April 23, 2024, Win.It America, Inc. and WinIt America Trade Company Limited filed their Motion for Summary Judgment/Summary Adjudication (“Win.It-State Farm MSJ”) regarding the State Farm Complaint. In support of the Win.It-State Farm MSJ, they concurrently filed: (1) Evidence; and (2) Separate Statement.

On April 30, 2024, by request of State Farm, the Clerk’s Office dismissed without prejudice WinIt America Trade Company Limited from the State Farm Complaint.

On June 11, 2024, State Farm filed its Motion for Leave to File First Amended Complaint. State Farm concurrently filed its Proposed Order.

On June 18, 2024, State Farm filed its Opposition to the Win.It-State Farm MSJ (“State Farm Opposition”). State Farm concurrently filed: (1) Declaration of Dominic J. Fiore; (2) Separate Statement; (3) Objections to Evidence; and (4) Proposed Order Re: Objections to Evidence. On June 21, 2024, State Farm filed its Compendium of Evidence.

On June 21, 2024, the Matysecks filed their Opposition to the Win.It-Labrador MSJ (“Matyseck Opposition”). They concurrently filed: (1) Notice of Joinder to State Farm Opposition; and (2) Separate Statement.

On June 21, 2024, Windrose Place, LLC filed its Notice of Joinder to Matyseck Opposition.

On June 21, 2024, the Labrador Parties filed their Notice of Joinder to State Farm Opposition.

On June 24, 2024, the Labrador Parties filed their Opposition to the Win.It-Labrador MSJ (“Labrador Opposition”). The Labrador Plaintiffs concurrently filed their Response to Separate Statement.

On June 26, 2024, by request of the Matysecks, the Clerk’s Office dismissed without prejudice WinIt America Trade Company Limited from the Matyseck Cross-Complaint.

On June 28, 2024, the Matysecks filed their Motion for Determination of Good Faith Settlement. They concurrently filed their Proposed Order.

On July 1, 2024, by request of Windrose Place, LLC, the Clerk’s Office dismissed without prejudice WinIt America Trade Company Limited from the Windrose Cross-Complaint.

On July 3, 2024, by request of the Matysecks, the Clerk’s Office dismissed Cathy O’Conner from the Matyseck Cross-Complaint.

On July 3, 2024, Win.It America, Inc. (“Win.It”) filed its Reply to All Oppositions to Motion for Summary Judgment/Adjudication (“Win.It Reply”). Win.It concurrently filed: (1) Evidentiary Objections to Lyle A. River’s Declaration; (2) Evidentiary Objections to Evidence Supporting State Farm’s Opposition; (3) Response to State Farm’s Opposition to Separate Statement; (4) Response to the Matysecks’ Opposition to Separate Statement; and (5) Reply to the Labrador Parties’ Response to Separate Statement.

“Any party to an action in which it is alleged that two or more parties are joint tortfeasors or co-obligors on a contract debt shall be entitled to a hearing on the issue of the good faith of a settlement entered into by the plaintiff or other claimant and one or more alleged tortfeasors or co-obligors, upon giving notice in the manner provided in subdivision (b) of Section 1005.” (Code Civ. Proc., § 877.6, subd. (a)(1).)

“In the alternative, a settling party may give notice of settlement to all parties and to the court, together with an application for determination of good faith settlement and a proposed order.” (Code Civ. Proc., § 877.6, subd. (a)(2).)

“The issue of the good faith of a settlement may be determined by the court on the basis of affidavits served with the notice of hearing, and any counteraffidavits filed in response, or the court may, in its discretion, receive other evidence at the hearing.” (Code Civ. Proc., § 877.6, subd. (b).)

The Matysecks move the Court to: (1) find that the settlement entered among the Matysecks, the Labrador Parties, and State Farm was made in good faith; and (2) enter their Proposed Order, which bars all present and future claims from continuing or being brought against the Matysecks for equitable comparative contribution or partial or comparative indemnity based on comparative negligence or comparative fault. (Motion for Determination of Good Faith Settlement, p. 10:13–18.)

Among other things, Counsel for the Matysecks declares: (1) that the Labrador Parties and State Farm are the only parties making affirmative causes of action against the Matysecks, as the remaining parties only seek indemnity against the Matysecks; (2) that the Matysecks have total insurance policy coverage of $100,000.00; (3) that the Matysecks’ other assets are essentially limited to Mary Matyseck’s Social Security checks; (4) that just State Farm’s claimed damages are $3,080,936.77, with the fire damages being estimated at over $500,000.00; (5) that the Matysecks are making a global settlement offer for their $100,000.00 policy limit; and (6) that the settlement offer was accepted and reached through arm’s length negotiations through counsel. (Motion for Determination of Good Faith Settlement, Decl. River, ¶¶ 11, 13–18, 20, 22, 24–25.)

The Court does not have any evidence that would indicate the settlement was not entered into in good faith. Rather, all of the evidence indicates that the settlement was entered into in good faith.

The Court finds that the settlement was entered into good faith. (Code Civ. Proc, § 877.6, subd. (b).)

State Farm filed evidentiary objections to the evidence of Win.It. The following are the Court’s rulings on these objections.

Objection	SUSTAINED	OVERRULED
1		OVERRULED
2		OVERRULED
3		OVERRULED
4		OVERRULED
5		OVERRULED

Win.It filed evidentiary objections to the evidence of State Farm. The following are the Court’s rulings on these objections.

Objection	SUSTAINED	OVERRULED
1		OVERRULED
2		OVERRULED
3		OVERRULED
4		OVERRULED
5		OVERRULED
6		OVERRULED
7		OVERRULED
8		OVERRULED
9		OVERRULED
10		OVERRULED
11		OVERRULED
12		OVERRULED
13		OVERRULED

“A party may move for summary judgment in an action or proceeding if it is contended that the action has no merit or that there is no defense to the action or proceeding. The motion may be made at any time after 60 days have elapsed since the general appearance in the action or proceeding of each party against whom the motion is directed or at any earlier time after the general appearance that the court, with or without notice and upon good cause shown, may direct.” (Code Civ. Proc., § 437c, subd. (1)(a).)

“[T]he party moving for summary judgment bears the burden of persuasion that there is no triable issue of fact and that he is entitled to judgment as a matter of law. That is because of the general principle that a party who seeks a court’s action in his favor bears the burden of persuasion thereon. There is a triable issue of material fact if, and only if, the evidence would allow a reasonable trier of fact to find the underlying fact in favor of the party opposing the motion in accordance with the applicable standard of proof.” (Aguilar v. Atl. Richfield Co. (2001) 25 Cal.4th 826, 850, citation omitted.)

“[T]he party moving for summary judgment bears an initial burden of production to make a prima facie showing of the nonexistence of any triable issue of material fact; if he carries his burden of production, he causes a shift, and the opposing party is then subjected to a burden of production of his own to make a prima facie showing of the existence of a triable issue of material fact.” (Aguilar, supra, at p. 850; Smith v. Wells Fargo Bank, N.A. (2005) 135 Cal.App.4th 1463, 1474, [applying the summary judgment standards in Aguilar to motions for summary adjudication].)

“On a summary judgment motion, the court must therefore consider what inferences favoring the opposing party a factfinder could reasonably draw from the evidence. While viewing the evidence in this manner, the court must bear in mind that its primary function is to identify issues rather than to determine issues. Only when the inferences are indisputable may the court decide the issues as a matter of law. If the evidence is in conflict, the factual issues must be resolved by trial.” (Binder v. Aetna Life Ins. Co. (1999) 75 Cal.App.4th 832, 839, citation omitted.)

“The trial court may not weigh the evidence in the manner of a fact finder to determine whose version is more likely true. Nor may the trial court grant summary judgment based on the court's evaluation of credibility.” (Binder, supra, at p. 840, citations omitted; see also Weiss v. People ex rel. Dep’t of Transp. (2020) 9 Cal.5th 840, 864 [“Courts deciding motions for summary judgment or summary adjudication may not weigh the evidence but must instead view it in the light most favorable to the opposing party and draw all reasonable inferences in favor of that party”].)

“On a motion for summary adjudication, the trial court has no discretion to exercise. If a triable issue of material fact exists as to the challenged causes of action, the motion must be denied. If there is no triable issue of fact, the motion must be granted.” (Fisherman's Wharf Bay Cruise Corp. v. Super. Ct. (2003) 114 Cal.App.4th 309, 320, citation omitted.)

Win.It (also called “WIN.IT America” in the relevant papers) moves the Court to grant summary judgment in its favor on the State Farm Complaint. (Win.It-State Farm MSJ, p. 2:1–6.) (The other party bringing this motion was recently dismissed from the State farm Complaint; arguments made in the initial motion only as to that party will be omitted below.)

Win.It argues that it is entitled to summary judgment because: (1) Win.It never had any connection with the subject motor, battery pack, or charger; (2) even assuming that Win.It did warehouse or arrange shipping of the subject motor, battery pack, or charger, the negligence claim would still fail because Win.It did not have notice of or opportunity to mitigate any purported defect in those products; (3) even assuming that Win.It did warehouse and arrange delivery of the subject products, the strict liability claim would still fail because those acts would not make Win.It part of those products’ chain of distribution; (4) the subrogation claim must fail because State Farm cannot establish that its equities are superior to Win.It’s equities; and (5) no act or omission on Win.It’s part contributed in any way to the subject fire. (Win.It-State Farm MSJ, pp. 14:17–18, 15:3–6, 16:6–9, 17:22–24, 21:21–23.)

State Farm disagrees, arguing: (1) that Win.It was a direct link in the vertical chain of distribution under strict products liability; (2) that Win.It is strictly liable under the stream of commerce approach to strict products liability; (3) that notice is not required to prove negligence; (4) that State Farm’s subrogation claim is warranted under equitable subrogation; and (5) that summary judgment is not warranted here because a genuine dispute to material fact exists for causation. (State Farm Opp’n, pp. 5:1–2, 8:21–22, 13:20, 14:21, 18:1–2.)

In its Reply, Win.It reiterates its arguments. Win.It also requests that the Court enter summary judgment in favor of Win.It America Trade Company Limited, claiming that State Farm is attempting to evade summary judgment by dismissing the action. (Reply, p. 10:1–16.)

All of Win.It’s arguments involve triable issues of material fact. Put differently, Win.It meets its initial burden by claiming that there are no facts that demonstrate it is liable, but State Farm meets its subsequent burden by showing that there are multiple triable issues of material facts, including but not limited to: (1) whether Win.It did have a connection to products that started the subject fire; (2) whether Win.It had notice or opportunity to mitigate purported defects in those products; (3) whether Win.It was part of those products’ chain of distribution; (4) what are the facts that will be considered for a consideration of the relative equities; and (5) whether any act or omission on Win.It’s part contributed in any way to the subject fire.

Neither summary judgment nor summary adjudication are appropriate as to the State Farm Complaint.

Win.It filed evidentiary objections to a declaration filed in support of the Matysecks’ Opposition. However, the Matysecks have since settled all affirmative claims in this matter pursuant to Code of Civil Procedure section 877.6. (See supra at Section II.B–C.) Thus, all of these evidentiary objections are immaterial to disposition of the motion and therefore need not be ruled on. (Code Civ. Proc., § 437c, subd. (q).)

The same legal standard applies here as with the Win.It-State Farm MSJ. (See supra at Section III.B.)

Win.It makes essentially the same arguments in the Win.It-Labrador MSJ (and the associated Reply) as it made in the Win.It-State Farm MSJ. (Win.It-Labrador MSJ, pp. 17:22–23, 18:9–13, 19:18–21, 21:10–13, 21:24–26; Reply, pp. p. 10:1–16.)

Notably, all of the opposing parties at issue — the Matysecks, the Labrador Parties, and Windrose Place, LLC — filed joinders, either directly to the State Farm Opposition or to the Matyseck Opposition (which had itself been joined to the State Farm Opposition).

The same analysis discussed as to the Win.It-State Farm MSJ is adopted here as to the Win.It-Labrador MSJ.

“Where the reason is the same, the rule should be the same.” (Civ. Code, § 3511.)

“The court may, in furtherance of justice, and on any terms as may be proper, allow a party to amend any pleading or proceeding by adding or striking out the name of any party, or by correcting a mistake in the name of a party, or a mistake in any other respect; and may, upon like terms, enlarge the time for answer or demurrer. The court may likewise, in its discretion, after notice to the adverse party, allow, upon any terms as may be just, an amendment to any pleading or proceeding in other particulars; and may upon like terms allow an answer to be made after the time limited by this code.” (Code Civ. Proc., § 473, subd. (a)(1).)

“Any judge, at any time before or after commencement of trial, in the furtherance of justice, and upon such terms as may be proper, may allow the amendment of any pleading or pretrial conference order.” (Code Civ. Proc., § 576.)

“A motion to amend a pleading before trial must: (1) Include a copy of the proposed amendment or amended pleading, which must be serially numbered to differentiate it from previous pleadings or amendments; (2) State what allegations in the previous pleading are proposed to be deleted, if any, and where, by page, paragraph, and line number, the deleted allegations are located; and (3) State what allegations are proposed to be added to the previous pleading, if any, and where, by page, paragraph, and line number, the additional allegations are located.” (Cal. Rules of Court, rule 3.1324(a).)

“A separate declaration must accompany the motion and must specify: (1) The effect of the amendment; (2) Why the amendment is necessary and proper; (3) When the facts giving rise to the amended allegations were discovered; and (4) The reason why the request for amendment was not made earlier.” (Cal. Rules of Court, rule 3.1324(b).)

“This discretion should be exercised liberally in favor of amendments, for judicial policy favors resolution of all disputed matters in the same lawsuit.” (Kittredge Sports Co. v. Super. Ct. (1989) 213 Cal.App.3d 1045, 1047.)

Leave to amend is thus liberally granted, provided there is no statute of limitations concern. (Kolani v. Gluska (1998) 64 Cal.App.4th 402, 411.) The Court may deny the plaintiff’s leave to amend if there is prejudice to the opposing party, such as delay in trial, loss of critical evidence, or added costs of preparation. (Ibid.)

State Farm moves for leave to file its proposed First Amended Complaint. (Motion for Leave to File First Amended Complaint, p. 7:22–23.) State Farm has complied with California Rules of Court, rule 3.1324(b), and it does not appear that there is a significant risk of prejudice to any other party by allowing the proposed amendment. (Ibid.: App’x of Proposed Changes; Decl. Letofsky, ¶¶ 3–6, 10; Exhs. A–C.)

The Motion for Leave to File First Amended Complaint is GRANTED. State Farm is granted fourteen days leave to file its proposed First Amended Complaint.