TENTATIVE RULING  

Calendar: 1 

Date:    8/5/2022         

Case No:      19 GDCV00388

Case Name: Canales v. Ideal Kitchen Supply, Inc., et al. 

                                                          MOTION FOR ATTORNEYS FEES

Moving Party: Defendants Norik Barseghian and Rita Gharibians   

Responding Party: Plaintiff Ricardo Canales   

RELIEF REQUESTED:

Award of attorneys’ fees in the sum of $93,195 against plaintiff Ricardo Canales individually and as Trustee of the Canales Family 1987 Trust 

SUMMARY OF FACTS:

This action was originally brought as an unlawful detainer action brought by plaintiff Ricardo Canales alleging that he is the landlord of premises in Glendale, and that defendant Ideal Kitchen Supply, Inc. entered into a written agreement with plaintiff to rent the premises for a fixed term, was served with a 3-day notice to pay rent or quit and failed to comply with the requirements of the notice by the required date. 

On May 28, 2019, the matter was called for a jury trial, final status conference and motion for summary judgment/adjudication filed by plaintiff Ricardo Canales as against defendant Ideal Kitchen Supply.  

The motion for summary judgment/adjudication was denied as it related to damages.  The court granted summary judgment as to the breach of the lease as to certain clauses, as follows:

“Court now GRANTS Summary Judgment as to breach of the lease as to the clauses concerning subletting and transfer business to new owner. Pursuant to Paragraph 12.1(a) and (b) of the lease, both require prior written consent of the landlord.  The facts are undisputed that Defendant’s did not obtain prior written consent of plaintiff, the landlord, for either the subletting of the premises, or of the transfer of ownership of the defendant’s businesses to the new owners. See Canales Declaration Paragraph 6; Exhibit A, Paragraph 12.1(a) and Paragraph 12.1(b). Pursuant to Paragraph 12.1(d), subletting or assignment without the lessor (Plaintiff’s) consent is a default per Paragraph 13.1(d) and is non-curable at the landlords’s election.  Id. Paragraph 10; Exhibit A, Paragraph 12.1(d); Paragraph 13.1(d). Plaintiff also has a 3-day Notice to Vacate premises based on subletting and assigning the premises without lessor’s prior written consent, in violation of the above referenced provisions of the lease. Toproff Declaration Paragraph 3: Exhibit, B. Landlord has elected to treat this breach as non-curable. Canales Declaration Paragraph 10.

The minute order also states: “Pursuant to an oral stipulation by Counsel, Defendant will turn over possession of the property by turning over the keys to the subject property by Friday.” 

On May 31, 2019, at an OSC re Entry of Judgment, counsel for defendant turned over the keys to counsel for plaintiff in open court, which counsel for plaintiff represented would be accepted on condition that defendant had vacated the premises and removed all other occupants. The court’s minute order states, “In the event that there are other unnamed occupants, Plaintiff may upon ex parte application restore Motion for Summary Judgment to calendar and Judgment in favor of Plaintiff to be Granted.”  It does not appear from the file that a judgment has been entered or notice of entry of judgment served.  

On June 27, 2019, plaintiff filed a First Amended Complaint for breach of lease agreement, alleging that defendant Ideal Kitchen Supply breached the commercial lease agreement by failing to pay appropriate rental amounts and other charges, failing to obtain and provide proof of proper insurance, holding over after the three-day notice, failing to maintain and repair the premises, and vacating the premises prior to the expiration of the lease.  

The FAC also alleges that defendants Norik Barseghian and Rita Gharibians executed a written guaranty of the lease pursuant to which they guaranteed defendant Ideal Kitchen Supply’s prompt performance of the Lease Agreement obligations to Plaintiff.  

Defendant Ideal Kitchen Supply filed a cross-complaint against plaintiff Canales as a cross-defendant, as well as against cross-defendants Hudson Commercial Partners, Inc., a real estate broker, and real estate agents Kelly Betpolice and Peter Steigleder, alleging that cross-defendants understood that when cross-complainant Ideal Kitchen Supply entered into the lease a major consideration for inducing Ideal to enter into the lease was Canales’ consent to permit the subletting of a portion of the premises to Global Packaging, Inc. for occupancy of approximately 50% of Ideal’s monthly base rent.   It is also alleged that cross-defendants failed to disclose and suppressed facts concerning the premises having major issues with hazardous materials and toxic gases, and other defects, including that the building, roof, skylights and other areas allow water to deluge the premises when it rains.  It is alleged that if Ideal had known of these conditions, it would not have entered into the lease, that these issues were not discovered until months into the lease, and that cross-complainant has been damaged by the conduct of cross-defendants.  The cross-complaint alleges causes of action for suppression of facts, rescission, negligent misrepresentation of fact, nuisance, breach of contract, breach of covenant of good faith and fair dealing, and breach of fiduciary duty.

The file shows that on April 14, 2022, at the Final Status Conference in this matter, the court noted there was no appearance by or for the defendant, conferred with counsel for plaintiff regarding the FSC as well an OSC re: Corrected Jury Instruction, and an OSC re: Revival of Suspended Corporate Defendant Ideal Kitchen Supply, Inc., and ruled, “The answer is stricken, and the cross-complaint is dismissed.”  

On April 18, 2022, the matter was called for trial. The minute order from that date indicates the court ruled on motions in limine, and further ruled:

“The Court makes a ruling on its own motion based on the pleadings pursuant to CCP 438 (a)(2) and 438 (c)(ii) and is therefor dismissing the defendants Norik Barseghian and Rita Gharibians.

The Court finds the guaranty was not signed by any of these defendants. The guaranty is not part of the lease or any of the addendums.  Norik Barseghian and Rita Gharibians were not named as defendants on in the original unlawful detainer. The Court is not making a finding as to whether or not the guaranty is enforceable as a stand-alone document. 

Plaintiff counsel is to submit a dismissal as to Norik Barseghian and Rita Gharibians with prejudice. 

The Court to signs [sic] the proposed order as it deals with Ideal kitchen re: default prove-up 

The Court proceeded [sic] with the Non-Jury trial as a default prove-up.”

The default prove up was conducted, the witness and admitted exhibits were listed, and the court further ruled:

“Judgment is to be entered for Plaintiff Ricardo Canales, an individual against Defendant Ideal Kitchen Supply, Inc., a California Corporation on the Amended Complaint (1st) filed by Ricardo Canales, an individual on 06/27/2019 for past rent due in the amount of $748,241.00 and interest of $52,326.00 for a total of $800,567.00. 

Plaintiff counsel is to prepare judgment after hearing.”

[Minute Order 4/18/22].

On April 19, 2022, plaintiff filed a Request for Dismissal, requesting dismissal of the action without prejudice as to Norik Barseghian and Rita Gharibians only.  The dismissal was entered as requested the same date. 

On April 20, 2022, defendants Barseghian and Gharibians filed an Objection to Plaintiff’s Request for Dismissal, arguing that plaintiff lost his right to voluntarily dismiss the action against those defendants without prejudice upon the court announcing its decision to adopt its tentative ruling on defendants’ Motion in Limine No. 1 and after the commencement of trial.   

On April 21, 2022, the court heard an ex parte application by plaintiff for order striking proposed order and minute order.  The court granted the ex parte application, and ordered:

“The Court corrects its minute order of April 18, 2022 nunc pro tunc and pursuant to CCP section 473(d) as a clerical error as follows:

The Court does not rule on Defendant’s Motion in Limine #1 but announced a tentative ruling to grant this motion.  The Court does not adopt its tentative ruling as a final ruling and does not enter any ruling on Defendant’s Motion in Limine #1.  

Plaintiff dismisses without prejudice defendants Norik Barseghian and Rita Gharibians. 

The Court proceeds with the Non-Jury Trial as a default prove-up.”

[Minute Order, 4/21/22]. 

 

On May 23, 2022, the court signed and filed as its order an Order re Notice of Errata, ordering that the FAC filed in this action is deemed amended to identify Plaintiff Ricardo Canales in his capacity as the trustee of the Canales Family 1987 Trust rather than as an individual.  

On June 15, 2022, the court signed and filed the Judgment by the court after court trial, indicating defendant did not appear at trial, and entering judgment for plaintiff Canales as trustee and against defendant Ideal Kitchen Supply, Inc. in the total sum of $800,567.00, with attorney fees to be awarded “per motion,” and costs awarded “per memo.”  

ANALYSIS:

Defendants Norik Barseghian and Rita Gharibians seek to recover against plaintiff the attorney’s fees they incurred in defending plaintiff’s contract claim in this action, arguing that plaintiff sought attorney’s fees under both the Lease in this action and the Guaranty, and that although the Guaranty was not executed by defendants, the Guaranty included an attorney’s fees provisions, pursuant to which if the Guaranty had been found enforceable, attorney’s fees could have been awarded against moving defendants. 

 

In general, under CCP § 102:

 

 “Except as attorney’s fees are specifically provided for by statute, the measure and mode of compensation of attorneys and counselors at law is left to the agreement, express or implied, of the parties...”

Under CPC section 1032(b), “a prevailing party is entitled as a matter of right to recover costs in any action or proceeding.”  Section 1033.5 (a) provides that an allowable cost under §1032 includes attorney’s fees, when authorized by contract, statute or law.  CCP § 1033.5 (a)(10).    

Where there is an agreement for attorney’s fees, Civil Code 1717 provides: 

“(a) In an action on a contract, where the contract specifically provides that attorney’s fees and costs, which are incurred to enforce that contract, shall be awarded either to one of the parties or to the prevailing party, then the party who is determined to be the party prevailing on the contract, whether he or she is the party specified in the contract or not, shall be entitled to reasonable attorney’s fees in addition to other costs. ...Reasonable attorney’s fees shall be fixed by the court and shall be an element of the costs of suit.”

CCP § 1032 defines “prevailing party”:

“(4) “Prevailing party” includes the party with a net monetary recovery, a defendant in whose favor a dismissal is entered, a defendant where neither plaintiff nor defendant obtains relief, and a defendant as against those plaintiffs who do not recover any relief against that defendant.  When any party recovers other than monetary relief and in situations other than as specified, the “prevailing party’ shall be as determined by the court, and under those circumstances, the court, in its discretion, may allow costs or not and, if allowed may apportion costs between the parties on the same or adverse sides...”

(Emphasis added). 

Here, defendants argue that since they are parties in whose favor a dismissal was entered, they are the prevailing parties in this action. 

The Guaranty upon which plaintiff based the action against the moving defendant includes an attorney’s fees provision:

“In the event any action be brought by said Lessor against Guarantors hereunder to enforce the obligation of Guarantors hereunder, unsuccessful party in such action shall pay to the prevailing party therein a reasonable attorney’s fee.  The attorney’s fee award shall not be computed in accordance with any court fee schedule, but shall be such as to full reimburse [sic] all attorneys’ fees reasonably incurred.” 

[Ex. 1, p.  000021].

The Lease Agreement also includes a provision stating, in pertinent part:

“31. Attorneys' Fees. If any Party or Broker brings an action or proceeding involving the Premises whether founded in tort, contract or equity, or to declare rights hereunder, the Prevailing Party (as hereafter defined) in any such proceeding, action, or appeal thereon, shall be entitled to reasonable attorneys' fees. Such fees may be awarded in the same suit or recovered in a separate suit, whether or not such action or proceeding is pursued to decision or judgment. The term, "Prevailing Party" shall include, without limitation, a Party or Broker who substantially obtains or defeats the relief sought, as the case may be, whether by compromise, settlement, judgment, or the abandonment by the other Party or Broker of its claim or defense. The attorneys' fees award shall not be computed in accordance with any court fee schedule, but shall be such as to fully reimburse all attorneys' fees reasonably incurred.”

[Ex. 1, p. 000013, para. 31].  

Defendants argue that they are entitled to fees under these provisions due to the reciprocity provisions of Civil Code section 1717 even if the subject Guaranty is inapplicable, invalid, or unenforceable, if the other party would have been entitled to fees had the other side prevailed.  See Santisas v. Goodwin (1998) 17 Cal.4th 599, 617 (“it has been consistently held that when a party litigant prevails in an action on a contract by establishing that the contract is invalid, inapplicable, unenforceable, or nonexistent, section 1717 permits that party’s recovery of attorney fees whenever opposing parties would have been entitled to attorney fees under the contract had they prevailed.”); M. Perez Co., Inc. v. Base Camp Condominiums Association No. One (2003) 111 Cal.App.4th 456, 467 (“courts have recognized a right of the defendant to recover attorney fees even if defendant proves there was no contract, in order to further the purposes of Civil Code section 1717.”).   

Defendants recognize that the action as to moving defendants was actually dismissed based on a Request for Dismissal filed by plaintiff, pursuant to which dismissal was entered “without prejudice” as to moving parties.  As noted above, the file shows the Request for Dismissal was filed on April 19, 2022, requesting dismissal of the action without prejudice as to 

Norik Barseghian and Rita Gharibians only.  The dismissal was entered as requested the same date.

 The matter accordingly appears to be governed by Civil Code section 1717(b), in which it is expressly stated:

"(2) Where an action has been voluntarily dismissed or dismissed pursuant to a settlement of the case, there shall be no prevailing party for purposes of this section."

Defendants argue that the dismissal by plaintiff here does not make this an action which has been “voluntarily dismissed.”  

Defendants argue that this is instead a case where plaintiff involuntarily dismissed the moving defendants, in reliance on case law under which it is held that a plaintiff’s right to voluntarily dismiss an action before trial is not absolute, but exceptions arise where an action has proceeded to determinative adjudication or to a decision that is tantamount to an adjudication.   Bank of America, N.A. v. Mitchell (2012) 204 Cal.App.4th 1199, 1209-1210.  

Defendants argue that plaintiff lost his right to voluntarily dismiss the action, without prejudice, upon the court announcing its tentative decision to grant defendants’ Motion in Limine No. 1, which sought to exclude all evidence on the execution of the guaranty.  Defendants argue that the motion in limine was dispositive, and that court on April 18, 2022 announced its tentative ruling, stating it would grant the motion and also enter judgment on the pleadings and dismiss the action as to moving defendants with prejudice.  Plaintiff was then provided 15 minutes to consider whether he would voluntarily dismiss his action against defendants, and plaintiff only agreed to do so in the face of the inevitable dispositive ruling, with counsel for defendants commenting to the court that, “You leave me no choice.”   

There was no court reporter at the April 18, 2022 hearing, and so no transcript available of the April 18, 2022 hearing.  Defendants rely on a transcript of the April 21, 2022 hearing, in which the court summarized what had previously occurred.  [Ex. 2, Transcript, Ex. 2, p. 4-5].  That transcript shows that the court previously rejected the argument now being made here, and stated:

“THE COURT GRANTED AN ORAL MOTION TO DISMISS WITHOUT PREJUDICE ON APRIL 18TH, AND PLAINTIFF'S COUNSEL SAID THEY WERE GOING TO FILE A REQUEST FOR DISMISSAL WITHOUT PREJUDICE AS TO THOSE TWO DEFENDANTS ANYWAY, AND THEY DID. THAT REQUEST FOR DISMISSAL WILL STAND. THE COURT IS NOT GOING TO CHANGE THAT REQUEST.”

[Ex. 2, Transcript, p. 3]. 

 Under CCP section 581 (b)(1), an action may be dismissed “upon written request of the plaintiff to the clerk,…or by oral or written request to the court at any time before the actual commencement of trial.” 

Defendants rely on CCP sections 581(a)(6) and (e).  CCP § 581 provides, in pertinent part:

 “(a)  As used in this section:…

(6)  ‘Trial.’ A trial shall be deemed to actually commence at the beginning of the opening statement or argument of any party or his or her counsel, or if there is no opening statement, then at the time of the administering of the oath or affirmation to the first witness, or the introduction of any evidence.”  

(b) An action may be dismissed in any of the following instances:

(1) With or without prejudice, upon written request of the plaintiff to the clerk, filed with papers in the case, or by oral or written request to the court at any time before the actual commencement of trial, upon payment of the costs, if any….

(c) A plaintiff may dismiss his or her complaint, or any cause of action asserted in it, in its entirety, or as to any defendant or defendants, with or without prejudice prior to the actual commencement of trial….

(e) After the actual commencement of trial, the court shall dismiss the complaint, or any causes of action asserted in it, in its entirety or as to any defendants, with prejudice, if the plaintiff requests a dismissal, unless all affected parties to the trial consent to dismissal without prejudice or by order of the court dismissing the same without prejudice on a showing of good cause….

(m) The provisions of this section shall not be deemed to be an exclusive enumeration of the court's power to dismiss an action or dismiss a complaint as to a defendant.”

Here, it appears that plaintiff made an oral request to the court to dismiss without prejudice on April 18, 2022, before the actual commencement of trial as statutorily defined.  There is no showing that this request was made after there had been an opening statement or argument, or after the administering of the oath or affirmation to the first witness, or the introduction of any evidence.  

In the transcript of the April 21, 2022 hearing, the court determined:

“THE COURT IS MAKING A SPECIFIC FINDING UNDER CCP 585(A)(6) THAT NO TRIAL BEGAN. THERE WAS NO OPENING STATEMENT AND NO WITNESS WAS SWORN.”

[Ex. 2, Transcript, p. 8]

With respect to the argument that there was argument on the motion in limine which constituted the actual commencement of trial, the court found:

“BUT IN ANY EVENT, NOR IS THIS PHRASE "OR ARGUMENT OF ANY PARTY" AS IT RELATES TO THE ISSUE OF OPENING STATEMENT, SO THE DEFENDANT, IDEAL KITCHEN, IS SAYING, "NOW, WAIT A MINUTE. THERE WAS ARGUMENT ON A MOTION IN LIMINE, SO THE TRIAL MUST HAVE STARTED UNDER CCP 581(A) SUBPART (6) BECAUSE THERE WAS ARGUMENT ON A MOTION IN LIMINE." WELL, ARGUMENT ON A MOTION IN LIMINE, IN THE COURT'S VIEW, DOES NOT START A TRIAL. IT'S NOT AN OPENING STATEMENT AND NO WITNESS HAD BEEN SWORN IN THE CASE.”

[Ex. 2, Transcript, p. 8] 

  It also appears that there was in fact no argument on the motion in limine at the hearing.   At the April 21, 2022, the court indicated that “I DON’T THINK I EVER ENTERTAINED ARGUMENT,” but stated the tentative ruling, and invited the parties to talk about it between themselves.  [Ex. 2, Transcript, p. 11].  Moreover, as set forth above, the statute expressly states that the statute is not “an exclusive enumeration of the court's power to dismiss an action or dismiss a complaint as to a defendant.”  CCP section 581(m).  It appears that defendants were voluntarily dismissed pursuant to request of plaintiff before the actual commencement of trial as permitted by statute.

Defendants argue that the concept of “commencement of trial” has been expanded so that a party loses the right to voluntarily dismiss an action “without prejudice,” in certain circumstances. 

Defendants rely on Groth Bros. Oldsmobile, Inc. v. Gallagher (2002) 97 Cal.App.4th 60, in which the court of appeal reversed an order denying a former corporate officer’s application for indemnity and remanded to the trial court, finding that the trial court had erred in concluding that it lacked jurisdiction to vacate a voluntary dismissal and rule on a pending demurrer. 

In that case, plaintiff had filed a complaint against the former corporate officer and others, alleging derivative cause of action and a conspiracy claim.   The officer answered the complaint, and then joined in a motion by the corporation to require plaintiff to post security as a prerequisite to prosecution of the derivative causes of action.  The motion was granted, and the trial order required plaintiff to post security, or, in the alternative, amend the complaint to eliminate derivative causes of action.   Plaintiff did not post security, but chose to file a First Amended Complaint, to which the officer demurred, arguing that some causes of action were not directed to defendant as an officer of the corporation, and other causes of action were derivative and so barred by the court’s previous ruling.  Plaintiff did not file an opposition to the officer’s demurrers, but instead unsuccessfully attempted to file a second amended complaint without leave of court, which the clerk rejected.  On April 18, 2000, the trial court issued a tentative ruling sustaining the officer’s demurrers without leave to amend and directing that the officer by dismissed from the action.   Plaintiff’s counsel appeared at the demurrer hearing the following, day, April 19, 2000, and advised the court that because the clerk had rejected his attempt to file a second amended complaint, plaintiff earlier that morning had filed a dismissal without prejudice of the entire action as to the officer.   Counsel for the officer objected, requesting the court to vacate the voluntary dismissal and enter a dismissal of judgment following the sustaining of the demurrers without leave to amend. The trial court concluded it lacked jurisdiction to do so as a result of the filing of the voluntary dismissal before the hearing and final determination on the merits of the demurrers.  

A consequence of this ruling was that when the officer filed a motion for an order requiring the corporation to indemnify him for defense costs pursuant to Corporations Code § 317, the trial court was compelled to deny the motion, reasoning that the voluntary dismissal did not meet the statutory requirement of “success on the merits” for purposes of triggering the mandatory indemnification provisions.  

The court of appeal reviewed case law which had held in various contexts that a plaintiff’s right to voluntary dismissal without prejudice could be cut off where a dispositive motion was pending, but before a ruling was made thereon, and concluded in connection with the case before it:

“We conclude that in these circumstances, where no opposition to a pending demurrer has been filed, where the court has made a tentative ruling against the plaintiff sustaining the demurrer without leave to amend, and where the allowance of a voluntary dismissal without prejudice during the time between issuance of the tentative ruling and the ruling becoming final would make a mockery of the tentative ruling procedure and would also frustrate the statutory scheme for indemnification of corporate officers, the court erred in concluding that it lacked jurisdiction to vacate the voluntary dismissal and in failing to grant the demurrer dismissing the action as to Gallagher with prejudice. In these circumstances, we shall reverse the order of the lower court denying mandatory indemnity to Gallagher.”

Groth Bros., at 73.

Plaintiff in opposition relies on a case in which the general case law on the subject was summarized, Franklin Capital Corp. v. Wilson (2007) 148 Cal.App.4th 187, in which the court of appeal reversed the trial court’s order dismissing an action with prejudice and directing the entry of a new order leaving the voluntarily dismissal as the operative document, in a situation where the dismissal had been entered just before an OSC hearing regarding dismissal based on plaintiff’s failure to appear at a mandatory settlement conference.  The appellate court concluded that inequity itself is not enough to defeat a voluntary dismissal, and that the dismissal must be linked somehow to the statutory requirement that the request for dismissal to be prohibited be made after the “actual commencement of trial,” so that some dispositive resolution of the matter was inevitable. The court of appeal reviewed the cases law and set forth a test for when a voluntarily dismissal could be disregarded: 

“When the dismissal could be said to have been taken

- (a)  in the light of a public and formal indication by the trial court of the  legal merits of the case, or

- (b)  in the light of some procedural dereliction by the dismissing plaintiff that made dismissal otherwise inevitable, then the voluntarily dismissal is ineffective.” 

Franklin, at 200 (italics in original).  

Here, the tentative ruling was “tentative,” and the court at the April 21, 2022 hearing made it clear that the court did not at the April 18, 2022 hearing adopt its tentative ruling as a final ruling, and that the court viewed the entire exchange at the April 18, 2022 hearing, including the oral request to dismiss the action without prejudice as to moving defendants, to have taken place before the actual commencement of trial.  Moreover, as discussed in more detail below, a disposition of the matter on its merits in favor of moving defendants was not inevitable, as the ruling on the motion in limine would not have been dispositive, and to the extent the court announced an intention to make a sua sponte motion for judgment on the pleadings, such a motion was not in fact made, and the possibility was not foreclosed that the pleading could be amended, or a separate action permitted to be filed in connection with the guaranty. 

Plaintiff argues in the opposition that defendants cannot bring this motion from the outset as plaintiff filed a request for voluntary dismissal of the action, and the court entered the dismissal, and this dismissal has not been vacated or set aside.  The file shows that by its minute order of April 21, 2022, the court clarified that its intention on April 18, 2022 was to permit plaintiff to voluntarily dismiss defendants prior to the tentative ruling becoming the order of the court, and prior to the commencement of official trial proceedings, which intention is bolstered by the transcript of the April 21, 2021 hearing submitted with the moving papers, as discussed above.  The file also shows that plaintiff filed written objection to the court entering the request for dismissal without prejudice in this matter, and that the court never sustained such an objection.  The moving papers show that at the hearing on April 21, 2022, at which the court granted plaintiff’s ex parte application to correct the minute order of April 18, 2022 nunc pro tunc based on error of the clerk, and to clarify that the tentative of April 18, 2022 did not become the order of the court, the court indicated that such a ruling was intended to resolve all issues with respect to the entry of dismissal by plaintiff.  The court at the April 21, 2022 hearing specifically stated:

“THEN AS A SEPARATE ISSUE, WE HAVE OBJECTION BY THE DEFENDANTS TO PLAINTIFF'S REQUEST FOR DISMISSAL WITHOUT PREJUDICE OF ACTIONS AGAINST DEFENDANTS NORIK BARSEGHIAN AND RITA GHARIBIANS. AND THE COURT IS -- NOTES THE OBJECTION, AND THE DISMISSAL WITHOUT PREJUDICE AS TO MR. BARSEGHIAN AND MS. GHARIBIANS WILL REMAIN.

THE COURT GRANTED AN ORAL MOTION TO DISMISS WITHOUT PREJUDICE ON APRIL 18TH, AND PLAINTIFF'S COUNSEL SAID THEY WERE GOING TO FILE A REQUEST FOR DISMISSAL WITHOUT PREJUDICE AS TO THOSE TWO DEFENDANTS ANYWAY, AND THEY DID. THAT REQUEST FOR DISMISSAL WILL STAND. THE COURT IS NOT GOING TO CHANGE THAT REQUEST.”

[Ex. 2, Transcript, pl 3].

The matter accordingly is in a posture where it has been dismissed as to moving defendants based on a Request for Dismissal without prejudice made by plaintiff which was entered as requested by the court. 

The dismissal as it stands has not been set aside or vacated, and defendants have made no motion to set it aside or vacate it.   

Generally, once a dismissal is entered, the trial court loses subject matter jurisdiction over the matter.  It is held that the trial court then has no jurisdiction to consider any matter other than a motion for costs or attorney’s fees, or to set aside the dismissal pursuant to CCP §473.   See Shapelle Industries, Inc. v. Superior Court (2005, 2nd Dist.) 132 Cal.App.4th 1101, 1108, citing Harris v. Billings (2nd Dist.) 16 Cal.App.4th 1396, 1405 (“Following entry of a dismissal of an action by a plaintiff under Code of Civil Procedure section 581, ‘a trial court is without jurisdiction to act further in the action except for the limited purpose of awarding costs and statutory attorney’s fees.’” (citations omitted)).”  

This motion essentially seeks to set aside the dismissal as improperly entered by the court, and the motion appears to be improper.  

Plaintiff also argues that the dismissal was voluntary as a matter of law because it was made by application to the court, and it is held, specifically in the context of fee awards, that “Any dismissal entered on plaintiff’s motion or request or on stipulation of the parties, before or during trial, is ‘voluntary’ within the meaning of Civil Code section 1717…and prevents a fee award.”  D & J , Inc. v. Ferro Corp. (1986) 176 Cal.App.3d 1191, 1194.  The D & J matter, however, involved a dismissal made with prejudice during trial, pursuant to former CCP section 581, sub. 5, which is now CCP section 581(e).  The dismissal here was not with prejudice, but without prejudice, and was not entered pursuant to subdivision (e), as trial had not commenced. 

In any event, in the instant case, the request was made by plaintiff, at the invitation of the court, and accepted by the court in proceedings which preceded the determination of the action on the merits, with a concession by the court in the corrected minute that the court’s tentative ruling had not been adopted by the court or any ruling made on the merits of the case against defendants.  

Plaintiff also argues that the dismissal remains voluntary regardless of any timing issues, because adverse judgment was not inevitable. 

Plaintiff first argues that plaintiff had not yet been permitted the opportunity to oppose the motion, as it had been brought, without ex parte application, and asked to be heard the following day.  It would appear that the circumstance distinguishes this matter from Groth, where the opportunity to timely oppose the demurrer had expired before the tentative ruling had been posted.   Plaintiff also argues that the motion in limine, which sought to prevent argument that defendants had signed the specific documents identified as a guaranty, would not have prevented plaintiff at trial from prevailing on alternative arguments, such as that defendants had signed the lease itself, incorporating the terms of the guaranty, and referencing themselves as guarantors, that defendants had initialed the guaranty, indicating their consent, or that defendants became parties to the guaranty according to principles of promissory estoppel or promissory fraud. 

Plaintiff also argues that a motion in limine, in fact, cannot be dispositive, based on LASC Rule 3.57(b), which provides:

“A motion in limine may not be used for the purpose of seeking summary judgment or the summary adjudication of an issue or issues.  Those motions may only be made in compliance with the Code of Civil Procedure section 437c and applicable court rules.” 

The motion in limine would not have disposed of the entire claim as to moving defendants.  And any other action by the court was neither inevitable nor dispositive of the claims under the guaranty which had not yet been pled.  As the court explained at the April 21, 2022 hearing, any motion the court expressed an intention to make or dismissal with prejudice was, first, not in fact made, and, second, was based on a review of the First Amended Complaint, which added the moving defendants as parties to a breach of contract cause of action as to the lease, but did not state a separate cause of action for breach of contract of the separate guaranty, or assert any alter ego allegations. [See FAC, First Cause of Action, “Breach of Lease Agreement,” paras. 6-17].   The FAC did not allege that the moving defendants were parties to the Lease, as opposed to the guaranty.  [FAC, para. 7].  The court at the April 21, 2022 hearing stated:

“WHEN THEY FILED THE AMENDED COMPLAINT ABOUT A YEAR LATER NAMING THE TWO INDIVIDUALS IN THEIR INDIVIDUAL CAPACITY ON THE GUARANTY, THEY COULD HAVE ALLEGED A SEPARATE CAUSE OF ACTION FOR BREACH OF CONTRACT OR BEACH OF THE GUARANTY. THEY DID NOT.  THEY HAVE THE OPPORTUNITY TO DO THAT NOW PURSUANT TO THE COURT’S RULING…” 

[Ex. 2, Transcript, p. 13]

The court at the April 21, 2022 hearing noted that any initial tentative was to be with prejudice, “HOWEVER, AS IT RELATES TO THE CAUSE OF ACTION FOR BREACH OF THE GUARANTY AS PART OF THE LEASE AGREEMENT.”  [Ex. 2, Transcript, p. 14]. 

The court notes that it at the April 21, 2022 hearing it had also noted that no settled statement had been requested in connection with the April 18, 2022 hearing, and that the account of what happened at the hearing represented in the Gill Declaration which was submitted with the ex parte application, “seems to be accurate.”  [Ex. 2, Transcript, p. 22].   That declaration has not been submitted with the moving papers or opposition.   

Overall, defendants have failed to establish that the dismissal without prejudice entered pursuant to oral motion and follow-up written request for dismissal without prejudice was anything other than voluntary, barring any claim for contractual attorney’s fees. 

The motion for such fees accordingly is denied. 

RULING:  

Motion by Defendants Norik Barseghian and Rita Gharibians for Attorneys Fees in the Sum of $93,195.00 Against Plaintiff Ricardo Canales, Individually and as Trustee of the Canales Family 1987 Trust is DENIED.  

The Court finds that the matter was voluntarily dismissed prior to the commencement of trial, so that the issue of the recovery of attorneys’ fees is governed by Civil Code section 1717(b), in which it is expressly stated:

"(2) Where an action has been voluntarily dismissed or dismissed pursuant to a settlement of the case, there shall be no prevailing party for purposes of this section."

 GIVEN THE CORONAVIRUS CRISIS, AND TO ADHERE TO HEALTH GUIDANCE THAT DICTATES SAFETY MEASURES, DEPARTMENT D IS ENCOURAGING AUDIO OR VIDEO APPEARANCES

Please make arrangement in advance if you wish to appear via LACourtConnect/Microsoft Teams by visiting www.lacourt.org to schedule a remote appearance.  Please note that LACourtConnect/Microsoft Teams offers free audio and video appearance. Counsel and parties (including self-represented litigants) are encouraged not to personally appear.  With respect to the wearing of face masks, Department D recognizes that currently, the Los Angeles Department of Public Health strongly recommends masks indoors, especially when interacting with individuals whose vaccination status is unknown; for individuals who have a health condition that puts them at higher risk for severe illness; individuals who live with someone who is at higher risk; and for individuals who are around children who are not yet eligible for vaccines.  In accordance with this guidance, it is strongly recommended that anyone personally appearing in Department D wear a face mask.  The Department D Judge and court staff will continue to wear face masks.  If no appearance is set up through LACourtConnect/Microsoft Teams, or otherwise, then the Court will assume the parties are submitting on the tentative.