Judge Randolph M. Hammock, Case Number: 19STCV27185, Date: 2023-08-22 Tentative Ruling

Plaintiffs/Cross-Defendants Antonio Cabral and Patricia Cabral allege in the operative First Amended Complaint that three King Palm Trees grew on their property in South Gate, California. The trees apparently blocked Defendants’ business sign. Plaintiffs allege that Defendant/Cross-Complainant Quint Tax Services Corp. and/or its CEO, Carlos M. Quintana, had the Palm Trees cut in half so as they would no longer block the business sign. Plaintiffs bring causes of action against Defendants for (1) trespass, (2) trespass to chattels, (3) trespass to timber, (4) conversion, (5) nuisance, and (6) negligence.

Quint Tax services filed a Cross-Complaint against Cross-Defendants Antonio Cabral and Patricia Cabral, as well as Rise Again Printing LLC. Quint alleges that a representative of Rise Again Printing LLC, a company who Quint hired to install a new signing at its business, in fact cut the palm tree. Accordingly, the FACC asserts causes of action against Rise Again Printing for (1) breach of contract, (2) negligence, and (3) equitable indemnity. It also includes causes of action against the Cabrals for Promissory Estoppel and Breach of Oral Agreement.

Code of Civil Procedure section 403.040 allows a plaintiff to file a motion for reclassification of an action within the time allowed for that party to amend the initial pleading. (Code Civ. Proc., § 403.040, subd. (a).) If the motion is made after the time for the plaintiff to amend the pleading, the motion may only be granted if (1) the case is incorrectly classified; and (2) the plaintiff shows good cause for not seeking reclassification earlier. (Code Civ. Proc., § 403.040, subd. (b).)

Because the initial time for Plaintiffs to amend the pleading has passed, the motion must show that the case is incorrectly classified, and good cause for not seeking reclassification earlier. In Walker v. Superior Court (1991) 53 Cal.3d 257, 262, the California Supreme Court held that a matter may be reclassified from unlimited to limited only if it appears to a legal certainty that the plaintiff's damages will necessarily be less than $25,000. (Walker v. Superior Court (1991) 53 Cal.3d 257.) In Ytuarte v. Superior Court (2005) 129 Cal.App.4th 266, 278, the Court of Appeals examined the principles it set forth in Walker and held that “the court should reject the plaintiff's effort to reclassify the action as unlimited only when the lack of jurisdiction as an ‘unlimited’ case is certain and clear.” (Id. at 279.) Nevertheless, the plaintiff must present evidence to demonstrate a possibility that the damages will exceed $25,000.00 and the trial court must review the record to determine “whether a judgment in excess of $25,000.00 is obtainable.” (Ibid.)

Reclassification involves evaluation of the amount fairly in controversy, not an evaluation of the merits of the claim. The trial court must reasonably determine that the verdict will “necessarily” fall short of the $25,001 required for an unlimited civil case. (Stern v. Superior Court (2003) 105 Cal. App. 4th 223 [citing Walker, supra, and Singer v. Superior Court (1999) 70 Cal App. 4th 1315, 1320-1321].)

Plaintiff filed this case in unlimited jurisdiction. Plaintiff now contends “[t]hree years later, after extensive litigation and this Court’s admonitions,” that the “correct classification for the case would be that of limited jurisdiction.” (Mtn. 3: 13-15.) Notably, Plaintiffs “are willing to limit the recovery sought to less [than] $25,000.00 to allow the reclassification of the case, should the Court grant the motion.” (Mtn. 4: 20-22.) Plaintiffs also contend that Defendants cannot obtain more than $25,000.00 in damages on the First Amended Cross-Complaint.

First, because Plaintiffs are foregoing their ability to recover more than $25,000.00 (Gabriel Decl. ¶ 4), the potential final judgment on the Complaint will necessarily fall below the jurisdictional amount, as a matter of law. Moreover, attorney fees, interest and costs are excluded in determining the amount in controversy. (CCP § 85(a).)

Although Defendants do not raise the point in opposition, it therefore also appears to a legal certainty that Plaintiffs’ concession limits the amount in controversy on the First Amended Cross-Complaint. In the FACC, Defendants seek indemnification to the extent Defendants incur monetary liability to Plaintiffs. Defendants have not shown the other damages sought against the Plaintiffs will in any manner exceed the jurisdictional limit.

Defendants oppose reclassification. They argue that Plaintiffs have not shown good cause for failing to bring this motion earlier. In support of good cause, Plaintiffs contend that upon the near-close of discovery and after unsuccessful mediation efforts, “certain educated concessions as to the damages sought” have revealed the true nature of damages. (Gabriel Decl. ¶ 4.) The court finds this to be “good cause” for bringing the motion at this time.

Defendants also argue reclassification is barred by judicial estoppel. The doctrine of judicial estoppel precludes a party from taking inconsistent positions in separate judicial proceedings. “It is invoked to prevent a party from changing its position over the course of judicial proceedings when such positional changes have an adverse impact on the judicial process.... ‘The policies underlying preclusion of inconsistent positions are general consideration[s] of the orderly administration of justice and regard for the dignity of judicial proceedings.’ ... Judicial estoppel is ‘intended to protect against a litigant playing ‘fast and loose with the courts.’” [Citation.] (The Swahn Grp., Inc. v. Segal (2010) 183 Cal. App. 4th 831, 841.)

The elements of judicial estoppel are “(1) the same party has taken two positions; (2) the positions were taken in judicial or quasi-judicial administrative proceedings; (3) the party was successful in asserting the first position (i.e., the tribunal adopted the position or accepted it as true); (4) the two positions are totally inconsistent; and (5) the first position was not taken as a result of ignorance, fraud, or mistake.” (Aguilar v. Lerner (2004) 32 Cal.4th 974, 986–987.)

Defendant Carlos Quintana initially moved to reclassify the case from unlimited jurisdiction to limited jurisdiction in 2020. Plaintiffs opposed that attempt, arguing that although they obtained only an alleged $5,500.00 as general damages, they also “prayed for special and punitive damages” which “could easily exceed $25,000.” (Plaintiff’s 03/06/2020 Opp. to Defendant’s Mtn. to Reclassify, 3: 36-27.) On July 24, 2020, this Court (Judge Stuart M. Rice) denied the Defendant’s motion to reclassify. (See 07/24/2020 Order.) Noting the “amorphous nature of the damages resulting from cutting the trees down,” the court could not determine to a legal certainty that damages would not exceed $25,000. (Id.)

Defendants cite no authority applying judicial estoppel to a reclassification motion. Moreover, Plaintiffs’ positions were reasonable based on the information they possessed at the time of each motion. In that sense, the positions are not “totally inconsistent.” The court therefore finds judicial estoppel inapplicable, or in the alternative, any previous actions of the Plaintiff do not rise to the level required for this Court to utilize judicial estoppel at this time.

Finally, Defendants argue they will be prejudiced by reclassification. However, the language of section 403.040 is mandatory, in that a court “shall” reclassify when the statutory requirements are satisfied. There is no indication that prejudice plays a role in the analysis. Be that as it may, to the extent there is “undue prejudice” to the Defendant (which there isn’t) such prejudice also does not rise to the level to overcome the mandatory nature of this motion.