Judge Randolph M. Hammock, Case Number: 24STCV04503, Date: 2024-07-17 Tentative Ruling

Judge: Randolph M. Hammock, Case: 24STCV04503, Date: 2024-07-17 Tentative Ruling

Plaintiff Aids Healthcare Foundation alleges it contracted with Defendants Cogenics Consulting Group and Planful, Inc. where Defendants would provide a budgeting software system for Plaintiff’s use. Plaintiff further alleges that Defendants failed to provide the software, in breach of the contracts.

TENTATIVE RULING:

On this Court’s own motion, the Substitution of Attorney filed on June 3, 2024, is hereby STRICKEN, and declared NULL AND VOID. The Weed Law Firm still remains the attorneys of record for Defendant CCG in this case. If the Weed Law Firm desires to withdraw from this case as the attorney of record for the Defendant CCG, it must either file a proper Substitution of Attorney or file a noticed motion to withdraw.

A Defendant seeking transfer of venue generally must file the motion “at the time he or she answers, demurs, or moves to strike.” (CCP § 396b(a).) Defendant Planful filed an Answer to the Complaint on March 26, 2024. (See 03/26/2024 Answer.) Two days later, it filed a Cross-Complaint. (See 03/28/2024 Cross-Complaint.)

It was not until after this point that Defendant Cogenics filed its motion for Transfer of Venue, which Defendant Planful attempted to “join” on June 5, 2024. (See 06/05/2024 Notice of Joinder.) Thus, because Defendant already filed an answer by the time it attempted to join the motion for transfer, its joinder was untimely and ineffective. The court therefore disregards any attempted joinder by Defendant Planful.

“Venue is determined based on the complaint on file at the time the motion to change venue is made.” (Brown v. Superior Court of Alameda County (1984) 37 Cal.3d 477, 482.) A plaintiff’s choice of venue is presumptively correct, and defendant bears the burden of demonstrating that venue is not proper there. (Battaglia Enterprises, Inc. v. Superior Court of San Diego County (2013) 215 Cal.App.4th 309, 313-14.)

Per CCP section 396b, on timely motion, the Court must order a transfer of an action “whenever the court designated in the Complaint is not the proper Court.” If the transfer is ordered on the ground that plaintiff filed in the “wrong court,” plaintiff is responsible for paying the costs and fees of transferring the action to whichever county the court orders, within 30 days after service of notice of the transfer order. If plaintiff fails to do so within 5 days after service of notice of the court, any other interested party, whether named in the complaint or not, may pay such costs and fees in order to expedite the transfer. If the fees and costs are not paid within 30 days, the action is subject to dismissal. (See CCP § 399.)

At its core, the action is based on breach of contract. Plaintiff alleges that in 2021, it was “repeatedly contacted by” Defendants Cogenics and Planful who “wanted to present and sell a budget management software” to Plaintiff. (Compl. ¶ 12.) Following a series of meetings, Plaintiff “decided to enter into a contract with Planful to purchase the Planful Software and accompanying services, and to enter a contract with Cogenics to install and implement the Planful Software at AHF.” (Id. ¶ 34.) The contract with Cogenics was the “Statement of Work.” (Id. ¶ 40.)

Throughout 2022, “Planful and Cogenics attempted, with no success, to implement the Planful Software at AHF.” (Id. ¶ 49.) “Because of Planful and Cogenics’ failures [in implementing the software], AHF was forced to develop and implement an alternate budgeting solution to complete the budget processes in fiscal year 2022.” (Id. ¶ 54.)

In mid 2023, Plaintiff requested a refund of the money paid for the software as the software “was unusable, and could not be accessed.” (Id. ¶ 60.) Defendants refused to refund the money paid. (Id. ¶ 61.) As of the time of the filing of the Complaint, Defendants had not provided a useable software system, refused to terminate the contract, and refused to refund Plaintiff’s money paid. (Id. ¶¶ 60-67.) Therefore, Plaintiff alleges that Defendant Cogenics “breached its obligations under the Statement of Work by failing to deploy the Planful Software within six weeks as represented in the Statement of Work, or at all, and its failure to deliver operable software that conformed to Cogenics’ representations.” (Id. ¶ 87.)

Similarly, Plaintiff alleges Defendant Planful “breached its obligations under the Master Subscription Agreement by failing to (a) provide AHF with the right to access and use its budgeting software (b) deliver operable software that conformed to Planful’s representations (c) provide AHF with professional services in accordance with the Professional Services Addendum (d) provide the professional services and deliverables to AHF as described in the Statement of Work and (e) terminate the Master Subscription Agreement in accordance with the terms of the Agreement.” (Id. ¶ 94.)

Plaintiff maintains its principal place of business in Los Angeles, CA. (Compl. ¶ 2.) Defendant Planful and Cogenics are headquartered in San Francisco County and Alameda County, respectively. (Id. ¶¶ 3, 4.)

“It is well established that a defendant is entitled to have an action tried in the county of his or her residence unless the action falls within some exception to the general venue rule. [Citations.]” (Brown v. Superior Court (1984) 37 Cal.3d 477, 483.) A statutory exception to the general venue rule is found in section 395.5, which provides that “[a] corporation or association may be sued in the county where the contract is made or is to be performed, or where the obligation or liability arises, or the breach occurs; or in the county where the principal place of business of such corporation is situated, subject to the power of the court to change the place of trial as in other cases.” (CCP § 395.5.)

Defendant Cogenics argues venue is improper in Los Angeles County because “the Parties did not enter into any alleged contracts with Plaintiff in Los Angeles County, Cogenics has never met with Plaintiff in Los Angeles County, and all work and services performed pursuant to the contract and its obligations were performed at Cogenics’ principal place of business in Alameda County. (Mtn. 3: 11-14.) In addition, Cogenics contends that “all communications and meetings with Plaintiff have been electronic communications.” (Id. 3: 17-18.) Defendant finally asserts, in a conclusory fashion, that “[a]ll duties and obligations arising from the contract alleged were all preformed [sic] in Alameda County.” (Mtn. 5: 21-22.)

Plaintiff opposes the motion. Plaintiff argues venue is proper in Los Angeles County for the following reasons. First, at least from Plaintiff’s end, “all communications regarding the Contract, both before and after it was signed, occurred in Los Angeles.” (Opp. 3: 19-20.) Plaintiff presents evidence that James Cuccia, Plaintiff’s VP of Business Planning and Analysis, was the lead contact in communications between Plaintiff and Defendants. (Cuccia Decl. ¶ 12.) Cuccia’s office is located at AHF’s headquarters in Los Angeles, California. (Id. ¶ 4.)

Second, Plaintiff argues the “purpose of” the contract was to implement Planful Software for the use of Plaintiff’s employees in LA. Third, Plaintiff argues that the contract required Defendant Cogenics to complete its performance in LA. This is because, according to Plaintiff’s Chief Information Officer, Mohandoss Tychicus, “[a]ll balance data and transaction data utilized by AHF’s Finance Department for budget planning and forecasting is stored on servers located in Los Angeles, California.” (Tychicus Decl. ¶¶ 2, 3.)

Fourth, Plaintiff argues that the contract was executed by AHF in Los Angeles. (See Cuccia Decl. ¶ 9 [“After receiving the signed Statement of Work and purchase order, I signed and returned them to Mr. Salman”].) Finally, Plaintiff contends that its injury occurred in Los Angeles, because it was forced to “develop and implement its own software” there after Defendant’s breach. (Compl. ¶¶ 64-65.)

Here, Plaintiff has demonstrated that at least a portion of the contract for the implementation and installation of the software was to be performed at Plaintiff’s headquarters in Los Angeles. Defendant has not presented any argument in its moving papers to negate this point, and has failed to file a Reply. “[I]t is the moving defendant's burden to demonstrate that the plaintiff's venue selection is not proper under any of the statutory grounds.” (Fontaine v. Sup.Ct. (2009) 175 Cal. App. 4th 830, 836, emphasis added.) In doing so, the corporate defendant challenging venue “has the burden of negating the propriety of venue as laid [o]n all possible grounds,” including the place of performance of the contract. (Karson Indus., Inc. v. Superior Ct. of Contra Costa Cnty. (1969) 273 Cal. App. 2d 7, 8–9.) Defendant has failed to meet that burden.

In the alternative to mandatory transfer, Defendant also moves for discretionary relief to transfer the case to any other county “[w]hen the convenience of witnesses and the ends of justice would be promoted by the change.” (CCP § 397(c).)

Defendant argues it is “severely inconvenient” for Defendants to litigate in Los Angeles, as “Defendants would be required to expend time and funds traveling back and forth to Los Angeles.” (Mtn. 6: 6-8.) Defendant also contends that it is “a small business and in the process of winding up.” (Id. 6: 8.) Defendant asserts that a transfer would “render the action far more convenient for numerous potential witnesses whose testimony will be central to the prosecution and defense in this case.” (Id. 6: 11-13.)

Again, however, Defendant has failed to meet its burden to establish that a transfer is necessary for the convenience of witnesses or the ends of justice. While the parties themselves are based in Northern California, “the inconvenience of the parties in attending the trial is not a factor to be considered in a motion [to transfer venue].” (Wrin v. Ohlandt (1931) 213 Cal. 158, 159–60.) Instead, it is the inconvenience of witnesses on which the court is concerned. Defendant has failed to identify any relevant witness that are located outside of Southern California.

Defendant has also not presented evidence, aside from the bare assertion in the motion, that Defendant is “in the process of winding up” such that it would be unduly prejudiced by defending the action in this court. A motion based on inconvenience of witnesses or the ends of justice generally requires admissible evidence in the form of declarations or affidavits. (See Juneau v. Juneau (1941) 45 Cal. App. 2d 14, 16; Lieppman v. Lieber (1986) 180 Cal. App. 3d 914, 919.) Therefore, Defendant has not met its burden to warrant a discretionary transfer based on the convenience of witnesses or the ends of justice.

“In its discretion,¿the court may order the payment to the prevailing party of reasonable expenses and attorney's fees incurred in making or resisting the motion to transfer whether or not that party is otherwise entitled to recover his or her costs of action. In determining whether that order for expenses and fees shall be made, the court shall take into consideration (1) whether an offer to stipulate to change of venue was reasonably made and rejected, and (2) whether the motion or selection of venue was made in good faith given the facts and law the party making the motion or selecting the venue knew or should have known.¿As between the party and his or her attorney, those expenses and fees shall be the personal liability of the attorney not chargeable to the party. Sanctions shall not be imposed pursuant to this subdivision except¿on notice contained in a party's papers, or on the court's own noticed motion, and after opportunity to be heard.”

Judge of the Superior Court

FN 1 - Defendant CCG filed its motion to transfer on April 3, 2024. On June 3, 2024, Defendant CCG improperly filed a Substitution of Attorney form indicating that its former counsel, Weed Law Group, was withdrawing. (See 06/03/2024 Substitution.) The Substitution of Attorney also indicates that Plaintiff would be representing itself but lists a “Naveed Salman” as the legal representative. It does not appear that Naveed Salman is a licensed attorney. “A corporation cannot represent itself in court, either in propria persona or through an officer or agent who is not an attorney.” (Vann v. Shilleh (1975) 54 Cal. App. 3d 192, 199.)

Any party may submit on the tentative ruling by contacting the courtroom via email at Smcdept49@lacourt.org by no later than 4:00 p.m. the day before the hearing. All interested parties must be copied on the email. It should be noted that if you submit on a tentative ruling the court will still conduct a hearing if any party appears. By submitting on the tentative you have, in essence, waived your right to be present at the hearing, and you should be aware that the court may not adopt the tentative, and may issue an order which modifies the tentative ruling in whole or in part.