Judge: Randy Rhodes, Case: 19TRCV00282, Date: 2023-01-06 Tentative Ruling
Case Number: 19TRCV00282 Hearing Date: January 6, 2023 Dept: F51
Dept. F-51
Date: 12/16/22 TRIAL
DATE: 6/12/23
Case #19TRCV00282
MOTION TO BIFURCATE
Motion Filed: 11/3/22
MOVING PARTY: Defendants Cross Creek Village
Homeowners Association, Brian Martin, Janice Meldola, Nicolass Pacitto, Lois
Bass, and Kodi Mattox (collectively, “Defendants”)
RESPONDING PARTY: Plaintiff Alexandar Cvetkovich
NOTICE: OK
RELIEF REQUESTED: An order bifurcating the issues of
liability and punitive damages, and to preclude evidence and/or reference to
punitive damages and Defendants’ financial condition during the liability phase
of trial.
TENTATIVE RULING: The motion is off calendar.
BACKGROUND
This
is an action by the owner of a condominium unit against the homeowners’
association (HOA), the HOA’s counsel, and others. The operative Second Amended
Complaint, filed on 9/9/20, contains the following causes of action: (1) breach
of governing documents, (2) breach of fiduciary duty, (3) breach of written
contract, (4) breach of Davis Stirling Act, (5) discrimination in violation of
FEHA and Unruh Civil Rights Act, (6) RICO Conspiracy, (7) unfair debt
collection practice, (8) fraud, (9) negligence, (10) nuisance, (11) negligent
infliction of emotional distress, (12) injunctive relief, (13) declaratory
relief, (14) malicious prosecution and (15) accounting.
On 11/3/22, Defendants filed
the instant motion to bifurcate the issues of liability and punitive damages.
On 12/6/22, Plaintiff filed his opposition. On 12/9/22, Defendants filed their
reply.
ANALYSIS
Applicable
Legal Standard
Defendants bring this timely motion, pursuant to Civil
Code section 3295, subdivision (d), in order to preclude evidence of
Defendants’ financial condition from being presented to the jury prematurely and
resulting in potential prejudice against Defendants. (Defs.’ Mot., 4:19–22.) In
an action where a plaintiff seeks punitive damages, the court must, on application
of any defendant, preclude the admission of evidence of the defendant's profits
or financial condition until after the trier of fact returns a verdict for the
plaintiff awarding actual damages and finds a defendant guilty of malice,
oppression, or fraud. (Civ. Code § 3295, subd. (d).) Evidence of profit and
financial condition is admissible only as to the defendant(s) found liable and
guilty of malice, oppression, or fraud, and must be presented to the same trier
of fact. (Ibid.) Under this procedure, the jury first decides whether to
impose liability for compensatory damages and whether the defendant acted with
fraud, malice or oppression. (Ibid.)
Plaintiff argues in opposition that here, Code of
Civil Procedure section 598 applies instead, contending that “bifurcation is
never mandatory and it [sic] totally within the court’s discretion.” (Pl.’s
Opp., 5:1–5.) Section 598 states, “The court may, when the convenience of
witnesses, the ends of justice, or the economy and efficiency of handling the
litigation would be promoted thereby, on motion of a party, after notice and
hearing, make an order … that the trial of any issue or any part thereof shall
precede the trial of any other issue or any part thereof in the case.” (Code
Civ. Proc. § 598.) While this statute is permissive, leaving discretion to the
Court as to whether to bifurcate the issues, Plaintiff cites to no specific
authority to support his argument that Code of Civil Procedure section 598
applies where, as here, a plaintiff seeks punitive damages.
On the other hand, Civil Code section 3295 is clear
that the Court must, upon defendant’s request, bifurcate the
trial in a case involving punitive damages, so that “wealth evidence” bearing
on the amount of punitive damages is not admitted until after plaintiff proves
entitlement to such damages by clear and convincing evidence. (Civ. Code §
3295.) The purpose of the statute is to avoid the risk that a defendant's
financial condition might taint the jury's determination on the underlying
liability case and on the issues of oppression, fraud or malice. (Adams v.
Murakami (1991) 54 Cal.3d 105, 121; Medo v. Superior Court (1988)
205 Cal.App.3d 64, 67.) Here, it is undisputed that Plaintiff’s seeks punitive
damages in his operative second amended complaint, and Defendants have made a
request pursuant to Civil Code section 3295. Therefore, the Court must
bifurcate the issues of liability and punitive damages. (Civ. Code § 3295,
subd. (d).)
Plaintiff argues that Civil Code section 3295 is
entirely inapplicable to Defendants because they do not claim to have “deep
pockets.” (Pl.’s Opp., 8:15–23.) Plaintiff’s argument lacks merit because the
statute is silent as to the level of a defendant’s relative wealth required in
order for the statute to take effect, and Plaintiff cites to no additional
authority to support this contention.
Accordingly, as Plaintiff requests punitive damages
against Defendants, Defendants therefore have a right to bifurcate the trial
under Civil Code section 3295 upon bringing the instant motion.
Judicial
Economy/Jury Confusion
Defendants
further argue that bifurcation is necessary because the jury would be confused
if it were forced to evaluate both Defendants’ liability for compensatory
damages under a “preponderance of the evidence” standard and Defendants’
liability for punitive damages under a “clear and convincing” standard in the
same trial. (Defs.’ Mot., 5:24–27.) A court may bifurcate a trial and exclude
evidence in the interests of promoting judicial efficiency and avoiding
confusing the jury. (Code Civ. Proc. § 1048, subd. (b); Evid. Code § 352.)
Plaintiff
argues in opposition that bifurcation would “only result in duplicative and
inefficient discovery and trials, a process that would be far more burdensome
than would a single, streamlined exchange of information.” (Pl.’s Opp., 8:6–8.)
However, as Defendants observe, bifurcation would in fact promote efficiency
because “a trial on punitive damages will not even be necessary at all, if
Plaintiff cannot first meet his burden in proving punitive damages liability.”
(Defs.’ Reply, 4:21–23.)
Additionally, as set forth above, under Civil Code
section 3295, Defendants have a right to the requested bifurcation because
Plaintiff seeks punitive damages. Plaintiff has not cited to any authority that
would give the Court any basis to deny Defendants’ Civil Code section 3295
motion for reasons pertaining to judicial efficiency. Accordingly, Plaintiff
has failed to successfully oppose the instant motion for mandatory bifurcation
under the applicable statute.
Prejudice
Defendants
further argue that the Court should grant the instant motion in the interests
of convenience and avoiding prejudice. (Defs.’ Mot., 5:3–10.) "The court,
in furtherance of convenience or to avoid prejudice, or when separate trials
would be conducive to expedition and economy, may order a separate trial of any
cause of action." (Code Civ. Proc. § 1048, subd. (b).) “The court in its
discretion may exclude evidence if its probative value is substantially
outweighed by the probability that its admission will (a) necessitate undue
consumption of time or (b) create substantial danger of undue prejudice, of
confusing the issues, or of misleading the jury.” (Evid. Code § 352.)
As set forth above, Civil Code section 3295 addresses
the potential prejudice against a defendant where evidence of its financial
condition is admitted before the plaintiff has proven that it is entitled to
punitive damages. Therefore, the Court need not address Defendants’ arguments
in favor of bifurcation under Code of Civil Procedure section 1048 and Evidence
Code section 352 as they pertain to prejudice against Defendants.
Plaintiff argues in opposition that the preclusion of
evidence of Defendants’ financial condition would prejudice him because he
needs the documents to prove liability and “establish prima facie facts and
truth about what took place.” (Pl.’s Opp., 6:16–17, 7:3–5.) Notwithstanding
Civil Code section 3295, evidence of defendant's wealth and/or profits is
admissible during the first phase of a bifurcated trial if relevant to
liability or other issues not concerning the amount of punitive damages. (Notrica
v. State Comp. Ins. Fund (1999) 70 Cal.App.4th 911, 939.)
Here, Plaintiff alleges, inter alia, that the HOA made
various financial transactions and breached fiduciary duties, resulting in harm
Plaintiff. Defendants concede that “certain financial records may be necessary
for disclosure in the context of discovery and trial in order to investigate
these claims and prepare defenses to the same,” but the complete disclosure of
each of the nine remaining defendants’ financial documents at the liability
stage of the bifurcated trial, which would include the financial records of
individual persons, would be overbroad and thus improperly prejudicial. (Defs.’
Reply, 4:5–18.)
In Notrica, the Court of Appeal found that the
trial court properly allowed the plaintiff to present evidence of a defendant’s
financial condition before the jury during the liability phase of the trial,
because the defendant had previously alleged that it was in financial
difficulty. (70 Cal.App.4th at 939.) Here, the Court similarly finds that
evidence of Defendants’ financial condition may be admissible during the first
phase of the bifurcated trial, but only to the extent that such evidence is
relevant to the issue of liability and the evidence pertains to the specific
alleged transactions at issue.
However, discovery is ongoing, and the Court notes
that Defendants bring their motion to bifurcate seven months before the date of
trial. To the extent the instant motion seeks to operate as a protective order,
the Court declines to make a ruling on limiting the discovery of such financial
documents at this time. Accordingly, the instant motion is off-calendar as
premature.
Timeliness
Defendants observe that Plaintiff’s opposition was
filed one day late under the filing deadlines set forth by Code of Civil
Procedure section 1005. Under Civil Code section 3528, “the law respects form less
than substance.” Additionally, the public policy of California favors
adjudicating cases on the merits (Elston v. City of Turlock¿(1985) 38
Cal.3d 227, 235; Hernandez v. Superior Court¿(2004) 115 Cal.App.4th
1242, 1246.) Here, Plaintiff, a self-represented litigant, filed his opposition
one day past the filing deadline, and Defendants have not alleged any prejudice
resulting from Plaintiff’s late filing. The Court thus exercises its
discretion, under Rule 3.110 of the California Rules of Court, to excuse the
untimely filed opposition. Nevertheless, after giving the untimely-filed
opposition full consideration, the Court declines to rule on the instant motion
as it has been prematurely filed.
CONCLUSION
The motion is off calendar.