Judge: Robert B. Broadbelt, Case: BC670702, Date: 2023-10-04 Tentative Ruling

Case Number: BC670702    Hearing Date: February 1, 2024    Dept: 53

Superior Court of California

County of Los Angeles – Central District

Department 53

MOVING PARTIES:             Defendants Halt Gold Group, LLC, Mike Celano, Charley Chartoff, John “Jack” Hanney, and Alexander Orbison

RESPONDING PARTIES:    Plaintiffs Jacob Blalock and Benjamin Novak

Motion to Bifurcate Trial

The court considered the moving, opposition, and reply papers filed in connection with this motion.

DISCUSSION

Defendants Halt Gold Group, LLC, d/b/a Patriot Gold Group LLC (“Patriot”), Mike Celano, Charley Chartoff, John “Jack” Hanney, and Alexander Orbison (collectively, “Defendants”) move the court for an order (1) bifurcating trial to separate the issues of liability from the issues regarding the requests for punitive damages, and (2) excluding all references to Defendants’ wealth or financial condition during the liability phase of trial, including references to their financial condition, wealth, net worth, income, or profits.  (Notice of Mot. p. 6-9; Mot., p. 3:13-15.)  Plaintiffs Jacob Blalock and Benjamin Novak (“Plaintiffs”) have opposed Defendants’ motion, contending that Defendants are improperly requesting the exclusion of financial information necessary to establish the full extent of Plaintiffs’ damages.

Civil Code section 3295, subdivision (d) provides that “[t]he court shall, on application of any defendant, preclude the admission of evidence of that defendant’s profits or financial condition until after the trier of fact returns a verdict for plaintiff awarding actual damages and finds that a defendant is guilty of malice, oppression, or fraud in accordance with Section 3294.¿ Evidence of profit and financial condition shall be admissible only as to the defendant or defendants found to be liable to the plaintiff and to be guilty of malice, oppression, or fraud.¿ Evidence of profit and financial condition shall be presented to the same trier of fact that found for the plaintiff and found one or more defendants guilty of malice, oppression, or fraud.”¿  

“While the statute refers only to evidence of the defendant’s financial condition, in practice bifurcation under this section means that all evidence relating to the amount of punitive damages is to be offered in the second phase, while the determination whether plaintiff is entitled to punitive damages (i.e., whether the defendant is guilty of malice, fraud or oppression) is decided in the first phase along with compensatory damages.”¿ (Holdgrafer v. Unocal Corp. (2008) 160 Cal.App.4th 907, 919.)¿¿¿ 

The court finds that (1) Plaintiffs have not shown that Patriot’s balance sheets and profit and loss statements are relevant to support their requests for compensatory damages in connection with this action, and (2) Defendants are entitled to an order bifurcating trial pursuant to Civil Code section 3295. 

Although Plaintiffs contend, in their opposition, that the income that they “realized through their employment and ownership” was based on commissions, profit sharing distributions, and the value of their shares, Plaintiffs have not shown that they are seeking compensatory damages based on the alleged lost profit sharing distributions and the value of their shares in this action.  (Opp., p. 1:12-18.)  Instead, the recovery of those damages appears to be at issue in Plaintiffs’ separate action (Case No. 19STCV35566).  (Papania Reply Decl., Ex. D, Complaint, ¶¶ 14, 20-23, 24 [alleging that the repurchase of Plaintiffs’ units was an act retaliation], 30 [seeking replevin of the units].)  Thus, the court finds that Plaintiffs have not presented evidence showing that Patriot’s balance sheets and profit and loss statements are relevant to the calculation of the compensatory damages that Plaintiffs are claiming in this action.

Thus, the court grants Defendants’ motion and makes the orders set forth below.  (Civ. Code, § 3295, subd. (d).)

ORDER

The court grants defendants Halt Gold Group, LLC, d/b/a Patriot Gold Group LLC, Mike Celano, Charley Chartoff, John “Jack” Hanney, and Alexander Orbison’s motion to bifurcate trial as set forth below.

The court orders that trial of this action shall be bifurcated as follows: (1) the jury will first decide the issues of whether to impose liability for compensatory damages and, if so, the amount of compensatory damages and whether defendants Halt Gold Group, LLC, d/b/a Patriot Gold Group, LLC, Mike Celano, Charley Chartoff, John “Jack” Hanney, and Alexander Orbison are guilty of malice, oppression, or fraud, and (2) only after making findings in plaintiffs Jacob Blalock and Benjamin Novak’s favor on all of those issues, the jury will then decide the issue of whether to impose punitive damages against defendants Halt Gold Group, LLC, d/b/a Patriot Gold Group, LLC, Mike Celano, Charley Chartoff, John “Jack” Hanney, and Alexander Orbison and, if so, the amount of punitive damages. 

The court orders that the admission of evidence of defendants Halt Gold Group, LLC, d/b/a Patriot Gold Group, LLC, Mike Celano, Charley Chartoff, John “Jack” Hanney, and Alexander Orbison’s profits or financial condition shall be precluded until after the trier of fact returns a verdict for plaintiffs Jacob Blalock and Benjamin Novak awarding actual damages and finds that defendants Halt Gold Group, LLC, d/b/a Patriot Gold Group, LLC, Mike Celano, Charley Chartoff, John “Jack” Hanney, and/or Alexander Orbison are guilty of malice, oppression, or fraud in accordance with Civil Code section 3294.  (Civ. Code, § 3295, subd. (d).)  Evidence of profit and financial condition shall be presented to the same trier of fact that found for plaintiffs Jacob Blalock and Benjamin Novak and found that defendants Halt Gold Group, LLC, d/b/a Patriot Gold Group, LLC, Mike Celano, Charley Chartoff, John “Jack” Hanney, and/or Alexander Orbison are guilty of malice, oppression, or fraud.  (Civ. Code, § 3295, subd. (d).)

The court orders defendants Halt Gold Group, LLC, d/b/a Patriot Gold Group, LLC, Mike Celano, Charley Chartoff, John “Jack” Hanney, and Alexander Orbison to give notice of this ruling.

IT IS SO ORDERED.

DATED:  February 1, 2024

_____________________________

Robert B. Broadbelt III

Judge of the Superior Court