Judge Ronald F. Frank, Case Number: BC700634, Date: 2023-11-13 Tentative Ruling

Judge: Ronald F. Frank, Case: BC700634, Date: 2023-11-13 Tentative Ruling

Case Number: BC700634 Hearing Date: April 3, 2024 Dept: 8

Tentative Ruling¿

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HEARING DATE: April 3, 2024

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CASE NUMBER: BC700634

CASE NAME: Julie A. Esphorst, et al. v. Darryl Leander Hicks, et al.

MOVING PARTY: (1) Defendant, Tung Ming and

(2) Proposed Intervenor, State Farm Mutual Automobile Insurance Company

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RESPONDING PARTY: (1) Plaintiff, Jesse Franklin Esphorst

(2) Defendant/Cross-Defendant/Cross-Complainant, Darryl Leander Hicks

(3) Plaintiff, Julie A. Esphorst

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JUDGMENT DATE: January 26, 2024 the Amended Judgment was entered.

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MOTION:¿ (1) Tung Ming’s Motion for Judgment Notwithstanding the Verdict

(2) Tung Ming’s Motion for New Trial

(3) State Farm’s Motion to Vacate Judgment

Tentative Rulings: (1) JNOV denied

(2) MNT denied on condition that Plaintiffs accept a 20% remittitur of non-economic damages

(3) State Farm’s Motion to Vacate Judgment is DENIED

I. BACKGROUND¿¿

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A. Factual¿¿

On March 1, 2021, Plaintiffs, Jesse Franklin Esphorst, an individual, and as successor-in-interest to The Estate of Jesse Eric Esphorst, deceased (Plaintiff”) filed this action against Defendants, Tung Ming, Kwan Cheung, Teddyland, LLC, and DOES 1 through 50. On October 16, 2018, Plaintiffs filed a First Amended Complaint (“FAC”) alleging causes of action for: (1) Wrongful Death – Negligence; (2) Negligence Per Se; and (3) Dangerous Condition of Public Property (Government Code § 835).

On April 14, 2021, Teddyland, LLC filed a Cross-Complaint against Cross-Defendants, Tung Ming, Kwan Cheung, and DOES 1 through 30. The Cross-Complaint alleges causes of action for: (1) Implied Indemnity; (2) Contribution; and (3) Equitable Indemnity.

On November 28, 2023, this matter came on regularly for trial and proceeded to the Jury on December 12, 2023. Moving parties claim that after making various representations about attending trial remotely, the case proceeded to trial with Defendant Ming being represented by counsel. The moving papers claim, with no admissible evidence, that due to a medical emergency Ming was unavailable to testify. The Court commenced the trial, and after granting Ming’s request to testify remotely on certain conditions the Court allowed Ming’s counsel to give a mini opening statement which included a succinct statement of what Ming might testify about. The Court allowed Ming’s counsel to participate in voir dire, approved of remote testimony from both defendants Ming (on certain conditions, from Australia) and Hicks (from state prison), and a jury was impaneled. Once the trial began, Ming himself failed to appear. According to periodic inquiry from the Court to Ming’s counsel they lost contact with him other than a brief, unverified email that was not under penalty of perjury. Ming was thus AWOL from the trial and his own counsel did not have a way of reaching him or obtaining a sworn statement from him as to his status or whereabouts or timetable for availability. Moving parties note that over Defendant Ming’s counsel’s objection, the Court denied Defendant Ming’s request for a trial continuance after the trial was already several days underway, and the Court ultimately ordered the matter to proceed to contested trial as to defendant Hicks and as an uncontested trial as to Defendant Ming. Opposing parties Plaintiffs argue that the Court engaged Ming’s counsel in a dialogue as to the Court’s options when an AWOL defendant fails to appear after being served with a trial subpoena or its equivalent, a notice to appear at trial. Moving parties contend that the basis for the Court’s selection of the option of an uncontested trial pursuant to Code of Civil Procedure section 594(a) was that Plaintiff Julie Eshorst had served Defendant Ming with a Notice to Appear at Trial pursuant to Code of Civil Procedure § 1987. Moving parties assert that as a result, Defendant Ming’s counsel, despite being present and ready to present a defense for Defendant Ming, was prohibited from Defending Ming in any manner at because of Ming’s violation of the Notice to Appear at trial. Plaintiffs opposition notes that Ming’s counsel conceded that an uncontested trial was one of two Section 594(a) options available to the Court, the other being a continuance of the trial to an unknown date since the Court had and still has no information as to when Ming might be available to attend a continued trial. The moving papers are devoid of a declaration from Ming, a doctor, or anyone else to explain why he went AWOL just before jury selection began.

The moving parties further note that at trial, this Court also denied the ex parte application of proposed intervenor, State Farm, for leave to intervene in the action after nearly all the evidence had been received and after the Court had pre-instructed the jury -- with Ming’s consent -- that the jury not consider whether any party had insurance coverage and that insurance was irrelevant to their consideration of the evidence. No proposed Complaint in Intervention was brought to the Court’s attention and neither Ming’s counsel nor the proposed intervenor proffered a plan on a proper manner of addressing the proposed intervenor’s identify as Ming’s insurer.

The moving parties also note that the Court severed the cross-complaints filed by Defendant Ming and Defendant Hicks to be tried on a later date, despite the fact that Hicks never served Defendant Ming with a Notice to Appear at Trial under Code of Civil Procedure § 1987. The Court had previously granted Defendant Ming’s Motion to Bifurcate Punitive Damages pursuant to Civil Code § 3295(d), but moving parties note that after ordering the trial to proceed uncontested as to Defendant Ming, the Court allowed punitive damages to be tried with the rest of Plaintiffs’ claims because defendant Hicks (who did appear and who testified remotely from prison) did not seek bifurcation. Further, moving parties assert that following the presentation of evidence and without the participation of Defendant Ming’s counsel (who opted to absent themselves form the balance of the trial due to the Court’s orders), the jury awarded a sum of money in the form of compensatory damages, allocated between the Plaintiffs. Moving parties also note that the jury also awarded punitive damages against Defendant Ming in a lump sum jointly to both Plaintiffs. The jury returned a verdict in the amount of $23.25 Million to Plaintiff Julie A. Esphorst for past and future non-economic damages. Plaintiff Jesse Esphorst was awarded $20.5 Million in non-economic damages for the loss of his son, and another $16 Million in non-economic damages for his own past and future non-economic damages. The jury also awarded $18,000 in punitive damages against Hicks and $2 Million in punitive damages against Ming. The Court entered its amended judgment on the jury verdict for the total of over $61 Million on January 26, 2024.

Now, Moving parties file a Motion for Judgment Notwithstanding the Verdict because Plaintiffs failed to introduce evidence of Defendant Ming’s financial condition and an award of punitive damages must not exceed a defendant’s ability to pay. Further, Moving Parties also have filed a Motion for New Trial on the grounds that Defendant Ming was allegedly wrongly barred from participating in trial that he failed to appear for in violation of the notice to appear at trial, for excessive damages, and other grounds.

B. Procedural

On February 22, 2024, Defendant, Tung Ming filed a Motion for Judgment Notwithstanding the Verdict. On March 14, 2024, Defendant/Cross-Defendant/Cross-Complainant, Darryl Leander Hicks filed an Opposition. On March 25, 2024, Defendant, Tung Ming filed a reply brief.

On February 23, 2024, Defendants, Tung Ming and Proposed Intervenor State Farm Mutual Automobile Insurance Company, also filed a Motion for New Trial. On March 14, 2024, Plaintiff, Jesse Franklin Esphorst filed an opposition brief. On March 14, 2024, Plaintiff, Julie Esphorst also filed an opposition. Additionally, on March 14, 2024, Defendant/Cross-Defendant/Cross-Complainant, Darryl Leander Hicks filed an opposition brief. On March 25, 2024, Defendant, Tung Ming and Proposed Intervenor’s State Farm Mutual Automobile Insurance Company filed reply briefs.

On February 23, 2024, Proposed Intervenor State Farm Mutual Automobile Insurance Company filed a Motion to Vacate Judgment. On March 14, 2024, Plaintiff, Jesse Franklin Esphort filed an Opposition. On March 14, 2024, Defendant/Cross-Defendant/Cross-Complainant, Darryl Leander Hicks also filed an Opposition. On March 25, 2024, Proposed Intervenor State Farm Mutual Automobile Insurance Company filed a reply brief.

II. EVIDENTIARY OBJECTIONS

Ming’s Objections to Plaintiff, Julie Esphorst’s Evidence In Support of Opposition to Motion for Judgment Notwithstanding the Verdict

Sustain: 1 & 2

Overrule: none.

III. ANALYSIS¿

A. Motion for Judgment Notwithstanding the Verdict

Legal Standard

The party against whom a verdict has been rendered may move the court for judgment notwithstanding the verdict, and the court shall grant the motion “whenever a motion for directed verdict for the aggrieved party should have been granted had a previous motion been made.” (Code Civ. Proc., § 629, subd. (a).) The purpose of such a motion is to challenge whether the opposing party’s evidence was sufficient to prove the claims or defenses asserted and now embodied by the jury’s verdict. (Hauter v. Zogarts (1975) 14 Cal.3d 104, 110.)

In ruling on a motion for judgment notwithstanding the verdict, the court does not weigh the evidence or determine the credibility of witnesses. (Hauter, supra, 14 Cal.3d at p. 110.) The party in whose favor the verdict was rendered is “entitled to the benefit of every favorable inference which may reasonably be drawn from the evidence and to have all conflicts in the evidence resolved in his favor.” (Castro v. State of California (1981) 114 Cal.App.3d 503, 507 (Castro).) “A motion for judgment notwithstanding the verdict may be granted only if it appears from the evidence, viewed in the light most favorable to the party securing the verdict, that there is no substantial evidence in support.” (Sweatman v. Dept. of Veterans Affairs (2001) 25 Cal.4th 62, 68 (Sweatman).) The focus in determining whether substantial evidence supports the verdict “is on the quality, rather than the quantity, of the evidence. ‘Very little solid evidence may be “substantial,” while a lot of extremely weak evidence might be “insubstantial.” ’ [Citation.] Inferences may constitute substantial evidence, but they must be the product of logic and reason. Speculation or conjecture alone is not substantial evidence.” (Roddenberry v. Roddenberry (1996) 44 Cal.App.4th 634, 651.)

A judgment notwithstanding the verdict “may be granted only if it appears from the evidence, viewed in the light most favorable to the party securing the verdict, that there is no substantial evidence in support.” (Sweatman, supra, 25 Cal.4th at 68.) The trial judge cannot weigh the evidence or determine the credibility of witnesses on a motion for judgment notwithstanding the verdict. (Hauter, supra, 14 Cal.3d at 110.) A court’s denial of a motion for directed verdict does not bar a later motion for judgment notwithstanding the verdict on the same ground. (Rollenhagen v. City of Orange (1981) 116 Cal.App.3d 414, 417, disapproved on other grounds in Brown v. Kelly Broadcasting Co. (1989) 48 Cal.3d 711.) Trial courts may grant judgments notwithstanding the verdict as to less than all issues. (Beavers v. Allstate Ins. Co. (1990) 225 Cal.App.3d 310, 323-324.) The trial court may grant a partial judgment notwithstanding the verdict in the defendant’s favor on the punitive damages portion if there is no substantial evidence to support the award. (Id. at p. 323.)

Discussion

Here, Tung Ming and State Farm filed a Motion for Judgment Notwithstanding the Verdict as to Plaintiffs’ Punitive Damages claims on the grounds that Moving Parties argue Plaintiffs failed to introduce evidence of Defendant Ming’s financial condition. “The purposes of punitive damages are to punish the defendant and deter the commission of similar acts. [Citations.] Three primary considerations govern the amount of punitive damages: (1) the reprehensibility of the defendant’s conduct; (2) the injury suffered by the victims; and (3) the wealth of the defendant. [Citation.] As to the wealth of the defendant, the function of deterrence ‘will not be served if the wealth of the defendant allows him to absorb the award with little or no discomfort’; conversely, ‘the function of punitive damages is not served by an award which, in light of the defendant’s wealth and the gravity of the particular act, exceeds the level necessary to properly punish and deter.’ ” (Rufo v. Simpson (2001) 86 Cal.App.4th 573, 619-620 (Rufo).)

“To enable an appellate court to review whether punitive damages are excessive, the record must contain ‘evidence of the defendant's financial condition.’ [Citation.] Because the important question is whether the punitive damages will have the deterrent effect without being excessive, an award that is reasonable in light of the first two factors, reprehensibility of the defendant's conduct and injury to the victims, may nevertheless ‘be so disproportionate to the defendant's ability to pay that the award is excessive’ for that reason alone. ‘[T]he purpose of punitive damages is not served by financially destroying a defendant. The purpose is to deter, not to destroy.’ ” (Rufo, 86 Cal.App.4th at p. 620.)

California Courts have reversed awards of punitive damages where such damages (in the amount of $5 million) exceeded more than two and one-half months of a defendants’ income in one year and more than seven months of such income in the next (Egan v. Mut. of Omaha Ins. Co. (1979) 24 Cal.3d 809, 824 (Egan)), where such damages (in the amount of half a million dollars) constituted almost one-third of a defendant’s net worth (Merlo v. Standard Life & Acc. Ins. Co. (1976) 59 Cal.App.3d 5, 18), and where such damages (in the amount of $2.5 million) were in excess of 15 percent of a defendant’s entire net worth (Little v. Stuyvesant Life Ins. Co. (1977) 67 Cal.App.3d 451, 469-470 (Little)).

Here, Moving Parties note that the jury instruction regarding how to factor an individual’s ability to pay punitive damages was read to the jury as follows:

(c) In view of a defendant’s financial condition, what amount is necessary to punish him or them, and discourage future wrongful conduct? You may not increase the punitive award above an amount that is otherwise appropriate merely because a defendant has substantial financial resources. Any award you impose may not exceed the defendant’s ability to pay. (December 11, 2023; 23:22–28.)

However, despite this, Moving Parties contend that at trial, Plaintiffs failed to establish Defendant Ming’s financial condition, net worth, or his ability to pay. Further, Moving Parties contend Plaintiff did not request documents from which to determine Defendant Ming’s financial condition, in conjunction with her Code of Civil Procedure section 1987 Notice to Appear at Trial, nor did any party serve a Notice to Produce documents at trial on Defendant Ming. Moving parties assert that opposing counsel relied heavily on portions of Defendant Ming’s deposition testimony to argue for a substantial award of punitive damages against Defendant Ming, including counsel for Plaintiff, Julie Esphorst arguing in closing, “Mr. Ming didn’t show up, but what do we know from the evidence? We know he told the police, [he’s] owned many Audis. He said in his deposition, [his] first car when [he] moved to California and got [his] driver’s license at 19, it was a brand-new Cadillac CTS. And then apparently, a year or two after he got a new Mercedes Benz SUV. That’s what we know about his ability. So you really don’t have any handcuffs on you with regard to Mr. Ming because he didn’t bother to come tell us about his abilities to pay.” Moving Parties note that this is not true, noting that Defendant Ming’s deposition testimony noted he bought the Mercedes Benz used.

Further, Moving Parties contend that counsel for Co-Defendant, Hicks, in closing, argued: “What we know in evidence about [Mr. Ming] is somewhat telling. Boarding school in England. Private school in Texas. During the summers, getting educated at what are Brown, Providence, UCLA, Georgetown. So a life of luxury? He bought his own vehicle, a Cadillac ATS or CTS right before he bought his 2016. Gives you a bit of a picture about him and also an evaluation when you het to the point of assigning punitive damages.” Defendant Ming argues opposing counsel committed misconduct by relying on facts not in evidence. Defendant Ming notes that he mentioned in passing to officers in the hours after the accidence that he “used to own a lot of Audis.” However, Defendant Ming contends that this statement was used by counsel without any foundation as to whether it was he or his family who owned these cars in the past. Further, Defendant Ming argues that there is no evidence the Cadillac he once purchased was “new”. Moreover, Moving Parties note that there is no evidence of which schools Defendant Ming attended nor that he lived a “life of luxury.” However, Defendant Ming notes that because his counsel was prohibited from presenting a defense, his counsel could not object to these misleading, and unsupported arguments.

To support his arguments, Moving Parties cite to Kelly v. Haag (2006) 145 Cal.App.4th 910 and Baxter v. Peterson (2007) 150 Cal.App.4th 673. In Kelly, the Court reversed a punitive damages award based on insufficiency of trial evidence. (Kelly, supra, 145 Cal.App.4th at 916-18.) There, the trial court awarded $75,000 in punitive damages where the testimony at trial was that, less than two years before trial, the defendant had purchased a large home for approximately $800,000, in which he had about $200,000 in equity, and that the defendant had owned another home for eight to ten years, in which the defendant had once represented that he had $400,000 to $500,000 in equity. (Id. 1t 917-17.) The Corut of Appeal found that there was no evidence whether – at the time of trial – he still owned the properties, or whether there was encumbrances on the properties at the time of trial, or whether the defendant had other liabilities. (Id. at 917.) Thus, the Court of Appeal reversed the award for punitive damages. (Id. at 921.) Further, in Baxter, the record indicated that the defendant owned substantial assets, but was “silent with respect to her liabilities.” The said assets included real properties, but there was no evidence whether they were encumbered or whether they generated a profit. The Baxter Court determined that the record was “silent” regarding the defendant’s liabilities, and therefore insufficient to evaluate the defendant’s ability to pay the punitive damages. (Baxter, supra, 150 Cal.App.4th at 681.)

Defendant Ming argues that Plaintiffs in this case, have presented an even sparser evidentiary record than in both Kelly and in Baxter. Thus, Defendant Ming argues that because Plaintiffs failed to establish Defendant Ming’s ability to pay, the evidence cannot support any award of punitive damages, let alone an award for $2 Million.

In Julie Esphorst’s Opposition, she argues that punitive damages were properly awarded against Defendant Ming because Mr. Ming’s failure to appear at trial, despite it being duly served improperly deprived Plaintiffs of the opportunity to develop more substantive evidence about his financial condition. Julie Esphorst argues that this case is analogous to that of Mike Davidov Co. v. Issod (2000) 78 Cal.App.4th 597, where the appellate court found that a defendant who failed to comply with a trial court’s order to produce records of his or her financial condition may be estopped from challenging the award on grounds of absence of evidence of financial condition. (Davidov, supra, 78 Cal.App.4th 605.) In Davidov, the jury rendered a verdict in favor of the plaintiff’s fraud claim, and the court granted the plaintiff’s request to conduct discovery of the defendant’s financial condition and ordered him to produce “all records regarding his net worth” by the following day. (Id. ay 603.) However, the defendant there had failed to comply and the court subsequently awarded $96,000 in punitive damages. (Id. at 604.) The Davidov defendant appealed, contending the plaintiff failed to provide sufficient evidence of his financial condition. (Id. at 605.) However, the Court of Appeal rejected this argument and held the defendant waive his right to complain about the lack of evidence by disobeying the trial court’s order to produce records reflecting his financial condition. (Id.at 608-09.) The Court of Appeal explained: “defendant’s records were the only source of information regarding his financial condition available to plaintiff. By his disobedience of a proper court order, defendant improperly deprived plaintiff of the opportunity to meet his burden of proof on the issue. Defendant may not now be heard to complain about the absence of such evidence. As defendant has not called our attention to anything in the record which otherwise reflects that the punitive damage award is excessive, we will affirm the award.” (Id.at 609.)

Here, Julie Esphorst argues that Davidov is analogous as Defendant Ming was served with a Notice to Appear, which would have allowed Plaintiff to question him about his financial condition. Julie Esphorst also argues this Court also ordered Defendant Ming’s remote appearance, and he agreed to the Court’s conditions, but nonetheless, failed to appear. Further, Julie Esphorst also contends that it is noteworthy that had Defendant Ming also failed to answer Plaintiff’s Complaint (rather than waiting until trial not to appear), the Court would have been authorized to award Plaintiff the $30,000,000 in punitive damages identified in her Statement of Damages pursuant to Code of Civil Procedure § 425.115.

This Court does not find Davidov to be on all fours to the case at bar as Plaintiffs did not place Defendant Ming on notice via court order, subpoena, nor Notice to Produce at Trial of production of information or documents relating to Ming’s financial condition. However, the Court does note that Plaintiff’s failure to appear at trial, despite his filing of a motion in limine to allow him to appear and testify remotely, which was conditionally granted, also was the reason Plaintiff was not able to ask him questions about his financial inability or ability to pay. Because a Motion for Judgment Notwithstanding the Verdict is to be weighed in favor of the party in whose favor the verdict was rendered, this Court is to weigh the arguments in favor of the Plaintiff’s here. The Court also notes that it sustained objection to the portions of the Plaintiff’s counsel’s declaration as they did not relate to the evidence the jury received in making its determination. As such, the Court is basing its analysis based on the portions of the evidence presented to the jury, and reasonable inferences the jury might have drawn from that evidence.

The Court DENIES the JNOV, finding there was sufficient evidence for the jury to have drawn the inference that Ming’s financial condition was such that he could afford a punitive damages verdict of the $2 Million amount awarded, and secondarily because of the estoppel effect of Ming’s failure to appear at trial in violation of the notice to appear at trial.

The Court will invite oral argument on the issue of whether the Notice to Appear at Trial was void because of Ming’s residence outside of the State of California at the time that Notice was served. This argument, which was never raised to the Court during the trial despite several discussions on the record regarding Ming’s failure to appear, was first raised in these motions.

B. Motion for New Trial

Legal Standard

Code of Civil Procedure section 657 provides the following grounds for granting a new trial motion, among others: (1) irregularity in the proceedings; (2) misconduct of the jury; (3) excessive or inadequate damages; (4) insufficiency of the evidence to justify the verdict or other decision, or the verdict or other decision is against law; and (5) error in law, occurring at the trial and excepted to by the party making the application. (Code Civ. Proc., § 657, subds. (1), (2), (5), (6), (7).)

In ruling on a new trial motion, the court sits as an independent trier of fact, and has the power to disbelieve witnesses, reweigh the evidence, and draw reasonable inferences therefrom contrary to those of the trier of fact, in an effort to determine whether the jury clearly should have reached a different conclusion. (Lane v. Hughes Aircraft Co. (2000) 22 Cal.4th 405, 412; Barrese v. Murray (2011) 198 Cal.App.4th 494, 503). “Unless such a moving party can show that by a retrial of the action, and supporting facts therefor are contained in the affidavit, he could establish an entirely different case favorable to himself in the event that a new trial be granted, it is a thoroughly settled rule that a motion for a new trial will not be granted.” (Moore v. Franchetti (1937) 22 Cal.App.2d 75, 79 (Moore).)

Discussion

The Court is inclined for the reasons discussed above to deny the motion for new trial as to all but one of the grounds asserted. The exception is the assertion of excessive damages. In the Court’s view, the jury’s awards of non-economic damages were the result of passion and prejudice in the total amount of $59 Million. Further, the Court notes the absence of any evidence of economic damages such as past or expected future medical expenses, which might have provided some tether for the jury to consider as bearing on the non-economic jury awards. Numerous jurors indicated during voir dire that they would be unable to place a dollar figure on the loss of the life of a child. Several jurors indicated during voir dire that they would have difficulty setting a dollar figure that was not tied to any objective figure or objective evidence. The law provides no template or measurement for jurors to make a determination of non-economic damages, so counsel presented passionate evidence including the plaintiffs’ own testimony of the degree of love they had for their stellar student and gifted athlete of a son, Jessie Junior. Photos and videos depicting the “relationship” that the mother and father had for “Junior” were presented, evidence designed to arouse the passions and emotions of jurors. The jury was properly instructed under the law that “no fixed standard exists for deciding the amount of these items of noneconomic damages. You must use your judgment to decide a reasonable amount based on the evidence and your common sense.” But that is not the end of the Court’s analysis

The good judgment of the Court can be employed to adjust the amount of damages awarded by a jury whose verdict is the result of passion or prejudice. It is the Court’s tentative ruling that the noneconomic damages were excessive, but in lieu of granting a new trial on damages the Court’s intention is to reduce the amount of the jury’s verdict as a condition of denying a new trial on the damages issue. The Court is inclined to reduce the non-economic damages by 20%, thus lowering the jury’s wrongful death non-economic awards to $18.6 Million to Plaintiff Julie A. Esphorst for past and future non-economic damages, to $16.4 Million for Plaintiff Jesse Esphorst in wrongful death non-economic damages, and $12.8 Million in non-economic damages for his own past and future bodily injury non-economic damages. These amounts are still massive but are more consistent with other wrongful death and bodily injury cases in the Court’s experience. The Court requests oral arguments as to whether Plaintiffs need a brief continuance of the hearing to discuss with their clients the Court’s tentative ruling as to the conditional reduction of non-economic damages in lieu of granting a new trial on damages. The Court’s tentative ruling is to leave the jury’s determinations of punitive damages undisturbed.

C. State Farm’s Motion to Vacate Judgment

Proposed Intervenor, State Farm, has also filed a Motion to Vacate Judgment. State Farm argues that the judgment entered in Plaintiffs’ favor should be vacated as State Farm should have been permitted to intervene on behalf of Defendant Ming. Preliminarily, this Court notes, despite State Farm’s attempt at arguing otherwise, that State Farm’s Motion to Vacate Judgment is improper pursuant to Code of Civil Procedure section 916. State Farm attempts to argue that Code of Civil Procedure section 916 would not stay this issue as the appeal does not affect this motion or is embraced by the judgment. However, despite State Farm’s Motion being labeled as a Motion to Vacate Judgment, the entirety of the motion is based on this Court’s order disallowing State Farm to intervene belatedly on behalf of Defendant Ming when State Farm first requested to do so near the close of the evidence. State Farm attempts to argue that because it appealed this Court’s Order Denying its Application for Leave to Intervene, by which it sought to be an action in this party, there was no judgment for State Farm to seek to vacate at the time State Farm appealed this Court’s order. The Court’s Amended Judgment was entered on January 26, 2024.

Pursuant to Code of Civil Procedure section 916(a), “the perfecting of an appeal stays proceedings in the trial court upon the judgment or order appealed from or upon the matters embraced therein or affected thereby, including enforcement of the judgment or order, but the trial court may proceed upon any other matter embraced in the action and not affected by the judgment or order.” (Code Civ. Proc., § 916, subd. (a).) “The principle of ‘subject matter jurisdiction’ relates to the inherent authority of the court involved to deal with the case or matter before it.” (Conservatorship of O’Connor (1996) 48 Cal.App.4th 1076, 1087.) As such, where there is no subject matter jurisdiction, a trial court does not have the power “to hear or determine [the] case.” (Abelleira v. District Court of Appeal (1941) 17 Cal.2d 280, 288.) Code of Civil Procedure section 916 – thus – stands for the proposition that a trial court is divest of subject matter jurisdiction over any matter embraced in or affected by the appeal during the pendency of that appeal. (Varian Medical Systems, Inc. v. Delfino (2005) 35 Cal.4th 180, 196 (“Delfino”).

The purpose of the automatic stay under section 916 is to preserve “the status quo until the appeal is decided” (Elsea v. Saberi (1992) 4 Cal.App.4th 625, 629), by maintaining “the rights of the parties in the same condition they were before the order was made” (Wolcott v. Hudner (1924) 67 Cal.App. 704, 707.) Thus, to preserve the status quo and return the parties to “the same condition they were before the order was made” (Ibid), Code of Civil Procedure section 916 necessarily renders any subsequent trial court proceeding on matters “embraced” in or “affected” by the appeal void – and not merely voidable. This is because, “[a] contrary conclusion would allow the trial court to render an appeal futile. (Delfino, supra, 35 Cal.4th at 198.) For example, “if trial court proceedings during the pendency of the appeal conflict with the reviewing court’s resolution of the appeal, then the appeal will likely be futile because the prevailing party, in most instances, will have no adequate remedy left.” (Ibid.)

This Court notes that whether a matter is “embraced in” or “affected by” an appeal, and thus outside a trial court’s jurisdiction, turns on whether it would have any bearing on the effectiveness of that appeal. (Curtin Maritime Corp. v. Pacific Dredge & Construction, LLC (2022)76 Cal.App.5th 651, 665.) A clear example of this can be found in Delfino, where the trial court denied defendants’ anti-SLAPP motion, and defendants subsequently appealed, and filed petition for writ of supersedeas, seeking to stay further trial court proceedings pending appeal. Delfino, supra, 35 Cal.4th at 180.) The trial court denied the application, and the Court of Appeal summarily denied the petition. (Id. at 188.) After trial, the jury found for the plaintiffs and the trial court issued a permanent injunction against defendants. (Ibid.) Following the entry of judgment, the Court of Appeal dismissed, as moot, defendants’ appeal from the order denying their anti-SLAPP motions. (Ibid.) Subsequently, the California Supreme Court analyzed the issue of whether an appeal from the denial of a special motion to strike under the anti-SLAPP statute effected an automatic stay of the trial court proceedings. (Ibid.) The Supreme Court found that it did, noting that “defendants’ anti-SLAPP motions encompassed all of plaintiffs’ causes of action. As such, all of the matters on trial were embraced in and affected by defendants’ appeal from the denial of that motion, and the trial court lacked subject matter jurisdiction over these matters. (Id. at 200.)

Here, it is clear that this Court’s ruling on State Farm’s Motion to Vacate, based on this Court’s ruling that it could not intervene would bear on the effectiveness of the Appellate Court’s decision on whether this Court erred in denying State Farm’s motion to intervene. This Court will not vacate an entire judgment based on an order currently being decided by the court of appeals. If this Court were to vacate the judgment based on State Farm’s argument that it had the right to intervene here, then the Court of Appeal’s potential determination that this Court did not err when it denied State Farm’s Motion to Intervene would be futile. As such, the Motion to Vacate Judgment is DENIED.