Judge: Salvatore Sirna, Case: KC069072, Date: 2024-05-14 Tentative Ruling

Case Number: KC069072    Hearing Date: May 14, 2024    Dept: G

Defendant/Cross-Complainant West Hills Construction, Inc.’s Motion to Bifurcate Issues of Warranty and Order for Court Trial

Respondent: Plaintiffs McKinley Home Foundation and McKinley Children’s Center, Inc.

TENTATIVE RULING

Defendant/Cross-Complainant West Hills Construction, Inc.’s Motion to Bifurcate Issues of Warranty and Order for Court Trial is GRANTED.

BACKGROUND

This is a breach of contract and warranty action. In June 2011, Plaintiffs McKinley Home Foundation (MHF) and McKinley Children’s Center, Inc. (MCC, collectively McKinley) entered into an agreement with Defendant West Hills Construction, Inc. (West Hills) in which West Hills agreed to install a solar power system manufactured and supplied by Green Volts, Inc. (Green Volts) in exchange for payment of $2,481,088.21. West Hills installed the system in May 2012 and in April 2015, a large number of components failed leading to the complete failure of the system.

On December 22, 2017, McKinley filed an operative First Amended Complaint against West Hills and Does 1-30, alleging causes of action for (1) breach of warranty, (2) breach of contract, and (3) breach of contract - third party beneficiary.

On July 24, 2017, West Hills filed a cross-complaint against Green Volts and Roes 1-20 for (1) equitable indemnity, (2) declaratory relief, (3) contribution, and (4) express indemnity.

On March 23, 2018, West Hills filed a motion for summary judgment on McKinley’s claims. On July 3, 2018, West Hills dismissed its cross-complaint against Green Volts. On July 11, 2018, the Court granted West Hills’ motion. On September 14, 2018, McKinley filed a notice of appeal.

On December 22, 2020, the Court of Appeal issued a decision that reversed the Court’s grant of summary judgment.

On October 7, 2021, West Hills moved to set aside dismissal of the Cross-Complaint. On November 5, 2021, the Court denied West Hills’ motion.

On November 9, 2021, West Hilled filed a cross-complaint against Green Volts and Roes 1-20 for (1) equitable indemnity, (2) declaratory relief, (3) contribution, and (4) express indemnity.

On May 12, 2022, West Hills filed a motion to bifurcate trial of contractual warranty claims from damages issues. On June 2, 2022, McKinley filed a notice of settlement of entire case.

On November 16, 2022, West Hills filed a motion to enforce a settlement agreement between West Hills and McKinley. On January 3, 2023, the Court denied West Hills’ motion, finding there was no enforceable settlement agreement.

On April 17, 2024, West Hills filed the present motion. A hearing on the motion is set for May 14, 2024, while a final status conference is set for June 24, 2024, and a jury trial is set for July 2, 2024.

ANALYSIS

West Hills moves for the bifurcation of liability and damages issues with the separate trial first being held on the issue of liability. For the following reasons, the Court GRANTS West Hills’ motion.

Legal Standard

Code of Civil Procedure section 598 establishes the following procedure for bifurcation of issues at trial:

“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, no later than the close of pretrial conference in cases in which such pretrial conference is to be held, or, in other cases, no later than 30 days before the trial date, 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, except for special defenses which may be tried first pursuant to Sections 597 and 597.5. The court, on its own motion, may make such an order at any time. Where trial of the issue of liability as to all causes of action precedes the trial of other issues or parts thereof, and the decision of the court, or the verdict of the jury upon such issue so tried is in favor of any party on whom liability is sought to be imposed, judgment in favor of such party shall thereupon be entered and no trial of other issues in the action as against such party shall be had unless such judgment shall be reversed upon appeal or otherwise set aside or vacated. 

If the decision of the court, or the verdict of the jury upon the issue of liability so tried shall be against any party on whom liability is sought to be imposed, or if the decision of the court or the verdict of the jury upon any other issue or part thereof so tried does not result in a judgment being entered pursuant to this chapter, then the trial of the other issues or parts thereof shall thereafter be had at such time, and if a jury trial, before the same or another jury, as ordered by the court either upon its own motion or upon the motion of any party, and judgment shall be entered in the same manner and with the same effect as if all the issues in the case had been tried at one time.” (Code Civ. Proc., § 598.)

By allowing the trial of liability issues before the trial of any other issue, the objective of Code of Civil Procedure section 598 “is avoidance of the waste of time and money caused by the unnecessary trial of damage questions in cases where the liability issue is resolved against the plaintiff.” (Cohn v. Bugas (1974) 42 Cal.App.3d 381, 385, quoting Trickey v. Superior Court (1967) 252 Cal.App.2d 650, 653.) However, the court cannot order the separate trial of an issue of liability when it is necessary to prove the plaintiff’s damages in order to establish that liability because of the nature of the case. (Cook v. Superior Court (1971) 19 Cal.App.3d 832, 834.)

Discussion

In this case, West Hills argues the Court should bifurcate trial of McKinley’s claims and first determine whether the warranty provisions at issue imposed a duty on West Hills. (Motion, p. 8:14-28.) West Hills argues bifurcation would expedite and simplify the presentation of evidence as a finding that the warranty provisions at issue are inapplicable to West Hills would obviate any further need for trial. (Motion, p. 8:14-28.) In opposition, McKinley argues this is merely an attempt to short-circuit McKinley’s right to a jury trial as there are multiple issues of fact with regards to West Hills’ alleged warranty obligations. (Opp., p. 5:14-28.)

“The interpretation of a written instrument, even though it involves what might properly be called questions of fact, is essentially a judicial function to be exercised according to the generally accepted canons of interpretation so that the purposes of the instrument may be given effect.” (Parsons v. Bristol Development Co. (1965) 62 Cal.2d 861, 865.) “It is therefore solely a judicial function to interpret a written instrument unless the interpretation turns upon the credibility of extrinsic evidence.” (Id., at p. 865.) And where there is “issues both of law and fact, the issue of law must be first disposed of.” (Code Civ. Proc., § 592.) “The jury is involved only if the court determines that 1) the wording of the instrument is reasonably susceptible of the interpretation contended for by the proponent of the extrinsic evidence, 2) the extrinsic evidence is relevant to prove the proposed meaning, and 3) the credibility of the proponent’s parol evidence is disputed.” (Equitable Life Assurance Society v. Berry (1989) 212 Cal.App.3d 832, 838 (Equitable Life Assurance Society).)

Here, the Court of Appeal held the warranty contract between McKinley and West Hills is facially ambiguous as a matter of law. (McKinley Home Foundation v. West Hills Construction, Inc. (Dec. 22, 2020, B292720) [nonpub. opn.].) Thus, interpretation of the warranty contract between McKinley and West Hills will turn on the parties’ extrinsic evidence. In support of their contention that West Hills’ warranty did not cover solar power components provided by Green Volts, West Hills argues Green Volts’ warranty and an email discussion between McKinley and West Hills suggests the solar panels were covered by Green Volts’ warranty. (Motion, p. 9:1-7.) But McKinley points to their own evidence which they argue establishes West Hills’ actions prior to the dispute were consistent with McKinley’s interpretation of the warranty contract including West Hills undertaking repairs of the solar panel components without cost. (Opp., p. 5:21-6:19.)

Ultimately, as noted above in Equitable Life Assurance Society, the mere introduction of extrinsic evidence does not mandate a jury determination unless the extrinsic evidence’s interpretation is reasonable, the extrinsic evidence is relevant, and its credibility is disputed. Because these are questions of law that the Court must determine first, West Hills’ requested bifurcation will not short-circuit McKinley’s right to a jury trial. Instead, it serves the interest of judicial economy by allowing the Court and the parties to avoid the costs of a jury trial if the extrinsic evidence presented does not require a jury determination.

In opposition, McKinley also argues the Court should not consider evidence in West Hills’ motion that was allegedly wrongfully withheld from McKinley in discovery. (Opp., p. 6:25-7:17.) But to the extent McKinley seeks to prevent West Hills from relying on this evidence here or at trial through arguments raised in an opposition, this is not the appropriate method to do so as this request requires a separate motion. Last, McKinley argues granting West Hills’ motion will cause unreasonable delay. (Opp., p. 7:19-8:12.) But McKinley’s argument assumes a jury trial will be required and ignores the possibility of the Court finding West Hills is entitled to judgment as a matter of law on the issue of the warranty’s interpretation.

Accordingly, West Hills’ motion is GRANTED.

CONCLUSION

Based on the foregoing, West Hills’ motion to bifurcate is GRANTED.