Judge Sandy N. Leal, Case 2023-01308368 2023-08-17 Tentative Ruling

Judge: Sandy N. Leal, Case: 2023-01308368, Date: 2023-08-17 Tentative Ruling

1) Application/Request

2) Case Management Conference

3) Motion for Change of Venue (Transfer)

Defendant Peter Vander Werff Construction, Inc.’s Motion for Change of Venue is DENIED.

“Where there are multiple parties and causes of action, venue may be proper in more than one county.” (Rycz v. Superior Court of San Francisco County (2022) 81 Cal.App.5th 824.)

Code Civ. Proc. § 396b states in pertinent part: “(a) Except as otherwise provided in Section 396a [not applicable here], if an action or proceeding is commenced in a court having jurisdiction of the subject matter thereof, other than the court designated as the proper court for the trial thereof, under this title, the action may, notwithstanding, be tried in the court where commenced, unless the defendant, at the time he or she answers, demurs, or moves to strike, or, at his or her option, without answering, demurring, or moving to strike and within the time otherwise allowed to respond to the complaint, files with the clerk, a notice of motion for an order transferring the action or proceeding to the proper court, together with proof of service, upon the adverse party, of a copy of those papers. Upon the hearing of the motion the court shall, if it appears that the action or proceeding was not commenced in the proper court, order the action or proceeding transferred to the proper court. ¶ (b) 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. …”

“[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. Superior Court (2009) 175 Cal. App. 4th 830, 836.)

Code Civ. Proc. § 395 states in pertinent part: “(a) Except as otherwise provided by law and subject to the power of the court to transfer actions or proceedings as provided in this title, the superior court in the county where the defendants or some of them reside at the commencement of the action is the proper court for the trial of the action.” Code Civ. Proc. § 395 further states: “Subject to subdivision (b), if a defendant has contracted to perform an obligation in a particular county, the superior court in the county where the obligation is to be performed, where the contract in fact was entered into, or where the defendant or any defendant resides at the commencement of the action is a proper court for the trial of an action founded on that obligation, and the county where the obligation is incurred is the county where it is to be performed, unless there is a special contract in writing to the contrary.” (Code Civ. Proc., § 395(a).)

Code Civ. Proc. § 395.5 states: “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.”

“The plaintiff's theory of the action as set forth in the complaint determines the venue. (Eckstrand v. Wilshusen (1933) 217 Cal. 380, 381–382, 18 P.2d 931.) ... ¶ A ‘mixed action’ is one where the plaintiff has alleged two or more causes of action, each of which is governed by a different venue statute. … (Brown v. Superior Court (1984) 37 Cal.3d 477, 488, 208 Cal.Rptr. 724, 691 P.2d 272.) Where the defendant is entitled to a change of venue as to one cause of action, the entire action is transferred. (Jhirmack Enterprises, Inc. v. Superior Court (1979) 96 Cal.App.3d 715, 720, 158 Cal.Rptr. 192.)” (Gallin v. Superior Ct., (1991) 230 Cal. App. 3d 541, 544–45.)

Where “two sophisticated parties agree, pursuant to arm’s length negotiations, to litigate an action in one of multiple statutorily permissible venues, they should be held to their agreement.” (Battaglia Enterprises, Inc. v. Superior Court (2013) 215 Cal.App.4th 309, 318.)

“Venue is determined based on the complaint on file at the time the motion to change venue is made.” (Malloy v. Superior Ct. (2022) 83 Cal. App. 5th 543, 553.)

As an initial matter, the Parties agreed, as part of the agreements both parties contend are enforceable, to an express written term in the subject Agreement, that “[i]f legal action is necessary to enforce the terms and conditions of this Equipment Lease, the Parties hereby agree that the Superior Court of California, County of Orange, shall be the sole jurisdiction and venue for the bringing of such action;” (Agreement, ¶ 19.2) Thus, as long as Orange County is a “statutorily permissible” venue for all of Mobile Kitchens’ causes of action, the Motion should be denied.

Plaintiff’s First Amended Complaint, the operative complaint at the time the Motion was filed, alleges causes of action for (1) Breach of Written Contract; (2) Fraud—Intentional Misrepresentation; (3) Fraud—False Promise; and (4) Declaratory Relief.

First, regarding the contract cause of action, PVW Construction contents that all performance of the prime contract takes place in San Diego County. (Gossage Decl., ¶ 9.) The Declaration of Charles Gossage states: “The Project is located in the County of San Diego. All performance of the Prime Contract takes place in the County of San Diego.” (Gossage Decl., ¶ 9.) Additionally, PVW Construction provides that the Lease was executed by PVW at its office in San Diego County. (Gossage Decl., ¶¶ 6, 14-17.)

Furthermore, a corporation’s “residence” is where the principal place of business of such corporation is situated. (Code Civ. Proc. § 395.5.) PVW Construction’s principal place of business is its home office located at 125 West Lexington Avenue, El Cajon, California 92020, which is within San Diego County. (Gossage Decl., ¶ 6; RJN § 3.)

Mobile Kitchens (referred to as MK in their brief) contends “[v]enue for actions relating to a PVW’s contractual obligations is proper in Orange County, as the location where the contract was written, revised, signed, and partially performed and was breached by PVW for non-payment. Crommelin Decl., ¶¶ 2, 5; Ex. A, C, E.” (Opposition, 11:18-21.) The Declaration of Wendy Crommelin states: “The Lease Agreement between MK and PVW, which Mr. Gossage initially signed in October 2021 (without making any changes), was drafted by MK and made in Orange County. The contract was to be partially performed in part in Orange County, where PVW was to pay MK. Throughout the duration of the lease term, PVW has sent its payments to MK’s 2031 South Lida Lane, Anaheim, California 92802 address.” (¶ 5.)

PVW Construction does not argue that the foregoing is not sufficient. Neither party cites caselaw regarding where the contract is made or where performance takes place.

Because Mobile Kitchens established that the payments were made in Orange County, the Court finds that this is sufficient to establish that Orange County is a “statutorily permissible” venue for the breach of contract cause of action. (Anaheim Extrusion Co. v. Sup.Ct. (Classic Molding Co.) (1985) 170 CA3d 1201, 1203.)

Second, PVW Construction contends that Mobile Kitchens’ cause of action for fraud is a transitory cause of action, meaning it can only be tried in Defendant’s County of Residence. PVW cites Sausen v. Anderton (1954) 129 Cal.App.2d 324 (Sausen) for the proposition that, a fraud cause of action such as Plaintiff’s is transitory and defendants are “entitled upon request to have this action tried in the county of the residence of one or the other of them.” (Id. at p. 326.)

Sausen states: “‘* * * Such an action is not ‘founded’ on the contract sought to be canceled—it is not a contract action at all, but a tort action based on fraud.' See also Brown v. Happy Valley Fruit Growers, 206 Cal. 515, 274 P. 977; Howe v. Tucker, 219 Cal. 193, 25 P.2d 832; Terry v. Rivergarden Farms Co., 29 Cal.App. 59, 154 P. 476; Kaluzok v. Brisson, 27 Cal.2d 760, 167 P.2d 481, 163 A.L.R. 1308.” (Id. 325-326.)

Again, PVW Construction’s principal place of business is its home office located at 125 West Lexington Avenue, El Cajon, California 92020, which is within San Diego County. (Gossage Decl., ¶ 6; RJN § 3.)

Mobile Kitchens (referred to as MK in their brief) contends “MK’s fraud causes of action arise out of false promises and intentional misrepresentations made in the inducement of the Agreement, and therefore directly stem from PVW’s contractual obligations under the Agreement. PVW used a ‘bait and switch’ approach by agreeing to essential terms, and then months later, after the contract had been performed sought to unilaterally and fraudulently change the terms of the deal by purporting to strike essential and material terms. As the fraud allegations arise and go hand in hand with PVW’s contractual obligations, they fall within the ambit of the forum selection clause and independent of such, under C.C.P. Section 395.5 as they arise out of the contractual obligations.” (Opposition, 11:21-12:2.)

The First Amended Complaint (FAC) alleges that Mobile Kitchens relied upon PVW Construction’s representations that it would abide by the Lease Agreement, the Lease’s Exhibit A, and Revised Exhibit A. (¶¶ 95-96.) The FAC also alleges that PVW Construction represented it would allow Plaintiff to enter Camp Pendleton and retake possession of the Equipment and Optional Items in the event that Defendant failed were in Default under the Lease. (¶ 97.) The FAC further alleges that PVW attempted to modify the terms of the lease unilaterally, claiming that Mobile Kitchens had no right under the Default provisions, and had no right to retake possession. (¶ 96.)

Based on the foregoing, Mobile Kitchens’ Fraud causes of action are essentially asking the Court to enforce the original Lease Agreement, the Lease’s Exhibit A, and Revised Exhibit A, and ignore PVW Construction’s unilaterally revised version. Because the damages from these causes of action flow from the alleged breach of contract causes of action, Mobile Kitchens’ action can be tried in Orange County Superior Court. Carse v. Zarevich, (1959) 170 Cal. App. 2d 167, 168–69.) All of the causes of action are to enforce the Lease Agreement that contains the venue selection clause.

Lastly, PVW Construction contends that it filed its San Diego action first and, therefore, San Diego is the proper County. However, it is undisputed that Mobile Kitchens served its Complaint first. “When two superior courts have concurrent jurisdiction over the subject matter . . . Priority of jurisdiction resides in the tribunal where process is first served.” (California Union Ins. Co. v. Trinity River Land Co., (1980) 105 Cal. App. 3d 104, 109, citing Halpin v. Superior Court, (1971) 14 Cal.App.3d 530, 545.) “The tribunal where process is served first which has priority, regardless of which action was filed first.” (Mungia v. Superior Ct. for Los Angeles Cnty., (1964) 225 Cal. App. 2d 280, 283.)

Based on the foregoing, the Motion is DENIED. The Court does not award attorney fees because it finds that the Motion was made in good faith. This ruling is without prejudice for any party to bring a motion for attorney fees once there is a prevailing party at the culmination of the case.

Plaintiff to give notice.