Judge Stephen P. Pfahler, Case Number: 22CHCV00382, Date: 2023-09-15 Tentative Ruling

Judge: Stephen P. Pfahler, Case: 22CHCV00382, Date: 2023-09-15 Tentative Ruling

Case Number: 22CHCV00382 Hearing Date: October 13, 2023 Dept: F49

Dept. F-49

Date: previously set on 09-15/2023 and continued to 10-13-2023

Case #22CHCV00382

Trial Date: N/A

RECONSIDER

MOVING PARTY: Plaintiffs, Kristen and Alfredo Galvan

RESPONDING PARTY: Defendants, Aqua Blue Construction, Inc., et al.

RELIEF REQUESTED

Motion for Reconsideration of the Order Compelling Arbitration

SUMMARY OF ACTION

Plaintiffs Kristen and Alfredo Galvan allege defendants Aqua Blue Construction, Inc., and Britton Julien entered into a contract for installation of a swimming pool and hardscape improvements to Plaintiffs’ home without a valid contractors license, due to the failure to maintain workers compensation insurance. Plaintiffs also allege the construction project was defectively completed.

On May 27, 2022, Plaintiffs filed a complaint for Breach of Contract, Negligence, Negligence Per Se, Breach of Implied Covenant of Good Faith and Fair Dealing, Breach of Express Warranty, and Recovery on Contract’s License Bond. On December 8, 2022, Aqua Blue Construction, Inc., and Britton Julien filed a cross-complaint against the Galvans for Breach of Written Contract, Defamation, and Fraud and Deceit. On December 22, 2022, American Contractors Indemnity Co. answered the complaint and filed a cross-complaint against Aqua Blue Construction, Inc., and the Galvans for Interpleader and Injunctive Relief.

On February 27, 2023, the court deemed the subject action and Aqua Blue Construction, Inc., et al. v. John Goshorn 22CHCV00392 NOT related. On March 20, 2023, Plaintiffs filed their first amended complaint without leave of court. On April 4, 2023, the court sustained the demurrer to the complaint and deemed the first amended complaint filed.

Meanwhile, on March 24, 2023, the court entered the parties’ stipulation whereby American Contractors Indemnity Company agreed to interplead the $15,000 in funds on the bond. Upon the completion of the deposit, American Contractors Indemnity Company will be dismissed from the complaint and will dismiss its own cross-complaint.

On April 6, 2023, the court granted the motion of Defendants, Aqua Blue Construction, Inc., et al., to compel arbitration. On September 21, 2023, American Contractors Indemnity Company dismissed itscomplaint.

RULING: Reconsideration: DENIED/Supplemental Hearing re Order Striking Additional Language: GRANTED.

Request for Judicial Notice: Granted.

The court takes judicial notice of its own entered order. Consistent with the September 15, 2023, ruling, the court will not consider the motion for reconsideration of the order itself, due to the lack of procedural qualification and substantive support under the statute. (Code Civ. Proc., § 1008; New York Times Co. v. Superior Court (2005) 135 Cal.App.4th 206, 212–213; Baldwin v. Home Sav. of America (1997) 59 Cal.App.4th 1192, 1199; Garcia v. Hejmadi (1997) 58 Cal.App.4th 674, 690-691; Gilberd v. AC Transit (1995) 32 Cal.App.4th 1494, 1500.)

Nevertheless, given the challenge arose from the addition of language to the order compelling arbitration, the court considered the additional language presented under due process and equity standards regarding the actual relief granted from the motion to compel arbitration. (Code Civ. Proc., § 473, subd. (d).) Plaintiffs challenged the language in the May 3, 2023, order regarding the fee allocation provision under Business and Professions Code section 7168 on grounds that the subject matter was not addressed in the hearing, and therefore improperly added to the order for arbitration. Plaintiffs additionally seek to recharacterize the proceeding as one of “consumer arbitration,” thereby barring any neutral or private arbitration company from hearing the claim, and requiring a finding of an ability to share fees or a waiver of fees on behalf of the Plaintiffs. Defendants in opposition countered the proposed order was lodged and served at the time of the hearing, and the statement regarding Business and Professions section 7168 constituted a proper reference for the basis of the order compelling arbitration. Defendants also challenged the “knowingly and intentionally false statements” asserted in the motion. Plaintiffs in reply reiterated the argument regarding the improper addition language into the as an action beyond the purview of the motion. Plaintiffs requested the court exercise its discretion in considering the order.

At the time of the September 15, 2023, hearing, the court wrote: “Defendants suggest that the argument regarding Business and Professions Code 7168 was in fact addressed via the order, but otherwise provides no support for any presentation of the issue in the motion itself. The February 10, 2023, filed motion itself in fact lacks reference to this section as part of the terms for arbitration. The April 6, 2023, minute order and motion itself also lacks reference to Business and Professions Code section 7168 as result of oral argument. The proposed order itself was filed and served as part of the motion however, and Plaintiffs apparently failed to present any objections to the order. No hearing regarding consideration of the additional language was otherwise considered by the court.”

The court ordered supplemental briefing. All parties timely submitted their briefs.

Defendants submitted a “Notice of Motion of Objection and Motion of Objection to Plaintiffs’ Attempt to Redact” the language of the order. Defendants first challenge the timeliness of the motion under the reconsideration statute, and cite to the prior court order regarding the failure to submit objections to the order. Defendants contend the lack of objections to the proposed order constituted a waiver. Plaintiffs in opposition challenges the applicability of Business and Professions Code 7168 to the arbitration. Plaintiffs next challenge the lack of service of the order itself on Plaintiffs, and denies any requirement to submit objections. Defendants in reply reiterates the lack of objections, contends the supplemental opposition improperly seeks reargument of items already ruled upon by the court, and maintains a waiver of the included section.

Defendants cite two sections of the California Rules of Court regarding service of orders. The court addresses the rules.

Rule 3.1312. Preparation and submission of proposed order

(a) Prevailing party to prepare

Unless the parties waive notice or the court orders otherwise, the party prevailing on any motion must, within five days of the ruling, serve by any means authorized by law and reasonably calculated to ensure delivery to the other party or parties no later than the close of the next business day a proposed order for approval as conforming to the court's order. Within five days after service, the other party or parties must notify the prevailing party as to whether or not the proposed order is so approved. The opposing party or parties must state any reasons for disapproval. Failure to notify the prevailing party within the time required shall be deemed an approval. The extensions of time based on a method of service provided under any statute or rule do not apply to this rule.

(b) Submission of proposed order to court

The prevailing party must, upon expiration of the five-day period provided for approval, promptly transmit the proposed order to the court together with a summary of any responses of the other parties or a statement that no responses were received.

(Subd (b) amended effective January 1, 2007; previously amended effective July 1, 2000.)

(c) Submission of proposed order by electronic means

If a proposed order is submitted to the court electronically in a case in which the parties are electronically filing documents under rules 2.250-2.261, two versions of the proposed order must be submitted:

Defendant also cites the family law standard for objections.

Rule 5.125. Preparation, service, and submission of order after hearing

The court may prepare the order after hearing and serve copies on the parties or their attorneys. Alternatively, the court may order one of the parties or attorneys to prepare the proposed order as provided in these rules. The court may also modify the timelines and procedures in this rule when appropriate to the case.

…

(b) Submission of proposed order after hearing to the court

Within 10 calendar days of the court hearing, the party ordered to prepare the proposed order must:

(1) Serve the proposed order to the other party for approval ...

(c) Other party approves or rejects proposed order after hearing

(1) Within 20 calendar days from the court hearing, the other party must review the proposed order to determine if it accurately reflects the orders made by the court and take one of the following actions:

...

(B) State any objections to the proposed order and prepare an alternate proposed order. Any alternate proposed order prepared by the objecting party must list the findings and orders in the same sequence as the proposed order. After serving any objections and the alternate proposed order to the party or attorney, both parties must follow the procedure in (e).

(2) If the other party does not respond to the proposed order within 20 calendar days of the court hearing, the party ordered to prepare the proposed order must submit the proposed order to the court without approval within 25 calendar days of the hearing date. ...

…

(e) Objections to proposed order after hearing

(1) If a party objects to the proposed order after hearing, both parties have 10 calendar days following service of the objections and the alternate proposed order after hearing to meet and confer by telephone or in person to attempt to resolve the disputed language. ...

The court declines to consider the standard for family law, and only addresses civil orders. The court first addresses valid service. The order in fact contains a proof of service on 433 North Camden Drive, Fourth Floor Beverly Hills, CA 90210, while the current address of counsel listed on the operative briefs is 9440 Santa Monica Boulevard., Suite 301 Beverly Hills, California 90210. This address is consistent with the address listed on the opposing documents to the arbitration and motion for reconsideration as well, though the court received a return of returned mail without any forwarding address on April 17, 2023, and May 10, 2023, for documents mailed to this address. The supplemental brief was also served on the Camden address, and counsel apparently received a copy of the document given the opposition. The court dockets shows no submitted change of address from Plaintiffs’ counsel however. The court cannot verify the correct address of counsel, and the opposition otherwise lacks any declaration attesting to the correct address. The court therefore declines to find any error in service given the returned mail to the court when also mailed to the same address and successful receipt of the supplemental briefs at the Camden address. The court invites counsel to submit any updated information, if applicable, with the court.

As for the order itself, the plain language of California Rules of Court, rule 3.1312(a) states in part: “the party prevailing on any motion must ... serve ... a proposed order for approval as conforming to the court's order.” Nothing in the opposition to the motion for reconsideration, supplemental brief, or reply in any way supports a finding of consistency between the moving papers, opposition, reply and tentative ruling on the hearing to compel arbitration, regarding the additional language under Business and Professions Code section 7168. The order is therefore NOT conforming to the court minute order, and the additional language in no way represents the order of the court and intent of the ruling.

The court improperly entered the order due to clerical error, and under its sua sponte power to nunc pro tunc correct an order reflecting a clerical error, the strikes the second sentence in section three (3) with all of its subject language regarding Business and Professions Code section 7168. (In re Doane's Estate (1964) 62 Cal.2d 68, 71.)

The court otherwise declines to effectively reconsider the original motion to compel arbitration, and determine whether the language under Business and Professions Code section 7168 applies to the arbitration proceeding. Given the paucity of criteria for conducting of the arbitration, as addressed in the April 6, 2023, order, the court finds nothing in this order limits the parties’ presentation of the issue regarding the award of attorney fees to the actual arbitrator for consideration of applicability.

The parties are therefore ordered to proceed with the arbitration selection, as ordered on April 6, 2023. The action remains stayed pending arbitration. The November 14, 2023, OSC re: Arbitration Status remains set pending the hearing, but subject to a new date.

Plaintiffs to provide notice.