Judge: Teresa A. Beaudet, Case: 21STCV44145, Date: 2024-02-13 Tentative Ruling

Case Number: 21STCV44145    Hearing Date: March 14, 2024    Dept: 50

Superior Court of California

County of Los Angeles

Department 50

            Background

On December 2, 2021, Plaintiff James McLeary (“McCleary”) filed this action against Defendants Sea View Inn at the Beach, Incorporated, Hal Keasler, Jim Murphy, Branden Alonzo, and Vuong Nguyen (collectively, “Defendants”).

On March 10, 2022, Sea View Inn at the Beach, Incorporated, Hal Keasler, and Jim Murphy (collectively, “Cross-Complainants”) filed a Cross-Complaint against McCleary, alleging causes of action for (1) conversion, (2) conversion, (3) injury to property, (4) breach of fiduciary duty, (5) intentional infliction of emotional distress, (6) violation of Civil Code section 51.7, (7) violation of Government Code section 12940(j), and (8) violation of Government Code section 12940(j). The Cross-Complaint seeks punitive damages. (See, e.g., Cross-Compl., Prayer for Relief, ¶ 3.)

On May 1, 2023, the Court issued an Order in this action providing, inter alia, that “[t]he Court, having considered the Parties’ Stipulation and good cause appearing therefor, IT IS HEREBY ORDERED AS FOLLOWS: 1. Plaintiff James McCleary’s (‘Plaintiff’) Second Amended Complaint, attached as Exhibit 4 to the Declaration of Susan Huerta in Support of Plaintiff’s [sic] Leave to File And Amend Plaintiff James McCleary’s Second Amended Complaint for Damages (the ‘SAC’) is deemed filed as of the date of this order….”

McCleary’s Second Amended Complaint (“SAC”) alleges causes of action for (1) breach of oral contract, (2) breach of implied covenant of good faith and fair dealing, (3) failure to pay wages, (4) failure to pay minimum wages (5) failure to pay overtime compensation, (6) failure to provide meal and rest periods, (7) failure to pay all accrued vacation time, (8) violation of Labor Code sections 201-203, (9) retaliation in violation of Labor Code sections 98.6 and 1102.5,

(10) unfair business practices pursuant to Business and Professions Code section 17200,

(11) wrongful termination in violation of public policy, (12) misclassification, (13) failure to provide accurate itemized statements, (14) violation of Labor Code section 2699, et seq., and (15) defamation per se. In the SAC, McCleary seeks punitive damages. (See, e.g., SAC, Prayer for Relief, ¶ 2.)

Defendants now move for an order bifurcating the parties’ respective punitive damages claims. The motion is unopposed.

Discussion

Defendants “request that the Court bifurcate the trial into two phases: (1) the first part should consist of trial and adjudication of the parties’ respective liabilities under the Second Amended Complaint and Cross-Complaint, the parties’ respective damages thereunder, if any, and the parties’ respective liability for punitive damages, and (2) a second phase, if needed, to determine the amount of punitive damages.” (Mot. at p. 4:24-28.)

Code of Civil Procedure section 1048, subdivision (b) provides: “[t]he court, in furtherance of convenience or to avoid prejudice, or when separate trials will be conducive to expedition and economy, may order a separate trial of any cause of action, including a cause of action asserted in a cross-complaint, or of any separate issue or of any number of causes of action or issues, preserving the right of trial by jury required by the Constitution or a statute of this state or of the United States.” (Code Civ. Proc., § 1048, subd. (b).)

Code of Civil Procedure sections 597 and 598 allow a court to order that the trial of any issue or part thereof proceed before the trial of any other issue to promote the ends of justice or the economy and efficiency of handling the litigation. Additionally, Evidence Code section 320 provides that trial courts have discretion to regulate the order of proof. “[T]rial courts have broad discretion to determine the order of proof in the interests of judicial economy.” (Grappo v. Coventry Fin. Corp. (1991) 235 Cal.App.3d 496, 504.) The objective of bifurcation 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.” (Horton v. Jones (1972) 26 Cal.App.3d 952, 955.)

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.” Civil Code section 3295, subdivision (d) goes on to state that “[e]vidence 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.” This section “requires a court, upon application of any defendant, to bifurcate a trial so that the trier of fact is not presented with evidence of the defendant’s wealth and profits until after the issues of liability, compensatory damages, and malice, oppression, or fraud have been resolved against the defendant.” (Torres v. Automobile Club of So. California (1997) 15 Cal.4th 771, 777-778.)

Accordingly, the Court finds that the punitive damages phase of trial must be bifurcated from the rest of trial. Evidence of the profits and financial condition of Defendants and McCleary will not be admissible at trial “until after the trier of fact returns a verdict for [McCleary and/or Cross-Complainants] awarding actual damages and finds that a [defendant or cross-defendant] is guilty of malice, oppression, or fraud in accordance with Section 3294.” (Civ. Code, § 3295, subd. (d).)

Conclusion

Based on the foregoing, the Court grants Defendants’ motion. The issue of the amount of punitive damages will not be tried and evidence of Defendants’ profits and financial condition will not be admitted unless and until the trier of fact returns a verdict for McCleary awarding actual damages and finds that the Defendants are guilty of malice, oppression, or fraud in accordance with Civil Code section 3294.

In addition, the issue of the amount of punitive damages will not be tried and evidence of McCleary’s profits and financial condition will not be admitted unless and until the trier of fact returns a verdict for Cross-Complainants awarding actual damages and finds that McCleary is guilty of malice, oppression, or fraud in accordance with Civil Code section 3294.

            Defendants are to provide notice of this ruling.

DATED:  March 14, 2024                              ________________________________

Hon. Teresa A. Beaudet

Judge, Los Angeles Superior Court