Judge: Teresa A. Beaudet, Case: 22STCV13462, Date: 2023-03-06 Tentative Ruling

Case Number: 22STCV13462    Hearing Date: March 6, 2023    Dept: 50

Superior Court of California

County of Los Angeles

Department 50

Background

On April 22, 2022, Plaintiff KCS West, Inc. (“KCS”) filed this action against Defendants 5959 LLC (“5959”) and Koar Airport Associates, LLC (“Koar”). The Complaint asserts causes of action for (1) foreclosure of mechanic’s lien, (2) breach of contract, (3) common count – quantum meruit, and (4) violation of prompt payment statutes.

On July 15, 2022, a Cross-Complaint was filed in this action by 5959 against KCS and Kajima U.S.A. Inc. (“Kajima”), asserting causes of action for (1) breach of contract, (2) express indemnity, (3) statutory indemnity, and (4) recovery on guarantee agreement.

On August 30, 2022, KCS filed a Cross-Complaint in this action against 5959 and Johnson Diversified, Inc., dba Plumbing Solutions (“Plumbing Solutions”). KCS filed the operative First Amended Cross-Complaint (“FACC”) in this action on September 16, 2022, asserting causes of action for (1) breach of contract, (2) negligence, (3) breach of contract third party beneficiary, (4) express indemnification, (5) implied indemnification, (6) declaratory relief, (7) strict product liability, (8) breach of express/implied warranty of merchantability, (9) breach of express/implied warranty of fitness for a particular purpose, (10) strict product liability - failure to warn, and (11) negligence - duty to warn.

On February 1, 2023, the Court issued a minute order providing, inter alia, that “[t]he Court finds that the following cases, 22STCV13462, 18TRCV00043, 22TRCV00350, and 22TRCV00639, are related within the meaning of California Rules of Court, rule 3.300(a). 22STCV13462 is the lead case.”  

KCS now moves for an order consolidating for all purposes the instant case (Case No. 22STCV13462), Case No. 22TRCV00350 entitled Land Mark Electric, Inc. v. KCS West, Inc., et al. (the “Land Mark Electric Action”), and Case No. 22TRCV00639 entitled Johnson Diversified, Inc., doing business as Plumbing Solutions v. 5959, LLC, et al. (the “Plumbing Solutions Action”). Specially appearing plaintiff Land Mark Electric, Inc. (“LME”) opposes.[1]

Request for Judicial Notice

The Court grants LME’s request for judicial notice.

Discussion

Code of Civil Procedure section 1048 grants discretion to trial courts to consolidate actions involving common questions of law or fact. “Consolidation is not a matter of right; it rests solely within the sound discretion of the trial judge. . .” (Fisher v. Nash Bldg. Co. (1952) 113 Cal.App.2d 397, 402.) There are two types of consolidation under section 1048: “a consolidation for purposes of trial only, where the two actions remain otherwise separate; and a complete consolidation or consolidation for all purposes, where the two actions are merged into a single proceeding under one case number and result in only one verdict or set of findings and one judgment.” (Hamilton v. Asbestos Corp. (2000) 22 Cal.4th 1127, 1147.) “The purpose is to enhance trial court efficiency (i.e., to avoid unnecessary duplication of evidence and procedures); and to avoid the substantial danger of inconsistent adjudications (i.e., different results because tried before different juries, or a judge and jury, etc.)” (Weil & Brown, Cal. Practice Guide: Civ. Proc. Before Trial (The Rutter Group 2022) ¶ 12:340.)

KCS indicates that it seeks to consolidate the instant action, the Land Mark Electric Action, and the Plumbing Solutions Action for all purposes. KCS contends that all three cases arise from claims related to a renovation and rehabilitation project of a hotel building located at 5959 West Century Blvd., Los Angeles, California 90045. The Court notes that (as set forth above) on February 1, 2023, the instant action, the Land Mark Electric Action, and the Plumbing Solutions Action were related with a fourth case, Carrier Johnson v. 5959 LLC, et al., Case No. 18TRCV00043. KCS indicates that “[d]ue to the age of the case, trial date, and presumed discovery completed to date, KCS does not seek consolidation with Case No. 18TRCV00043.” (Mot. at p. 5, fn. 1.)

The Instant Case – KCS West, Inc. v. 5959 LLC, et al. (Case No. 22STCV13462)

            In the Complaint in the instant case, KCS alleges, inter alia, that the real property that is the subject of the action is located at 5959 West Century Boulevard, Los Angeles, California, 90045 (the “Property”) and is owned by 5959, Koar, or both. (Compl., ¶ 6.) On or about March 29, 2018, KCS and 5959 entered into a written contract in which KCS agreed to act as the general contractor for the renovation and rehabilitation of an existing office building located at the Property into a hotel building. (Compl., ¶ 7.) KCS alleges that despite its demands for payment from 5959, there remains due and owing to KCS under the contract the principal sum of no less than $9,167,775.21 plus interest. (Compl., ¶ 8.)  

            In its Cross-Complaint in the instant case, 5959 alleges, inter alia, that KCS breached the subject March 29, 2018 contract by failing to perform all of its obligations under the contract, including, but not limited to, failing to provide and install non-defective shower pans in the guest room bathrooms, and failing to defend and protect 5959 from and against mechanic’s liens and mechanic’s lien foreclosure actions by various subcontractors of KCS on the project. (Cross-Compl., ¶ 8.)

            In its FACC in this action, KCS alleges, inter alia, that on or about May 16, 2018, KCS entered into a written subcontract with Plumbing Solutions (the “Subcontract”) whereby Plumbing Solutions agreed to furnish and install plumbing systems for the subject project, including the shower pans, in exchange for payment. (FACC, ¶ 9.) KCS alleges, inter alia, that Plumbing Solutions breached the Subcontract by: (1) per 5959, allegedly failing to perform its work in a workmanlike manner; (2) per 5959, allegedly failing to properly install, store, ship, or handle the Shower Pans in a workmanlike manner causing property damage; (3) failing to correct the Shower Pan work; and (4) failing to defend and indemnify KCS for claims arising out of Plumbing Solutions’ procurement, storage, shipping, handling, or installation of the shower pans. (FACC, ¶ 20.)

The Land Mark Electric Action (Case No. 22TRCV00350)

            In the Land Mark Electric Action, LME filed a Complaint on May 4, 2022 against KCS and Hudson Insurance Company.  

LME filed the operative Second Amended Complaint (“SAC”) in the Land Mark Electric Action on September 16, 2022 against KCS, 5959, and Harco National Insurance Company, asserting causes of action for (1) breach of written contract, (2) breach of oral contract, (3) work, labor and services rendered/agreed price, (4) work, labor, and services rendered/reasonable value, (5) unjust enrichment, (6) enforcement of mechanic’s lien release bond, (7) claim for equitable adjustment for delay and disruption, (8) breach of the implied covenant of correctness of plans and specifications, (9) account stated, (10) open book account, (11) negligence, and (12) breach of contract by third party beneficiary.

            In the SAC, LME alleges, inter alia, that KCS entered into a contract with 5959 in which KCS acted as a prime contractor for a construction project on the property located at 5959 West Century Blvd. Los Angeles, California 90045. (SAC, ¶¶ 3, 11.) The project, known commonly as the “5959 West Century Hyatt,” involved converting an existing building into a hotel (the “Project”). (SAC, ¶ 11.) LME and KCS entered into a subcontract agreement (the “Subcontract Agreement”) which became effective on May 9, 2018, pursuant to which LME was to perform electrical work and provide related labor, material, equipment and services for the Project. (SAC, ¶ 12.) LME alleges that the defendants in its action breached the Subcontract Agreement in a number of ways. (See SAC, ¶ 21.)

            In the Land Mark Electric Action, 5959 filed a Cross-Complaint on October 10, 2022 against KCS and Kajima, asserting causes of action for (1) express indemnity and (2) statutory indemnity.

            In addition, in the Land Mark Electric Action, KCS filed a Cross-Complaint on October 18, 2022 against 5959, asserting causes of action for (1) breach of the implied warranty of correctness of plans and specifications, and (2) equitable indemnification. 

The Plumbing Solutions Action (Case No. 22TRCV00639)

In the Plumbing Solutions Action, Plumbing Solutions filed a Complaint against 5959 and KCS on July 28, 2022.

Plumbing Solutions filed the operative First Amended Complaint (“FAC”) against 5959, KCS, and Harco National Insurance Company on October 11, 2022. The FAC alleges causes of action for (1) breach of contract, (2) common counts, (3) wrongful withholding of payment, (4) enforcement of stop notice, and (5) claim on bond to release mechanic’s lien.

In the FAC, Plumbing Solutions alleges, inter alia, that on or about May 16, 2018 it entered into a written contract with KCS for the construction of plumbing and related plumbing fixtures relating to the construction of a hotel at the premises located at 5959 West Century Boulevard, Los Angeles, California 90045, for the total price of $5,830,000. (FAC, ¶¶ 4, 11.) Plumbing Solutions proceeded with the installation of all plumbing and fixtures for the construction of the hotel as required by the contract, including the installation of various Kohler Enameled Cast Iron Bath Pans. (FAC, ¶ 14.) Plumbing Solutions alleges that within the last two years, KCS breached the parties’ contract by failing to pay in full the plumbing project invoice, and that it is owed the sum of $797,957.18. (FAC, ¶ 25.)

In the Plumbing Solutions Action, 5959 filed a Cross-Complaint against KCS and Kajima on October 19, 2022, asserting causes of action for (1) express indemnity and (2) statutory indemnity.

            Consolidation

            KCS asserts that consolidation is appropriate because the three actions arise out of the same project, raise the same issues regarding liability, and involve substantially the same witnesses. KCS also asserts that lack of consolidation could result in inconsistent rulings in the three related lawsuits before different triers of fact despite many of the same parties being named as plaintiffs, defendants, cross-complainants, and/or cross-defendants across the three separate lawsuits.

            In its opposition, LME first asserts that the motion should be denied pursuant to Code of Civil Procedure section 1008. Pursuant to Code of Civil Procedure section 1008, subdivision (b), “[a] party who originally made an application for an order which was refused in whole or part, or granted conditionally or on terms, may make a subsequent application for the same order upon new or different facts, circumstances, or law, in which case it shall be shown by affidavit what application was made before, when and to what judge, what order or decisions were made, and what new or different facts, circumstances, or law are claimed to be shown. For a failure to comply with this subdivision, any order made on a subsequent application may be revoked or set aside on ex parte motion.”

            LME notes that on December 28, 2022, the Honorable Alan B. Honeycutt issued an order in the matter Carrier Johnson v. 5959 LLC, et al., Case No. 18TRCV00043 that “Supervising Judge, Alan Honeycutt, has read and reviewed the Notice of Related Case filed on 12/02/2022, by counsel for Cross-Defendant KCS West, Inc., and Kajima USA. Inc. Case involves the same property, but the cases appear to involve different issues. The Court finds that 18TRCV00043, 22TRCV00350, 22STCV13462, and 22TRCV00639 are NOT RELATED, therefore the Notice of Related Case is DENIED.” (LME’s RJN, Ex. A.) LME asserts that “[s]ince KCS has not shown any compelling evidence of ‘new or different facts, circumstances, or law’ justifying their renewed Motions as required by Code of Civil Procedure section 1008(b), the Court should deny the Motion.” (Opp’n at p. 10:17-19.)

            In the reply, KCS asserts that although Department 50’s February 1, 2023 minute order provides that “[t]he Court finds that the following cases, 22STCV13462, 18TRCV00043, 22TRCV00350, and 22TRCV00639, are related within the meaning of California Rules of Court, rule 3.300(a),” the Court actually determined at the February 1, 2023 Case Management Conference that only cases 22STCV13462, 22TRCV00350, and 22TRCV00639 were related, excluding Case No. 18TRCV00043. (Navarrete Decl., ¶ 5.) KCS asserts that Judge Honeycutt’s December 28, 2022 Order does not conflict with Department 50’s February 1, 2023 Order because the December 28, 2022 Order was issued in the context of four cases, whereas Department 50’s February 1, 2023 Order only relates to the three cases, i.e., cases 22STCV13462, 22TRCV00350, and 22TRCV00639. KCS also asserts that Code of Civil Procedure section 1008 is inapplicable here because KCS’s instant motion is not a motion for reconsideration with respect to Case No. 18TRCV00043.

            The Court has discussed with the supervising judge of Civil the procedural posture of all four of the cases that have been related. As a result, the four cases will remail related and assigned to Dept. 50 pursuant to this Court’s February 1, 2023 Order.

            LME also asserts that consolidation is prejudicial to LME’s right to a jury trial. LME asserts that “5959 LLC’s counsel has made clear that except for 5959 LLC’s lawsuit against the Architect, 5959 LLC will seek to have all disputes involving the Project be adjudicated by judicial reference. Should 5959 LLC’s plan come to fruition, LME will be denied its right to have its lawsuit heard by a jury ---despite the fact that the LME Subcontract does not include a judicial reference provision.” (Opp’n p. 10:21-25.)  KCS counters that LME is bound to judicial reference based on the provisions of its subcontract, specifically, Section 11.4 of the subcontract, which provides in pertinent part that “[s]ubcontractor acknowledges that the Project is being constructed in accordance with the Contract and the Contract Documents. To the extent that there is a conflict between the provisions set forth in this Article 11 and the dispute resolution procedures set forth in the Contract, the dispute resolution procedures in the Contract will govern. Subcontractor consents to joinder of Owner, Architect and other design professionals, other subcontractors and suppliers and any other party that Contractor deems necessary to resolve claims filed by or against Contractor that arise out of similar facts, issues or incidents and are related to the Project to prevent inconsistent dispute resolution awards or judgments.” (Navarrete Decl., ¶ 6; Ex B, § 11.4.) KCS asserts that the binding dispute resolution called for in Section 13.2 of the prime contract is “Judicial Reference per California Code of Civil Procedure § 638.” (Navarrete Decl., ¶ 7, Ex. C.) At this juncture, it is premature for the Court to determine whether a judicial reference is warranted since any request therefor is not currently before this Court.   

            LME also asserts in the opposition that the cases do not involve sufficiently common questions of law or fact. Specifically, LME asserts that “[e]ach of the actions involves distinct contractual obligations, duties, breaches of those duties, and individualized damages. KCS’ and Plumbing Solutions’ claims involving a purported installation of a defective shower pan based on a single source specification, have nothing to do with the delay and disruption claims incurred by the electrical subcontractor LME.” (Opp’n at p. 12:8-11.) LME also contends that consolidation would cause unreasonable discovery delays for both subcontractors, and that “there is a high risk that a trial involving dozens of subcontractors, consultants and architect witnesses, which provided different materials and/or services, will be too confusing and complex for a jury to follow and distinguish when focusing and also addressing the issues in the Plumbing Solution litigation.” (Opp’n at p. 13:13-16.) 

            KCS counters that the cases involve common questions of law and fact and thereby warrant consolidation. KCS indicates that KCS and 5959 are defendants or cross-defendants in the instant action, the Land Mark Electric Action, and the Plumbing Solutions Action. KCS also asserts that the three actions all involve various disputes between the owner, 5959, and KCS’s subcontractors who worked on the subject construction project. KCS also notes that consolidation does not require that all issues in the three actions completely overlap, rather that “[w]hen actions involving a common question of law or fact are pending before the court, it may order a joint hearing or trial of any or all the matters in issue in the actions; it may order all the actions consolidated and it may make such orders concerning proceedings therein as may tend to avoid unnecessary costs or delay.” (Code Civ. Proc., § 1048.)

            LME also asserts that coordination will not avoid delay or promote efficiency. Specifically, LME asserts that “it is much more efficient and economical for each subcontractor to have its chance to depose KCS and 5959 PMKs in the unconsolidated individual cases as it will not require the attendance of all subcontractor counsel at multiple days of PMK depositions in a consolidated matter and it will allow the PMK’s to be able focus their preparation for a particular deposition.” (Opp’n at p. 13:26-14:2.) KCS counters that a judicial referee will make discovery more efficient preventing unreasonable delays.

            Lastly, LME contends that consolidation will not prevent inconsistent rulings, because “a ruling whether a plumbing contractor is or is not owed for work completed related to a defective shower pan hardly seems to potentially conflict with a rulings related to LME’s claims of abandonment, cardinal changes, lack of coordination, and excessive disruption and delays caused by among other persons, 5959, its Architect, and its general contractor KCS.” (Opp’n at p. 14:25-15:2.) As set forth above, KCS contends that that a lack of consolidation could result in inconsistent rulings before different triers of fact despite many of the same parties being named as plaintiffs, defendants, cross-complainants, and/or cross-defendants across the three separate lawsuits.

Conclusion

The Court finds that KCS has the better part of the argument for consolidation in that all three actions arise out of the same project, the actions raise many of the same issues regarding liability and will involve many of the same witnesses.  Additionally, by consolidating the matters, the risk of inconsistent rulings is eliminated. For these reasons, the Court grants the motion to consolidate the three cases (22STCV13462, 22TRCV00350 and 22TRCV00639.

KCS is ordered to give notice of this Order.

DATED:  February 21, 2023                         

________________________________

Hon. Teresa A. Beaudet

Judge, Los Angeles Superior Court