Judge: Thomas Falls, Case: KC070029, Date: 2022-09-30 Tentative Ruling

Case Number: KC070029    Hearing Date: September 30, 2022    Dept: R

Tentative Ruling

 

Defendants Shm Quantum Leap, Inc. Dba Keller Williams Signature Realty’s And Linda Young's Motion To Bifurcate Equitable Issues At Trial is GRANTED.

 

Background

 

This lawsuit involves a dispute over the sale of the real property located at 20560 E. Holt Avenue in Covina (“subject property”). Plaintiff Virginia Asset Partners, LLC (“Plaintiff”) alleges that Defendants Linda Young and Sergio Ulloa misrepresented the subject property’s acreage. Specifically, two days after entering into the Sale Contract with Plaintiff, Defendant Sergio Ulloa purported to convey on behalf of Defendant USM a portion of the Subject Property to the Carillos, thus rendering the lot size as 1.7 acres rather than the represented 3.6 acres.

 

On February 8, 2018, Plaintiff filed the instant action.

 

On May 3, 2018, USM Investments, Inc. (“USM”) filed a cross-complaint, asserting causes of action against Plaintiff Virginia Asset Partners, LLC dba Virginia Assets LLC (“Plaintiff”), Cross-Defendant Jade Escrow, Inc. (“Jade”) and Roes 1-20 for:

 

1.      Breach of Contract

2.      Fraud

3.      Breach of the Covenant of Good Faith and Fair Dealing

4.      Rescission

5.      Breach of Fiduciary Duty

6.      Breach of Contract

7.      Professional Negligence

 

On October 10, 2019, Plaintiff filed two “Amendment[s] to Complaint,” wherein Herman Carrillo was named in lieu of Doe 1 and Rosemary Carrillo was named in lieu of Doe 2 (collectively, “the Carrillos”).

 

On July 13, 2021, Plaintiff filed a Third Amended Complaint (“TAC”), asserting causes of action against USM, Sergio M. Ulloa, individually and as President of USM Investments, Inc. (“Ulloa”), the Carrillos, Linda Young (“Young”), SHM Quantum Leap, Inc. dba Keller Williams Signature Realty (“Keller Williams”) and Does 3-20 for:

 

1.      Specific Performance

2.      Declaratory Relief

3.      Breach of Contract

4.      Fraud

5.      Aiding and Abetting

6.      Constructive Trust

7.      Cancellation of Instruments

8.      Preliminary and Permanent Injunction

9.      Breach of Fiduciary Duties

10.  Breach of Contract

11.  Tort of Another

12.  Negligent Misrepresentation

13.  Intentional Misrepresentation

 

On August 20, 2021, Plaintiff dismissed the Carrillos without prejudice.

 

On October 18, 2021, a “Stipulation and Order Dismissing Causes of Action from the Third Amended Complaint” was filed, wherein Plaintiff dismissed the second and sixth-eighth causes of action as against Young and Keller Williams only with prejudice.

 

On November 22, 2021, the court adopted its Tentative Ruling with the following modification:

The Demurrer - with Motion to Strike (CCP 430.10) filed by SHM Quantum Leap, Inc. on 10/08/2021 is Sustained with Leave to Amend. Demurrer to Complaint of Plaintiff Virginia Asset Partners, LLC is OVERRULED in part (i.e., as to the tenth cause of action) and SUSTAINED in part (i.e., as to the fourth and eleventh through thirteenth causes of action). Defendant SHM Quantum Leap, Inc. dba Keller Williams’ demurrer is SUSTAINED as to the fifth cause of action. Petitioner is granted 30 days leave to amend. Defendant's Motion to Strike Portions of Plaintiff’s Third Amended Complaint is DENIED as MOOT.

 

On December 21, 2021, Plaintiff filed a Fourth Amended Complaint against Defendants USM Investments, Inc; Sergio Ulloa; Herman Carrillo; Rose Marie Carrillo; Linda Young; SHM Quantum Leap, Inc. Dba Keller Williams Signature Realty for:

 

1. Specific Performance;

2. Declaratory Relief;

3. Breach Of Contract;

4. Fraud;

5. Aiding And Abetting;

6. Constructive Trust;

7. Cancellation Of Instruments;

8. Preliminary And Permanent Injunction;

9. Breach Of Fiduciary Duties;

10. Breach Of Contract;

11. Negligent Misrepresentation; And

12. Intentional Misrepresentation

 

On April 4, 2022, Defendants filed a Motion to Set Aside/Vacate Default (“Motion”), which the court granted.

 

On August 6, 2022, the court heard oral argument on three summary judgment motions and one motion to continue trial, and the court denied all four motions.

 

On September 6, 2022, Defendants SHM Quantum Leap, Inc. Dba Keller Williams Signature Realty And Linda Young's (“Moving Defendants”) Filed the instant Motion To Bifurcate Equitable Issues At Trial (“Motion”).

 

On September 20, 2022, Defendants USM Investments, Inc. And Sergio Ulloa Loyalty Business Center, Inc. (“Opposing Defendants”) Filed Their Opposition.

 

On September 21, 2022, Moving Defendants filed their Reply.

 

Legal Standard

 

“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 [. . .] make an order [. . .] 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 [. . .]¿ The court, on its own motion, may make such an order at any time. [. . .]”¿ (CCP § 598, portions omitted.) 

 

“The 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.”¿ (CCP § 1048(b).) 

 

Discussion

 

Moving Defendants seek to bifurcate the trial because the action involves both equitable and legal issues, and the equitable issue should be first tried by the court.

 

Opposing Defendants argue that “[e]quity cannot go first, in this case, however, as all of the evidence is interrelated and interlinked.” (Opp. p. 2.)

 

“It is well established that, in a case involving both legal and equitable issues, the trial court may proceed to try the equitable issues first, without a jury . . . and that if the court's determination of those issues is also dispositive of the legal issues, nothing further remains to be tried by a jury.” (Raedeke v. Gibraltar Sav. & Loan Assoc. (1974) 10 Cal.3d 665, 671.) 

 

To the extent that Opposing Defendants disagree, they do so without citation to any authority. Accordingly, as Plaintiff's first cause of action for specific performance is undoubtedly equitable in nature, it is for the trial court to determine the merits of this cause of action. And in the interest of judicial efficiency wherein the trial court's ruling on this specific performance claim may negate the need for a jury trial altogether, this court exercises its discretion to abide by the “equity first rule.”[1]

 

Conclusion

 

Based on the foregoing, the motion to bifurcate the trial is granted.


[1] The order of trial, in mixed actions with equitable and legal issues, has great significance because the first factfinder may bind the second when determining factual issues common to the equitable and legal issues. (Wegner et al., Cal. Practice Guide: Civil Trials and Evidence ¶ 2:160, p. 2–32.1.) It is well-established in California jurisprudence that “[t]he court may decide the equitable issues first, and this decision may result in factual and legal findings that effectively dispose of the legal claims.” (Nwosu v. Uba (2004) 122 Cal.App.4th 1229, 1244, italics omitted.) This District Court of Appeal has observed that the “better practice” is for “the trial court [to] determine the equitable issues before submitting the legal ones to the jury.” (Bate v. Marsteller (1965) 232 Cal.App.2d 605, 617.)