Judge: Upinder S. Kalra, Case: 22STCV00036, Date: 2023-01-05 Tentative Ruling
Case Number: 22STCV00036 Hearing Date: January 5, 2023 Dept: 51
Tentative Ruling
Judge Upinder S.
Kalra, Department 51
HEARING DATE: January
5, 2023
CASE NAME: Vitamin
Energy, Inc., v. Bolton & Company, et al.
CASE NO.: 22STCV00036
MOTION
FOR STAY OF PROCEEDINGS
MOVING PARTY: Defendant Bolton & Company
RESPONDING PARTY(S): Plaintiff Vitamin Energy, Inc.
REQUESTED RELIEF:
1. An
order staying the current proceedings pending the resolution of two underlying
actions
TENTATIVE RULING:
1. Motion
for Stay of Proceedings is GRANTED, in part. Discovery is to continue until the
next scheduled hearing, February 27, 2023.
STATEMENT OF MATERIAL FACTS AND/OR PROCEEDINGS:
On Janaury 3, 2022, Plaintiff Vitamin Energy, Inc.,
(“Plaintiff”) filed a complaint against Defendants Bolton & Company,
Gregory Matthew Doherty, and Chris Morey (“Defendants.”) The complaint alleged
five causes of action, including professional negligence and breach of
contract. The complaint alleges that Plaintiff entered into a contract with
Defendants, who are insurance brokers and agents. Plaintiff alleges that
Defendants made misrepresentations as to their expertise and services, which
resulted in a failure to procure necessary insurance coverage. After being sued
by the parent company of 5-Hour Energy, Plaintiff’s claim to its insurance was
denied.
On March 3, 2022, Defendants filed a Demurrer with a Motion
to Strike.
On April 27, 2022, Plaintiff filed a First Amended
Complaint.
On June 1, 2022, Plaintiff filed a Request for Dismissal as
to Defendants Morey and Doherty.
On June 1, 2022, Defendant Bolt & Company filed an
Answer.
The current Motion for Stay of Proceedings was filed on
October 26, 2022. Plaintiff’s Opposition was filed on December 22, 2022.
Defendant’s Reply was filed on December 28, 2022. In Defendant’s reply,
Defendants point out that Plaintiff’s opposition was due on December 21, but
did not file until the 22nd. While the opposition was late,
Defendant still had enough time to provide a substantive reply. Thus, the court
will not disregard the Opposition.
LEGAL STANDARD:
Courts have the power to amend and control
their process and orders so as to make them
conform to law and justice. (Code Civ. Proc. § 128, subd. (a)(8).) “Trial courts
generally have the inherent power to stay proceedings in the interests of
justice and to promote judicial efficiency.” (Freiberg v. City of Mission Viejo (1995) 33 Cal.App.4th 1484,
1489.)
ANALYSIS:
Defendant argues that the matter should be stayed as
required under California law. As an initial matter, the Court grants Defendant’s
request for judicial notice.
Coverage-related
lawsuits where “the coverage question turns on facts to be litigated in the
underlying action” must be stayed. (Motion 4: 9-12, citing to Montrose Chem. Corp v. Superior Court (1993) 6 Cal.4th 287, 201 (Montrose).)
The claims
asserted against Defendant are based on two related lawsuits. The first is fairly
characterized as the underlying lawsuit—whether Defendant recommended
“sufficient liability coverage for Plaintiff to account for the purported
propensity of 5-Hour Energy to file lawsuits to quell competitors, including
Plaintiffs.” (Motion 4: 21-23, FAC ¶ 23.) The second is a coverage lawsuit—whether
Evanston Insurance Company will offer
coverage under a general liability policy. The lawsuit here alleges
professional negligence by defendant for failing to disclose that the policy issued
by Evanston lacked coverage for fasle advertising, mislabeling or trademark
infringement. (FAC ¶ 28.) . Additionally, Defendant argues that the Court
should use its broad discretion to stay the matter under the other underlying
action is resolved. The claims “are dependent on factual issues to be decided
in two ongoing separate matters, the Underlying Action and the Coverage
Action.” (Motion 5: 26-27.)
Plaintiff argues that the matter
should not be stayed. Specifically, Plaintiff argues that the underlying
action, the coverage action, and the California action involve different
parties and different claims for relief. The overlapping issue involves
coverage and damages. Further, the different factual determinations are not
“unseemly conflicts” as stated by the Defendant, as “there is nothing incompatible
about different factual findings in actions involving different parties.” (Opp.
11: 7-9.) Further, a stay would cause unnecessary delay. Additionally, the Montrose involved a stay of the coverage
liability, “not a broker liability case.” Lastly, Defendant waived the
opportunity to stay the proceedings as this motion could have been brought in
January 2022 when the complaint was initially filed, but waited until October
26, 2022, to file.
The Court
finds that a stay is required and, even if it was not, the Court will exercise
its discretion to issue a stay, but will allow for discovery to continue. As
the Court in Montrose stated, “a stay
of the declaratory relief action pending resolution of the third party suit is
appropriate when the coverage question turns on facts to be litigated in the
underlying action.” (Montrose Chemical
Corp. v. Superior Court (1993) 6 Cal.4th 287, 301.) Here, the facts in the
Underlying and Coverage Actions will determine certain factual matters, such as
whether Evanston is required to indemnify Plaintiff. As Defendant argues in
reply, Defendant’s liability and Plaintiff’s damages cannot be determined until
after the Underlying and Coverage Actions are resolved. However, as this matter
involves facts from 2018, discovery is allowed to continue until the scheduled
discovery hearings, scheduled for February 27, 2023, unless the parties resolve
the matter outside of the court.
Motion
for Stay of the Proceedings is GRANTED.
Conclusion:
For
the foregoing reasons, the Court decides the pending motion as follows:
Motion for Stay of Proceedings is
GRANTED, in part. Discovery is to continue until February 27, 2023.
Moving party is to give notice.
IT IS SO ORDERED.
Dated: January
5, 2023 __________________________________ Upinder
S. Kalra
Judge
of the Superior Court