Judge Upinder S. Kalra, Case Number: 22STCV02427, Date: 2023-12-06 Tentative Ruling

CASE NAME: Timed Out, LLC v. Chippewa d/b/a Much and House Public Relations and Marketing Management

MOVING PARTY: Defendant Chippewa dba Much and House Public Relations and Marketing Management

1. An Order continuing the February 13, 2024 trial date pending appeal on dismissal of the cross-claims dismissed on Anti-SLAPP grounds.

On January 20, 2022, Plaintiff Timed Out, LLC (Plaintiff) filed a Complaint against Defendant Chippewa d/b/a Much and House Public Relations and Marketing Management (Defendant) with two causes of action for: (1) Implied Contractual Indemnity, and (2) Equitable Indemnity or Contribution.

According to the Complaint, various models assigned their claims against Prisma for posting their images to social media without consent to Timed Out. Chippewa had an agreement with Prisma to perform marketing services and posted the models’ images. Timed Out filed a previous claim against Prisma on June 1, 2017. Prisma filed a Cross-Complaint against Chippewa on August 24, 2017. On January 21, 2020, Timed Out and Prisma partially settled. Prisma dismissed its Cross-Complaint and assigned any claims it had against Chippewa to Timed Out as part of this settlement agreement. After verdict, Chippewa moved for new trial, which the court denied. Chippewa appealed this decision. Timed Out seeks to enforce Prisma’s assigned claims against Chippewa.

On September 2, 2022, Chippewa filed a Cross-Complaint against Timed Out and Prisma with seven causes of action for: (1) breach of contract (against Prisma), (2) tortious interference with contract and inducing breach of contract (against Timed Out), (3) breach of implied covenant of good faith and fair dealing (against Prisma), (4) fraud (against Prisma), (5) equitable indemnity (against Prisma), (6) tort of another (against Prisma), and (7) declaratory relief that agreement is void (against Prisma and Timed Out).

According to the Cross-Complaint, Timed Out and Prisma schemed to secretly transfer a full range of supposed rights of recovery against Chippewa to Timed Out. Chippewa alleges that prior to Timed Out’s agreement with Prisma, Prisma and Chippewa had been working together to defend against Timed Out’s case. Chippewa further alleges that the settlement agreement allowed Prisma to transfer Chippewa’s privileged information to Timed Out so that Timed Out would “win” at trial and then pursue claims against Chippewa. Finally, Chippewa claims that Prisma violated their inferred joint defense agreement.

On January 31, 2023, the court GRANTED Cross-Defendant’s Special Motion to Strike (Anti-SLAPP) Cross-Complainant’s Cross-Complaint with prejudice.

On November 6, 2023, Defendant filed the instant motion. On November 21, 2023, Plaintiff timely filed an opposition. Defendant timely filed a reply on November 29, 2023.

The court grants Plaintiff’s request for judicial notice as to Exhibits A and B. (Evid. Code § 452(c), (d); See Kalnoki v. First American Trustee Servicing Solutions, LLC (2017) 8 Cal.App.5th 23,37.) However, the court only takes judicial notice of the foregoing documents only as to “the existence, content and authenticity of public records and other specified documents”; it does not take judicial notice of the truth of the factual matters asserted in those documents. (Dominguez v. Bonta (2022) 87 Cal. App. 5th 389, 400.)¿

“Except as provided in Sections 917.1 to 917.9, inclusive, and in Section 116.810, the perfecting of an appeal stays proceedings in the trial court upon the judgment or order appealed from or upon the matters embraced therein or affected thereby, including enforcement of the judgment or order, but the trial court may proceed upon any other matter embraced in the action and not affected by the judgment or order.” (Cal. Code Civ. Proc. (CCP) § 916(a).) The purpose of the automatic stay of trial court proceedings after appeal is perfected is to protect the appellate court's jurisdiction by preserving the status quo until the appeal is decided; the automatic stay prevents the trial court from rendering an appeal futile by altering the appealed judgment or order by conducting other proceedings that may affect it. (Royals v. Lu (2022) 81 Cal.App.5th 328, 343 [probate case where decedent’s daughter and wife pursued competing claims against each other].) “The court has the power to determine as a matter of procedure whether it should try the issues raised by the complaint and answer, and leave the issues formed by the cross-complaint to be determined later, or to await the action of a reviewing court to determine whether or not the cross-complaint was well founded, before proceeding with trial.” (Hayes v. Pierce (1940) 15 Cal.2d 662, 666-667 [commenting on an order striking a cross-complaint that “merely realleged the matters arising out of the dispute . . . already the subject of litigation.”])

Defendant contends that the court should continue the current trial date pending appeal on the dismissed cross-claims because the cross-claims and Plaintiff’s claims arise from the same matters, the same transactions and agreements, and involve the same witnesses. As such, Defendant contends that proceeding to trial may lead to irreconcilable outcomes that render their pending appeal futile.[1] Plaintiff argues the claims are not related and linked because it’s not an action to enforce a settlement agreement, but an indemnity action. Additionally, Plaintiff argues that Defendant makes the same arguments in its Cross-Complaint as it did in the first matter which the Appellate Court rejected, so, they are bound by that decision. Defendant replies that the cross-claims and Complaint are intertwined because Plaintiff served substantially similar discovery in this case as in the previous case, attached the Settlement Agreement and Assignment agreement to its Complaint, inaccurately cites trial court and appellate language, it raised affirmative defenses to these claims in its Answer, and indemnity does not bar claims challenging enforceability.

The court agrees with Plaintiff that continuing the trial pending the appeal is inappropriate.[2] First, the court is not persuaded by Defendant’s argument, albeit an implied argument, that it cannot challenge the Assignment by Prisma to Plaintiff without its Cross-Complaint. Indeed, several of Defendant’s affirmative defenses in its Answer encompass the causes of action in its Cross-Complaint. (RJN, Exhibit B, page 16 [“To the extent the indemnity issue might arise in a future proceeding, nothing in the settlement or assignment restricts Chippewa’s ability to defend itself.”] Therefore, Defendant’s claim that issues would need to be relitigated fully is unavailing.

The court is also persuaded by Plaintiff’s argument that Defendant has already presented its Cross-Complaint claims in the first lawsuit. (RJN, Exhibit A, Page 7 [“Based on this authority, and the evidence presented by Timed Out, the court concludes that the judgment entered in this action was not the product of collusion.” and “The outcome of the trial and the mode of Prisma’s participation within it underscores that the settlement agreement at issue here is not like those found to be collusive in the cases above.”])

Accordingly, the court DENIES Defendant’s motion to continue trial pending appeal.

[1] The court disregards any argument by Defendant advocating the merits of its Cross-Complaint.

[2] The court is not persuaded by Defendant’s argument that the Cross-Complaint involves the same matters as the Complaint. Defendant’s authorities show instances of clear connection (spousal support claims and real property ownership disputes).