Judge: Walter P. Schwarm, Case: 30-2022-01257590, Date: 2022-10-18 Tentative Ruling
Motion No. 1:
Defendants’ (Benjamin Arsenian and Law Offices of Benjamin Arsenian) Demurrer, filed on 6-10-22 under ROA No. 30, is SUSTAINED in part and OVERRULED in part as set forth below.
“A demurrer tests the pleading alone, and not the evidence or the facts alleged. . . . To the extent there are factual issues in dispute, however, this court must assume the truth not only of all facts properly pled, but also of those facts that may be implied or inferred from those expressly alleged in the complaint. [Citations.]” (City of Atascadero v. Merrill Lynch, Pierce, Fenner & Smith, Inc. (1998) 68 Cal.App.4th 445, 459.) Code of Civil Procedure section 452, states, “In the construction of a pleading, for the purpose of determining its effect, its allegations must be liberally construed, with a view to substantial justice between the parties.” Perez v. Golden Empire Transportation Transit District (2012) 209 Cal.App.4th 1228, 1238, provides, “This rule of liberal construction means that the reviewing court draws inferences favorable to the plaintiff, not the defendant. [Citations.]” C.A. v. William S. Hart Union High School District (2012) 53 Cal.4th 861, 872 (C.A.), provides, “To survive a demurrer, the complaint need only allege facts sufficient to state a cause of action; each evidentiary fact that might eventually form part of the plaintiff’s proof need not be alleged. [Citation.]”
The Demurrer challenges the first cause of action Interpleader in Plaintiffs’ (Dennis Dascanio and Law Offices of Dennis Dascanio, APC) Complaint, filed on 5-2-22 under ROA No. 2, pursuant to Code of Civil Procedure section 430.10, subdivisions (d), (e), and (f). (Demurrer; 3:2-8.) The Demurrer challenges the second cause of action (Breach of Contract) pursuant to Code of Civil Procedure section 430.10, subdivisions (e), (f), and (g). (Demurrer; 9-17.) The Demurrer challenges the third cause of action (Declaratory Relief) pursuant to Code of Civil Procedure section 430.10, subdivisions (e) and (f). (Demurrer; 3:18-22.)
First Cause of Action (Interpleader):
Code of Civil Procedure section 386, subdivision (a), states, “A defendant, against whom an action is pending upon a contract, or for specific personal property, may, at any time before answer, upon affidavit that a person not a party to the action makes against him, and without any collusion with him, a demand upon such contract, or for such property, upon notice to such person and the adverse party, apply to the court for an order to substitute such person in his place, and discharge him from liability to either party, on his depositing in court the amount claimed on the contract, or delivering the property or its value to such person as the court may direct; and the court may, in its discretion, make the order; or such defendant may file a verified cross-complaint in interpleader, admitting that he has no interest in such amount or such property claimed, or in a portion of such amount or such property and alleging that all or such portion of the amount or property is demanded by parties to such action or cross-action and apply to the court upon notice to such parties for an order to deliver such property or portion thereof or its value to such person as the court shall direct. And whenever conflicting claims are or may be made upon a person for or relating to personal property, or the performance of an obligation, or any portion thereof, such person may bring an action against the conflicting claimants to compel them to interplead and litigate their several claims. The order of substitution may be made and the action of interpleader may be maintained, and the applicant or interpleading party be discharged from liability to all or any of the conflicting claimants, although their titles or claims have not a common origin, or are not identical but are adverse to and independent of one another.”
“The true test of suitability for interpleader is the stakeholder’s disavowal of interest in the property sought to be interpleaded, coupled with the perceived ability of the court to resolve the entire controversy as to entitlement to that property without need for the stakeholder to be a party to the suit.” (Pacific Loan Management Corporation v. Superior Court (1987) 196 Cal.App.3d 1485, 1489-1490 (Pacific).).
Hood v. Gonzales (2019) 43 Cal.App.5th 57, 75 (Hood), provides, “Moreover, we note that interpleader applies whenever there are conflicting claims to money or property. (See § 386, subd. (b).) Thus, the fact that Hood was holding the settlement check, but could not deposit it into his client trust account because Gonzales would not endorse it, is not determinative under this statute. The record also shows Hood turned over the settlement check to the court clerk when he filed the interpleader action. We thus also reject Gonzales's argument that interpleader was improper because Hood did not ‘control’ the settlement check, which argument, in any event, is unsupported by any legal authority. [Citation.]” (Italics in Hood.)
“ ‘ “[I]nterpleader is an equitable proceeding in which the rights of the parties, as between themselves, are governed by principles of equity.” [Citations.] “The purpose of interpleader is to prevent a multiplicity of suits and double vexation. [Citation.] ‘The right to the remedy by interpleader is founded, however, not on the consideration that a [person] may be subjected to double liability, but on the fact that he [or she] is threatened with double vexation in respect to one liability.’ [Citation.]” [Citation.] “In an interpleader action, the court initially determines the right of the plaintiff to interplead the funds; if that right is sustained, an interlocutory decree is entered which requires the defendants to interplead and litigate their claims to the funds.” [Citation.] Then, in the second phase of an interpleader proceeding, the trial court also has “the power under section 386 to adjudicate the issues raised by the interpleader action including: the alleged existence of conflicting claims regarding the interpleaded funds; plaintiffs' alleged position as a disinterested mere stakeholder; and ultimately the disposition of the interpleaded funds after deducting plaintiffs' attorney fees.” [Citation.]’ [Citation.]” (Id., at pp. 71-72; (Italics in Hood).)
The Complaint states, “The global settlement resulted in checks payable to SANTAMARIA, ARSENIAN and DASCANIO in the amount of $8,425,000.00. [¶] DASCANIO’s retainer agreement allows him to recovery 15% in attorney’s fees from the workers compensation portion of the settlement, or $150,000.00, which leaves SANTAMARIA $650,000.00 from the remaining $800,000.00 workers compensation portion of the global settlement checks. [¶] The personal injury retainer allowed recovery of 40% of the personal injury portion of the settlement as attorney fees. [¶] The personal injury portion of the global settlement check is $7,625, 000.00 [¶] The attorney fees payable to counsel are 40% of the personal injury portion of the global settlement check. [¶] Thus, 40% of the $7,625,000.00 is equal to $3,050,000.00 as recoverable attorney fees from the personal injury portion of the global settlement checks. [¶] DASCANIO’s fee splitting agreement with ARSENIAN gives him 50% of the recoverable attorney fees on the personal injury portion of the global settlement checks. [¶] DASCANIO’s portion of the $3,050,000.00 in personal injury attorney’s fees would be $1,525,000.00.” (Complaint, ¶ 23-30; Uppercase in Complaint.) The Complaint alleges, “ARSENIAN presently has the global settlement checks.” (Complaint, ¶ 45 (Uppercase in Complaint.).) The Complaint also pleads, “DASCANIO believes ARSENIAN may attempt or may have already deposited the settlement checks without his signature,” “DASCANIO has given notice to the carrier to void the original checks and issue a new check to the Superior Court of California, County of Orange so that the Court can hold the disputed funds and promptly release the funds due to SANTAMARIA,” and “ARSENIAN is in possession of the global settlement checks the amount of $8,425.000.00 in the names of SANTAMARIA, DASCANIO and ARSENIAN.” (Complaint, ¶¶ 47, 58, and 70.)
Here, the Complaint pleads that Plaintiffs do not have possession of the settlement checks at issue. Under Code of Civil Procedure section 386, subdivision (a), Plaintiffs do not have the ability to deliver the funds to the court because the Complaint alleges that Plaintiffs do not possess the funds. (Complaint, ¶ 70.) Further, Plaintiffs have an interest in the funds. Although Plaintiffs claim no interest in the portion of the funds owed to Marco Santamaria (Complaint, ¶ 74), Plaintiff’s Complaint requests the court to order Defendants to “. . . interplead and litigate their claims to the subject matter of this interpleader . . . .” (Complaint; 13:15-17.) The first step, however, is for a court to determine the right of a plaintiff to interplead the funds. Since Plaintiffs have an interest in the funds to which the seek to interplead based on the allegations in the Complaint, they do not have a right to request an interpleader order. Plaintiffs are not disinterested parties as to the funds they seek to interplead because they claim a portion of those funds. Therefore, the court SUSTAINS the Demurrer to the first cause of action pursuant to Code of Civil Procedure section 430.10, subdivision (e). The court does not address the Demurrer as to Code of Civil Procedure section 430.10, subdivision (d), because the court has resolved the Demurrer to the first cause of action under Code of Civil Procedure section 430.10, subdivision (e).
Second Cause of Action (Breach of Contract):
Maxwell v. Dolezal (2014) 231 Cal.App.4th 93, 97-98, “To establish a cause of action for breach of contract, the plaintiff must plead and prove (1) the existence of the contract, (2) the plaintiff's performance or excuse for nonperformance, (3) the defendant's breach, and (4) resulting damages to the plaintiff. [Citations.]” Stockton Mortgage, Inc. v. Tope (2014) 233 Cal.App.4th 437, 453 (Stockton), states, “The elements of a breach of oral contract claim are the same as those for a breach of written contract: a contract; its performance or excuse for nonperformance; breach; and damages. [Citations.]” Code of Civil Procedure section 430.10, subdivision (g), states, “In an action founded upon a contract, it cannot be ascertained from the pleading whether the contract is written, is oral, or is implied by conduct.”
The Demurrer states, “In this case, under Count 1 of plaintiffs’ breach of contract cause of action plaintiff alleges that defendants entered into a lease with plaintiffs, however, Exhibit B to plaintiffs’ complaint, which appears to be a lease between OC Main Street owner LLC and Law Offices of Dennis Dascanio, does not contain defendants’ name anywhere, and further, is a mere draft copy which is not dated or signed. Notwithstanding, it is clear from the exhibit that defendants are not party to any lease contract. [¶] As to Counts 2 to11 of plaintiff's breach of contract cause of action, which purportedly relate to referral agreements, plaintiffs have merely attached lists seemingly created by plaintiffs. The purported contracts alleged in plaintiff's complaint are not sufficiently definite for the court to ascertain the parties’ obligations and determine whether those obligations have been performed or breached. . . . [¶]Thus, the allegations contained in plaintiff's breach of contract cause of action are not pled with specificity in order to give notice to the defendants and to furnish them with definite charges, thus failing to state facts sufficient to state a cause of action, the entire cause of action and all counts therein are uncertain and it cannot be ascertained from the complaint weather the alleged contracts are written oral or implied by conduct.” (Demurrer; 7:3-21.)
As to Breach of Contract—Count 1, the Complaint sufficient alleges a breach of contract cause of action. Exhibit B-2 to the Complaint states in part, “Here is the lease agreement for your records. Leslie will be making the payments and billing you individually per our agreed 45/30/25 split (DD/BA/JR). Let us know if you have any questions or comments. Thx, D” (Complaint, ¶ 82.) The Complaint further alleges “The lease is also evidenced by ARSENIAN’s performance for 40 months” (Complaint ¶ 83.) The allegations in the Complaint sufficiently plead a written agreement between the parties, Plaintiffs’ performance (Complaint, ¶ 86), Defendants’ breach (¶¶ 87 and 88), and damages (Complaint, ¶¶ 88 and 89.) Therefore, the court OVERRULES the Demurrer as to Breach of Contract—Count 1.
As to Breach of Contract—Counts 2-11, except for Breach of Contract—Count 8 (Complaint, ¶¶ 13 and 14), the Complaint does not adequately allege whether the contracts in Breach of Contract—Counts 2-7 and 9-11 were oral, written, or implied by conduct. Therefore, the court OVERRULES the Demurrer as to the Breach of Contract—Count 8 cause of action, and SUSTAINS the Demurrer as to the causes of action alleges as Breach of Contract—Counts 2-7 and Counts 9-11.
Declaratory Relief:
“ ‘The fundamental basis of declaratory relief is the existence of an actual, present controversy over a proper subject.’ [Citation.]” (City of Cotati v. Cashman (2002) 29 Cal.4th 69, 79; Italics in original.) “ ‘To qualify for declaratory relief, [a party] would have to demonstrate its action presented two essential elements: “(1) a proper subject of declaratory relief, and (2) an actual controversy involving justiciable questions relating to [the party’s] rights or obligations.” ’ [Citation.] (Jolley v. Chase Home Finance, LLC (2013) 213 Cal.App.4th 872, 909.)
Paragraphs 161-164 of the Complaint sufficiently plead a cause of action for declaratory relief. Therefore, the court OVERRULES the Demurrer to the third cause of action.
Based on the above, the court SUSTAINS Defendants’ (Benjamin Arsenian and Law Offices of Benjamin Arsenian) Demurrer, filed on 6-10-22 under ROA No. 30, as to the first cause of action for Interpleader and the Breach of Contract Causes of Action alleged as Counts 2-7 and 9-11 with 14-days leave to amend from the date of service of the notice of the court’s ruling. (City of Stockton v. Superior Court (2007) 42 Cal.4th 730, 747.) The court OVERRULES the Demurrer as to the remaining causes of action.
Defendants are to give notice.
Motion No. 2:
Moving Parties (Dennis Dascanio and Law Offices of Dennis Dascanio, APC) unopposed Motion to Consolidate (Motion), filed on 6-2-22 under ROA No. 21, is GRANTED.
California Rules of Court, Rule 3.350(a)(1), provides: “A notice of motion to consolidate must: [¶] (A) List all named parties in each case, the names of those who have appeared, and the names of their respective attorneys of record; [¶] (B) Contain the captions of all the cases sought to be consolidated, with the lowest numbered case shown first; and [¶] (C) Be filed in each case sought to be consolidated.” The Motion sufficiently complies with California Rules of Court, rule 3.350.
The Motion lists all parties who have appeared and their attorneys of record in their Notice of Motion. Thus, the Motion complies with of California Rule of Court, rule 3.350(a)(1)(A).
The caption on the Motion sets forth the two civil actions to be consolidated and with the lowest numbered action shown first. Thus, the Motion complies with California Rule of Court, rule 3.350(a)(1)(B).
The court’s file Case No. 30-2022-01258583 reflects that Moving Parties filed this Motion in that cases. Thus, the Motion complies with California Rule of Court, rule 3.350(a)(1)(C).
Code of Civil Procedure section 1048, subdivision (a), states, “When 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 matters in issue in the actions; it may order all the action consolidated and it may make such orders concerning proceedings therein as may tend to avoid unnecessary costs or delay.”
On 5-2-222, Moving Parties filed Case No. 30-2022-01257590 entitled Dascanio v Arsenian. On 5-6-22, Defendants (Benjamin Arsenian dba The Law Offices of Benjamin Arsenian, PC) filed Case No. 30-2022-01258583 entitled Arsenian v. Dascanio.
Each of these actions involves the distribution of settlement funds resulting from the settlement of both the underlying workers compensation action and the related personal injury action. Each of the plaintiffs allege they have an interest in the settlement funds at issue.
Moving Plaintiffs have met their burden of showing that consolidation will promote judicial efficiency. Moving Plaintiffs promptly brought the motion and there is no argument that the Defendants will be prejudiced. Defendants did not file an opposition to the motion.
Therefore, the court GRANTS Moving Parties (Dennis Dascanio and Law Offices of Dennis Dascanio, APC) unopposed Motion to Consolidate filed on 6-2-22 under ROA No. 21. The court designates Case No. 30-2022-01257590 as the lead case because it is the earlier filed case. (California Rules of Court, rule 3.350(b).)
Moving Parties are to give notice.