Case Number: BC577100 Hearing Date: March 20, 2017 Dept: 37
CASE NAME: Merino, et al. v. Metro Apts, LLC, et al.
CASE NO.: BC577100
HEARING DATE: 3/20/17
CALENDAR NO.: 8
TRIAL DATE: N/A
SUBJECT: Motion to Dismiss Plaintiffs’ Equitable Cause of Action for “Violation of Business and Professions Code section 17200”
MOVING PARTY: Defendant Metro Apts, LLC
OPPOSING PARTY: Plaintiffs Blanca Carolina Menjivar Merino, Jose Rigoberto Hernandez Orellana, Jimena Saraey Hernandez, and Ma. De Los Angeles Valdivia Garcia
COURT’S TENTATIVE RULING
The motion to dismiss is denied. Counsel for Plaintiffs to give notice.
STATEMENT OF THE CASE
In this action, tenants brought habitability claims against their landlord, including (1) violation of Civil Code section 1942.4, (2) breach of the warranty of habitability, (3) nuisance, (4) violation of the Unfair Competition Law (Bus. & Prof. Code, § 17200, et seq.) (the “UCL Claim”), and (5) negligence. On January 3, 2017, Plaintiffs proceeded to trial on all of their claims except the fourth, and on January 17, 2017, the jury returned a verdict in Plaintiffs’ favor. Defendant Metro Apts, LLC now moves the court to dismiss the UCL Claim. Defendant contends that the UCL Claim is equitable in nature and therefore should have been tried to the court before the legal claims were tried to the jury, and that Plaintiffs waived the claim by failing to do so. Plaintiffs oppose the motion.
The parties agree that the UCL Claim is equitable in nature and that Plaintiffs therefore did not have a right to try the claim to a jury. (See, e.g., Hodge v. Superior Court (2006) 145 Cal.App.4th 278, 284-285.) The parties also agree that the historical distinction between equitable and legal claims remains generally intact, as “[i]n most instances, separate equitable and legal issues are ‘kept distinct and separate,’ with legal issues triable by a jury and equitable issues triable by the court.” (Hoopes v. Dolan (2008) 168 Cal.App.4th 146, 156.) The parties disagree, however, whether Plaintiffs were obligated to try the UCL Claim to the court before proceeding to a jury trial on the legal claims, and whether Plaintiffs’ failure to do so effectively precludes them from conducting a bench trial on the UCL Claim now that the jury trial has ended.
There is no “bright line” rule with respect to the sequence of trying equitable and legal claims in a single action. As Defendant notes, it is well established that trial courts may try equitable issues first in order to promote judicial economy. (Hoopes, supra, 168 Cal.App.4th at p. 157; Raedeke v. Gibraltar Sav. & Loan Assoc. (1974) 10 Cal.3d 665, 671.) The rationale is that if the court’s determination of the equitable issues proves dispositive of the legal issues, nothing further remains to be tried to a jury. (Raedeke, at p. 671.) However, it is equally clear that legal issues may be tried before equitable ones, and that, in that circumstance, “a jury’s determination of legal issues may curtail or foreclose equitable issues.” (Hoopes, at p. 157; see also Hughes v. Dunlap (1891) 91 Cal. 385, 388.) Thus, while trying equitable issues before legal issues may serve judicial economy in most situations, may be the more common practice, or even may generally be the better practice, there is no rule mandating that courts and litigants always observe that particular sequential order.
As Plaintiffs point out, judicial economy is not necessarily served where there is no significant overlap of issues such that the trial of one might dispose of the other. This is not a case, for instance, where the defendant raised an equitable defense that might have disposed of the plaintiffs’ legal claims. Instead, Plaintiffs’ UCL Claim is distinct and separate from the claims for violation of Civil Code section 1942.4, breach of the warranty of habitability, nuisance, and negligence. As Plaintiffs observe, there is no showing that one set of claims, if tried first, would dispose of the other claims. (Opposition, p. 7:4-6.) Accordingly, while trying equitable issues before legal issues may serve judicial economy in most situations, it is not apparent that the practice would have done so here. To the contrary, in this case if the UCL claims were tried first, the parties would have very likely had to present evidence to the jury that the court had already heard in the equitable phase, leading to a duplication of effort.
In the reply, Defendant cites a line of cases advising that where a case involves both equitable and legal claims, “equitable issues are to be decided first” (National Elec. Supply Co. v. Mt. Diablo Unified School Dist. (1960) 187 Cal.App.2d 418, 422), and that “the court should first resolve the equitable issues” (County of Butte v. Bach (1985) 172 Cal.App.3d 848, 866, fn. 8; see also Eldridge v. Burns (1982) 136 Cal.App.3d 907, 917 [“The equitable solution should be determined in the first place, and hopefully decisively, by the trial court, on facts and principles to be presented there”]). However, these cases do not mandate a particular sequential order. Instead, they represent instances in which courts determined judicial economy would be served by trying the equitable claims first. As discussed, a jury trial of legal claims may proceed a bench trial of equitable claims. (See, e.g., Hoopes, supra, 168 Cal.App.4th at p. 157; Hughes, supra, 91 Cal. at p. 388.)
Defendant also cites Raedeke for the proposition that Plaintiffs were obligated to make an “election of remedies.” However, the circumstances of this case were different from those in Raedeke. In Raedeke, the plaintiffs asserted a cause of action to set aside a trust deed foreclosure, an equitable action, and those for fraud and breach of contract seeking damages. When the trial court stated an intention to “ ‘proceed with the equitable issues,’ ” the plaintiffs’ counsel voluntarily waived any right to set aside the foreclosure sale and stated that the plaintiffs would proceed “ ‘on purely a question of law having to do with damages.’ ” (Raedeke, supra, 10 Cal.3d at p. 671.) In assessing the situation, the Court stated:
Clearly, plaintiffs’ counsel appreciated the substantial risk that if the court tried the “equitable” issues first, plaintiffs might forfeit their right to a jury trial altogether. 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 (or, as here, with an advisory 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.
(Ibid.) Thus, in Raedeke, the plaintiffs voluntarily chose to waive the right to the equitable action in order to proceed on the legal issues, a litigation tactic based on the risk that the court’s determination on the equitable issues might have foreclosed potential relief from a jury. That did not happen here. Instead, as Plaintiffs point out, when the parties discussed the sequence of trying equitable and legal issues at the Final Status Conference on December 30, 2016, the court determined that the equitable issues would be tried after the jury trial. (Opposition, Exh. B, pp. 10-11.) There was no objection to this order of proceeding.
In sum, there is no rule or requirement mandating a bench trial of equitable claims before a jury trial of legal claims, and for this reason, the motion is denied.
1. The court notes Plaintiffs’ point that Defendant filed a motion to dismiss rather than a motion for directed verdict. However, in light of the court’s ruling on the merits of the dispute, the procedural point is moot.