SUPERIOR COURT OF CALIFORNIA
COUNTY OF LOS ANGELES – NORTHEAST DISTRICT
|UNI-GLORY DEVELOPMENT, INC. ,
FAIRVIEW EAST, LLC , et al.,
|Hearing Date:||December 13, 2021|
|[TENTATIVE] ORDER RE:
PLAINTIFF AND CROSS-DEFENDANTS’ MOTION TO BIFURCATE TRIAL
MOVING PARTIES: Plaintiff and Cross-Defendant Uni-Glory Development, Inc. and Cross-Defendants George Zhang, Lucy Xiangxin Gao, and Chien-Kuo Liu
RESPONDING PARTY: Defendant and Cross-Complainant Fairview East, LLC
Plaintiff and Cross-Defendants’ Motion to Bifurcate Trial
The court considered the moving papers, opposition, and reply filed in connection with this motion.
Plaintiff Uni-Glory Development, Inc. (“Uni-Glory”) filed this action on April 6, 2017, against Defendant Fairview East, LLC (“Fairview”). The operative Second Amended Complaint (“SAC”) was filed on November 8, 2017, and asserts causes of action for (1) breach of written contract, (2) implied indemnity, and (3) declaratory relief. The gravamen of this action is a dispute over unpaid sums for construction work performed under an agreement between Uni-Glory, a general contractor, and Fairview, the property owner and developer.
On August 25, 2017, Fairview filed a cross-complaint against, among others, Uni-Glory, George Zhang, Lucy Xiangxin Gao, and Chien-Kuo Liu (collectively, the “Uni-Glory Parties”). The operative Fourth Amended Cross-Complaint (“4ACC”) was filed on August 31, 2020, and asserts causes of action for breach of contract, fraud, negligence, and recovery of payments to unlicensed contractor (Bus. & Prof. Code, § 7031(b)). Fairview alleges that Uni-Glory is not entitled to any payments because Uni-Glory was not a duly licensed contractor at the relevant time.
The Uni-Glory Parties now move for an order bifurcating trial into three phases.
Code of Civil Procedure section 1048, subdivision (b) provides: “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.” The objective of bifurcation typically is “avoidance of the waste of time and money caused by the unnecessary trial of damage questions in cases where the liability issue is resolved against the plaintiff.” (Horton v. Jones (1972) 26 Cal.App.3d 952, 955.)
Code of Civil Procedure section 598 allows a court to order that the trial of any issue or part thereof proceed before the trial of any other issue to promote the ends of justice or the economy and efficiency of handling the litigation. Additionally, “trial courts have broad discretion to determine the order of proof in the interests of judicial economy.” (Grappo v. Coventry Fin. Corp. (1991) 235 Cal.App.3d 496, 504.)
Civil Code section 3295, subdivision (d) provides that “[t]he court shall, on application of any defendant, preclude the admission of evidence of that defendant’s profits or financial condition until after the trier of fact returns a verdict for plaintiff awarding actual damages and finds that a defendant is guilty of malice, oppression, or fraud in accordance with Section 3294.” Section 3295, subdivision (d) “requires a court, upon application of any defendant, to bifurcate a trial so that the trier of fact is not presented with evidence of the defendant’s wealth and profits until after the issues of liability, compensatory damages, and malice, oppression, or fraud have been resolved against the defendant.” (Torres v. Automobile Club of So. California (1997) 15 Cal.4th 771, 777-778.)
The Uni-Glory Parties seek an order bifurcating trial as follows:
Phase One: bench trial on the legal issue of whether Fairview’s claim for disgorgement under Business and Professions Code section 7031, subdivision (b) is time-barred and/or statutorily barred by Business and Professions Code section 7031, subdivision (d)
Phase Two: jury trial
Phase Three: punitive damages in the event that the jury returns a verdict in favor of Fairview on its fraud claims
As an initial matter, the court notes that there is no dispute that the issue of punitive damages is properly bifurcated from the rest of trial. Therefore, the motion is granted as to Phase Three.
The court also notes that there is no dispute that the statute of limitations issue and the issue of the application of Business and Professions Code section 7031, subdivision (d) should be tried first. The only dispute appears to be whether Phase One is appropriately tried to a jury or to the court.
Business and Professions Code section 7031, subdivision (b) authorizes an action to be brought by “a person who utilizes the services of an unlicensed contractor…to recover all compensation paid to the unlicensed contractor for performance of any act or contract.” Business and Professions Code section 7031, subdivision (d) provides that “proof of licensure…shall be made by production of a verified certificate of licensure from the Contractors State License Board which establishes that the individual or entity bringing the action was duly licensed in the proper classification of contractors at all times during the performance of any act or contract covered by the action.”
Because licensure is a “required element of a contractor plaintiff’s case in chief,” a contractor is entitled to a jury trial on the issue of the validity of the licensure. (Jeff Tracy, Inc. v. City of Pico Rivera (2015) 240 Cal.App.4th 510, 517-518.) This is especially the case when the party challenging the validity of the license goes “behind the face of the license” to prove that the required managing employee or responsible managing officer is a “sham”. (Id. at p. 518.) Here, Fairview alleges in the 4ACC that Uni-Glory obtained a license under the qualifying individual, Chien-Kuo Liu, via fraud. (4ACC, ¶ 14.) Fairview explicitly alleges that Uni-Glory was not properly licensed, and that Liu was a sham. (4ACC, ¶ 65.) Based on these allegations, the court finds that the issue of valid licensure must be tried by a jury.
Similarly, the court finds that the issue of the application of the statute of limitations is also appropriately tried by a jury. (E-Fab, Inc. v. Accountants, Inc. Services (2007) 153 Cal.App.4th 1308, 1320 [“Resolution of the statute of limitations issue is normally a question of fact.”]; Filosa v. Alagappan (2020) 59 Cal.App.5th 772, 778 [“Although application of the statute of limitations is normally a question of fact, the question becomes one of law when the evidence is susceptible of only one reasonable conclusion.”].) Although the Uni-Glory Parties argue that the statute of limitations issue in this case has become a legal issue, the court disagrees. The Uni-Glory Parties argue that the date by which Uni-Glory ceased providing construction services to Fairview (and thus, when the cause of action under Business and Professions Code section 7031, subdivision (b) began to accrue) is undisputed based on questions counsel for Fairview asked during the deposition of George Zhang. The Uni-Glory Parties characterize counsel’s line of questioning as his having taken a “position” to which Fairview is bound under the doctrines of judicial estoppel and party admission.
Judicial estoppel prevents a party from “asserting a position in a legal proceeding that is contrary to a position previously taken in the same or some earlier proceeding.” (Gottlieb v. Kest (2006) 141 Cal.App.4th 110, 130-131.) “In California, courts consider five factors in determining whether to apply judicial estoppel: ‘The doctrine [most appropriately] applies “‘when (1) the same party has taken two positions; (2) the positions were taken in judicial or quasi-judicial administrative proceedings; (3) the party was successful in asserting the first position (i.e., the tribunal adopted the position or accepted it as true); (4) the two positions are totally inconsistent; and (5) the first position was not taken as a result of ignorance, fraud, or mistake.”’” (Id. at p. 131, quoting Aguilar v. Lerner (2004) 32 Cal.4th 974, 986-987.) Here, the factors do not support applying judicial estoppel. There is no authority for the proposition that asking questions at a deposition is equivalent to taking a “position” in a proceeding, and more important, there is no showing that Fairview was “successful” in asserting any such position. By the same token, counsel’s questions did not constitute a party admission by an agent. Therefore, the court finds that the statute of limitations issue is not “undisputed” and is properly tried to a jury.
Based on the foregoing, the court grants in part and denies in part the Uni-Glory Parties’ motion to bifurcate.
The court orders that trial in this matter will be tried in the following phases:
Phase One: jury trial on the issue of whether Fairview’s claim for disgorgement under Business and Professions Code section 7031, subdivision (b) is time-barred and/or statutorily barred by Business and Professions Code section 7031, subdivision (d)
Phase Two: jury trial on all other issues
Phase Three: punitive damages in the event that the jury returns a verdict in favor of Fairview on its fraud claims.
Fairview is ordered to give notice of this ruling.
IT IS SO ORDERED.
DATED: December 13, 2021
Judge of the Superior Court