Case Number: BC531655 Hearing Date: June 04, 2018 Dept: 34

SUBJECT: Motion for an Order Imposing an Undertaking for Out of State Resident Plaintiff

Moving Party: Defendant Sport Chalet, Inc.

Resp. Party: Plaintiff Massimo Millauro

The Court takes judicial notice of Exhibits 1 and 2 submitted by plaintiff.

The motion is GRANTED in part. The Court orders plaintiff to file an undertaking in the amount of $7,500.00.

BACKGROUND:

Plaintiff commenced this action on 12/24/13 and filed a First Amended Complaint on 05/29/15. On 05/02/17, plaintiff filed a Second Amended Complaint (“SAC”) against defendant for: (1) negligence. Plaintiff alleges that he purchased a bicycle from defendant’s store on or about 04/21/12 and that he was subsequently injured because the bicycle was negligently assembled.

On 04/06/18, the Court granted plaintiff leave to file a Third Amended Complaint to allege a new cause of action for strict product liability.

On 04/10/18, the Court granted defendant’s motion for summary adjudication of plaintiff’s negligence cause of action.

ANALYSIS:

Defendant Sport Chalet, Inc. moves for an order requiring plaintiff to post an undertaking to secure the anticipated costs of suit. (See Notice of Motion, p. 1:25-27.)

Relevant Law

Code of Civil Procedure section 1030 provides, in relevant part:

“(a) When the plaintiff in an action or special proceeding resides out of the state, or is a foreign corporation, the defendant may at any time apply to the court by noticed motion for an order requiring the plaintiff to file an undertaking to secure an award of costs and attorney’s fees which may be awarded in the action or special proceeding. For the purposes of this section, “attorney’s fees” means reasonable attorney’s fees a party may be authorized to recover by a statute apart from this section or by contract.

(b) The motion shall be made on the grounds that the plaintiff resides out of the state or is a foreign corporation and that there is a reasonable possibility that the moving defendant will obtain judgment in the action or special proceeding. The motion shall be accompanied by an affidavit in support of the grounds for the motion and by a memorandum of points and authorities. The affidavit shall set forth the nature and amount of the costs and attorney’s fees the defendant has incurred and expects to incur by the conclusion of the action or special proceeding.

(c) If the court, after hearing, determines that the grounds for the motion have been established, the court shall order that the plaintiff file the undertaking in an amount specified in the court’s order as security for costs and attorney’s fees.

(d) The plaintiff shall file the undertaking not later than 30 days after service of the court’s order requiring it or within a greater time allowed by the court. If the plaintiff fails to file the undertaking within the time allowed, the plaintiff’s action or special proceeding shall be dismissed as to the defendant in whose favor the order requiring the undertaking was made.

(Code Civ. Proc. § 1030, subd. (a)-(d).)

The purpose of the statute is to enable California residents sued by nonresidents to secure costs in light of the difficulty of enforcing judgment for costs against one who is not within the court’s jurisdiction and to thereby act to prevent out-of-state residents from filing frivolous lawsuits against California residents. (See Alshafie v. Lallande (2009)171 Cal.App.4th 421.)

Discussion

Defendant argues that the Court should require plaintiff to post an undertaking of not less than $15,000.00 to secure the costs of suit because plaintiff now resides out of state and there is at least a “reasonable probability” that defendant will prevail at trial. (See Motion, p. 5:2-6:28.)

Plaintiff resides out of state

Defendant explains that plaintiff was formerly a resident of North Hollywood, California, but now resides in Nevada. (See Id. at p. 5:5-10.) Recently, defendant served a demand that plaintiff appear for a physical examination in California, but plaintiff’s counsel “served an Objection and Notice of Nonappearance” on the ground that “plaintiff currently lives in Henderson Nevada.” (Ibid.)

Plaintiff does not dispute that he resides out of state, but argues that requiring an undertaking in this case would not serve the purpose of the statute. (See Opposition, p. 2:21-3:8.) Plaintiff argues that the purpose of the statute is to prevent “out-of-state residents from filing frivolous lawsuits against California residents.” (See Id. at p. 2:25-26 [quoting Yao v. Superior Court (Lovell) (2002) 104 Cal.App.4th 327, 331.) However, plaintiff filed this case when he was a California resident, he has “meaningfully participated in discovery” and, “while living in Nevada, attend[ed] a defense medical examination in California.” (Id. at p. 3:1-3.) As a result, defendant’s motion fails “to provide any specifics about how and why enforcing a judgment against Plaintiff in Nevada would be difficult as opposed to merely convenient.” (Id. at p. 3:3-5.)

Plaintiff’s argument relies on an incomplete statement of the purpose of section 1030. In Alshafie, v. Lallande, the court concluded that the purpose of the statute is to enable California residents sued by nonresidents to secure costs in light of the difficulty of enforcing judgment for costs against one who is not within the court’s jurisdiction and to thereby act to prevent out-of-state residents from filing frivolous lawsuits against California residents. (See Alshafie v. Lallande (2009)171 Cal.App.4th 421.) As a result, defendant need not specifically explain why collecting the judgment would be difficult; that difficulty is inherent in the fact that the Court would not have jurisdiction to enforce a judgment against a resident of Nevada.

Reasonably probability of prevailing

Defendant further argues that there is at least a “reasonable probability” that it will prevail in this action. (See Id. at p. 5:15-25.) This Court has previously stricken plaintiff’s claims for gross negligence, determined that plaintiff executed a general release, and granted summary adjudication in defendant’s favor as to plaintiff’s negligence claim. (See Ibid.; See also Minute Order of 04/10/18.) Although plaintiff has filed a Third Amended Complaint alleging strict liability for failure to warn, defendant has filed a motion for summary judgment “founded on the failure of plaintiff to read the Owners Manual he admits he received. It contains the very warnings plaintiff alleges he was not given.” (Motion, p. 5:21-22.)

In his opposition, plaintiff argues that defendant has failed to establish a reasonable possibility of prevailing because “the user’s manual was written by the bicycle’s manufacturer, so the warnings contained therein are from the manufacturer, not Defendant, the retailer. However, the TAC alleges that Defendant, who sold and assembled the bicycle failed to give warnings . . . about ‘. . . foreseeable dangerous conditions of the bicycle . . . including Defendant’s inadequate and/or defective assembly . . .” (Opposition, p. 3: 15-21.) Based on previous decisions in similar cases, plaintiff argues that defendant cannot rely on the “express assumption of risk clause in the sale agreement to show it will prevail.” (See Id. at p. 3:27-4:21.) Ultimately, plaintiff argues that there is “no reasonable possibility that Defendant will prevail in this case based on the points and evidence cited in its motion.” (Id. at p. 4:22-23.)

Plaintiff’s argument ignores two relevant facts that show that there is at least some reasonable probability that defendant might prevail in this action. First, plaintiff alleges that he was injured while riding the bicycle that he had purchased from defendant because, due to negligent assembly, “the handlebars of the bicycle came off, became dislodge or otherwise misaligned causing Plaintiff to lose his balance and fall to the ground.” (See RJN, Exh. 1, TAC ¶ 16.) Second, the Owner’s Manual, which plaintiff acknowledges that he received, contains a section entitled “Mechanical Safety Check” which directs the owner to “Routinely check the condition of your bicycle before every ride.” (See RJN, Exh. 2, p. 3.) This section recommends that the owner check, among other things, that the “nuts, bolts, screws & other fasteners” are not loose, and that “the saddle and handlebar stem are parallel to the bike’s center line and clamped tight enough so that you can’t twist them out of alignment.” (See Id. at p. 3-5.) The manual also direct the owner to:

“Make sure nothing is loose. Lift the front wheel off the ground by two or three inches, then let it bounce on the ground. Anything sound, feel or look loose? Do a visual and tactile inspection of the whole bike. Any loose parts or accessories? If so, secure them. If you’re not sure, ask someone with experience to check.” (Id. at p. 4.)

Even when a manufacturer or distributor is under a duty to warn consumers about potentially defective products, “a product seller is not subject to liability for failing to warn or instruct regarding risks and risk-avoidance measures that should be obvious to, or generally known by, foreseeable product users.” (6 Witkin, Summary of California Law, Torts (11th Ed. 2018) § 1631; Rest. 3d, Torts § 2(c).)

Although the Court expresses no opinion as to the actual merits of the case, the facts of this case suggest that there is at least a reasonable probability that defendant could prevail in this action.

Sufficiency of the affidavit

Plaintiff argues that the motion must be denied because the supporting declaration lacks foundation and is therefore insufficient under section 1030(b). (See Opposition, p. 4:25-5:11.) Section 1030(b) requires that the motion be accompanied by an affidavit that “shall set forth the nature and amount of the costs and attorney’s fees the defendant has incurred and expects to incur by the conclusion of the action or special proceeding.” (See Code Civ. Proc. § 1030, subd. (b).) Plaintiff argues that defendant has “failed to substantiate or justify the assumptions in the supporting declaration . . . that hiring accident reconstruction and bicycle experts will cost an estimated minimum of $9,000 or that Defendant will incur an estimated $3,000 in costs for deposing Plaintiff’s expert witnesses . . .” (See Opposition, p. 5:2-11.)

Defendant’s declaration states that defendant has already incurred $5,195 in expenses and expects to incur at least an additional $25,000 in expenses related to conducting a physical examination and hiring various experts. (See Cohen Decl., ¶¶ 5-6, 9.) Defense counsel estimates these costs “based on almost forty (40) years of litigation” experience.” (Id. at ¶ 9.) As noted above, the plain language of section 1030(b) only requires the moving party to submit an affidavit setting forth costs that have already been incurred and those that it “expects to incur.” (Code Civ. Proc. § 1030(b).) Defendant’s declaration appears to satisfy that standard. Plaintiff has not cited any authority to suggest that the affidavit must be based on anything more substantial than defense counsel’s own experience.

Amount of the Undertaking

Despite its belief that it could incur at least $25,000 in additional expenses related to this case, defendant seeks an undertaking “of not less than $15,000.00.” (See Motion, p. 6:18-28.)

Plaintiff argues that this sum is excessive and “will create a financial bar to justice that is impossible for Plaintiff to surmount, and could result in this case being disposed of based on his inability to pay $15,000 rather than the merits of the case.” (See Opposition, p. 5:15-21.) It is true that section 1030 provides for dismissal of the case if the plaintiff fails to file an undertaking within 30 days of the Court’s order. (See Code Civ. Proc. § 1030, subd. (d).) Although Plaintiff fails to cite to any authority in support of his claim that the total amount of the requested undertaking or plaintiff’s ability to pay is a relevant consideration, the Court believes that it must consider plaintiff’s ability to post the bond in setting the amount.

In a slightly different, but nonetheless analogous situation of imposing attorney’s fees, one of the factors that the Court may consider is “the financial circumstances of the losing party, and the impact of the award on that party.” (Garcia v. Santana (2009) 174 Cal.App.4th 464, 476.) “In the proper case, the trial court does have the discretion to determine that the award that is reasonable is zero.” (Id. at p. 477.)

“[T]he interests of justice are paramount in all legal proceedings [citation.] In short, justice is the ‘sole justification of our law and courts.’” (Moncharsch v. Heily & Blase (1992) 3 Cal.4th 1, 34, Kennard, J., conc. and dis.)

California has a “long-standing public policy of ensuring that all litigants have access to the justice system [or an alternate forum] for resolution of their grievances, without regard to their financial means.” (Penilla v. Westmont Corp. (2016) 3 Cal.App.5th 205, 220, quoting Roldan v. Callahan & Blaine (2013) 219 Cal.App.4th 87, 94.) “Both the pauper and the millionaire are entitled to be treated fairly before the trier of fact. (Las Palmas Assoc. v. Las Palmas Center Assoc. (1991) 235 Cal.App.3d 1220, 1242, quoting Seimon v. Southern Pac. Transportation Co. (1977) 67 Cal. App. 3d 600, 606.)

This is not a case where a foreign plaintiff decides to sue in a California Court. Nonetheless, while plaintiff filed this suit when he was a California resident, he currently resides out-of-state.

Considering all of these factors, the motion is GRANTED. The Court orders plaintiff to file an undertaking in the amount of $7,500.00.