Case Number: MC023661 Hearing Date: July 01, 2014 Dept: A11

SUPERIOR COURT OF THE STATE OF CALIFORNIA
COUNTY OF LOS ANGELES – NORTH DISTRICT

JOHN MATTHYS, )
) Case Number MC 023661
Plaintiff, )
) ORDER AFTER HEARING
V )
) Date of Hearing:
HECTOR ORTEGA MARISCAL, JR.; ) July 1, 2014
Et al. ) Dept. A-11
) Judge Randolph A. Rogers
Defendants. )
____________________________________)

Defendant State Farm Mutual Automobile Insurance Company’s motion for summary judgment came on for hearing on July 1, 2014. Plaintiff John Matthys appeared through his counsel of record, ______________________. Defendant State Farm Mutual Automobile Insurance Company appeared through its counsel of record, _______________________. The Court, having received and reviewed the pleadings of record and evidence submitted and having considered argument of counsel, it is hereby ORDERED:

Defendant State Farm Mutual Automobile Insurance Company’s motion for summary judgment is DENIED as to the first cause of action and GRANTED as to the second cause of action.

SO ORDERED this the _____ day of July, 2014.

______________________
RANDOLPH A. ROGERS,
JUDGE

SUPERIOR COURT OF THE STATE OF CALIFORNIA
COUNTY OF LOS ANGELES – NORTH DISTRICT

JOHN MATTHYS, )
) Case Number MC 023661
Plaintiff, )
) STATEMENT OF DECISION
V )
) Date of Hearing:
HECTOR ORTEGA MARISCAL, JR.; ) July 1, 2014
Et al. ) Dept. A-11
) Judge Randolph A. Rogers
Defendants. )
____________________________________)

The Court bases the Order After Hearing of this date upon the following Statement of Decision:

1. This case arises from an arbitration award granted in a personal injury case. The underlying case involved Hector Ortega Mariscal, Jr. (“Mariscal”), the insured of Defendant State Farm Mutual Automobile Insurance Company (“Defendant”), who was involved in a car accident. Plaintiff John Matthys (“Plaintiff”) was a passenger in Mariscal’s vehicle at the time of the accident. Plaintiff suffered injuries and sued Mariscal and his employers in a personal injury suit, case number MC019072.

2. The parties stipulated to binding arbitration, the terms of which permitted an award floor of $25,000 and maximum of $300,000. The stipulation further provided that “[a]ny liens (i.e. worker’s compensation liens, government liens, medical liens, etc.), medical bills, claims for reimbursement, attorney’s fees or other costs are to be paid by the plaintiff out of the award, if any, and are the sole responsibility and obligation of plaintiff.”

3. The Arbitrator found in favor of Plaintiff, awarding $437,360.50 on June 25, 2012. Pursuant to the stipulation, the award recoverable by Plaintiff was limited to $300,000.

4. Plaintiff apparently requested payment shortly thereafter, the payment of which was withheld by Defendant on the grounds that a worker’s compensation lien claim was outstanding on the award.

5. Plaintiff apparently reached a compromise on the lien in August, and payment on all claims and awards was apparently made in December of 2012.

6. Standard for summary judgment or summary adjudication – A party may move for summary judgment in any action or proceeding if it is contended the action has no merit or that there is no defense to the action or proceeding. Cal. Code Civ. Proc. § 437c(a). To prevail on a motion for summary judgment, the evidence submitted must show there is no triable issue as to any material fact and that the moving party is entitled to judgment as a matter of law. Cal. Code Civ. Proc. § 437c(c). In other words, the opposing party cannot present contrary admissible evidence to raise a triable factual dispute.

7. “For purposes of motions for summary judgment and summary adjudication: [¶] (1) A plaintiff or cross-complainant has met his or her burden of showing that there is no defense to a cause of action if that party has proved each element of the cause of action entitling the party to judgment on that cause of action. Once the plaintiff or cross-complainant has met that burden, the burden shifts to the defendant or cross-defendant to show that a triable issue of one or more material facts exists as to that cause of action or a defense thereto. The defendant or cross-defendant may not rely upon the mere allegations or denials of its pleadings to show that a triable issue of material fact exists but, instead, shall set forth the specific facts showing that a triable issue of material fact exists as to that cause of action or a defense thereto.” CCP § 437c(p)(1).

8. When ruling on a summary judgment motion, the trial court must consider all inferences from the evidence, even those contradicted by the moving party’s evidence. The motion cannot succeed unless the evidence leaves no room for conflicting inferences as to material facts; the court has no power to weigh one inference against another or against other evidence. Murillo v. Rite Stuff Food Inc. (1998) 65 Cal.App.4th 833, 841. In determining whether the facts give rise to a triable issue of material fact, “‘[a]ll doubts as to whether any material, triable, issues of fact exist are to be resolved in favor of the party opposing summary judgment . . . .’” Gold v. Weissman (2004) 114 Cal.App.4th 1195, 1198-99. “In other words, the facts alleged in the evidence of the party opposing summary judgment and the reasonable inferences there from must be accepted as true.” Jackson v. County of Los Angeles (1997) 60 Cal.App.4th 171, 179.

9. First Cause of Action (Breach of Contract) – The elements for a breach of contract are: (1) the existence of a contract; (2) plaintiff’s performance or excuse for nonperformance; (3) defendant’s breach (or anticipatory breach); and (4) resulting damage. See Wall Street Network, Ltd. v. N.Y. Times Co. (2008) 164 Cal.App.4th 1171, 1178. It has further been said that damages are not an element of a cause of action for breach of contract because nominal damages are available. See Midland Pacific Bldg. Corp. v. King (2007) 157 Cal.App.4th 264, 275; Cal. Civ. Code §3360 (“[w]hen a breach of duty has caused no appreciable detriment to the party affected, he may yet recover nominal damages”).

10. Defendant argues for summary judgment in its favor on the grounds that it was not a party to the stipulation for binding arbitration, and further, that Plaintiff suffered no damages from its alleged breach. Plaintiff contends that counsel retained by Defendant on behalf of its insured is an employee of Defendant, and further that the delayed payment deprived Plaintiff of the ability to negotiate a better deal with regards to the worker’s compensation lien.

11. From the evidence submitted, there is evidence showing that Orszag was Defendant’s employee. Motion for Summary Judgment, Exhibit 7. Moreover, the evidence indicates that Defendant both considered itself liable to Plaintiff, and had an identity of interest identical to that of Mariscal, such that liability for one applied to liability of the other. In addition, it is unquestioned that Defendant’s potential liability, absent the terms of the stipulation, would be for the full amount of the arbitration award. It is only under the terms of the stipulation that Defendant’s total payment is reduced to $300,000. There is no evidence that Defendant objected to the terms of the stipulation for arbitration, and ample evidence that Defendant made payment pursuant, not to the arbitration award, but to the terms of the stipulation to binding arbitration.

12. The doctrine of 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. The doctrine serves a clear purpose: to protect the integrity of the judicial process.” Jackson v. County of Los Angeles (1997) 60 Cal.App.4th 171, 181. “Judicial estoppel is designed to maintain the purity and integrity of the judicial process by preventing inconsistent positions from being asserted.” Id. at 182. The doctrine applies where “(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; (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 183. Each of these is applicable here.

13. Defendant, while not superficially the same party as Mariscal, all but concedes it is liable to Plaintiff to the same extent as Mariscal. See also Cal. Ins. Code §11580(b)(2) (requiring insurance policy to include provisions allowing a judgment creditor to recover against the insurer for judgments against its insured for bodily injury, death, or property damage); Gray v. Begley (2010) 182 Cal.App.4th 1509, 1523 (“the key factor in determining whether an insurer is bound . . .is whether the insurer provided the insured with a defense”). It defended Mariscal as it was apparently required to do, and paid the award as required by the insurance contract. The identity of interest, the overlap of representation, and the identical liability suggest that Defendant and Mariscal are essentially the same parties in the two proceedings. Cf. French v. Rishell (1953) 40 Cal.2d 477, 481 (holding a pension board and the city to be the same parties for collateral estoppel purposes because one was merely the agent of the other); Cargill, Inc. v. Souza (2011) 201 Cal.App.4th 962, 965 (nonsignatory party may recover contractual attorney fees where “the nonsignatory party stands in the shoes of a party to the contract”). Defendant has further taken contradictory positions: that it need pay only the maximum of $300,000 pursuant to the stipulation, and that it cannot be held liable to the terms of the stipulation. These positions were taken in judicial and quasi-judicial proceedings, and Defendant clearly successfully asserted the first position, considering its payments. Defendant took the first position fully informed of the terms of the stipulation and award, and indeed, never questioned that it was bound by the terms of the stipulation until disputes as to the manner of payment arose.

14. To allow Defendant to claim it is not bound by the stipulation agreement when it has clearly benefited from its terms and proceeded as if it were bound would severely impinge upon the integrity of the judicial and quasi-judicial processes here involved. This is particularly true in light of the fact that Defendant would unhesitatingly call upon the protections of the stipulation agreement should Plaintiff have attempted to sue it for the full amount awarded by the arbitrator. Such gamesmanship is precisely of the sort the doctrine means to prevent. “Our adversarial system limits the affirmative duties owed by an advocate to his adversary, but that does not mean it frees him to deceive courts, argue out of both sides of his mouth, fabricate facts and rules of law, or seek affirmatively to obscure the relevant issues and considerations behind a smokescreen of self-contradictions and opportunistic flip-flops.” Ferraro v. Camarlinghi (2008) 161 Cal.App.4th 509, 558.

15. Defendant’s further claim that no damages were suffered is unavailing as well. “A plaintiff is entitled to recover nominal damages for the breach of a contract, despite inability to show that actual damage was inflicted upon him.” Sweet v. Johnson (1959) 169 Cal.App.2d 630, 632. As such, even were Defendant’s claim true, it has still failed to point out any area related to damages upon which a motion for summary judgment can be granted.

16. Accordingly, Defendant’s motion for summary judgment as to the breach of contract cause of action is DENIED.

17. Second Cause of Action (Fraud) – The elements for fraud are: (1) misrepresentation, (2) knowledge of the falsity, (3) intent to defraud, (4) justifiable reliance, and (5) resulting damages. See Charnay v. Cobert (2006) 145 Cal.App.4th 170, 184.

18. As an initial matter, Plaintiff cannot rely on representations made in “open court” as evidence of fraud. See Cal. Civ. Code §47 (“A privileged publication or broadcast is one made: . . . In any . . . (2) judicial proceeding, (3) in any other official proceeding authorized by law, or (4) in the initiation or course of any other proceeding authorized by law”); Action Apartment Ass’n, Inc. v. City of Santa Monica (2007) 41 Cal.4th 1232, 1241 (the litigation privilege “applies to any communication (1) made in judicial or quasi-judicial proceedings; (2) by litigants or other participants authorized by law; (3) to achieve the objects of the litigation; and (4) that [has] some connection or logical relation to the action”); Kuehn v. Kuehn (2000) 85 Cal.App.4th 824, 834 (“the absolute litigation privilege of Civil Code section 47, subdivision (b), bars derivative tort actions . . . including fraud, negligence and negligent misrepresentation”).

19. Plaintiff’s fraud cause of action is premised on the representation that Defendant would pay the arbitration award to Plaintiff. Opposition 4:14-15. Plaintiff’s arguments, however, are undermined by Plaintiff’s counsel’s own letter, which states that counsel “worked out an arrangement with the subrogation attorney whereby his client will accept the sum of $95,500 . . . [and Plaintiff] will accept a separate check in the amount of $204,500.00 made payable to only [the Plaintiff and counsel] to resolve the personal injury case which was arbitrated.” Motion for Summary Judgment, Exhibit 8.

20. Similarly, Plaintiff attempts to contend that the timing of the payments, coinciding with the lodging of the worker’s compensation lien and its resolution, reflected fraud perpetrated by Defendant. Plaintiff has produced no evidence showing any representation by the Defendant as to the timing of the payment of the award, nor has he produced any evidence to show Defendant withheld payment in bad faith. Under such circumstances, Plaintiff has not produced any admissible evidence to show there is a triable issue of material fact with regards to his fraud claim.

21. Accordingly, Defendant’s motion for summary judgment as to the fraud cause of action is GRANTED.

SO ORDERED AND ADJUDGED this the ______ day of July, 2014.

___________________________________
RANDOLPH A. ROGERS, JUDGE