Case Name: Mark & Anne Venable, et al. v. MH Engineering Co., et al.
Case No.: 1-12-CV-221501
Date: June 24, 2014
Time: 9:00 a.m.
Dept: 21

Defendants ESPS, Inc. (“ESPS”), the successor in interest to Earth Systems Consultants Northern California (“ESCNC”), and ES Geotechnologies (“ESG”) bring a motion for summary adjudication of their affirmative defense to the causes of action asserted against them in the second amended complaint (“SAC”) by plaintiffs Mark Venable, Anne Venable, Doug Boehner (“Doug”), and Rita Boehner (collectively, “Plaintiffs”). (See Code Civ. Proc. [“CCP”], § 437c, subd. (f).)

After ESG and ESPS filed this motion, Plaintiffs dismissed the causes of action asserted against ESPS in the SAC. Accordingly, the motion for summary adjudication, with respect to causes of action asserted against (and affirmative defenses asserted by) ESPS is MOOT.

The Court notes that ESG submitted what appears to be a separate statement of material facts in support of its reply papers. There is no legal authority allowing a moving party to submit a separate statement in support of its reply papers. (Nazir v. United Airlines, Inc. (2009) 178 Cal.App.4th 243, 252.) This document will therefore not be considered by the Court. In addition, ESG submitted an “objection” to Plaintiffs’ supplemental opposition on the ground that it is late, and request that the Court “strike” the supplemental opposition on that basis. There is no legal authority allowing the Court to “strike” late-filed opposing papers. A court may, in its discretion, refuse to consider late-filed papers. (See Cal. Rules of Court, rule 3.1300(d).) Here, however, ESG was able to submit reply papers that address the merits of Plaintiffs’ arguments. Therefore, the Court exercises its discretion to consider the late-filed papers.
Furthermore, the Court acknowledges that defendant Granite Construction Company (“Granite”) filed an opposition to this motion, and defendant MH Engineering Company (“MH”) filed a joinder to that opposition. However, since Granite and MH are not plaintiffs in this action, it appears that they do not have standing to oppose the motion.

I. Requests for Judicial Notice

ESG’s request for judicial notice in support of the motion is GRANTED. (See Evid. Code, § 452, subd. (d); see also People ex rel. Lockyer v. Shamrock Foods Co. (2000) 24 Cal.4th 415, 422, fn. 2 [only relevant matters subject to judicial notice].)

Plaintiffs’ request for judicial notice in support of their opposition is GRANTED IN PART and DENIED IN PART. (See Evid. Code, § 452, subd. (d); see also People ex rel. Lockyer v. Shamrock Foods Co. (2000) 24 Cal.4th 415, 422, fn. 2.) The request is GRANTED as to the notice of dismissal, the SAC, and the answer to the SAC. The request is DENIED as to the records from the bankruptcy court.

Also, Plaintiffs’ supplemental request for judicial notice is DENIED. (See People ex rel. Lockyer v. Shamrock Foods Co. (2000) 24 Cal.4th 415, 422, fn. 2.)

II. Evidentiary Objections

Plaintiffs’ evidentiary objections are OVERRULED.

ESG’s evidentiary objections are OVERRULED.

III. Motion for Summary Adjudication

As an initial matter, ESG describes the instant motion as a motion for summary adjudication of its affirmative defense; however, this is actually a motion for summary adjudication of Plaintiffs’ causes of action on the ground that their ability to recover is limited by ESG’s affirmative defense. (Compare § 437c, subds. (f)(1) & (o)(2) [motion for summary adjudication must completely dispose of a claim or affirmative defense, and a plaintiff’s cause of action may be disposed by an affirmative defense that completely bars the claim], with See’s Candy Shops, Inc. v. Super Ct. (2012) 210 Cal.App.4th 889, 899-900 [motion of summary adjudication of an affirmative defense is proper when brought by a plaintiff and “completely disposes” of—i.e. negates—the affirmative defense].) ESG’s affirmative defense of contractual limitation of liability, if proven, would not completely dispose of any cause of action, issue of legal duty, affirmative defense, or claim for punitive damages; but rather, it would only limit Plaintiffs’ recovery against ESG to $25,000. CCP section 437c, subdivision (f)(1) does not permit summary adjudication of an issue of damages other than punitive damages that does not completely dispose of a cause of action. (DeCastro West Chodorow & Burns, Inc. v. Super Ct. (1996) 47 Cal.App.4th 410, 422 [denying the defendants’ motion for summary adjudication on issue of lost opportunity damages].) Since ESG’s motion, if granted, would not completely dispose of any cause of action, defense, issue of legal duty, or punitive damages claim, this motion is not permitted by CCP section 437c, subdivision (f). Furthermore, while CCP section 437c, subdivision (s) authorizes a motion for summary adjudication of an issue that would not completely dispose of a cause of action, affirmative defense, or damages claim other than punitive damages, such a motion must be brought pursuant to a stipulation of all of the parties, prior court order, and comply with certain procedures. (See CCP, § 437c, subd. (s).) Here, the parties did not stipulate to this motion, there is no prior court order authorizing the motion, and ESG does not otherwise comply with the procedures set forth in CCP section 437c, subdivision (s). Therefore, this motion for summary adjudication cannot be heard under CCP section 437c, subdivision (s). Given that there is no other legal basis for the Court to deliberate the merits of this motion, it must be denied.
Even if this motion could properly be heard under CCP section 437c, subdivision (f), ESG has not proffered sufficient evidence to establish the prima facie elements of its affirmative defense. (See Civ. Code, § 2782.5 [parties to a construction contract may “negotiate[e] and expressly” agree to limit liability between the parties “(a) for design defects, or (b) of the promisee to the promisor arising out of or relating to the construction contract”]; see also Markborough California, Inc. v. Super Ct. (1991) 227 Cal.App.3d 705, 715 [“Markborough”] [indicating that to establish the affirmative defense of a contractual liability limitation clause, the defendant must establish that (1) a construction contract exists between the parties, (2) the parties negotiated and expressly agreed to the liability limitation clause, and (3) the liability limitation clause is not unconscionable or in violation of public policy].; see also Civ. Code, §§ 1550 & 1565 [for a valid contract to exist, the parties must have consented to it, and consent must be mutual, free, and communicated by each to the other].)

The evidence submitted by ESG only shows that (1) Plaintiffs allege a contract exists between them and ESG exists and is dated June 16, 2006; (2) Plaintiffs seek damages for breach of contract and negligence; (3) ESG sent Doug a work order (“ESG Work Order”) dated June 12, 2006, and (4) the ESG Work Order contained a limitation of liability clause. However, none of this evidence supports ESG’s assertion that Plaintiffs entered into a contract with ESG that contained a liability limitation clause. ESG specifically refers to the ESG Work Order as containing the limitation of liability provision, but the ESG Work Order is not signed by Plaintiffs, and ESG submits no evidence to support their contention that this document was part of an enforceable agreement between it and Plaintiffs. Furthermore, the ESG Work Order is dated June 12, 2006, but Plaintiffs allege to have entered into a contract with ESG on June 16, 2006. Accordingly, ESG has not proffered as evidence any liability limitation clause in an enforceable contract between it and Plaintiffs.

In addition, ESG argues that, since Plaintiffs allege that ESG, ESCNC, and ESPS are alter egos of one another, it necessarily follows that any liability limitation clause in an agreement between Plaintiffs and ESCNC or ESPS constitutes an enforceable agreement between Plaintiffs and ESG. ESG cites no legal authority for the proposition that a liability limitation clause in an agreement between a plaintiff and a defendant is enforceable by another defendant against the plaintiff simply because the plaintiff alleges that the two defendants are alter egos of one another. Moreover, allowing a defendant to escape liability by asserting the alter ego doctrine in such a manner seems to contradict the purpose for allowing plaintiffs to assert alter ego liability claims, i.e. to promote justice and prevent a corporate-defendant from escaping liability for its wrongdoing. (See Mesler v. Bragg Management Co. (1985) 39 Cal.3d 290, 301 [“the corporate form will be disregarded only in narrowly defined circumstances and only when the ends of justice so require”].) Therefore, ESG’s argument is not well-taken.

In sum, ESG has not proffered evidence sufficient to support the existence of an enforceable contract between it and Plaintiffs that contains a limitation of liability clause. Thus, ESG has not submitted evidence necessary to meet its initial burden, and the Court does not need to consider Plaintiffs’ evidence. (See See Consumer Cause, Inc. v. SmileCare (2001) 91 Cal.App.4th 454, 468 & 477; see also CCP, § 437c, subd. (p)(2).)

In sum, since ESG’s motion for summary adjudication would not dispose of any cause of action, affirmative defense, or claim for punitive damages, and since ESG did not comply with the additional procedural requirements of CCP section 437c, subdivision (s), this motion is procedurally improper. In any event, ESG has not met its initial burden of production.
Accordingly, to the extent the motion pertains to claims against (and affirmative defenses asserted by) ESG, the motion for summary adjudication is DENIED.

Finally, the Court notes that ESG requests that, should the court deny the motion for summary adjudication, the Court instead “issue an order in limine limiting Plaintiffs’ recovery against ESG.” In limine motions are typically used to determine evidentiary issues immediately before trial and are not designed to replace dispositive motions—e.g., motions for summary adjudication—prescribed by the CCP. (Johnson v. Chiu (2011) 199 Cal. App. 4th 775, 780.) Thus, the Court will not issue the “order in limine” requested by ESG.