Case Name: Silverline Construction, Inc. v. Coyle/Reno, et al.

Case No.: 1-13-CV-256329

Defendant Coyle/Reno (“Coyle”) moves to compel judicial reference proceedings in this consolidated action. Defendant Riverview Capital Investment, LLC (“Riverview”) moves for an order staying all claims by plaintiff Silverline Constructions, Inc. (“Silverline”) pending completion of judicial reference proceedings. Riverview has filed a joinder in Coyle’s motion. Plaintiff MMV Steel Construction, Inc. has filed a joinder in opposition to Coyle’s motion.

Coyle’s and Riverview’s motions are essentially the same in that they both seek to compel judicial reference proceedings. The only difference is that Riverview’s motion also requests a stay. Consequently, the Court will address the motions together.

Riverview’s request for judicial notice is GRANTED. (Evid. Code, § 452, subd. (d).)

Silverline’s request for judicial notice is GRANTED. (Evid. Code, § 452, subd. (d).)

Coyle’s objections to evidence are OVERRULED.

Riverview’s objections to evidence are OVERRULED.

Riverview argues that Silverline’s opposition was filed late and should be struck. Riverview was able to file a reply brief and does not appear to have been prejudiced by the late opposition papers. Therefore, the Court will consider Silverline’s opposition.

Silverline has filed a supplemental opposition and Coyle has filed a supplemental reply. There is no authority permitting the filing of such papers and they have been disregarded by the Court.

Riverview argues that Riverview and Coyle have stipulated to judicial reference and Judge Hayes of the San Diego County Superior Court ordered Silverline to participate in that judicial reference. The order referred to by Riverview related to Riverview’s motion to transfer venue to Santa Clara County. The language of that order states, in relevant part:

The Court finds Santa Clara to be the proper venue to resolve the issues raised by the instant litigation because of the other multiple pending matters involving the same project, the fact that plaintiff in this case is a party to those cases, and the location of the subject project is in Santa Clara County. In order to avoid inconsistent rulings and provide a convenient forum for witnesses the matter must be transferred to Santa Clara County. Additionally, the prime contract regarding the subject project, which was incorporated into the various subcontracts, requires that all disputes be resolved by judicial reference in Santa Clara. Finally, defendant in the instant action joins in the motion to transfer venue to Santa Clara.

(Request for Judicial Notice in Support of Riverview Capital Investment, LLC’s Motion for Order Staying Silverline Construction, Inc’s Action Pending Completion of Judicial Reference Proceedings and Enforcing Existing Order, Tab 1.)

Riverview’s argument relies on Judge Hayes’s statement that the prime contract requires all disputes to be resolved by judicial reference. Silverline argues in opposition that Judge Hayes’s order only dealt with the issue of whether to transfer the San Diego action to Santa Clara and should not be considered a final order regarding the issue of judicial reference. This Court agrees with Silverline. The motion before Judge Hayes solely concerned transfer of venue. The statement by Judge Hayes regarding judicial reference appears to have been included simply as another reason why the motion for transfer should be granted and was not an order determining that the parties must participate in a judicial reference.

Coyle and Riverview contend that this consolidated action must go to a judicial reference because the prime contract between Riverview and Coyle included a provision requiring that disputes between the parties be resolved by judicial reference, and the master subcontract agreement between Coyle and Silverline incorporated the terms of the prime contract. Even if this is true, there is a fundamental problem with Coyle’s and Riverview’s motions. Both Grey Mountain Concrete, Inc. (“Grey Mountain”) and KTGY Group, Inc. (“KTGY”) assert that they were not parties to the prime contract or master subcontract agreement. Coyle and Riverview have not submitted any agreement showing what contract terms would apply to Grey Mountain and KTGY from their respective agreements. Since the only basis for compelling a judicial reference is the prime contract together with the master subcontract agreement, it is not apparent how Grey Mountain and KTGY can be forced to participate in the judicial reference since they were not parties to those agreements.

Coyle argues that Grey Mountain, as an “affiliated” company to Silverline, cannot avoid joint adjudication of its claims. Coyle cites to no authority in support of this argument and does not provide any explanation for how Grey Mountain can be bound by an agreement it never signed. Coyle only states that it is a legal impossibility for the claims of Grey Mountain and the corresponding defenses of Coyle to be adjudicated separately. (Coyle/Reno Joint Venture’s Reply to Opposition to Motion to Compel Judicial Reference Proceedings in Consolidated Action, p. 11:9-10.) It is for this reason that the motions must be denied. The instant action consolidates a number of cases and includes parties that are not bound by the prime contract and the master subcontract agreement. The Court cannot order those parties to participate in a judicial reference. Further, as pointed out by Coyle, the case cannot be separated in such a way that only certain parties participate in a judicial reference. Consequently, this consolidated action cannot be sent to a judicial reference. Accordingly, Coyle’s and Riverview’s motions are DENIED.