Case Name: Wacker Chemie AG v. Adema Technologies, Inc., d/b/a/ Gloria Solar (USA)

Case No.: 2016-1-CV-293023

Demurrer to Complaint or in the Alternative Motion to Stay by Defendant Adema Technologies, Inc., d/b/a Gloria Solar (USA)

Plaintiff Wacker Chemie AG (“Wacker”) is a German corporation. (Complaint, ¶2.) On or about May 8, 2015, a judgment was entered in favor of plaintiff Wacker against defendant Adema Technologies, Inc., d/b/a Gloria Solar (USA) (“Adema”), a California corporation, in a court in the Federal Republic of Germany for the principal sum of €14,062,728.77 plus interest and costs (“German Judgment”). (Complaint, ¶¶3 – 4.) The German Judgment is final, conclusive, and enforceable under the law of the Federal Republic of Germany. (Complaint, ¶5.) No part of the German Judgment has been paid or satisfied. (Complaint, ¶6.) On or about November 4, 2015, a decision on costs was rendered in favor of plaintiff Wacker against defendant Adema for the sum of €266,028.00 plus interest (“German Costs Decision”). (Complaint, ¶7.) The German Costs Decision is final, conclusive, and enforceable under the law of the Federal Republic of Germany. (Complaint, ¶8.) No part of the German Costs Decision has been paid or satisfied. (Complaint, ¶9.) Plaintiff Wacker alleges the German Judgment and German Costs Decision are entitled to recognition in California under the Uniform Foreign-Country Money Judgments Recognition Act (Code Civ. Proc., §1713, et seq.). (Complaint, ¶10.)

On March 22, 2016, plaintiff Wacker filed a complaint against defendant Adema seeking recognition of a foreign-country money judgment. On May 25, 2016, defendant Adema filed this demurrer to the complaint or, in the alternative, motion to stay. On July 5, 2016, plaintiff Wacker filed opposition.

Discussion

I. Defendant Adema’s demurrer to the complaint is OVERRULED.

One of the enumerated grounds for demurrer is that, “[t]here is another action pending between the same parties on the same cause of action.” (Code Civ. Proc., §430.10, subd. (c).) “This is a plea in abatement: ‘A plea in abatement pursuant to section 430.10, subdivision (c), may be made by demurrer or answer when there is another action pending between the same parties on the same cause of action.” (Weil & Brown, et al., CAL. PRAC. GUIDE: CIV. PRO. BEFORE TRIAL (The Rutter Group 2015) ¶7:74, p. 7(I)-37 citing Plant Insulation Co. v. Fibreboard Corp. (1990) 224 Cal.App.3d 781, 789.)

“The identical cause of action must be involved in both suits, so that a judgment in the first action would be res judicata on the claim in the present lawsuit (claim preclusion).” (Id. at ¶7:75.2, p. 7(I)-38 citing Bush v. Superior Court (1992) 10 Cal.App.4th 1374, 1384.) “The identity of the ‘causes of action’ is determined by a comparison of the facts alleged in each complaint. To be the same ‘cause of action,’ each complaint must allege invasion of the same ‘primary right.’” (Id.)

In support of its demurrer, defendant Adema argues there is another action pending because defendant Adema brought suit against plaintiff Wacker in the U.S. District Court for the Central District of California on December 4, 2013 (“Federal Court Action”). On or about July 22, 2014, the U.S. District Court granted Wacker’s motion to dismiss the Federal Court Action on the basis that a forum selection clause required Adema to bring its claims in Germany. Defendant Adema asserts that it timely filed a notice of appeal of the dismissal which is presently pending before the United States Court of Appeals for the Ninth Circuit.

A fatal flaw with defendant Adema’s demurrer is that it requires the court to take judicial notice of a number of facts with regard to the Federal Court Action and defendant Adema has not submitted an appropriate or complete request for judicial notice. California Rules of Court, rule 3.1113, subdivision (l) states, “Any request for judicial notice must be made in a separate document listing the specific items for which notice is requested and must comply with rule 3.1306(c).” California Rules of Court, rule 3.1306, subdivision (c) states, in relevant part, “A party requesting judicial notice of material under Evidence Code sections 452 or 453 must provide the court and each party with a copy of the material.” Here, defendant Adema’s request for judicial notice is not made in a separate document, does not list the specific items for which notice is requested, and is incomplete in that the only document made available to the court is the United States District Court’s order granting motions to dismiss for forum non conveniens. Defendant Adema’s demurrer is dependent upon a number of facts, not all of which can be established from the order granting the motions to dismiss even if this court were to deem this a procedurally proper request. Defendant Adema has not sufficiently demonstrated that there is another action pending between the same parties on the same cause of action.

Accordingly, defendant Adema’s demurrer to plaintiff Wacker’s complaint on the ground that there is another action pending between the same parties on the same cause of action [Code Civ. Proc., §430.10, subd. (c)] is OVERRULED.

II. Defendant Adema’s alternative motion to stay is DENIED.

In the alternative, defendant Adema moves to stay the pending action. Defendant Adema relies initially upon Code of Civil Procedure section 918.5, subdivision (a) which states, “The trial court may, in its discretion, stay the enforcement of a judgment or order if the judgment debtor has another action pending on a disputed claim against the judgment creditor.” Defendant Adema’s reliance on this statute is misplaced as there is not yet a judgment or order in this pending action for the court to enforce.

Next, defendant Adema relies upon Caiafa Prof. Law Corp. v. State Farm Fire & Cas. Co. (1993) 15 Cal.App.4th 800, 804 (Caiafa) where the court wrote:

It is black letter law that, when a federal action has been filed covering the same subject matter as is involved in a California action, the California court has the discretion but not the obligation to stay the state court action. [Citations.]

“In exercising its discretion the court should consider the importance of discouraging multiple litigation designed solely to harass an adverse party, and of avoiding unseemly conflicts with the courts of other jurisdictions. It should also consider whether the rights of the parties can best be determined by the court of the other jurisdiction because of the nature of the subject matter, the availability of witnesses, or the stage to which the proceedings in the other court have already advanced.” [Citation.] The California Supreme Court also has isolated another critical factor favoring a stay of the state court action in favor of the federal action, a factor which happens to be present in this case-the federal action is pending in California not some other state. [Citation.]

In Caiafa, the defendant insurance company, State Farm, hired plaintiff attorney as Cumis counsel. State Farm paid a portion of plaintiff’s fees and later brought a federal court action (in California) against plaintiff under RICO for allegedly padding bills and charging for unnecessary legal work. The plaintiff later petitioned a California superior court to compel arbitration of the unpaid Cumis fees. The state trial court stayed the arbitration pending resolution of the federal RICO action. The Caiafa court found that the lower court did not abuse its discretion to stay. First, it was reasonable to conclude that the rights of the parties could best be determined by the federal court based on the subject matter. The federal court action raised issues much broader than just the collection of unpaid Cumis fees. A resolution of the broader federal issues necessarily encompassed a determination of whether the plaintiff would be entitled to any Cumis fees at all. Second, a stay would avoid unseemly conflicts because the federal court’s determination would resolve all issues relating to entitlement of Cumis fees, not just the ones raised by the plaintiff in the state action. Third and finally, since the federal court action was pending in California, it would be of equal convenience to the parties and witnesses in the California state court action.

Even assuming defendant Adema adequately demonstrated that the federal action covers the same subject matter as the present action, defendant Adema does not sufficiently demonstrate that the rights of the parties will be best determined by the federal court. Defendant Adema’s argument that it will likely prevail on its appeal to the United States Court of Appeals for the Ninth Circuit is entirely speculative. Defendant Adema proffers no evidence or argument to substantiate any likelihood of success.

Accordingly, defendant Adema’s alternative motion to stay plaintiff Wacker’s complaint is DENIED.