Cholakian & Assoc. v. Super. Ct. , 236 Cal. App. 4th 361 ( 2015 )

Filed 4/29/15
CERTIFIED FOR PUBLICATION
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
THIRD APPELLATE DISTRICT
(Sacramento)
----
CHOLAKIAN & ASSOCIATES et al., C076759
Petitioners, (Super. Ct. No. 34-2014-
00157913-CU-IC-GDS)
v.
THE SUPERIOR COURT OF SACRAMENTO
COUNTY,
Respondent;
ELAINE MCDONOLD et al.,
Real Parties in Interest.
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ORIGINAL PROCEEDING in mandate. Robert C. Hight, Judge. Petition granted
with directions.
Hinshaw & Culbertson, Edward F. Donohoe, Kendra L. Basner and Jared W.
Matheson for Petitioners.
No appearance for Respondent.
Dreyer Babich Buccola Wood Campora, Robert A. Buccola and Steven M.
Campora for Real Parties in Interest.
Under Code of Civil Procedure section 396b, subdivision (a),1 where an action has
been filed in the “wrong venue,” a defendant may move to transfer the case to the “proper
court for the trial thereof.” In such a case, “if an answer is filed,” the court may consider
opposition to the motion to transfer and may retain the action in the county where filed to
promote the convenience of witnesses or the ends of justice. (§ 396b, subd. (d).) The
question in this case is whether, in a multi-defendant case, an answer must be filed by all
defendants before the court may consider opposition to the motion to transfer venue. We
conclude the answer is yes. In this case, the trial court considered opposition to the
motion before all defendants had answered the complaint. Accordingly, we issue a
preemptory writ of mandate directing the trial court to vacate its order denying the
motion to transfer and to issue a new order granting the motion.
BACKGROUND
The Underlying Action
In 2010, Debra Hackett was seriously injured in an accident in Sacramento County
in which a tractor and trailer owned by Silva Trucking, Inc. and driven by Elaine
McDonold jackknifed and collided with the vehicle being driven by Hackett.
1 Further undesignated statutory references are to the Code of Civil Procedure.
2
Silva Trucking was insured by Carolina Casualty Insurance Company (CCIC),
who retained the law firm Cholakian & Associates to provide a defense. Silva Trucking
had an excess liability insurance policy with Lexington Insurance Company (LIC), who
retained the law firm Lewis, Brisbois, Bisgaard & Smith, LLP (Lewis Brisbois) as
counsel.
Prior to filing suit, Hackett and her husband William made a settlement demand of
$5,000,000, the policy limits. The demand was not accepted.
In 2012, the Hacketts filed a personal injury action in Sacramento County against
Silva Trucking and McDonold. The jury awarded the Hacketts $34.9 million in damages.
The Current Action
In 2014, Silva Trucking and McDonold brought suit in Sacramento County against
LIC, CCIC, Cholakian & Associates and individual attorneys Kevin Cholakian and
Jennifer Kung (collectively Cholakian), and Lewis Brisbois and individual attorney
Ralph Zappala (collectively Lewis Brisbois). As to LIC and CCIC, the complaint alleged
bad faith and breach of contract. As to the law firms and attorneys, the complaint alleged
legal malpractice. The gravamen of the complaint was that the insurers unreasonably
refused to accept the policy limit demand when the insured’s liability was clear and
damages were known to be in excess of the policy limit. The attorneys failed to advise
their insurer clients to accept the demand and the consequences of failing to do so, and
failed to advise Silva Trucking and McDonold of their need for personal counsel.
LIC and CCIC responded with demurrers. Lewis Brisbois answered with a
general denial and asserted 22 affirmative defenses.
Motion to Transfer Venue
Cholakian moved to transfer venue to San Mateo County, and requested attorney
fees and costs. The motion was made on the ground that Sacramento County was not a
proper venue because no individual defendant resided there and no corporate defendant
had its principal place of business there. Cholakian presented supporting declarations by
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the individual attorneys attesting to their county of residence and their firm’s principal
place of business. San Mateo was the residence of Kevin Cholakian and the principal
place of business of Cholakian & Associates.
Silva Trucking and McDonold opposed the motion. They first argued that venue
was proper in Sacramento County under the special contract rule of section 395,
subdivision (a), because Cholakian’s letter of retention was a special contract with an
obligation to perform the contract in Sacramento County. They further argued that the
case should stay in Sacramento County based on the convenience of witnesses and
because answers had been filed.2 They provided numerous declarations from people they
identified as likely witnesses, attesting that Sacramento County was more convenient
than San Mateo County for trial.
The trial court found venue was not proper in Sacramento County as to the
professional negligence cause of action, rejecting the argument that the retention letter
constituted a special contract. However, the court found persuasive the opposition to the
motion to transfer based on convenience of witnesses, and denied the motion to transfer
venue to San Mateo County.
Cholakian petitioned this court for a writ of mandate directing the trial court to
vacate its order denying the motion to transfer venue and to enter a new order granting
the motion. We issued an alternative writ of mandate.
DISCUSSION
I
Rules of Venue
“Venue is determined based on the complaint on file at the time the motion to
change venue is made. [Citations.]” (Brown v. Superior Court (1984) 37 Cal. 3d 477,
2 LIC filed an answer shortly after this opposition was filed.
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482 (Brown).) “For venue purposes, actions are classified as local or transitory. To
determine whether an action is local or transitory, the court looks to the ‘main relief’
sought. Where the main relief sought is personal, the action is transitory. Where the
main relief relates to rights in real property, the action is local. [Citation.]” (Ibid., fn. 5.)
Here the action sought damages for bad faith, breach of contract, and legal malpractice.
The relief sought is personal, not related to real property, and thus the action is transitory.
(See Peiser v. Mettler (1958) 50 Cal. 2d 594, 601-602 [cause of action for damages for
breach of contract is clearly a transitory cause of action].)
Ordinarily, the proper county for trial of a transitory action is the county in which
the defendants or some of them reside. (§ 395.) “It is well established that a defendant is
entitled to have an action tried in the county of his or her residence unless the action falls
within some exception to the general venue rule. [Citations.]” (Brown, supra, 37 Cal.3d
at p. 483.) In this writ proceeding, Silva Trucking and McDonold have abandoned their
argument that the “special contract” exception applies. They rely solely on section 396b.
Where the action is commenced in the wrong venue, that section permits a
defendant to move to transfer the action to the proper court. This motion must be made at
or before the time the defendant answers, demurs, or moves to strike. (§ 396b, subd. (a).)
“In any case, if an answer is filed, the court may consider opposition to the motion to
transfer, if any, and may retain the action in the county where commenced if it appears
that the convenience of the witnesses or the ends of justice will thereby be promoted.”
(Id., subd. (d).)
“The court will not entertain a motion for change of venue on the ground of
convenience of witnesses when the defendant has not filed an answer, for the reason that
until the issues are joined the court cannot determine what testimony will be material.
[Citations.] For the same reason, a motion for change of venue cannot be defeated on the
ground of convenience of witnesses until an answer is filed.” (Johnson v. Superior Court
(1965) 232 Cal. App. 2d 212, 214.)
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“A party aggrieved by an order granting or denying a motion to change the place
of trial may petition this court for a writ of mandate requiring trial of the matter in the
proper court. [Citations.] An appellate court reviews such an order under the abuse of
discretion standard. [Citation.] A trial court abuses its discretion when venue is
mandatory in a county other than the county where the action has been brought.
[Citation.]” (State Bd. of Equalization v. Superior Court (2006) 138 Cal. App. 4th 951,
954, fn. omitted.)
II
Petitioners’ Contention and Rules of Statutory Construction
Cholakian contends venue in Sacramento County was improper and transfer to
San Mateo County was mandatory. He argues that because he had not yet filed an
answer, the court’s consideration of the opposition was premature. Cholakian relies on
an encyclopedia entry: “[W]here there are several proper and necessary defendants, all of
them must have filed answers before the plaintiff's countermotion will be entertained.”
(61 Cal.Jur.3d (2012) Venue, § 105, p. 498, citing Woods v. Berry (1931) 111 Cal. App.
675 (Woods).)
To determine whether the encyclopedia correctly states the rule requires
interpretation of section 396b, subdivision (d). The interpretation of a statute presents a
question of law, which we review de novo. (Apartment Assn. of Los Angeles County, Inc.
v. City of Los Angeles (2009) 173 Cal. App. 4th 13, 21.)
The rules of statutory construction are well settled. “Our fundamental task in
construing a statute is to ascertain the intent of the lawmakers so as to effectuate the
purpose of the statute. [Citation.] We begin by examining the statutory language, giving
the words their usual and ordinary meaning. [Citation.] If there is no ambiguity, then we
presume the lawmakers meant what they said, and the plain meaning of the language
governs. [Citations.] If, however, the statutory terms are ambiguous, then we may resort
to extrinsic sources, including the ostensible objects to be achieved and the legislative
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history. [Citation.] In such circumstances, we ‘ “select the construction that comports
most closely with the apparent intent of the Legislature, with a view to promoting rather
than defeating the general purpose of the statute, and avoid an interpretation that would
lead to absurd consequences.” [Citation.]’ [Citations.]” (Day v. City of Fontana (2001)
25 Cal. 4th 268, 272.)
III
Analysis
Silva Trucking and McDonold contend the “the plain language of the statute”
refutes Cholakian’s contention that all defendants must file an answer before the trial
court may consider the convenience of witnesses in opposition to a motion to transfer
venue, providing instead that only a single defendant need answer in a multiple defendant
case. They rely on section 396b, subdivision (d)’s provision that “if an answer is filed,”
the court may consider opposition to the transfer motion. They argue that “an answer”
requires only one. Since Lewis Brisbois, and subsequently LIC, filed an answer, Silva
Trucking and McDonold assert the trial court properly considered the convenience of
witnesses in denying the motion to transfer venue.
We reject this “plain meaning” argument. To the extent that the argument is based
on the use of the seemingly singular classification of the term “an answer,” in interpreting
the Code of Civil Procedure, “the singular number includes the plural.”3 (§ 17, subd. (a);
see also Morgan v. Imperial Irrigation District (2014) 223 Cal. App. 4th 892, 907 [“under
the general rules of statutory construction, the use of a word in the singular form is
interchangeable with the use of the word in the plural form”].) To the extent the
argument is based on the use of the indefinite article “an,” we observe that in these cases
courts reverse the usual presumption favoring plain meaning, “and typically find that a
3 Appellate counsel for Cholakian surprised us at oral argument by appearing not only to
be unfamiliar with this general rule of interpretation, but also to argue against it.
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term introduced by ‘a’ or ‘an’ applies to multiple subjects or objects, absent a contrary
intent.” (Singer & Singer, 2A Sutherland Statutes and Statutory Construction (7th ed.
2014) § 47:34, p. 507.)
Thus, in a case with multiple defendants, the statute may properly be read to say,
“if answers are filed.” This reading suggests that all defendants’ answers must be filed
prior to considering any opposition. At a minimum, the disputed meaning is ambiguous.
In determining the meaning of the ambiguous statute, we look to the purpose of the
statute and the “ostensible objects to be achieved.” (Day v. City of Fontana, supra, 25
Cal.4th at p. 272.)
We first consider the reason for the requirement that an answer be filed prior to
consideration of opposition to transfer based on witness convenience. As discussed, an
answer must be filed to settle the issues and permit the trial court to determine what
testimony (and thus what witnesses) are material. (Johnson v. Superior Court, supra, 232
Cal.App.2d at p. 214.) “When in opposition to a motion for a change to the residence of
defendant the convenience of witnesses is alleged, and requires that an action be tried in
the county where it was brought, the place of trial will not ordinarily be changed. This
rule, however, is subject to the exception that, unless answer has been filed at the time the
demand for change of venue is made, a counter-motion to retain the case on such ground
will not lie, for the obvious reason that until the issues are settled the court cannot
determine what testimony will be material. [Citations.]” (Gordon v. Perkins (1928) 203
Cal. 183, 185, italics added.)
This reason for requiring an answer on file can be fulfilled only by requiring
answers from all defendants so that all issues are settled. Although Silva Trucking and
McDonold argue that here the issues can be determined by the answers that have already
been filed, we interpret the statute as it must apply in all cases. (See Cal. Const., art. IV,
§ 16, subd. (a) [“[a]ll laws of a general nature have uniform operation”].) It is not
difficult to foresee a case where a particular defendant’s answer raises new and different
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issues from another defendant’s answer, necessitating new and different witnesses, such
as by raising a particular affirmative defense. Further, where, as here, some defendants
have demurred, resolution of the demurrers may change the matters at issue and the
material witnesses whose convenience should be considered in opposition to transfer.
Second, we consider the long-standing policy of law favoring and safeguarding a
defendant’s right to defend in his county of residence and construe section 369b in light
of that policy. “The right of a defendant to have an action brought against him tried in
the county in which he has his residence is an ancient and valuable right, which has
always been safeguarded by statute and is supported by a long line of judicial decisions.
‘The right of a plaintiff to have an action tried in another county than that in which the
defendant has his residence is exceptional, and, if the plaintiff would claim such right, he
must bring himself within the terms of the exception.’ [Citation.]” (Brown v. Happy
Valley Fruit Growers (1929) 206 Cal. 515, 521-522 (Happy Valley).) “[I]t has been
declared to be the policy of the law jealously to guard the right of the defendant to have a
trial in the county where he resides . . . .” (Neet v. Holmes (1942) 19 Cal. 2d 605, 612.)
“Because the law favors the right of trial at the defendant's residence, a plaintiff who lays
venue elsewhere must be able to show the action is either local or is a transitory action
triable outside the county of the defendant's residence. [Citations.]” (Lebastchi v.
Superior Court (1995) 33 Cal. App. 4th 1465, 1469.)
This right is personal to each defendant and cannot be waived by another
defendant. “ ‘The language of section 395 requires the action to be tried in the county in
which the defendants, or some of them, reside, not where they do not reside. The consent
of certain defendants not residing in the county where the action is brought could not
take away from the defendants who do not reside there the right to have the cause
transferred to the county of their residence. To hold otherwise would be a violation of
the provisions of section 395.’ ” (Happy Valley, supra, 206 Cal. at p. 521, quoting Wood,
Curtis & Co. v. Herman Min. Co. (1903) 139 Cal. 713, 716, italics added.) Because the
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right of each defendant to defend in its own county cannot be forfeited by the actions of
other defendants, the answers of other defendants cannot take the place of each
defendant’s own answer, necessary to permit consideration of opposition to that same
defendant’s motion to transfer venue.
Thus both the purpose of section 396b, subdivision (d) and the policy relating to
venue favor interpreting that subdivision to require answers of all proper defendants be
filed before an opposition to a motion to transfer to a correct court will be considered on
the basis of convenience of witnesses or the ends of justice.4
Silva Trucking and McDonold contend no statute or case law supports this
interpretation. They contend the Woods case, decided two years before section 396b was
enacted, explicitly declined to address the issue of whether all defendants’ answers had to
be filed in order to consider opposition. Further, they assert--erroneously--that in Woods
all defendants had filed answers.
In Woods, supra, 111 Cal. App. 675, an action was filed in Shasta County. Three
defendants, all San Francisco residents, separately moved to transfer venue to San
Francisco. All defendants had demurred and two had filed answers; the third, Berry, had
not. Plaintiff filed a counter motion to retain venue in Shasta County based on
convenience of witnesses. (Id. at p. 681.) This court found Berry’s motion for transfer
should have been granted, despite his bankruptcy. (Id. at p. 680.) In support of our
reasoning, we quoted at length from Happy Valley, as we have done ante. (Id. at p. 682.)
The Woods court declined to consider the transfer motions filed by the two
answering defendants. (Woods, supra, 111 Cal.App. at p. 683.) Nor did it address the
4 Answers are required from only proper defendants because only proper defendants are
considered in determining venue. “If any person is improperly joined as a defendant or
has been made a defendant solely for the purpose of having the action tried in the
superior court in the county where he or she resides, his or her residence shall not be
considered in determining the proper place for the trial of the action.” (§ 395, subd. (a).)
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argument that the answers of these defendants were filed only to follow the then
prevailing rule requiring an answer at the same time as the demurrer, so the answers
should not open the door to a counter motion based on the convenience of witnesses.
(Ibid.) Silva Trucking and McDonold cite to this portion of Woods in asserting that
Woods did not address the issue before this court.
Woods does, however, support our current and continuing interpretation of section
396b. In Woods, we held the motion to transfer by defendant Berry, who had not filed an
answer, should have been granted, notwithstanding the counter motion by plaintiffs.
(Woods, supra, 111 Cal.App. at p. 681.) That is the same result we reach here. We
recognize that the Woods decision predated section 396b, but it reflects the strong and
continuing policy favoring trial in the county of defendant’s residence.
Silva Trucking and McDonold contend that judicial economy and the policy to
eliminate delay in the trial courts (see Gov. Code, §§ 68600 et seq.) are best served by
permitting a trial court to consider the convenience of witnesses before all answers are
filed. But that is not always the situation. As discussed, we can easily imagine multiple
defendant cases where a late answering defendant’s answer changes the calculus as to
what county is the most convenient for witnesses. Further, the potential for a retransfer
pursuant to section 397 appears to have been contemplated. “After the answer is filed,
plaintiff may move for retransfer to the original court for the convenience of witnesses
and the ends of justice. [Citation.]” (Scribner v. Superior Court (1971) 19 Cal. App. 3d
764, 766.)
Further, these general policies do not trump the language of the statute--which
may be read to require “answers,”--the reason for the answer requirement, and the policy
specific to venue. We note that nothing in the law provides for venue to be determined at
the commencement of the action based on the convenience of plaintiff’s witnesses.
Plaintiff can control the number of transfers by following the venue rules. “If a plaintiff
has failed to heed the venue rules above, and the defendant makes timely objection, the
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court must order the action transferred to any ‘proper’ county requested by defendant.
(This is true even if grounds exist for retransferring the action back to the county where
filed, on the grounds of ‘convenience of witnesses’ . . . )” (Weil & Brown, Cal. Practice
Guide: Civil Procedure Before Trial (The Rutter Group 2014) ¶ 3:551, pp. 3-134 to 3-
135.)
DISPOSITION
Cholakian’s petition for a writ of mandate is granted. Let a preemptory writ of
mandate issue directing the trial court to: (1) vacate its order denying Cholakian’s motion
to transfer venue to San Mateo County; and (2) enter a new and different order granting
that motion. Cholakian shall recover costs on appeal. (Cal. Rules of Court, rule
8.493(a)(1)(A).)
DUARTE , J.
We concur:
NICHOLSON , Acting P. J.
MAURO , J.
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