Jeffrey Nugent et al vs Michael R Turner et al
Jeffrey Nugent et al vs Michael R Turner et al
Case Number
21CV03012
Case Type
Hearing Date / Time
Mon, 11/13/2023 - 10:00
Nature of Proceedings
Motion for Entry of Cottle Case Mgmt Order; Motion re Motion for Entry of Cottle CMC Order; Motion re Motion to Comply w/Statutory Undertaking Requirements
Tentative Ruling
Jeffrey Nugent, et al. v. Michael R. Turner, et al.
Case No. 21CV03012
Hearing Date: November 13, 2023
HEARING: 1. Defendants Michael R. Turner and Lynn J. Turnder’s Motion for Plaintiffs to Comply with Statutory Undertaking;
2. Defendants Michael R. Turner and Lynn J. Turnder’s Motion for Entry of Cottle Case Management Order;
3. Defendants Coldwell Banker Residential Brokerage Company, Lori Bowles, Dana Zertuche, and Crysta Metzger’s Motion for Entry of Cottle Case Management Order.
ATTORNEYS: David M. Grokenberger / Jason W. Wansor / R. Scott Mullen of Rogers,
Sheffield & Campbell, LLP for plaintiffs and cross-defendants
Jeffrey Nugent, Carla Gervasio-Nugent, and Patrik Nugent, a
minor, by and through his guardian ad litem, Jeffrey Nugent
John O’Meara / Caitlin M. Salata of Bremer Whyte Brown & O’Meara
LLP for defendants and cross-complainants Michael R. Turner and
Lynn J. Turner
Jana S. Johnston / Andrew M. Cox of Mullen & Henzell LLP for
defendants Coldwell Banker Residential Brokerage Company, Lori
Bowles, Dana Zertuche, and Crysta Metzger
TENTATIVE RULING:
- The Turner defendant’s motion for the Nugent plaintiffs to file an undertaking is granted in the amount of $50,000.00, pursuant to Code of Civil Procedure section 1030. The undertaking shall be in favor of the Turners and be made within 30 days of service of the order on the parties. The Nugents shall file proof of the undertaking with the court.
- The motions of defendants for entry of a Cottle case management order is denied.
Background: Plaintiffs Jeffrey Nugent, Carla Gervasio-Nugent, and Patrik Nugent, a minor, by and through his guardian ad litem, Jeffrey Nugent (the Nugents) filed their complaint on July 29, 2021. It named as defendants Michael R. Turner and Lynn J. Turner, both individually and as Trustees of the Michael R. Turner and Lynn J. Turner Revocable Trust, dated February 26, 2010 (the Turners), Coldwell Banker Residential Brokerage Company (Coldwell Banker), Lori Bowles (Bowles), Dana Zertuche (Zertuche), and Crysta Metzger (Metzger). The complaint alleged causes of action for breach of contract, negligence, rescission, breach of fiduciary duty/negligence, intentional misrepresentation, negligent misrepresentation, and concealment. Their claims arose from their lease of premises at 6965 Shepard Mesa Road in Carpinteria, from the Turners, for a fixed term lease which commenced on April 1, 2019, and was to extend through July 15, 2020. Coldwell Banker acted as agent for both the Turners (through agent Crysta Metzger) and for the Nugents (through agents Lori Bowles and Dana Zertuche) in the transaction.
The Turners answered the complaint on September 24, 2021 and filed a cross-complaint back against Jeffrey Nugent and Carla Gervasio-Nugent on October 22, 2021. The cross-complaint alleged a single cause of action for breach of contract, alleging that the Nugents had vacated the premises four and one-half months prior to the termination of the lease, and refused to pay rent for the remaining period of the lease.
As alleged: In June 2018, Bowles agreed to help the Nugents find a residence to lease for their family. Bowles was and is a real estate salesperson for Coldwell Banker. Bowles first shared a listing for the property with the Nugents on December 17, 2018. Carla Gervasio-Nugent expressed interest, and believed the rent was in a good amount. Jeffrey Nugent personally visited the property with Bowles and Metzger on January 24, 2019, at which time Bowles told him that she and Metzger worked in the same office. As the parties worked to finalize a lease, Jeffrey Nugent said he was glad that Bowles and Metzger were both Coldwell Banker agents working out of the same office, because he believed it would make the Nugents more likely to obtain a lease of the property, as opposed to potential tenants who were not represented by a Coldwell Banker agent. Jeffrey Nugent now denies that Bowles ever told him that she and Metzger both worked for Coldwell Banker, or that any Coldwell Banker agent ever told him about the dual agency.
On January 27, 2019, Bowles emailed the Nugents to confirm their request that Bowles make an offer to the Turners to lease the Property, transmitting to the Nugents a blank California Association of Realtors Residential Lease or Month-to-Month Rental Agreement. Bowles then communicated the offer to Metzger, who expressed that the offer appeared to be one that would be acceptable to the Turners, subject to a rental application form the Nugents and negotiation of a final lease.
The original term of the lease discussed by the Nugents and the Turners was to begin on March 1, 2019. On February 12, 2019, however, the Nugents requested that the start date of the lease be changed to April 1, 2019. The Turners agreed to the request. Jeffrey Nugent again visited the property on February 16, 2019.
On February 17, 2019, Metzger sent to Bowles a draft lease for the property. Bowles then forwarded it to the Nugents. The draft lease had a term commencing April 1, 2019, and terminating March 31, 2020 [Coldwell Banker Exhibit 7]—a lease term which did not exceed one year. At ¶ 40, the draft lease identified Coldwell Banker as the agent for the Landlord, separately identified Coldwell Banker as the agent for the Tenant, and the appropriate boxes were checked to indicate that Coldwell Banker was the agent for both the Landlord and the Tenant. In the boxed section of the CAR form following ¶50, the draft lease also reflected that Coldwell Banker was the Leasing Real Estate Broker Firm, through agents Lori Bowles and Dana Zertuche, and that Coldwell Banker was the Listing Real Estate Broker Firm, through agent Crysta Metzger. The section set forth the same address for Coldwell Banker within the information for the Leasing Real Estate Broker Firm, as within the information for the Listing Real Estate Broker Firm.
Bowles sent an updated draft lease [Coldwell Banker Exhibit 17] to the Nugents on February 25, 2019. The updated lease contained the same lease term, the same information within ¶ 40, and the same information within the boxed section which follows ¶50. This version had been electronically signed by the Turners, and by Bowles, Zertuche, Metzger, and Barbara Koutnik. Jeffrey Nugent replied that he would forward it to his attorney to look over. On February 27, 2019, Bowles emailed the Nugents, and advised that the Turners would like an executed copy by March 1, and inquired whether there would be any problems in doing so.
On March 1, 2019, Jeffrey Nugent emailed Bowles and explained his “last minute thought for which I apologize profusely,” with respect to the 12-month lease’s relationship to his son’s school year, and requested that the lease term be extended to 18 months to get his son through his school year. He noted that he was excited and ready to sign the lease. The Turners countered with a termination date of July 15, 2020, which the Nugents accepted.
The Nugents signed the final lease on March 5, 2019. The information in ¶ 40 remained unchanged from the February 17 draft lease, except that it was signed by the agents. It reflected a lease term from April 1, 2019 to July 15, 2020. Although the lease was now for a term beyond one year, the box in ¶ 40(B) was not checked, and the CAR Form AD containing language from Civil Code section 2079.16 was not attached. None of the agents or parties to the lease noticed the need to check the box and provide Form AD. Both Bowles and Metzger have declared that they did not intentionally withhold the form, and that the failure to check the box and attach the form was an oversight.
The Nugents declared that the Coldwell agents did not explain the dual agency role of the individual agents, and did not obtain their “informed consent” “in writing or by oral advisement as to the nature and consequences of the dual agency representation” prior to the execution of the lease. The Nugents also declared they were unaware of the dual agency role prior to execution of the lease.
On January 14, 2020, Carla Gervasio-Nugent emailed Bowles, complaining about spiders in the house, construction in the area, highway construction and traffic travel times to Patrik’s school, the lack of teens in the neighborhood, and that the rent amount was overpriced for a property that was not a luxury property. She indicated they wished to move out prior to July, since they wanted to take Patrik to Switzerland for medical treatments.
Bowles communicated to Metzger that the Nugents wanted to vacate the property and terminate the lease early. On February 1, 2020, Metzger sent a response to Bowles, on behalf of the Turners, offering options other than the Nugents’ immediate vacation of the property and the lease.
Ultimately, the Nugents sent an email to Bowles on February 3, 2020, explaining that they were leaving the property for medical and health reasons for their son and family. Bowles clarified that the Nugents wished to give their 30-day notice to the Turners, and the Nugents responded affirmatively. By email dated February 5, 2020, the Nugents advised that they had moved out, and had arranged for the cleaning of the house.
The Nugents contend that they advised the Turners of their election to rescind and cancel the lease effective on or about March 1, 2020. They vacated the property and did not pay any further rent for the last four and a half months of the lease.
The Turners filed the present motion for order that plaintiffs comply with statutory undertaking on September 29, 2023. Plaintiffs filed an opposition to the motion on October 25, 2023, seeming to acknowledge that an undertaking is proper but arguing that the amount requested is grossly overstated.
The Turners filed their motion for entry of Cottle case management order on September 29, 2023, and Coldwell Banker Residential Brokerage Company, Lori Bowles, Dana Zertuche, and Crysta Metzger filed their motion for entry of Cottle case management order on October 17, 2023. The Nugent’s filed their opposition to both motions on October 25, 2023.
ANALYSIS:
1. Motion for Undertaking
“(a) When the plaintiff in an action or special proceeding resides out of the state, or is a foreign corporation, the defendant may at any time apply to the court by noticed motion for an order requiring the plaintiff to file an undertaking to secure an award of costs and attorney’s fees which may be awarded in the action or special proceeding. For the purposes of this section, “attorney’s fees” means reasonable attorney’s fees a party may be authorized to recover by a statute apart from this section or by contract.
“(b) The motion shall be made on the grounds that the plaintiff resides out of the state or is a foreign corporation and that there is a reasonable possibility that the moving defendant will obtain judgment in the action or special proceeding. The motion shall be accompanied by an affidavit in support of the grounds for the motion and by a memorandum of points and authorities. The affidavit shall set forth the nature and amount of the costs and attorney's fees the defendant has incurred and expects to incur by the conclusion of the action or special proceeding.
“(c) If the court, after hearing, determines that the grounds for the motion have been established, the court shall order that the plaintiff file the undertaking in an amount specified in the court’s order as security for costs and attorney’s fees.
“(d) The plaintiff shall file the undertaking not later than 30 days after service of the court's order requiring it or within a greater time allowed by the court. If the plaintiff fails to file the undertaking within the time allowed, the plaintiff's action or special proceeding shall be dismissed as to the defendant in whose favor the order requiring the undertaking was made.
“(e) If the defendant’s motion for an order requiring an undertaking is filed not later than 30 days after service of summons on the defendant, further proceedings may be stayed in the discretion of the court upon application to the court by the defendant by noticed motion for the stay until 10 days after the motion for the undertaking is denied or, if granted, until 10 days after the required undertaking has been filed and the defendant has been served with a copy of the undertaking. The hearing on the application for the stay shall be held not later than 60 days after service of the summons. If the defendant files a motion for an order requiring an undertaking, which is granted but the defendant objects to the undertaking, the court may in its discretion stay the proceedings not longer than 10 days after a sufficient undertaking has been filed and the defendant has been served with a copy of the undertaking.
“(f) The determinations of the court under this section have no effect on the determination of any issues on the merits of the action or special proceeding and may not be given in evidence nor referred to in the trial of the action or proceeding.
“(g) An order granting or denying a motion for an undertaking under this section is not appealable.” (Code Civ. Proc., § 1030.)
“The purpose of the statute is to enable a California resident sued by an out-of-state resident “ ‘ “to secure costs in light of the difficulty of enforcing a judgment for costs against a person who is not within the court’s jurisdiction.” ’ ” [Citations.] The statute therefore acts to prevent out-of-state residents from filing frivolous lawsuits against California residents.” (Yao v. Superior Court (2002) 104 Cal.App.4th 327, 332.)
The Turners request that plaintiffs be ordered to file an undertaking in the amount of $157,763.22 to secure any award of costs in favor of the Turners. Pursuant to the declaration of the Turner’s counsel, to date the Turners have recovered $2,763.22 in recoverable costs. (O’Meara Dec., ¶ 31.) The Turners anticipate incurring at least $3,000.00 for filing and motion fees, $45,000.00 for deposition costs, $4,000.00 for costs of subpoenaed records, and $5,000.00 for translation of German and Swiss treatment records. (Ibid.) They also anticipate at least $100,000.00 in expert costs, arguing that they may recover expert fees due to the Nugent’s rejection of the Turner’s Code of Civil Procedure section 998 offer to compromise. (O’Meara Dec., ¶¶ 32, 33, 36.)
The Nugents concede that they are out-of-state plaintiffs and that there is a low threshold for the Turners in establishing a “reasonable possibility” of prevailing at trial. The Nugents only argue that the amount requested is overstated and miscalculated. Specifically, they argue that the Turners would only be entitled to recover costs in the event of a favorable outcome in their favor, and that even if the Turners beat their Code of Civil Procedure section 998 offer to compromise, expert fees are discretionary. The Nugents further argue that O’Meara’s declaration lacks documentation and explanation as to why the Turners believe that their recoverable costs will be so high.
The court agrees with the Nugents that the requested undertaking is too large. The court is not inclined to include speculative expert fees that the Turners have not shown are likely to be incurred, nor is the court satisfied that the Turners have provided adequate explanation for requesting $45,000.00 in deposition costs, $4,000.00 to subpoena records, or $5,000.00 for translation of treatment records. As noted above, this case has been proceeding for approximately two years and four months and the Turners have incurred less than $3,000.00 to date.
The court will reduce the requested amount to reasonably include costs that the Turners are reasonably likely to recover should they prevail. The court will order the Nugents to file an undertaking in the amount of $50,000.00, pursuant to Code of Civil Procedure section 1030, in favor of the Turners, within 30 days of service of the order on the parties, and file proof of the undertaking with the court.
2. Cottle Case Management Order
The Turners and the Caldwell Banker defendants request that the court enter a case management order under Cottle v. Superior Court (1992) 3 Cal.App.4th 1367 (Cottle) and Lore v. Lone Pine Corp. 1986 WL 637507 (Lone Pine), requiring the Nugents to produce a report containing prima facie admissible evidence regarding the elements of their claims.
In Cottle, a case involving “approximately 175 owners and renters of certain residential properties . . . sued various defendants . . . for personal injuries (both physical injuries and emotional distress injuries) and property damages as a result of defendants’ construction and development . . . on a site that for many years had been used as a dumping ground for certain oil industry hazardous wastes and other by-products.” (Cottle, supra, 3 Cal.App.4th at p. 1371.) “Early on in the litigation, the court determined that this case was a complex litigation case . . .” (Id. at p. 1372.)
Lone Pine, a New Jersey case, was a suit “against some 464 defendants.” (Lone Pine, supra, at p. 1.)
Likewise, the other “Lone Pine/Cottle” cases cited by defendants, and those researched by the court, exclusively involve numerous parties and numerous complex tort issues.
“(a) Definition
A “complex case” is an action that requires exceptional judicial management to avoid placing unnecessary burdens on the court or the litigants and to expedite the case, keep costs reasonable, and promote effective decision making by the court, the parties, and counsel.
“(b) Factors
In deciding whether an action is a complex case under (a), the court must consider, among other things, whether the action is likely to involve:
“(1) Numerous pretrial motions raising difficult or novel legal issues that will be time-consuming to resolve;
“(2) Management of a large number of witnesses or a substantial amount of documentary evidence;
“(3) Management of a large number of separately represented parties;
“(4) Coordination with related actions pending in one or more courts in other counties, states, or countries, or in a federal court; or
“(5) Substantial postjudgment judicial supervision.
“(c) Provisional designation
Except as provided in (d), an action is provisionally a complex case if it involves one or more of the following types of claims:
“(1) Antitrust or trade regulation claims;
“(2) Construction defect claims involving many parties or structures;
“(3) Securities claims or investment losses involving many parties;
“(4) Environmental or toxic tort claims involving many parties;
“(5) Claims involving mass torts;
“(6) Claims involving class actions; or
“(7) Insurance coverage claims arising out of any of the claims listed in (c)(1) through (c)(6).
“(d) Court's discretion
Notwithstanding (c), an action is not provisionally complex if the court has significant experience in resolving like claims involving similar facts and the management of those claims has become routine. A court may declare by local rule that certain types of cases are or are not provisionally complex under this subdivision.” (Cal. Rules of Court, rule 3.400.)
The present matter does not fit into any of the above categories and is not a complex case. There are three plaintiffs and six defendants. The claims, as alleged, are fairly straightforward and routine. This is simply not an appropriate case for the court to enter a Cottle case management order. The motion will be denied.