On 08/26/2013 USA WASTE OF CALIFORNIA INC filed a Contract - Other Contract lawsuit against CITY OF IRWINDALE. This case was filed in Los Angeles County Superior Courts, Pomona Courthouse South located in Los Angeles, California. The Judges overseeing this case are OKI, DAN THOMAS, KENNETH R. FREEMAN and GLORIA WHITE-BROWN. The case status is Pending - Other Pending.
Pending - Other Pending
Los Angeles County Superior Courts
Pomona Courthouse South
Los Angeles, California
OKI, DAN THOMAS
KENNETH R. FREEMAN
USA WASTE OF CALIFORNIA INC
USA WASTE OF AMERICA INC.
DISPATCH TRANSPORTATION LLC
IRWINDALE CITY OF
IRWINDALE PARTNERSHIPS L.P
GLENDORA COURTYARD LLC.
WINDROW EARTH TRANSPORT
COMMODITY TRUCKING ACQUISITION LLC
YOKA WALTER M. ESQ.
YOKA WALTER MICHAEL ESQ.
JOHNSON J. CRAIG
KIM GINA J. ESQ
DARLING JOHN D.
GALANTE FRED ESQ.
PRICE STUART WINSTON ESQ.
8/5/2014: Notice of Change of Address or Other Contact Information
8/24/2015: Minute Order
4/2/2018: Other -
2/6/2019: Memorandum of Points & Authorities
2/14/2019: Minute Order
at 08:30 AM in Department J, Gloria White-Brown, Presiding; Hearing on Motion to Bifurcate - Not Held - Taken Off Calendar by PartyRead MoreRead Less
at 08:30 AM in Department J, Gloria White-Brown, Presiding; Hearing on Motion to Bifurcate - Held - Motion DeniedRead MoreRead Less
Declaration (OF CHRISTOPHER LEYEL); Filed by USA Waste of America , Inc. (Plaintiff)Read MoreRead Less
Order (Tentative Ruling); Filed by ClerkRead MoreRead Less
Certificate of Mailing for (Minute Order (Hearing on Motion to Bifurcate) of 03/27/2019); Filed by ClerkRead MoreRead Less
Minute Order ( (Hearing on Motion to Bifurcate)); Filed by ClerkRead MoreRead Less
Stipulation - No Order (OF DISPATCH TRANSPORTATION); Filed by DISPATCH TRANSPORTATION LLC (Defendant)Read MoreRead Less
Memorandum of Points & Authorities; Filed by Commodity Trucking Acquisition LLC (Defendant)Read MoreRead Less
Declaration (Supplemental Declaration Of Traci G. Choi In Support Of Motion To Bifurcate Of Defendant Commodity Trucking Acquisition); Filed by Commodity Trucking Acquisition LLC (Defendant)Read MoreRead Less
Opposition (USA Waste's Opposition to Commodity Trucking's Motion to Bifurcate and Declaration of Chad Chen in Support Thereof); Filed by USA Waste of America , Inc. (Plaintiff)Read MoreRead Less
Answer; Filed by IRWINDALE PARTNERSHIPS,L.P (Defendant)Read MoreRead Less
Notice of Hearing on Demurrer; Filed by IRWINDALE, CITY OF (Defendant)Read MoreRead Less
Notice of Case Management Conference (Amended); Filed by ClerkRead MoreRead Less
Notice of Case Management Conference; Filed by ClerkRead MoreRead Less
Rtn of Service of Summons & ComplRead MoreRead Less
Notice of Case Management Conference; Filed by ClerkRead MoreRead Less
Civil Case Cover SheetRead MoreRead Less
Summons (on Complaint)Read MoreRead Less
Notice of Related Case; Filed by USA Waste of America , Inc. (Plaintiff)Read MoreRead Less
Complaint; Filed by USA Waste of America , Inc. (Plaintiff)Read MoreRead Less
Case Number: KC066276 Hearing Date: July 20, 2020 Dept: J
HEARING DATE: Monday, July 20, 2020
RE: USA Waste of California, Inc. v. City of Irwindale, et al. (KC066276)
1. Defendant Commodity Trucking Acquisition, LLC’s MOTION TO BIFURCATE
Responding Party: Plaintiff, USA Waste of California, Inc.
2. Defendant Commodity Trucking Acquisition, LLC’s MOTION IN LIMINE NO. 11 TO EXCLUDE EVIDENCE OF USA’s CLAIM FOR NON-RESTITUTIONARY DISGORGEMENT UNDER THE UCL
Responding Party: Plaintiff, USA Waste of California, Inc.
1. Defendant Commodity Trucking Acquisition, LLC’s Motion to Bifurcate is GRANTED.
2. Defendant Commodity Trucking Acquisition, LLC’s Motion in Limine No. 11 to Exclude
Evidence of USA’s Claim for Non-Restitutionary Disgorgement Under the UCL is
On August 30, 2016, Dispatch Transportation, LLC dba Windrow Earth Transport (“Dispatch”) filed its Chapter 7 bankruptcy petition; on September 1, 2016, Dispatch filed a “Notice of Stay of Proceedings.” On November 8, 2016, a Declaratory Judgment as between Plaintiff and City was filed. On November 28, 2016, Plaintiff dismissed its second and fourth causes of action, with prejudice. On August 16, 2017, the “Order Granting Motion for Relief from the Automatic Stay Under 11 U.S.C. § 362” was entered by the U.S. Bankruptcy Court in case styled In re: Dispatch Transportation, LLC, Case No. 6:16-bk-17768-MH.
On March 16, 2018, Dispatch’s default was entered.
A Trial Setting Conference is set for July 20, 2020.
1. Motion to Bifurcate
“The court shall, on application of any defendant, preclude the admission of evidence of that defendant’s profits or financial condition until after the terrier of fact returns a verdict for plaintiff awarding actual damages and finds that a defendant is guilty of malice, oppression, or fraud in accordance with Section 3294. Evidence of profit and financial condition shall be admissible only as to the defendant or defendants found to be liable to the plaintiff and to be guilty of malice, oppression, or fraud. Evidence of profit and financial condition shall be presented to the same trier of fact that found for the plaintiff and found one or more defendants guilty of malice, oppression, or fraud.” (Civil Code § 3295(d).)
“The purpose behind Civil Code section 3295, which allows bifurcation and preclusion of evidence of a defendant’s wealth and profits during the liability phase of trial, is to minimize prejudice prior to the jury’s determination of a prima facie case of liability for punitive damages. However, such evidence is not to be excluded on the basis of prejudice when the information is relevant to liability.” (Notrica v. State Compensation Ins. Fund (1999) 70 Cal.App.4th 911, 939 [citations omitted].)
Commodity Trucking moves the court for an order, per CCP §§ 598 and 3295(d), for an order
bifurcating the issue of punitive damages and precluding any evidence and argument regarding
Commodity Trucking’s financial status and, if applicable, corporate size and/or profits unless
Plaintiff proves liability and its entitlement to punitive damages in the first phase of trial, and
there is a second phase.
Plaintiff advises that it does not intend to present evidence of Commodity Trucking’s “financial
status” or its “corporate size” unless and until trial reaches a punitive damages phase (Opposition, 4:14-15), but contends that evidence regarding Commodity Trucking’s profits is
essential to its causes of action for intentional interference with contractual relations and Business & Professions Code § 17200. (Id., 3:10-13.) Plaintiff claims that “[e]vidence of [Plaintiff’s] lost profits and the amount of restitutionary disgorgement necessarily impact essential elements of USA Waste’s causes of action.” (Id., 2:9-11.)
elements which a plaintiff must plead to state the cause of action for
intentional interference with contractual relations are (1) a valid contract
between plaintiff and a third party; (2) defendant's knowledge of this
contract; (3) defendant's intentional acts designed to induce a breach or
disruption of the contractual relationship; (4) actual breach or disruption of
the contractual relationship; and (5) resulting damage.” (Pacific Gas & Electric Co. v. Bear Stearns & Co. (1990)
To state a cause of action under Business & Professions Code § 17200, a plaintiff must allege (1) a business practice, (2) that is unfair, unlawful or fraudulent; and (3) an authorized remedy. Under the UCL, prevailing plaintiffs “are generally limited to injunctive relief and restitution.” (Cel-Tech Communications, Inc. v. Los Angeles Cellular Telephone Co. (1999) 20 Cal.4th 163, 179). “[N]onrestitutionary disgorgement of profits is not an available remedy in an individual action under the UCL.” (Korea Supply Co. v. Lockheed Martin Corp. (2003) 29 Cal.4th 1134, 1152.)
Evidence of Commodity Trucking’s profits, then, is not “essential” to either of Plaintiff’s causes of action.
Accordingly, the motion is GRANTED.
2. MIL Re: Exclude Evidence of Claim for Non-Restitutionary Disgorgement Under UCL
Commodity Trucking moves the court for an order directing Plaintiff, its counsel, and/or its witnesses, including its damages expert, not to testify, present questions about, or make any reference to any evidence of non-restitutionary disgorgement under its Unfair Competition Claim, including evidence regarding Commodity Trucking’s alleged profits, on the basis that said evidence is irrelevant and inadmissible because Plaintiff cannot recover non-restitutionary damages under the UCL.
At the outset, the court determines that the subject request is the proper subject of a motion in limine. “A motion in limine, which is a commonly used tool brought at the beginning of trial when evidentiary issues are anticipated by the parties, is designed to preclude the presentation of evidence deemed inadmissible and prejudicial by the moving party.” (Schweitzer v. Westminster Investments, Inc. (2007) 157 Cal.App.4th 1195, 1214.)
Plaintiff has alleged, inter alia, as follows: Plaintiff operated the Arrow Pit from 2004 to 2014. (SAC, ¶¶1 and 50.) United Rock purchased the Arrow Pit in approximately 1989 and continued to own and operate the property until 2004. (Id., ¶36.) United Rock initiated backfilling operations in the Arrow Pit in the late 1990s. (Id.) On or about August 26, 2004, City and United Rock entered into an agreement to settle United Rock’s claims against City in three different lawsuits (the “2004 Settlement Agreement”). (Id., ¶38c, Exh. E.) Section 4 of the 2004 Settlement Agreement states, in relevant part, as follows:
“Prioritization of Filling Activities. The parties agree that the City shall prioritize and require the refilling of the quarries in the City in the following order: United Quarry 1, then United Quarry 2 . . . The City agrees that it will not enter into an agreement with any other operator that prioritizes the filling obligations of such operator ahead of United’s Quarry 1. Notwithstanding the foregoing, nothing herein shall prevent the City from filling its own quarries using fill that would not otherwise be reasonably available to United. Additionally, nothing herein shall prohibit the City from approving the filling of any privately-operated quarry in the City, provided such quarry(ies) use fill that would not otherwise be reasonably available to United.”
On or about September 14, 2004, the Irwindale Reclamation Authority and United Rock entered into the SMARA Operation Rights Transfer and Conveyance Agreement (“SMARA Transfer Agreement”); Paragraph 4(b) therein provides in part:
“Obligations of United Regarding Prioritization of Filling Activities
The City has agreed that it shall prioritize and require the refilling of the quarries in the City in the following order: United Quarry 1, then United Quarry 2 . . . Nothing herein, however, shall restrict United form utilizing fill material it or its affiliates own to refill its quarries. United shall not be restricted from using fill materials provided by third parties for the purposes of slope stabilization required by the City or similar incidental work.” (Id., ¶38c, Exh. D.)
JH Properties, Inc. (“JH Properties”) contracted to purchase the Arrow Pit from United Rock by a purchase and sale agreement dated September 7, 2004. (Id., ¶37.) JH Properties subsequently assigned its interest in the agreement to Irwindale Partners LP (“Irwindale Partners”) and Irwindale Partners purchased the Arrow Pit effective on or about December 13, 2004. (Id.) Before the closing on the purchase of the Arrow Pit, Irwindale Partners and United Rock executed an Assignment of Rights and Liabilities Agreement dated December 3, 2004 (“Assignment of Rights”); the purchase and sale agreement and Assignment of Rights transferred, assigned and conveyed to Irwindale Partners all of United Rock’s rights and obligations in the Arrow Pit and various permits and agreements applicable to and governing the backfilling operations at the Arrow Pit including, but not limited to Supplement No. 1 to Reclamation Plan prepared by Dames & Moore for United Rock submitted to City on May 10, 1990 (“Reclamation Plan”), a Standstill and Tolling Agreement between United Rock and City dated February 28, 2002 (“Standstill Agreement”), the SMARA Transfer Agreement and the Settlement Agreement. (Id., ¶38, Exhs. B-E.) Irwindale Partners, as landlord, and Plaintiff, as tenant, entered into a commercial lease of the Arrow Pit dated November 9, 2004 (“Lease”). (Id., ¶48, Exh. F.) Under the terms of the Lease, Plaintiff agreed to maintain and operate the Arrow Pit in accordance with and subject to the terms, conditions and requirements of the Reclamation Plan, the Standstill Agreement, the SMARA Transfer Agreement, the Settlement Agreement and the Lease. (Id., ¶49.)
In October 2007 City entered into a License Agreement For Performance of Remediation and Grading Work (“License Agreement”) with Dispatch Transportation, LLC (“Dispatch”) to conduct a backfill operation to remediate and grade the Manning Pit. (Id., ¶54, Exh. G.) Upon information and belief, Commodity Trucking purchased all of Dispatch’s assets in a private UCC Article 9 foreclosure sale in or about September 2011, and now holds, maintains and operates assets formerly belonging to Dispatch, including the right to operate the Manning Pit. (Id., ¶63.) Commodity Trucking operated the Manning Pit as a competing landfill operation. (Id., ¶96.)
Commodity Trucking engaged in unfair business practices “[b]y accepting backfill material that should have gone to the Arrow Pit as required by the City’s Prioritization Obligation.” (Id., ¶95.) Commodity Trucking “accepted soil and/or inert debris from contractors who have sought bids from contractors who have sought bids from USA Waste to accept the very same fill material in the Arrow Pit. The soil and/or inert debris from third party commercial contractors and others would reasonably have been available to USA Waste but for” Commodity Trucking’s “unlawful operation of the Manning Pit.” (Id., ¶96.) Commodity Trucking “interfere[ed] with USA Waste’s operation of the Arrow Pit” and “caused direct economic harm to USA Waste.” (Id., ¶98.) Plaintiff seeks to “recover and/or disgorge all lost profits, costs, expenses and fees as permitted by law.” (Id., ¶100.)
However, Commodity Trucking’s counsel Alfred Shaumyan (“Shaumyan”) represents that during the September 10, 2018 deposition of Plaintiff’s expert William Ackerman (“Ackerman”), Ackerman stated that for his UCL disgorgement opinion he will testify at trial that Plaintiff is entitled to the profits that Commodity Trucking allegedly made by operating the Manning Pit, including the profits it could have made had it charged the prices that Plaintiff was charging at the Arrow Pit or the prices Plaintiff was charging at the Arrow Pit before the Manning Pit started accepting fill in late 2011. (Shaumyan Decl., ¶2.)
In Korea Supply, supra, 29 Cal.4th 1134, Plaintiff Korea Supply Company (“KSC”) represented manufacturers of military equipment in transactions with the Republic of Korea. KSC represented MacDonald Dettwiler in its bid to obtain a contract from the Republic of Korea for military equipment known as a SAR system. KSC expected a commission of over $30 million if MacDonald Dettwiler were awarded the contract. The Korean Ministry of Defense subsequently awarded the contract to Loral, a competitor of MacDonald Dettwiler, despite the fact that MacDonald Dettwiler’s bid was about $50 million lower and that the project management office of the Korean Defense Intelligence Command had determined that MacDonald Dettwiler’s equipment was far superior to Loral’s system. KSC later learned that the Korean Ministry of Defense had awarded the contract to Loral (now Lockheed Martin Tactical Systems, Inc. [“Lockheed Martin”]) as a result of bribes and sexual favors. KSC sued Lockheed Martin. KSC asserted a claim under the UCL and sought disgorgement of the profits realized by Lockheed Martin on the sale of the SAR to Korea.
The California Supreme Court determined that disgorgement of profits allegedly obtained by means of an unfair business practice is not an authorized remedy in an individual action under the UCL where these profits are neither money taken from a plaintiff nor funds in which the plaintiff has an ownership interest. (Id. at 1140.) The court determined that “[t]he remedy sought by plaintiff in this case is not restitutionary in this case because plaintiff does not have an ownership interest in the money it seeks to recover from defendants. . . it is clear that plaintiff is not seeking the return of money or property that was once in its possession. KSC has not given any money to Lockheed Martin; instead, it was from the Republic of Korea that Lockheed Martin received its profits. Any award that plaintiff would recover from defendants would not be restitutionary as it would not replace any money or property that defendants took directly from plaintiff.” (Id.) The court acknowledged that “restitution is broad enough to allow a plaintiff to recover money or property in which he or she has a vested interest,” but determined that plaintiff had no vested interest in the money it sought to recover:
“KSC itself acknowledges that, at most, it had an ‘expectancy’ in the receipt of
a commission. KSC’s expected commission is merely a contingent interest since
KSC only expected payment if MacDonald Dettwiler was awarded the SAR
contract. Such an attenuated expectancy cannot, as KSC contends, be likened
to ‘property’ converted by Lockheed Martin that can now be the subject of a
constructive trust. To create a constructive trust, there must be a res, an
‘identifiable kind of property or entitlement in defendant’s hands.’ [Citation.] As
the United States Supreme Court recently said, a constructive trust requires
‘money or property identified as belonging in good conscience to the plaintiff
[which can] clearly be traced to particular funds or property in the defendant’s possession.’ The recovery requested in this case cannot be traced to any particular
funds in Lockheed Martin’s possession and therefore is not the proper subject of a constructive trust.” (Id. at 1150.)
The court noted that “[a]llowing the plaintiff in this case to recover nonrestitutionary disgorgement under the UCL would enable it to obtain tort damages while bypassing the burden of proving the elements of liability under its traditional tort claim for intentional interference with prospective economic advantage” and that “[g]iven the UCL’s liberal standing requirements and relaxed liability standards, were we to allow nonrestitutionary disgorgement in an individual action under the UCL, plaintiffs would have an incentive to recast claims under traditional tort theories as UCL violations” “without having to meet the more rigorous pleading requirements of a negligence action or a breach of contract suit.” (Id. at 1151.)
The court further opined that “it is possible that due process concerns would arise if an individual business competitor could recover disgorgement of profits under the UCL. While restitution is limited to restoring money or property to direct victims of an unfair practice, a potentially unlimited number of individual plaintiffs could recover nonrestitutionary disgorgement. Allowing such a remedy would expose defendants to multiple suits and the risk of duplicative liability without the traditional limitations on standing.” (Id. at 1151.)
Here, Commodity Trucking argues that Plaintiff is precluded by Korea Supply from recovering profits allegedly obtained by means of an unfair business practice where these profits are neither money taken from a plaintiff nor funds in which the plaintiff has an ownership interest. (Id. at 1140.) Plaintiff argues that it is seeking restitutionary disgorgement on the basis that it had a vested interest in the fill material pursuant to the Prioritization Agreement. Commodity Trucking argues that Plaintiff ha, at most, as with KSC in Korea Supply, an “expectancy” that the material dumped at the Manning Pit would have been dumped at the Arrow Pit. “A ‘vested’ interest is one that is ‘unconditional,’ ‘absolute,’ and ‘not contingent.’ A contingent interest, on the other hand, is dependent upon an uncertain future event.” (National Rural Telecommunications Co-op. v. DIRECTV, Inc. (C.F. Cal. 2003) 319 F.Supp.2d 1059, 1080.)
Plaintiff’s argument fails. Plaintiff does not have a vested interest in the fill material brought to the Manning Pit because, as counsel conceded, nothing in the Prioritization Agreement required Commodity Trucking to dump its material at the Arrow Pit. (Shaumyan Decl., Exh. A. 13:6-10 [“Was it required for some reason that that fill be deposited in the City of Irwindale or could Dispatch/CTA have taken it outside of the City of Irwindale, number one?—so to another location and another city”]; 16:14-24 [Mr. Chen: . . . So as it pertains to the vested interest and the profits, the fill that went into the Manning Pit, once it went into the Manning Pit should have come to us. The court: Right. That’s once it went there, but were they required to put it in the Manning—in the city of Irwindale, period? Could have they taken it elsewhere? Mr. Chen: . . . The fundamental answer to that question is no. CTA could have brought the material anywhere else. They could have taken it to the City of Arcadia, Baldwin Park, Pomona, wherever they wanted to . . .”]) nor did anything require Commodity Trucking’s customers to dump material at the Arrow Pit. Significantly, however even if Plaintiff had a vested interest in the material, it did not have a vested interest in Commodity Trucking’s profits; rather, Plaintiff merely had an expectation it would have received the profits earned by Commodity Trucking from its Manning Pit operation had the City complied with the Prioritization Obligation.
Further, Plaintiff does not cite to any authority holding that one who holds a vested contractual right may obtain a defendant’s profits under the UCL. Allowing Plaintiff to recover Commodity Trucking’s alleged profits merely because Plaintiff has a vested contractual right would enable Plaintiff to obtain tort damages while bypassing the burden of proving the elements for intentional interference with contract, an outcome which the California Supreme Court in Korea Supply rejected.
The motion is granted.
 “United Quarry 1” refers to the Arrow Pit. (Id., ¶46.)
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