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This case was last updated from Los Angeles County Superior Courts on 08/15/2019 at 09:54:41 (UTC).

NIGEL HUDSON VS JOHN ELY BACHSIAN ET AL

Case Summary

On 04/26/2017 NIGEL HUDSON filed a Contract - Other Contract lawsuit against JOHN ELY BACHSIAN. This case was filed in Los Angeles County Superior Courts, Stanley Mosk Courthouse located in Los Angeles, California. The Judge overseeing this case is GAIL FEUER. The case status is Pending - Other Pending.

Case Details Parties Documents Dockets

 

Case Details

  • Case Number:

    ****9102

  • Filing Date:

    04/26/2017

  • Case Status:

    Pending - Other Pending

  • Case Type:

    Contract - Other Contract

  • Court:

    Los Angeles County Superior Courts

  • Courthouse:

    Stanley Mosk Courthouse

  • County, State:

    Los Angeles, California

Judge Details

Presiding Judge

GAIL FEUER

 

Party Details

Plaintiff and Petitioner

HUDSON NIGEL

Defendants and Respondents

UNIVERSAL GROUP INC

GLOBAL GUNITE AND SHOTCRET

BACHSIAN JOHN ELY

UNIVERSAL CONSTRUCTION GROUP INC

GLOBAL PREMIER INSURANCE SERVICES

BACHSIAN JOHN

DOES 1 THROUGH 50

Attorney/Law Firm Details

Plaintiff and Petitioner Attorneys

HOROWITZ MARTIN L. ESQ.

HORWITZ MARTIN L.

Defendant and Respondent Attorneys

GORDON GREGORY H. ESQ.

FREDERICK J. ALAN ESQ.

FREDERICK J. ALAN

GORDON GREGORY H.

JENNINGS MAR J.

LYNCH ROBERT J.

LAGMAN-LEGASPI CATHERINE

 

Court Documents

Trial Brief

7/2/2019: Trial Brief

Motion in Limine

7/3/2019: Motion in Limine

Jury Instructions

7/8/2019: Jury Instructions

Minute Order

7/11/2019: Minute Order

Minute Order

5/10/2018: Minute Order

Motion in Limine

10/15/2018: Motion in Limine

Special Verdict

10/19/2018: Special Verdict

Opposition

10/24/2018: Opposition

Opposition

10/24/2018: Opposition

Reply

10/29/2018: Reply

Reply

11/7/2018: Reply

Minute Order

11/8/2018: Minute Order

Notice

5/23/2019: Notice

SUMMONS

4/26/2017: SUMMONS

PROOF OF SERVICE OF SUMMONS

5/15/2017: PROOF OF SERVICE OF SUMMONS

GLOBAL PREMIER INSURANCE SERVICES' NOTICE OF DEMURRER AND DEMURRER TO COMPLAINT; MEMORANDUM OF POINTS AND AUTHORITIES

7/17/2017: GLOBAL PREMIER INSURANCE SERVICES' NOTICE OF DEMURRER AND DEMURRER TO COMPLAINT; MEMORANDUM OF POINTS AND AUTHORITIES

DECLARATION OF PAUL J. WHITEHEAD IN SUPPORT OF GLOBAL PREMIER INSURANCE SERVICES DEMURRER TO COMPLAINT

7/17/2017: DECLARATION OF PAUL J. WHITEHEAD IN SUPPORT OF GLOBAL PREMIER INSURANCE SERVICES DEMURRER TO COMPLAINT

Minute Order

8/28/2017: Minute Order

138 More Documents Available

 

Docket Entries

  • 10/16/2019
  • Hearingat 09:30 AM in Department 78 at 111 North Hill Street, Los Angeles, CA 90012; Non-Jury Trial

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  • 07/19/2019
  • Docketat 09:30 AM in Department 78; Jury Trial - Held

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  • 07/19/2019
  • DocketMinute Order ( (Jury Trial)); Filed by Clerk

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  • 07/19/2019
  • DocketJury Instructions; Filed by Clerk

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  • 07/19/2019
  • DocketOther - (General Verdict); Filed by Clerk

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  • 07/19/2019
  • DocketJury Question; Filed by Clerk

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  • 07/18/2019
  • Docketat 09:30 AM in Department 78; Jury Trial - Held - Continued

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  • 07/18/2019
  • DocketMinute Order ( (Jury Trial)); Filed by Clerk

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  • 07/17/2019
  • Docketat 09:30 AM in Department 78; Jury Trial - Held - Continued

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  • 07/17/2019
  • DocketMinute Order ( (Jury Trial)); Filed by Clerk

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228 More Docket Entries
  • 05/09/2017
  • DocketProof-Service/Summons

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  • 05/08/2017
  • DocketPROOF OF SERVICE SUMMONS

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  • 05/08/2017
  • DocketProof-Service/Summons; Filed by Nigel Hudson (Plaintiff)

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  • 05/04/2017
  • DocketProof-Service/Summons

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  • 05/04/2017
  • DocketPROOF OF SERVICE OF SUMMONS

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  • 05/04/2017
  • DocketProof-Service/Summons

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  • 05/04/2017
  • DocketPROOF OF SERVICE OF SUMMONS

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  • 04/26/2017
  • DocketComplaint; Filed by Nigel Hudson (Plaintiff)

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  • 04/26/2017
  • DocketSUMMONS

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  • 04/26/2017
  • DocketCOMPLAINT FOR DAMAGES FOR (1) BREACH OF CONTRACT; (2) NEGLIGENCE; ETC

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Tentative Rulings

Case Number: BC659102    Hearing Date: January 22, 2021    Dept: 78

Superior Court of California

County of Los Angeles

Department 78

Nigel hudson;

Plaintiff,

vs.

john bachsian, et al.;

Defendants.

Case No.:

BC659102

Hearing Date:

January 22, 2021

[TENTATIVE] RULING RE:

dEFENDANTS’ MOTION FOR rECONSIDERATION OF RULING ON PLAINTIFF’S MOTION FOR ATTORNEYS’ FEES

dEFENDANT jOHN bACHSIAN’S MOTION FOR ATTORNEYS’ FEES

DEFENDANTS’ MOTION TO TAX COSTS

Plaintiff Nigel Hudson’s MOTION TO TAX COSTS

Moving Defendants’ Motion for Reconsideration is DENIED. Defendant John Bachsian’s Motion to Tax Costs is DENIED.

Moving Defendants’ Motion for Attorneys’ Fees is CONTINUED until March3,2021. Plaintiff Hudson’s Motion to Tax Costs is similarly CONTINUED. Moving Defendants to file supplemental documentation exclusively as to attorneys’ fees specific to Bachsian in connection with the November 8, 2018 hearing by February 3, 2021. Plaintiff to file Opposition by February 17, 2021.

Factual Background

The factual background relating to this motion is fully set forth in the Final Statement of Decision re Phase II of Trial issued by the Court on March 2, 2020.

Discussion

On August 25, 2020 this Court granted Plaintiff’s Motion for Attorneys’ Fees in the amount of $204,802.30. On August 26, 2020, this Court entered judgment in favor of Hudson and against the Moving Defendants.

Here, Defendants John Bachsian (“Bachsian”), Universal Group, Inc. (“Universal Group”), and Universal Construction Group, Inc. (“Universal Construction,” and collectively, “Moving Defendants”) seek reconsideration of that August 25, 2020 Order. Moving Defendants contend that the award should be reduced because (1) judgment was entered on August 26, 2020, which allows Defendants to file their own motions for attorneys’ fees and costs; and (2) Plaintiff should not be able to recover attorneys’ fees after the 998 Offer. (Motion Recon. at pp. 3-4.)

A Motion for Reconsideration must be based on “new or different facts, circumstances, or law[.]” (Code Civ. Proc. § 1008, subd. (b).) The standard is not whether the parties acted reasonably, but whether new or different facts or circumstances or law may effect a different result. Section 1008’s requirement for “new or different facts” has been interpreted by California courts as requiring both “newly discovered evidence and an explanation for not producing it earlier[.]” (Baldwin v. Home Sav. of America (1997) 59 Cal.App.4th 1192, 1199.) The legislative intent behind section 1008 was to narrowly limit reconsideration motions: “the measure was ‘designed ‘to reduce the number of motions to reconsider and renewals of previous motions heard by judges in this state.’ ” (Id. citing Garcia v. Hejmadi (1997) 58 Cal.App.4th 674, 688-689, as modified on denial of reh'g (Nov. 19, 1997).)

The Moving Defendants’ fundamental argument throughout their motion is that the Moving Defendants are the “prevailing party.” (Motion Fees at p. 3.) This theory is based on the fact that on November 14, 2018, the Court found that Bachsian was not the alter ego of Universal Group or Universal Construction. (Motion Fees at p. 3.)

Where neither party obtains a “complete victory,” the “trial court has also been empowered to identify the party obtaining ‘a greater relief ’ by examining the results of the action in relative terms: the general term ‘greater’ includes ‘[l]arger in size than others of the same kind’ as well as ‘principal’ and ‘[s]uperior in quality.’” (Silver Creek, LLC v. BlackRock Realty Advisors, Inc. (2009) 173 Cal.App.4th 1533, 1538.) “ ‘[I]n determining litigation success, courts should respect substance rather than form, and to this extent should be guided by ‘equitable considerations.’ For example, a party who is denied direct relief on a claim may nonetheless be found to be a prevailing party if it is clear that the party has otherwise achieved its main litigation objective.” (Id. at 1539.)

This case is a breach of contract case where Hudson alleged that Defendants breached the construction contract by performing defective and sub-standard work. (SAC ¶¶ 10-17.) Hudson alleged damages of $313,000. (SAC ¶ 21.) On August 26, 2020, after a jury trial, the Court entered judgment in favor of Hudson and against Universal Group and Universal Construction in the amount of $96,800 in economic damages, plus attorneys’ fees. On August 25, 2020, in ruling on Hudson’s Motion for Attorneys’ Fees, this Court held that although Hudson may not have achieved all of his “litigation objectives,” Hudson could recover attorneys’ fees under the prevailing party theory. (Order 8/26/20.) The Court holds the same, here.

Based on equitable consideration, Hudson experienced greater “litigation success” in this action because a jury decided the case in favor on Hudson and against the Moving Defendants in the amount of $96,800. (Order 8/26/20.) Bachsian obtained only an intermediary victory when the Court held on November 14, 2018 that Universal Group and Universal Construction were not alter egos of Bachsian. (Order 11/14/18.) Judgment was not entered in favor of Bachsian, nor was Bachsian awarded any monetary recovery.

As the court held in Hilltop Investment Associates v. Leon (1994) 28 Cal.App.4th 462: “Technically speaking, appellant was ‘a prevailing party’ in that personal liability was not visited upon him on the concept of alter ego.” (Hilltop Investment Associates v. Leon (1994) 28 Cal.App.4th 462, 468.) However, in this case, Hudson prevailed on the ultimate breach of contract claim and received a favorable jury verdict. Accordingly, the Court declines to reconsider its previous ruling: Hudson’s award of attorneys’ fees stands.

In Hilltop, the Court affirmed the trial’s court decision to not award attorneys’ fees to the party who prevailed on the alter ego theory. (Id.) In the interest of fairness, this Court finds that the Moving Defendants may recover attorneys’ fees only as to preparing pleadings and attending the hearing in connection with the Court’s November 14, 2018 Ruling on the alter ego claim. The Court will not award attorneys’ fees for any work prepared for the non-prevailing Defendants, for any work prepared for Bachsian unrelated to the November 8, 2018 hearing, or for any work prepared after November 14, 2020.

Moving Defendants also move to strike or tax Hudson’s costs incurred after October 26, 2018 when Defendants served Hudson with a CCP § 998 statutory offer to compromise. (Motion Tax at p. 3.) They contend that Hudson should recover only pre-offer attorneys’ fees. (Motion Tax at p. 4.)

“Any notice of motion to strike or to tax costs must be served and filed 15 days after service of the cost memorandum. If the cost memorandum was served by mail, the period is extended as provided in Code of Civil Procedure section 1013. If the cost memorandum was served electronically, the period is extended as provided in Code of Civil Procedure section 1010.6(a)(4).” (California Rules of Court Rule 3.1700, subd. (b)(1).) 

“Code of Civil Procedure section 1032, subdivision (b) [], guarantees prevailing parties in civil litigation awards of the costs expended in the litigation: ‘Except as otherwise expressly provided by statute, a prevailing party is entitled as a matter of right to recover costs in any action or proceeding.’” (Williams v. Chino Valley Independent Fire Dist. (“Williams”) (2015) 61 Cal.4th 97, 100.).

“If the items on a verified cost bill appear proper charges, they are prima facie evidence that the costs, expenses and services therein listed were necessarily incurred.” (Rappenecker

First, this Motion is untimely. Hudson filed a Memorandum of Costs on August 28, 2020. Defendants filed the instant Motion to Tax on September 14, 2020, 17 days later. The Motion was served by electronic service and does not receive an extended service period pursuant to CCP § 1013 for service by mail. Further, the Memorandum of Costs does not include attorneys’ fees, which were previously determined on August 25, 2020.

Second, should the Court nonetheless consider the Motion, the CCP § 998 offer was for $120,000 including fees and costs. (Motion Tax, Exh. A, p. 2.) Hudson’s final judgment in this case was for $96,800 plus $204,802.30, for a total award of $391,602.30, more than double the § 998 offer. Accordingly, Moving Defendants’ arguments are without merit.

Accordingly, Moving Defendants’ Motion for Reconsideration is DENIED. Defendant John Bachsian’s Motion to Tax Costs is DENIED.

Moving Defendants’ Motion for Attorneys’ Fees is CONTINUED until March3,2021. Plaintiff Hudson’s Motion to Tax Costs is similarly CONTINUED. Moving Defendants to file supplemental documentation exclusively as to attorneys’ fees specific to Bachsian in connection with the November 8, 2018 hearing by February 3, 2021. Plaintiff to file Opposition by February 17, 2021.

DATED: January 22, 2021

________________________________

Hon. Robert S. Draper

Judge of the Superior Court

Case Number: BC659102    Hearing Date: August 06, 2020    Dept: 78

Superior Court of California

County of Los Angeles

Department 78

Nigel hudson;

Plaintiff,

vs.

john bachsian, et al.;

Defendants.

Case No.:

BC659102

Hearing Date:

August 6, 2020

[TENTATIVE] RULING RE:

PLAINTIFF’S MOTION FOR ATTORNEY’S FEES

Factual Background

The factual background relating to this motion is fully set forth in the Final Statement of Decision issued by the court on August 2, 2020. This Ruling addresses the issue of attorney’s fees referred to in that Statement.

DISCUSSION

Plaintiff is requesting an attorney’s fee award of $212,702.80, calculated at an hourly rate of $425 per hour for his counsel. Defendant does not contest the reasonableness of this hourly rate and in any event the Court finds the rate well within appropriate guidelines for an attorney of plaintiff’s counsel’s experience and proficiency. While defendant does claim that some of the hours included in the calculation were not appropriately included, defendant has not provided the court with a sufficient basis to reduce the award based on these calculations.

Defendant also does not contest the fact that there is a provision in the operative contract providing for an award of attorney’s fees to the “prevailing party” in any action based on a breach of the contract. Defendant does assert, however, that plaintiff did not fully achieve his “litigation objectives,” and therefore the Court should exercise its discretion to not award plaintiff’s attorney’s fees in this action despite the fact that plaintiff receive a net monetary recovery.

The Court understands that it has discretion to find that a plaintiff did not fully achieve his “litigation objectives” and therefore is not be entitled to an award of attorney’s fees. Based on the same analysis set forth in Regency Midland Construction, Inc. v. Legendary Structures, Inc. (2019) 41 Cal of 5th 94, 1000, however, the Court does not believe exercising that discretion to deny plaintiff the attorney’s fees he was required to incur in this action would be just or appropriate.

Plaintiff trusted defendant to build a backyard and swimming pool that complied with the drawings defendant provided. What plaintiff is left with is a backyard in total disarray and a jury verdict for $96,800 to allow him to attempt to repair the damage and build what he was promised defendant would build. To require him, in addition, to pay the attorney’s fees he was required to incur to achieve this result would be unconscionable. While plaintiff did not succeed in all of his litigation objectives, he did receive the “net monetary recovery” in the action and the Court is exercising its discretion to award him the attorney’s fees he incurred to achieve this result which are in the amount of $212,702.30.

Plaintiff to give notice.

DATED: August 6, 2020

________________________________

Hon. Robert S. Draper

Judge of the Superior Court

Case Number: BC659102    Hearing Date: August 05, 2020    Dept: 78

Superior Court of California

County of Los Angeles

Department 78

Nigel hudson;

Plaintiff,

vs.

john bachsian, et al.;

Defendants.

Case No.:

BC659102

Hearing Date:

August 6, 2020

[TENTATIVE] RULING RE:

PLAINTIFF’S MOTION FOR ATTORNEY’S FEES

Factual Background

The factual background relating to this motion is fully set forth in the Final Statement of Decision issued by the court on August 2, 2020. This Ruling addresses the issue of attorney’s fees referred to in that Statement.

DISCUSSION

Plaintiff is requesting an attorney’s fee award of $212,702.80, calculated at an hourly rate of $425 per hour for his counsel. Defendant does not contest the reasonableness of this hourly rate and in any event the Court finds the rate well within appropriate guidelines for an attorney of plaintiff’s counsel’s experience and proficiency. While defendant does claim that some of the hours included in the calculation were not appropriately included, defendant has not provided the court with a sufficient basis to reduce the award based on these calculations.

Defendant also does not contest the fact that there is a provision in the operative contract providing for an award of attorney’s fees to the “prevailing party” in any action based on a breach of the contract. Defendant does assert, however, that plaintiff did not fully achieve his “litigation objectives,” and therefore the Court should exercise its discretion to not award plaintiff’s attorney’s fees in this action despite the fact that plaintiff receive a net monetary recovery.

The Court understands that it has discretion to find that a plaintiff did not fully achieve his “litigation objectives” and therefore is not be entitled to an award of attorney’s fees. Based on the same analysis set forth in Regency Midland Construction, Inc. v. Legendary Structures, Inc. (2019) 41 Cal of 5th 94, 1000, however, the Court does not believe exercising that discretion to deny plaintiff the attorney’s fees he was required to incur in this action would be just or appropriate.

Plaintiff trusted defendant to build a backyard and swimming pool that complied with the drawings defendant provided. What plaintiff is left with is a backyard in total disarray and a jury verdict for $96,800 to allow him to attempt to repair the damage and build what he was promised defendant would build. To require him, in addition, to pay the attorney’s fees he was required to incur to achieve this result would be unconscionable. While plaintiff did not succeed in all of his litigation objectives, he did receive the “net monetary recovery” in the action and the Court is exercising its discretion to award him the attorney’s fees he incurred to achieve this result which are in the amount of $212,702.30.

Plaintiff to give notice.

DATED: August 6, 2020

________________________________

Hon. Robert S. Draper

Judge of the Superior Court

Case Number: BC659102    Hearing Date: March 03, 2020    Dept: 78

Superior Court of California

County of Los Angeles

Department 78

Nigel hudson;

Plaintiff,

vs.

john bachsian, et al.;

Defendants.

Case No.:

BC659102

Hearing Date:

March 3, 2020

[TENTATIVE] RULING RE:

PLAINTIFF’S MOTION FOR ATTORNEY’S FEES

Factual Background

The factual background relating to this motion is fully set forth in the Final Statement of Decision issued by the court on August 2, 2020. This Ruling addresses the issue of attorney’s fees referred to in that Statement.

DISCUSSION

Plaintiff is requesting an attorney’s fee award of $212,702.80, calculated at an hourly rate of $425 per hour for his counsel. Defendant does not contest the reasonableness of this hourly rate and any event the Court finds the rate well within appropriate guidelines for an attorney of plaintiff’s counsel’s experience and proficiency. While defendant does claim that some of the hours included in the calculation were not appropriately included, defendant has not provided the court with a sufficient basis to reduce the award based on these calculations.

Defendant also does not contest the fact that there is a provision in the operative contract providing for an award of attorney’s fees to the “prevailing party” in any action based on a breach of the contract. Defendant does assert, however, that plaintiff did not fully achieve his “litigation objectives,” and therefore the Court should exercise its discretion to not award plaintiff’s attorney’s fees in this action despite the fact that plaintiff receive a net monetary recovery.

The Court understands that it has discretion to find that a plaintiff did not fully achieve his “litigation objectives” and therefore is not be entitled to an award of attorney’s fees. Based on the same analysis set forth in Regency Midland Construction, Inc. v. Legendary Structures, Inc. (2019) 41 Cal of 5th 94, 1000, however, the Court does not believe exercising that discretion to deny plaintiff the attorney’s fees he was required to incur in this action would be just or appropriate.

Plaintiff trusted defendant to build a backyard and swimming pool that complied with the drawings defendant provided. What plaintiff is left with is a backyard in total disarray and a jury verdict for $96,800 to allow him to attempt to repair the damage and build what he was promised defendant would build. To require him, in addition, to pay the attorney’s fees he was required to incur to achieve this result would be unconscionable. While plaintiff did not succeed in all of his litigation objectives, he did receive the “net monetary recovery” in the action and the Court is exercising its discretion to award him the attorney’s fees he incurred to achieve this result which are in the amount of $212,702.30.

Plaintiff to give notice.

DATED: March 3, 2020

________________________________

Hon. Robert S. Draper

Judge of the Superior Court

Case Number: BC659102    Hearing Date: March 02, 2020    Dept: 78

Superior Court of California

County of Los Angeles

Department 78

Nigel hudson;

Plaintiff,

vs.

john bachsian, et al.;

Defendants.

Case No.:

BC659102

Hearing Date:

October 16, 2019

FINAL STATEMENT OF DECISION RE:PHASE ii OF TRIAL

Factual Background

This is an action for breach of contract. The complaint alleges that on April 27, 2015, Plaintiff Nigel Hudson (“Hudson”) entered into a written construction contract with Defendant John Bachsian (“Bachsian”) and his companies, Defendants Universal Group Inc. (“Universal Group”) and Universal Construction Group, Inc. (“Universal Construction Group”) , for the installation of a swimming pool, deck, retaining walls, and associated work for Hudson’s residence. (FAC ¶¶ 10, 11.) The contract contained a warranty that the work would be free from defects for three years. (FAC ¶ 12.) The work, however, was defective, substandard, and not performed in a workmanlike manner, and caused Hudson damages in excess of $313,000.00. (FAC ¶¶ 15, 21.). The actual written contract is between plaintiff and Universal Group, Inc.

On November 8, 2018 the court heard testimony on the preliminary issue of whether defendants Universal Group Inc. and Universal Construction Group, Inc. are the alter egos of defendant Bachsian, making Bachsian personally liable for any judgment entered against them in this action. This is an equitable issue which must be resolved by the court. On November 14, 2018 the Court held that Universal Group Inc. and Universal Construction Group, Inc. are not the alter egos of defendant Bachsian. In connection with the same hearing counsel for defendants stipulated that Universal Group Inc. and Universal Construction Group, Inc. are the alter egos of each other.

The case was tried to a jury from July 9, 2019 to July 19, 2019. On July 19, 2019 the jury returned a verdict in favor of Hudson and against Universal Construction and Universal Construction Group [1]in the amount of $96,800.

The jury verdict left three issues to be decided in Phase II of the trial: (1) Is Hudson Entitled to the disgorgement of all monies paid by him on the project because Universal Group did not have worker’s compensation insurance covering it employees, (2) Is Hudson entitled to an award of attorneys’ fees incurred in proving issues as to which Defendants denied requests for admission? And, (3) is any ultimate award to Hudson in this case, including attorneys’ fees, limited to the amount of the contract price? The parties submitted supplemental briefs on these issues and on October 16, 2019 additional testimony was offered, Exhibits received and arguments heard on these subjects. On October 31, 2019, after receipt of the binders containing the Exhibits received in Phase II, the matter was submitted for decision.

The Court has read, reviewed and considered all of the above. The Court has also read and reviewed Plaintiff’s Objections to Tentative Statement of Decision filed December 19, 2019 and, based thereon rules as follows: (1) Plaintiffs’ Objections are overruled, and(2) This Final Statement of Decision is of the decision of the Court on Phase II of the trial.

DISCUSSION

Disgorgement of All Monies Paid

Hudson’s request for disgorgement is based on the assertion that because Universal group did not have Worker’s compensation insurance covering employees who worked on the Hudson project, its contracting license was suspended as a matter of law, and it therefore did not have a valid contractor’s license. It is the alleged absence of this contractor’s license that Hudson claims entitles him to disgorgement of all funds he paid on the project. There are a number of problems with this claim.

First, there was a significant amount of testimony about the order of the Contractors’ State License Board, of which the Court took judicial notice, suspending Universal Construction’s license to contract. But in issuing this order well after the contract at issue here was entered into and terminated (by Hudson), the Contractor’s State License Board expressly found that during this entire contract period, both Universal Construction and Universal Construction Group had valid and existing state contractor’s licenses. And even the post contract order was suspended, leaving both companies free to validly enter into contracts even after that order.

Second, while the evidence showed some confusion between Mr. Bachsian, who oversaw the construction, and his wife, who handled the bookkeeping and reporting to the State Contractor’s License Board, over which entity (Universal Construction or Universal Construction Group, which was its successor) was employing the workers on Hudson’s project, this was in a sense irrelevant because in fact they were the same people, whether employed by Universal Group or Universal Construction Group. The evidence was uncontradicted that they were covered by Worker’s Compensation Insurance at all times when they were performing work on Hudson’s property.

Hudson’s request for a declaratory judgment requiring disgorgement of all funds paid to Universal construction is denied.

Requests for Admission

Hudson requests an award of attorneys fees under CCP§2033.420(a) for defendants’ refusal to admit requests such as “Admit you performed defective work on the project” and “Admit you breached your contract with Hudson.” Section 2033.420(b)(3) provides that attorneys’ fees will not be awarded when “the party failing to make the admission had reasonable grounds to believe that that party would prevail in the matter.” The Court finds that defendants did have such grounds to deny the requests at issue and therefore decline to issue an attorney’s fee award on this basis.

Limitation on Hudson’s Award to the Amount of the Contract

The final issue in Phase II is whether the limitation of Defendants’ liability contained in Universal Group’s contract is valid. The clause containing this limitation states that Universal Group’s cumulative liability to Hudson and to “all contractors and subcontractors” on the project for damages “including but not limited to lawyer’s fees” is limited to “the contract amount or to a lesser amount.[i]” Hudson claims that this limitation violates Civil Code Section 1717 which requires an award of reasonable attorneys to either prevailing party in a contract action even if the contract authorizes an award of such fees to only one of the parties. The Court agrees.

As the authorities cited by plaintiff hold, the whole purpose of Section 1717 is to make the right to contractual attorneys’ fees reciprocal, whether this is stated in the contract or not. The contract does explicitly state that Reasonable attorneys fees shall be awarded to the prevailing party in any action brought under this Contract.[ii]” Nothing in the contract limits the damages or attorneys’ fees Defendants could recover from Hudson if Hudson breached the contract. Conceptually Defendants argument would justify a contract provision that each party would be entitled to attorneys fees in the event of a breach but the amount Defendants to recover are unlimited but Hudsons recovery would be limited to $1. This is not what either reciprocal or reasonable mean.

The Court also believes that the limitation Defendants are attempting to invoke also violates the prohibition against liquidated damages contained in Code of Civil Procedure, section 1671. This is true whether the issue is analyzed under Code of Civil Procedure section 1671(b) or(d). There was nothing impractical or extremely difficult about calculating the damages that would flow from a breach of the contract at the time the contract was entered into and the court believes it was unreasonable, under the circumstances existing at that time, to limit Hudsons but not Defendants’ recovery for such a breach. The Court therefore finds that Section 3j of the contract is not a valid limitation on the damages or attorneys fees Hudson can recover in this action.

Both parties have briefed to an extent the question of who the prevailing party in this action and is therefore entitled to an award of attorneys’ fees and costs. That was not the subject of the trial on Phase II and will not be decided in this Statement of Decision. Instead that issue will be addressed in the court separate ruling in connection with the March 3, 2020 hearing on that subject.

Plaintiff to give notice.

DATED: March 2, 2020

________________________________

Hon. Robert S. Draper

Judge of the Superior Court


[1] Because there was a stipulation that Universal Group and Universal Construction Group are alter egos of each other, the jury verdict form referred only to "Universal."


[i] Exhibit 39, Section 3J of the Terms and Conditions.

[ii] Id, Section 10.

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