Saturday, May 16, 2015

Redwood City Express...

Cholakian & Assocs. v. Superior Court, No. C076759 (D3 Apr. 29, 2015) 

This is a bad faith denial of insurance and legal malpractice case against the former defendant’s insurer and two law firms, stemming from a big liability verdict in an auto accident case. It was filed in Sacto Superior—the same venue as the underlying trial. The insurers demurred, one firm answered, and the other moved to transfer venue to San Mateo County under Code of Civil Procedure § 396b(a). On the venue motion, the trial court found that venue was generally improper in the Sac, because no defendant resided there. But because some defendants had answered, it found that, under § 396b(d), the convenience of witness was an overriding factor and thus denied the motion. The law firm took a writ.

Section 396b(d) says, even when venue is initially improper, the court can deny the motion for witness convenience “if an answer is filed[.]”  In an action that isn’t a real property dispute, before an answer is filed, the court is to look only to the residence of the defendants in determining the proper venue. The question is, in a multi-defendant case, is the condition satisfied when a defendant other than the moving party has answered. 

The plaintiff put all his chips on the fact that the statute says “an answer” in the singular. Bad bet. Settled rules of construction—including rules codified in the Code of Civil Procedure—establish that use of the singular includes the plural. Moreover, the point of the rule is that the scope of disputed issues—an thus the relevant population of witnesses—can’t really be determined until the answer comes in.* And the right of a defendant to be sued in its home county is personal. It shouldn’t be waived because some other defendant answered. This was all apparently bolstered by a 1931 case decided before § 396d was enacted. In any event, the upshot is that the moving defendant needs to have answer. Since it hadn’t, the court should have limited its inquiry to the residence of defendants and not considered witness convenience.

Writ granted.

*This is kind of a silly fiction. A California answer (which usually takes the form of a one-sentence general denial) is essentially useless in determining the scope of the issues in the case.

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