Perini Corp. v. Alagia-Crosby Engineers

Filed 10/5/07 Perini Corp. v. Alagia-Crosby Engineers CA1/4

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FIRST APPELLATE DISTRICT

DIVISION FOUR

Perini Corporation and Perini Building Co., Inc., (collectively Perini) appeal a judgment entered after the trial court granted the motion of Alagia-Crosby Engineers, Alagia Engineering Group, Inc., Patrick Crosby (collectively Alagia-Crosby) and Baumann Engineering (Baumann) for judgment on the pleadings. We affirm.

I. BACKGROUND

The Board of Trustees of the California State University (CSU) hired Perini to design and build a residence hall and guest center in 1988. Among Perinis subcontractors was Alagia-Crosby, which provided structural engineering services. Alagia-Crosby in turn hired Baumann to work on a portion of the project. The contract between Perini and Alagia-Crosby required Alagia-Crosby to indemnify Perini from claims arising out of Alagia-Crosbys services. Perini states, and Alagia-Crosby and Baumann do not dispute, that the project was substantially complete in 1990.

CSU brought an action against Perini and others in June 1999, alleging defects in the design and construction of the building project. Perini cross-complained in October 1999 for indemnity against various subcontractors and consultants. The cross-complaint included Roes 1 through 50, but did not name Alagia-Crosby or Baumann. A jury trial on CSUs complaint and on Perinis cross-complaint began in June 2002, and proceeded for more than a month. The parties reached a settlement in August 2002, and by early 2003, the complaint had been dismissed with prejudice and Perini had dismissed the last party named in the cross-complaint.[1]

Perini made an ex parte application for relief from the dismissal on July 29, 2003, in order to assert a cross-complaint against Alagia-Crosby. The application asked for [a]n order setting aside Perinis voluntary dismissal of its cross-complaint in this action, under [Code of Civil Procedure[2] section 473, subdivision (b),] or in the alternative, an order under [section 473, subdivision (a)] allowing Perini to amend its Second Amended Cross-Complaint in this action. According to the declaration of Perinis counsel, he had mistakenly concluded that an independent action for indemnity could be brought at any time within one year of the settlement, but had recently discovered information that suggested Perini should have brought its indemnity action against Alagia-Crosby as part of its cross-complaint.[3]

The trial court granted the application and signed the order prepared by Perinis counsel. The order stated: On July 29, 2003 Perini Corporation and Perini Building Co., Inc. (Perini), Inc. [sic] applied, ex parte, for an order setting aside Perinis voluntary dismissal of its cross-complaint in this action, under C.C.P.  473(b), on the grounds of mistake, inadvertence, excusable neglect, or attorney fault, and for an order allowing Perini to file its Third Amended Cross-Complaint in this action.^[[4]] [] The matter having been heard, and based upon the application and evidence submitted by Perini, the Court hereby grants the ex parte relief, and orders the following: [] 1. Perinis voluntary dismissal of its cross-complaint in this action is hereby vacated; [] 2. Perini is granted leave to file its Third Amended Cross-Complaint. The Third Amended Cross-Complaint, lodged with Perinis ex parte application, is deemed filed as of July 29, 2003.

The amended cross-complaint named as cross-defendants Alagia-Crosby Engineers, Alagia Engineering Group, Inc., and Patrick Crosby. The trial court authorized Perini to file an amendment to its amended cross-complaint. The amendment named three additional cross-defendants, including Baumann. Perini later sought and received leave to file a fourth amended cross-complaint, which named another cross-defendant, Kalman Mechanical, Inc. (Kalman). Its request was unopposed.

Alagia-Crosby moved for judgment on the pleadings, contending that Perini could not bring new cross-defendants into the case after the original causes of action and the original parties had all been dismissed. Baumann and Kalman joined the motion. The trial court denied the motion without prejudice. At the hearing on the motion, however, the court expressed concern that it might have abused its discretion in allowing Perini to revive the cross-complaint and add new parties.

Alagia-Crosby moved for judgment on the pleadings for a second time, contending the trial court should not have set aside Perinis dismissal of the cross-complaint because it had failed to demonstrate that its attorney had made an excusable mistake, that section 473 cannot be used to circumvent the statute of limitations, and that it had improperly failed to give Alagia-Crosby notice of the ex parte application. Baumann and Kalman joined in the motion. The trial court granted the motion, finding that it had lacked grounds to set aside Perinis dismissal of its cross-complaint because Perini failed to demonstrate that its attorneys mistake was excusable or a legally cognizable mistake.[5] The court also indicated that Perini had been granted leave to file the amended complaint as part of the relief awarded on its application to set aside the dismissal under  473(b).

Alagia-Crosby moved to dismiss the first amended cross-complaint, the amendment, and all remaining unnamed Roe cross-defendants, and Kalman and Baumann joined in the motion. The trial court granted the motion. Alagia-Crosby moved for entry of judgment, and Baumann and Kalman joined in the motion. Judgment was entered in favor of Alagia-Crosby, Baumann, and Kalman. This timely appeal ensued.[6]

II. DISCUSSION

A. Standard of Review

A motion for judgment on the pleadings presents a mixed question of law and fact that is predominantly one of law, viz., whether or not the factual allegations that the plaintiff makes are sufficient to constitute a cause of action. (Gerawan Farming, Inc. v. Lyons (2000) 24 Cal.4th 468, 515.) A ruling on a motion of this sort is reviewed de novo. (Ibid.) Here, however, the trial court did not decide whether the factual allegations stated a cause of action, but whether Perini could properly raise any factual allegations at allthat is, whether it had properly allowed Perini relief from the dismissal and leave to file the amended cross-complaint.[7] An order granting relief under section 473 or allowing amendment of a pleading is reviewed for abuse of discretion. (In re Marriage of Eben-King & King (2000) 80 Cal.App.4th 92, 118; Reynolds v. Bement (2005) 36 Cal.4th 1075, 1091.) To the extent the order granting judgment on the pleadings was based on the trial courts decision to reconsider and reverse its earlier decision granting relief under section 473, we will review it for abuse of discretion. (See New York Times Co. v. Superior Court (2005) 135 Cal.App.4th 206, 212 [ruling on motion for reconsideration reviewed for abuse of discretion]; compare Centennial Ins. Co. v. United States Fire Ins. Co. (2001) 88 Cal.App.4th 105, 110-111 [where trial court exercised discretion in passing on motion for summary judgment, ruling reviewed for abuse of discretion rather than de novo].)

B. Propriety of Order Granting Judgment on the Pleadings

Perini contends it never dismissed its cross-complaint in its entirety, and that as a result the trial courts ruling granting relief from the dismissal under section 473, subdivision (b) was superfluous. According to Perini, in addition to granting relief from the dismissal under section 473, subdivision (b), the trial court also granted leave pursuant to subdivision (a) to file an amended cross-complaint, and that ruling was unaffected by the ruling on the second motion for judgment on the pleadings.

Perinis ex parte application sought alternative relief: an order setting aside the dismissal of the cross-complaint under section 473, subdivision (b), or an order allowing Perini to file an amended cross-complaint under section 473, subdivision (a). In vacating the dismissal and granting Perini leave to file its amended cross-complaint, the trial court referred only to section 473, subdivision (b).

Section 473, subdivision (b) allows a trial court to relieve a party or his or her legal representative from a judgment, dismissal, order, or other proceeding taken against him or her through his or her mistake, inadvertence, surprise, or excusable neglect. Section 473, subdivision (a)(1) provides, in pertinent part: The court may, in furtherance of justice, and on any terms as may be proper, allow a party to amend any pleading or proceeding by adding or striking out the name of any party . . . . The court may likewise, in its discretion, after notice to the adverse party, allow, upon any terms as may be just, an amendment to any pleading or proceeding in other particulars . . . .

The record indicates that Perini dismissed the named cross-defendants after the parties reached a settlement, but did not dismiss the Roe cross-defendants, and that the Roe cross-defendants were severed at the outset of the trial. There is no indication in the record that the trial court dismissed the Roe cross-defendants sua sponte. For purposes of this discussion, we will assume that the cross-complaint had not been dismissed as to the Roe cross-defendants at the time Perini applied for relief under section 473.

Even if the cross-complaint was technically viable as to the Roe defendants, however, it does not follow that the order allowing Perini to file an amended cross-complaint survived the judgment on the pleadings. In its opposition to the second motion for judgment on the pleadings, Perini argued not only that its mistake was excusable under section 473, subdivision (b), but also that the trial court had liberal power to grant leave to amend pleadings under 473(a) [sic]. In ruling on the motion, the trial court noted Perinis arguments that the operative cross-complaint had never been dismissed in its entirety and that the court had broad discretion to grant the relief requested in [its] ex parte application. Nevertheless, the trial court not only reversed its decision to grant relief from the dismissal, but also granted judgment on the pleadings. In the circumstances, we can only conclude the trial court reconsidered and reversed the entire order setting aside the dismissal and allowing Perini to file its amended cross-complaint.

The evidence amply supports the trial courts decision. Section 473, subdivision (a)(1) allows the court to permit a pleading to be amended by adding a party in furtherance of justice. The court could reasonably conclude that justice would not be served by allowing an amendment to name entirely new cross-defendants more than four years after the action was filed. The cross-complaint was governed by section 337.15, which requires actions to recover damages from latent defects in the construction of a property to be filed within 10 years of substantial completion of the development. ( 337.15, subd. (a)(1).) An exception exists, however, in the case of cross-complaints for indemnity, which may be filed . . . in an action which has been brought within the time period set forth in subdivision (a) of this section. ( 337.15, subd. (c).) The project was substantially completed in 1990, 13 years before Perini sought to add Alagia-Crosby and Baumann to its cross-complaint.

The goal of section 337.15  is to protect contractors and other professionals and tradespeople in the construction industry from perpetual exposure to liability for their work. [Citations.] The statute reflects a legitimate concern that expanding concepts of liability could imperil the construction industry unless a statute of limitations was enacted. [Citation.] Such concerns legitimately include the prohibitive cost of insurance against a perpetual and never ending risk.  (Lantzy v. Centex Homes (2003) 31 Cal.4th 363, 374.) Our Supreme Court has explained that the statute was the result of legislative concern about the economic effects on the construction industry of builders liability for defects in past projects, which under former law continued as long as the defects remained undiscovered and undiscoverable by reasonable inspection. (Id. at pp. 374-375.) The provision allowing cross-complaints for indemnity after that time period has been explained as follows: In a direct action for damages or indemnity, a subcontractor may be held liable no more than 10 years after substantial completion of his services. In a cross-complaint for indemnity, a subcontractor may be held liable to indemnify a contractor only so long as the contractor can be reached in a direct action for damages, or 10 years after substantial completion of the general contractors project. (Valley Circle Estates v. VTN Consolidated, Inc. (1983) 33 Cal.3d 604, 614, italics added.) Furthermore, bringing an action for indemnity by cross-complaint promotes judicial efficiency and allows related evidence and matters of proof to be consolidated in a single proceeding. (Id. at pp. 614-615.)

Here, Perini made no attempt to bring Alagia-Crosby and Baumann into the action until after the case had proceeded to a jury trial that lasted more than a month, after the case had been settled, and after the named cross-defendants had been dismissed. At that point, Perini could no longer be reached in a direct action for damages, and judicial efficiency would not be promoted by allowing a new cross-defendant to be brought into the action, requiring an entirely new trial. For reasons of its own, Perini chose not to bring Alagia-Crosby and Baumann into the action as cross-defendants until the action was effectively defunct.[8] Indeed, the fact that Perini itself treated the action as defunct is shown by the fact that it asked the trial court for relief from the voluntary dismissal of its cross-complaint in this action. In the circumstances, the trial court did not abuse its discretion in deciding Perini could not amend the cross-complaint to name Alagia-Crosby and Baumann.

III. DISPOSITION

The judgment is affirmed.

________________________

RIVERA, J.

We concur:

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RUVOLO, P.J.

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REARDON, J.

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[1] The record contains the dismissals of several of the parties named in the original cross-complaint. It does not appear to contain a complete copy of the first amended cross-complaint, which was filed October 23, 2000 and amended August 10, 2001; and we are unable to verify the identities of the cross-defendants who were parties to the case at the time of trial. The parties agree, however, that all named cross-defendants were dismissed by early 2003.

[2] All statutory references are to the Code of Civil Procedure.

[3] Perini did not proceed under section 474, which allows a pleading naming Doe defendants to be amended when the true name of the defendant is discovered, presumably because it was aware of Alagia-Crosbys identity and potential liability for indemnity at the time it filed the original cross-complaint. (See Woo v. Superior Court (1999) 75 Cal.App.4th 169, 177 [for amended complaint to relate back to original complaint under section 474, plaintiff must have been genuinely ignorant of defendants identity at time of original complaint]; McOwen v. Grossman (2007) 153 Cal.App.4th 937, 943-944 [ignorance of defendants identity includes ignorance of facts giving rise to cause of action against defendant].)

[4] The discrepancy between the applications request for leave to file a second amended cross-complaint, and the order, which granted leave to file a third amended cross-complaint was apparently a clerical error. For the sake of simplicity, we will refer to the third amended cross-complaint simply as the amended cross-complaint where the context allows.

[5] The Honorable Alex Saldamando, who granted the motion, was the same judge who had originally granted Perinis ex parte application for relief from the dismissal.

[6] Perinis appeal was later dismissed as to Kalman only.

[7] A court may reconsider its previous rulings on its own motion after informing the parties of its concern that a prior interim ruling is erroneous, soliciting briefing, and holding a hearing. (Le Francois v. Goel (2005) 35 Cal.4th 1094, 1108.) At the hearing on the first motion for judgment on the pleadings, the trial court expressed its concern that it had abused its discretion in reviving the cross-complaint and allowing Perini to add new parties, and denied the motion without prejudice, in effect inviting Alagia-Crosby and Baumann to raise it in a second motion for judgment on the pleadings. Under the circumstances, we reject Perinis contention that Alagia-Crosby and Baumann waived their objections to the trial courts order allowing relief from the dismissal and granting Perini leave to file its amended cross-complaint.

[8] A declaration by Perinis counsel in opposition to the second motion for judgment on the pleadings indicated that Perini contacted Alagia-Crosby and Baumann regarding its potential indemnity claim before trial, but did not include them as cross-defendants, both because Perinis counsel believed a separate action for indemnity could later be asserted, and because Perini, Crosby, and Bauman agreed that they would all work together to present the best possible defense of the Universitys claims, and deal with indemnity issues after any judgment or settlement.