Foundation Engineers, Inc. v. Superior Court

• Decision Date: 01 October 1993
• Docket Number: No. H011398,H011398
• Citation: 19 Cal.App.4th 104,23 Cal.Rptr.2d 469
• Court: California Court of Appeals Court of Appeals
• Parties: FOUNDATION ENGINEERS, INC., et al., Petitioners, v. The SUPERIOR COURT of Santa Clara County, Respondent. OLIVEWOOD I PROFESSIONAL OFFICES OWNERS ASSOCIATION, Real Party in Interest.

Page 469

23 Cal.Rptr.2d 469

19 Cal.App.4th 104

FOUNDATION ENGINEERS, INC., et al., Petitioners, v. The SUPERIOR COURT of Santa Clara County, Respondent OLIVEWOOD I PROFESSIONAL OFFICES OWNERS ASSOCIATION, Real Party in Interest.

No. H011398.

Court of Appeal, Sixth District, California.

Oct. 1, 1993.

Certified for Partial Publication ^*

Michael G. Marderosian, Law Offices of Marderosian, Swanson & Oren, Fresno, for petitioners Foundation Engineers, Inc.

Rob D. MacDonald, Richard G. White, Inc., San Jose, for real party in interest Olivewood I Professional Offices Owners Ass'n.

WUNDERLICH, Associate Justice.

1. Introduction

We determine below a question of first impression: What is the proper venue for an action based on the negligent design and construction of a building?

Petitioners Foundation Engineers, Inc., and The Twining Laboratories, Inc., seek a statutory writ of mandate following denial of a motion to change venue to the county where the buildings are located. We will grant the writ for reasons stated below.

2. Trial court proceedings

On July 9, 1991, plaintiff Olivewood I Professional Offices Owners Association (property owner) filed a complaint in Santa Clara County alleging the following. Property owner is an association that owns an office condominium project (the buildings) located in the city and county of Merced, California. Numerous defendants, including petitioners, negligently designed and constructed the buildings, which are now defective and require restoration. "Among [the] defective conditions ... are the following ...: [p] Defects in soil preparation and foundation construction, undermining the structural integrity and longevity of the buildings." As a result of the defective work, "the value of the subject property and structures has been reduced and diminished in an amount presently unknown." The complaint alleged causes of action for negligence, strict liability, breach of implied warranty, and declaratory relief. Property owner asked for damages and for a declaration that defendants are required to fix the defects. There was no allegation of a contract between property owner and any defendant.

Petitioners sought to move the case to Merced County and filed a motion for change of venue. The motion was heard on March 2, 1993. In a notice of ruling, the court conditionally denied the motion, "provided that within ten (10) days of the date this order is filed, plaintiff deletes from its complaint all references or allegations concerning damage to the real property upon which the subject office building is situated. Contrary to the claim made in plaintiff's opposition to the motion, the complaint in its present form does in fact explicitly allege injury (in the form of diminished value) to the underlying real property; while the Court will accept plaintiff's assurance ... that plaintiff is not actually seeking damages for such alleged injury, moving defendants properly may contest venue in this Court as long as the allegations in question remain."

Subsequently property owner filed a "revised first amended complaint" that described Foundation Engineers as a California corporation doing business in Merced County and Twining Laboratories, Inc., as the successor-in-interest of Foundation Engineers, doing business in Merced County. The amended complaint repeats the allegations quoted above. The sole detectable change in conformance with the trial court's direction is that the strict liability cause of action was amended to allege that the value of the "subject structures," rather than the "real property," has been reduced and diminished.

Petitioners made a second motion to change venue which was denied after hearing on May 27, 1993, by an order filed June 24, 1993 and this petition for writ of mandate was filed July 2, 1993.

3.--5. ^**

6. The venue statutes

The venue statutes provide for a variety of locations for trial of actions, depending on the nature of the action.

Code of Civil Procedure section 392 ¹ provides in pertinent part: "(1) Subject to the power of the court to transfer actions and proceedings as provided in this title, the county in which the real property, which is the subject of the action, or some part thereof, is situated, is the proper county for the trial of the following actions: [p] (a) For the recovery of real property, or of an estate or interest therein, or for the determination in any form, of such right or interest, and for injuries to real property...."

Section 395, subdivision (a), provides in part: "If the action is for injury to person or personal property or for death from wrongful act or negligence, either the county where the injury occurs or the injury causing death occurs or the county in which the defendants, or some of them reside at the commencement of the action, shall be a proper county for the trial of the action."

Section 395, subdivision (a), further provides in part: "Subject to subdivision (b), when a defendant has contracted to perform an obligation in a particular county, either the county where the obligation is to be performed or in which the contract in fact was entered into or the county in which the defendant or any such defendant resides at the commencement of the action shall be a proper county for the trial of an action founded on such obligation, and the county in which the obligation is incurred shall be deemed to be the county in which it is to be performed unless there is a special contract in writing to the contrary."

Section 395.5 provides in part: "A corporation or association may be sued in the county where the contract is made or is to be performed, or where the obligation or liability arises, or the breach occurs; or in the county where the principal place of business of such corporation is situated...."

7. Venue is proper at the location of the negligently designed and constructed building

The venue statutes above contain potentially overlapping provisions for the place of trial, particularly when an action involves multiple causes of action. Since these statutes do not provide rules for determining which provision applies, the courts have developed some rules.

Actions involving realty and fitting under section 392 are termed "local," as contrasted with "personal" or "transitory." (Smith v. Smith (1891) 88 Cal. 572, 575-576, 26 P. 356; Smith, et al. v. Smith (1894) 4 Cal.Unrep. 860, 861, 38 P. 43.) We are particularly concerned with the provision in section 392 fixing venue "for injuries to real property."

One approach to fixing venue in an action involving multiple causes of action is to determine the essence of the action. What is its "nature?" (Smith, et al. v. Smith, supra, 4 Cal.Unrep. at p. 864, 38 P. 43.) What is its "subject-matter?" (Smith v. Smith, supra, 88 Cal. at p. 576, 26 P. 356.) What is "the main relief sought?" (Grangers' Bank v. Superior Court (1893) 4 Cal.Unrep. 130, 133, 33 P. 1095.) This approach ascertains the essential character of the action to establish venue.

Another approach to fixing venue is to disregard local causes of action when joined to personal or transitory causes of action. Smith v. Smith, detected a "general spirit and policy of the statute ... to give to the defendant the right of having all personal actions against him tried in the county of his residence." (88 Cal. at p. 575, 26 P. 356.) When a plaintiff joins local and transitory causes of action, venue follows the transitory cause of action. (Id. at p. 576, 26 P. 356.)

Turlock Theatre Co. v. Laws (1939) 12 Cal.2d 573, 86 P.2d 345, employed the second approach. That action was for unpaid theater rentals, to terminate the lease and recover possession. (Id. at p. 574, 86 P.2d 345.) The court determined that "the cause of action for the unpaid rentals is the primary object of the complaint, and relief by way of restoration of possession would follow the judgment on that cause of action." (Id. at p. 578, 86 P.2d 345.) Since a transitory cause of action was joined with a local one, venue followed the transitory one. (Ibid.)

Some opinions have employed both approaches. Peiser v. Mettler (1958) 50 Cal.2d 594, 328 P.2d 953, is a pertinent example. It involved "four so-called causes of action: breach of contract; conversion of certain structures and improvements; restoration and reinstallment of the same structures and improvements; and a cause of action for waste 'if such property cannot be restored.' " (Id. at pp. 603-604, 328 P.2d 953.) The relief sought was damages for breach of contract, damages for waste, and damages for the loss of use and value of improvements if they could not be restored. (Id. at p. 604, 328 P.2d 953.) The removed improvements were "two dwelling houses; one duplex dwelling, one general utility building; one shed;" and various well-drilling equipment. (Id. at p. 600, 328 P.2d 953.)

The court concluded "that the main relief sought in all four causes of action was personal and that title to, or possession of, real property was only incidentally involved." (50 Cal.2d at p. 604, 328 P.2d 953.) "The entire transaction arose out of the alleged breach of the lease agreement...." (Id. at p. 605, 328 P.2d 953.) The only wrong alleged was "the removal of the improvements heretofore described in violation of the terms of the lease." (Id. at p. 605, 328 P.2d 953.) "The severance of the fixtures and improvements from the land 'changed the character of the property from real to personal, irrespective of the means by which it was accomplished.' " (Id. at p. 606, 328 P.2d 953.) Thus, either the main relief sought was transitory or at least a transitory cause of action was joined with a local one, so venue followed the transitory cause of action. (Ibid.) The court did not expressly consider whether an injury to real property was alleged.

Peiser is important for its differences. It arose out of a lease contract. As noted above, section 395 contains special provisions for breach of contract actions....