Hensley v. San Diego Gas & Elec. Co.

• Citation: 213 Cal.Rptr.3d 803,7 Cal.App.5th 1337
• Decision Date: 31 January 2017
• Docket Number: D070259
• Court: California Court of Appeals
• Parties: William Michael HENSLEY et al., Plaintiffs and Appellants, v. SAN DIEGO GAS & ELECTRIC COMPANY, Defendant and Respondent.

7 Cal.App.5th 1337

213 Cal.Rptr.3d 803

William Michael HENSLEY et al., Plaintiffs and Appellants,

v.SAN DIEGO GAS & ELECTRIC COMPANY, Defendant and Respondent.

D070259

Court of Appeal, Fourth District, Division 1, California.

Filed January 31, 2017

Manuel Corrales, Jr., San Diego, for Plaintiffs and Appellants.

Sempra Energy, Office of the General Counsel, San Diego Gas & Electric Company Office of the General Counsel and Charles Larry Davis, San Diego, Quinn Emanuel Urquhart & Sullivan and Daniel H. Bromberg, Kenneth R. Chiate, Kristen Bird and Jeffrey N. Boozell, Los Angeles, for Defendant and Respondent.

O'ROURKE, J.

After this court dismissed the appeal of plaintiffs and appellants William Michael Hensley and Linda Hensley¹ from a nonappealable stipulated judgment pursuant to a settlement agreement, the Hensleys and defendant and respondent San Diego Gas & Electric Company (SDG & E) entered into an amended stipulated judgment that they assert now constitutes a final disposition of all of their claims. They contend the amended stipulated judgment is final and appealable in that it was entered to facilitate an appeal following the trial court's adverse in limine determination of a critical issue: the Hensleys' legal ability to recover damages for William's emotional distress on trespass and nuisance causes of action arising from a wild fire that damaged their house and property. We now conclude the amended stipulated judgment is final and appealable and our opinion, with respect to the trespass and nuisance claims only, is not advisory. On the merits, we hold the Hensleys were legally entitled to present evidence of William's emotional distress on their claims for trespass and nuisance as annoyance and discomfort damages recoverable for such torts. Because the trial court excluded evidence of emotional distress damages in their entirety, we reverse.

FACTUAL AND PROCEDURAL BACKGROUND²

After sustaining fire damage to their home and property in 2007, the Hensleys sued SDG & E alleging causes of action for inverse condemnation, negligence, trespass, nuisance, negligence per se, violation of California Public Utilities Code section 2106, intentional infliction of emotional distress, negligent infliction of emotional distress and violation of Health and Safety Code section 13007. They alleged in part that the fire caused soot, charring and other damage to their home; damage to their landscaping; and the destruction of 155 avocado trees on their land. SDG & E moved for summary adjudication of the Hensleys' intentional and negligent infliction of emotional distress claims, arguing in part that they were barred from seeking damages for psychological stress arising from property damages caused by the fire and its aftermath. After the Hensleys conceded they did not seek emotional distress damages flowing from those two causes of action, the trial court dismissed them.

During the course of the summary adjudication proceedings, the parties disputed whether California law permitted the Hensleys to recover emotional distress damages under their trespass and nuisance causes of action, including damages for the alleged aggravation of William's preexisting Crohn's disease

and ensuing losses (medical expenses as well as lost employment income from his permanent disability) due to the stress he claimed to have experienced as a result of the fire and its aftermath.

On SDG & E's unopposed motion, the court bifurcated the trial and ordered the damages phase to take place before trial on the issue of liability. SDG & E thereafter moved to exclude evidence of William's asserted emotional distress damages, arguing the Hensleys were not legally entitled to recover the claimed damages under theories of trespass and nuisance. In part, SDG & E argued that while damages for "annoyance and discomfort" were permitted to compensate plaintiffs for an injury to their peaceful enjoyment, emotional distress damages were different, and not permitted for a "negligent" trespass or nuisance involving property damage.

The court granted the motion, ruling William's damages claim, including for lost earnings and permanent disability as a result of his aggravated Crohn's disease

, fell within the rubric of "general" emotional distress damages, which under Kelly v. CBI Constructors, Inc. (2009) 179 Cal.App.4th 442, 102 Cal.Rptr.3d 32 (Kelly ), could not be categorized as the "distinct" and "more minimal annoyance and discomfort" damages recoverable for nuisance and trespass. It excluded all evidence, testimony and argument regarding his emotional distress.

Rather than proceed to trial, the parties in May 2015 stipulated to a judgment pursuant to a settlement agreement,³ and the Hensleys then appealed from that judgment. This court dismissed the appeal, holding the stipulated judgment was not a final judgment because its language was ambiguous in that it implied that no final determination had been reached as to liability, and that after resolution of the appeal a trial on liability and damages would transpire. (Hensley v. San Diego Gas & Electric Company , supra , D068276.) We further held the stipulated judgment violated the one final judgment rule because it did not completely resolve the issues of liability and damages, excluding the contested emotional distress damages. (Ibid . ) Because those issues remained unresolved, the judgment was interlocutory and did not eliminate the possibility of further litigation and appellate review regardless of the outcome of the first appeal on the availability of emotional distress damages. (Ibid . ) Finally, we held the ambiguity in the settlement terms created the potential for a complete misunderstanding between the parties that could necessitate additional postappeal trial court proceedings. (Ibid . )

Following our remittitur and an unsuccessful writ petition (Hensley v. Superior Court , D069946), the parties entered into another stipulation in which SDG & E stated it "denie[d] any liability for the damages claimed by the Hensleys but desire[d] to resolve this dispute to avoid continuing and significant costs of litigating this dispute." The stipulation states the parties have entered into a settlement agreement "providing for a payment, which already has been made, compensating the Hensleys for their alleged property losses and provided [sic ] that the Plaintiffs would receive another payment 'if and only if a final order from the California Court of Appeal or California Supreme Court is issued which reverses Judge Strauss's [order excluding evidence of William's emotional distress] and remands for trial in which William ... may attempt to prove and is specifically allowed to seek damages relating to the alleged exacerbation of his Crohn's disease

under any cause of action or legal theory[.]" The stipulation acknowledges the parties' May 2015 stipulated judgment and this court's dismissal of their ensuing appeal, then provides:

"[T]he parties wish to enter into an amended stipulated judgment that is final and appealable but reserves the right of Plaintiffs to appeal from the April 17, 2015 order;

"... [T]he parties agree that the Court should enter a final judgment resolving all of Plaintiffs' claims and the entire case consisting of the terms set forth below for the purpose of facilitating Plaintiffs' appeal of the Court's April 17, 2015 order:

"1. Plaintiffs ... shall take nothing on their claims against Defendant SDG & E for inverse condemnation, negligence, negligence per se, violation of California Public Utilities Code [section] 2106, intentional infliction of emotional distress, negligent infliction of emotional distress, and violation of California Health and Safety Code [section] 13007.

"2. Plaintiffs ... also shall take nothing on their claims against Defendant SDG & E for trespass and nuisance.

"3. Plaintiffs ... shall take nothing on their complaint against Defendant SDG & E for any asserted claims.

"4. This stipulated final judgment resolving all of the claims in this case is without prejudice to the rights of Plaintiffs ... to appeal this final judgment, including the Court's April 17, 2015 order denying William ... recovery of emotional distress damages arising from his allegations of trespass and nuisance claims, which effectively precluded him from recovering damages for the alleged exacerbation of his pre-existing Crohn's disease

allegedly caused by such mental stress."

Based on the stipulation, the court entered a judgment that the Hensleys "take nothing from Defendant SDG & E." The Hensleys appeal from the amended stipulated judgment.

DISCUSSION

I. Threshold Considerations

Following the filing of the notice of appeal, we again requested that the parties brief whether (1) this appeal was taken from a nonappealable order or judgment, and (2) the appeal seeks an advisory opinion. The parties respond that the judgment is final and appealable in that it was taken to facilitate appeal, and provides the Hensleys shall take nothing on all of their causes of action, thereby disposing of all of the claims in the case. They maintain any opinion is not merely advisory in part because if the Hensleys succeed on appeal, the parties' settlement agreement requires SDG & E to make an additional payment to them.

A. Final Judgment

Here, the judgment is final and appealable because it disposes of all of the causes of action in this case. The trial court's new judgment is one in which the Hensleys "shall take nothing" on every cause of action against SDG & E. There is no pending cause of action following the judgment, nor is there any longer a suggestion or indication in their stipulation or the judgment that the parties seek to retain their right to undergo a trial on any of their causes of action following the resolution of this appeal. Further, there is no waiver of any statute of limitations or "carve-out" of any claim for refiling and/or prosecution after remittitur, which would render the judgment nonappealable. (See Kurwa v....