Walker v. Superior Court

Decision Date01 April 1991
Docket NumberNo. S014626,S014626
Citation807 P.2d 418,279 Cal.Rptr. 576,53 Cal.3d 257
CourtCalifornia Supreme Court
Parties, 807 P.2d 418 Michael WALKER, Petitioner, v. The SUPERIOR COURT of Los Angeles County, Respondent; RESIDENTIAL CONSTRUCTION ENTERPRISES et al., Real Parties in Interest. Charlene WHITE, Petitioner, v. The SUPERIOR COURT of Los Angeles County, Respondent; Charles D. SLATON et al., Real Parties in Interest.

Weldon Diggs, Linda M. Wilde, Upland, Richard L. Garrigues, Los Angeles and Frank M. Harford, Los Angeles, for petitioners.

De Witt W. Clinton, County Counsel, and Frederick R. Bennett, Asst. County Counsel, for respondent.

Anderson, McPharlin & Conners, Ann Graupmann and Patrick J. Hast, Los Angeles, for real parties in interest.

LUCAS, Chief Justice.

We granted review to resolve a conflict in the Courts of Appeal concerning interpretation of Code of Civil Procedure section 396, which governs the transfer of cases from the superior court to the municipal court when an action fails to meet the superior court's jurisdictional requirement of an amount in controversy exceeding $25,000. (All further statutory references are to this code unless otherwise indicated.)

One line of decisions, followed by the Court of Appeal in the present case, holds that section 396 precludes transfer if the amount prayed for in the complaint meets the superior court jurisdictional requirement, and the prayer is neither fraudulent nor fictitious on its face. (E.g., Davis v. Superior Court (1972) 25 Cal.App.3d 596, 599-601, 102 Cal.Rptr. 238 (hereafter Davis ).) Respondent superior court, represented in this proceeding by county counsel, interprets a recently developed contrary view of section 396 as permitting transfer if it appears to the superior court after a hearing that a judgment in excess of $25,000 is "unlikely" or "not reasonably probable." (E.g., Williams v. Superior Court (1989) 216 Cal.App.3d 378, 381, 382, 264 Cal.Rptr. 677 (hereafter Williams (RD Instruments) [following Campbell v. Superior Court (1989) 213 Cal.App.3d 147, 261 Cal.Rptr. 509 (hereafter Campbell ) ].)

We conclude the former line of cases construes the statute too narrowly, but that respondent interprets the latter too broadly; we shall construe section 396 as requiring transfer when (i) the absence of jurisdiction is apparent before trial from the complaint, petition, or related documents, or (ii) during the course of pretrial litigation, it becomes clear that the matter will "necessarily" result in a verdict below the superior court jurisdictional amount, and the court affords the parties an opportunity to contest transfer. Applying these principles to the present actions, we conclude the superior court abused its discretion in ordering transfer, and accordingly affirm the judgment of the Court of Appeal.

I. Facts and Procedure

Both matters arise from automobile accidents. In each case petitioner sued to recover damages for personal injuries. The respective records are very sparse and contain no reported hearings. We must therefore rely on the uncontested factual representations in the briefs. They disclose the following:

A. Walker

Petitioner Walker, while riding a motorcycle, was struck by a car driven by an employee of real parties in interest Residential Construction Enterprises and Larry Millikin (hereafter, collectively, RCE). He was thrown onto the hood of the car and landed on the roadway, allegedly causing injuries to his knee, neck, and back. He sued for unspecified medical expenses, lost earnings, property damage, and general damages. RCE filed answers asserting, inter alia, comparative fault on petitioner's part. In a subsequent at-issue memorandum petitioner claimed general damages of $1 million, continuing medical damages of over $6,000, over $1,800 in continuing lost earnings, and property damage of $750. At some point he entered into a $15,000 settlement with RCE's employee and continued to pursue his action against RCE.

The matter was referred to arbitration, at which petitioner revised his claim for general damages to $250,000. Ultimately petitioner received a $30,000 arbitration award that, less the $15,000 settlement from the employee, amounted to a $15,000 award against RCE. Both petitioner and RCE sought a trial de novo. Thereafter Judge Workman of respondent Los Angeles Superior Court conducted two settlement conferences with the parties and ordered them to attend a "voluntary" settlement conference. The settlement conference was conducted before two pro tempore judges, who recommended a settlement of $25,000.

When the parties next appeared before the court at a status conference, petitioner's counsel mentioned the settlement recommendation of $25,000. The court reviewed the file, questioned counsel, expressed skepticism about petitioner's claimed medical expenses and lost wages, and determined that the case did not meet the superior court's amount-in-controversy minimum of a claim in excess of $25,000. A few days later, without holding a hearing or affording the parties an opportunity to further address the issue, the court ordered the matter transferred to the municipal court. At the same time the court issued an order to show cause regarding that transfer and set a hearing on the matter for a future date.

Petitioner initiated the present action for a writ of mandate directing the superior court to set aside its transfer order and to vacate the hearing date on the order to show cause regarding the transfer.

B. White

Petitioner White was a pedestrian crossing a street when she was struck by a car driven by real party in interest Charles D. Slaton. Her complaint asserted she was "in a cross-walk" at the time of the impact, and prayed for damages "according to proof" for wage loss, hospital and medical expenses, loss of earning capacity, loss of use of property, and general damages.

The matter was referred to arbitration. The Slatons asserted petitioner was not in a crosswalk at the time of the impact. Petitioner presented claims for medical bills over $17,000 and sought more than $10,000 in lost wages; it is unclear whether she also presented claims for general damages. The arbitrator awarded petitioner $25,000 plus costs and noted, "Principles of comparative fault have been applied." Petitioner prepared a motion for trial de novo but did not file it, assertedly because she learned that the Slatons had moved for a trial de novo. Thereafter, on a date scheduled for a status conference, Judge Kakita of respondent superior court reviewed the case, including the arbitration award, questioned counsel for both parties, and ordered the matter transferred to the municipal court for failure to meet the jurisdictional amount-in-controversy requirement of the superior court.

Petitioner initiated the present action for a writ of mandate directing respondent to set aside its transfer order. The Court of Appeal consolidated the matter with Walker, issued a stay of hearing in the latter action, issued alternative writs of mandate in both matters, and eventually filed an opinion granting the requested writs in both matters.

II. Analysis
A. Superior court jurisdiction and section 396

"Superior courts have original jurisdiction in all causes except those given by statute to other trial courts." (Cal. Const., art. VI, § 10.) In section 86, subdivision (a)(1), the Legislature has defined municipal court jurisdiction as "cases at law in which the demand, exclusive of interest, or the value of the property in controversy amounts to twenty-five thousand dollars ($25,000) or less...." Accordingly, superior court jurisdiction requires an amount in demand exceeding $25,000.

Section 396 governs transfer of matters to and from the superior court. The first, second, and fifth paragraphs of that section are particularly germane. The first paragraph provides: "If an action or proceeding is commenced in a court which lacks jurisdiction of the subject matter thereof, as determined by the complaint or petition," the action "shall" be transferred to a court having jurisdiction.

The second paragraph states: "If an action or proceeding is commenced in ... a court which has jurisdiction of the subject matter thereof as determined by the complaint or petition, and it thereafter appears from the verified pleadings, or at the trial, or hearing, that the determination of the action or proceeding ... will necessarily involve the determination of questions not within the jurisdiction of the court, in which the action or proceeding is pending, the court, whenever such lack of jurisdiction appears, must suspend all further proceedings therein and transfer the action or proceeding ... to a court having jurisdiction thereof...."

The fifth paragraph of section 396 provides: "Nothing herein shall be construed to require the superior court to transfer any action or proceeding because the judgment to be rendered, as determined at the trial or hearing, is one which might have been rendered by a municipal or justice court...." 1

B. Interpreting section 396

Petitioners, citing, inter alia, Davis, supra, 25 Cal.App.3d 596, 599-600, 102 Cal.Rptr. 238, and Depretto v. Superior Court (1981) 116 Cal.App.3d 36, 39, 171 Cal.Rptr. 810, assert that if the amount claimed is calculated in good faith and is supported by allegations, the sole determinant of jurisdictional value is the amount prayed for in the complaint or in other pleadings (see § 425.10, subd. (b)). They conclude that because Walker's at-issue memorandum and White's claims asserted during arbitration were in good faith and supported by allegations, and both exceeded $25,000, the superior court was compelled to retain the two matters.

It is true that Davis cited cases and contains language supporting such a restrictive interpretation of section 396. (Davis, supra, 25 Cal.App.3d at p. 600, 102 Cal.Rptr. 238, quoting Rodley v. Curry (1898) 120 Cal. 541, 543, ...

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