Warwick Cal. Corp. v. Applied Underwriters, Inc.
Decision Date | 07 January 2020 |
Docket Number | A155523 |
Court | California Court of Appeals Court of Appeals |
Parties | WARWICK CALIFORNIA CORP. et al., Plaintiffs and Respondents, v. APPLIED UNDERWRITERS, INC., et al., Defendants and Appellants. |
Counsel for Appellants: Hinshaw & Culbertson LLP; Spencer Y. Kook, Los Angeles, Travis Wall, San Francisco, Kent R. Keller, Los Angeles
Counsel for Respondents: Larry J. Lichtenegger, Carmel, and Roxborough, Pomerance, Nye & Adreani; Nicholas P. Roxborough, Woodland Hills, Joseph Christopher Gjonola
This case arises out of a dispute over payment for workers’ compensation insurance. Plaintiffs are six companies affiliated with the Warwick Hotel chain (collectively, Warwick). Defendants include several companies affiliated with Applied Underwriters, Inc. (collectively, Applied). The trial court stayed the action based on inconvenient forum as to all plaintiffs with the exception of two Warwick companies that are incorporated in California (the California plaintiffs). In 2018, a court trial was held to hear the California plaintiffs’ claims and Applied’s cross-claim for breach of contract. The court found that neither side proved the damages elements of their claims. Applied filed a notice of appeal from the court’s statement of decision (SOD), which is not a judgment or an appealable order. Accordingly, we will dismiss this appeal.
Warwick’s operative first amended complaint was filed in May 2016. In addition to the Applied defendants, Warwick sued Willis of New York, Inc., which is an insurance brokerage firm, and 50 Doe defendants. Warwick alleged nine causes of action against various combinations of defendants, seeking damages and equitable relief based on theories of breach of contract, fraud and unfair business practices. As support for these claims, Warwick alleged the following facts: Warwick used Willis as their broker to procure workers’ compensation insurance. In June 2013, Willis presented Warwick with a quote for purchasing insurance from the Applied defendants. Defendants made representations to Warwick about the nature of the insurance program that was being offered to Warwick. Based on those representations, Warwick entered into a contract to purchase workers’ compensation insurance for a three-year period, from June 14, 2013, through June 14, 2016. One policy, issued by defendant California Insurance Company, covered Warwick employees in California and Texas. Another policy, issued by a different Applied defendant, covered employees in New York and Colorado.
According to the complaint, on June 19, 2013, five days after Warwick’s insurance coverage went into effect, Applied presented Warwick with a "Reinsurance Participation Agreement" (RPA), which constituted an adhesion contract and which Warwick had no choice but to accept. Thereafter, Applied used new criteria disclosed for the first time in the RPA to adjust claims made against the Warwick policies in a way that significantly increased costs to Warwick. Furthermore, Applied refused to correct the inflated invoices and attempted to coerce Warwick to admit that the incorrect invoices were accurate by threatening to deprive Warwick of insurance coverage it was required by law to provide to its employees and by charging "enormous and unconscionable cancellation fees under the RPA."
In June 2016, Applied filed a motion to stay this action on the ground of inconvenient forum under Code of Civil Procedure, section 418.10 ( section 418.10 ).1 The motion was based on a forum selection clause in the RPA, which required that claims relating to the RPA be filed in Nebraska, where defendant Applied Underwriters, Inc. was incorporated. Applied argued that Warwick’s workers’ compensation insurance program was a "significant, multifaceted commercial transaction," involving employees in New York, Colorado, Texas and California, and that "[t]he California portion [of the program] was ... by far the smallest component, representing only 5 percent of the total payroll at issue." Therefore, Applied requested the following order:
In October 2016, the superior court granted Applied’s motion for a stay based on inconvenient forum as to all plaintiffs except for the two California plaintiffs, with respect to which the motion was denied. The order states:
Applied filed a petition for writ of mandate in this court challenging the denial of its motion to stay proceedings as to the California plaintiffs. However, their petition was denied in January 2017.2
In 2018, the California plaintiffs’ case was assigned for a bench trial in San Francisco County. The trial court granted a motion in limine to exclude evidence pertaining to "Warwick’s non-California entities" because that part of this case had been stayed and, as the court observed, Applied had subsequently filed suit against Warwick in Nebraska. Acknowledging the broad sweep of its in limine ruling, the court stated: "It may be that damages can be allocated or appointed between California and non-California Warwick entities; the trial evidence will determine that."
On August 17, 2018, the court signed a relatively brief SOD, which was filed that same day. The court began by finding that the California plaintiffs had abandoned all non-contract claims by failing to address them at trial, that Applied’s cross-complaint was solely for breach of contract, and, therefore, that "this was a breach of contract trial." Then the court found that "neither side proved damages with reasonable certainty at trial and thus failed to prove their breach of contract claims." According to the SOD, this finding was supported by undisputed evidence establishing three key facts. First, the workers’ compensation insurance Applied sold to Warwick "was not sold or priced on a per-entity basis," but instead, all Warwick entities were in "one national Warwick risk pool." Second, the California plaintiffs did not "contract to pay a percentage of the RPA monies due to [Applied] from Warwick," but instead, all Warwick entities made payments "together." Finally, the California plaintiffs were not "due back a percentage of any RPA overages" because "all Warwick entities were treated together."
The SOD concluded: Moreover, the court found, because neither party proved any claim at trial, there was no prevailing party and thus no award of costs or attorney fees.
Applied concedes "[t]here is no judgment in this case." They contend, however, that the SOD is a final judgment within the meaning of section 904.1, subdivision (a)(1). Alternatively, Applied requests that we treat their opening brief as a petition for a writ of mandate. The California plaintiffs do not address these issues at all but instead ask us to "affirm the trial court’s decision and deny Applied’s appeal."
"The existence of an appealable judgment [or order] is a jurisdictional prerequisite to an appeal." ( Jennings v. Marralle (1994) 8 Cal.4th 121, 126, 32 Cal.Rptr.2d 275, 876 P.2d 1074 ( Jennings ).) "A reviewing court has jurisdiction over a direct appeal only when there is (1) an appealable order or (2) an appealable judgment." ( Griset v. Fair Political Practices Com. (2011) 25 Cal.4th 688, 696, 107 Cal.Rptr.2d 149, 23 P.3d 43 ( Griset ).) Moreover, "the right to appeal is strictly statutory, and a judgment or order is not appealable unless made so by statute." ( Enrique M. v. Angelina V. (2004) 121 Cal.App.4th 1371, 1377, 18 Cal.Rptr.3d 306.)
Consistent with these settled rules, " ‘[a]n attempt to appeal from a nonappealable order does not give this court jurisdiction or authority to review it.’ " ( Doe v. United States Swimming, Inc. (2011) 200 Cal.App.4th 1424, 1432, 133 Cal.Rptr.3d 465.) Whether or not the opposing party makes a jurisdictional objection, "[a] reviewing court must raise the issue on its own initiative whenever a doubt exists as to whether the trial court has entered a final judgment or other order or judgment made appealable by Code of Civil Procedure section 904.1." ( Jennings, supra, 8 Cal.4th at pp. 126–127, 32 Cal.Rptr.2d 275, 876 P.2d 1074 ; see also Baker v. Castaldi (2015) 235 Cal.App.4th 218, 221–222, 185 Cal.Rptr.3d 17 [].)
In this case, Applied posits, with little analysis, that the SOD is appealable because it is essentially a final judgment. We disagree.
A judgment is final within the meaning of section 904.1, subdivision (a)(1) " ‘ "when it terminates the litigation between the parties on the merits of the case and leaves nothing to be done but to enforce by execution what has been determined." ’ " ( Sullivan v. Delta Air Lines, Inc. (1997) 15 Cal.4th 288, 304, 63...
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