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Davis Moreno Construction, Inc. v. Frontier Steel Buildings Corp.

November 9, 2009

DAVIS MORENO CONSTRUCTION, INC., PLAINTIFF,
v.
FRONTIER STEEL BUILDINGS CORPORATION, DEFENDANT.



The opinion of the court was delivered by: Oliver W. Wanger United States District Judge

MEMORANDUM DECISION AND ORDER DENYING DEFENDANT'S MOTION FOR RECONSIDERATION

(Docs. 42 and 49)

By Memorandum Decision filed on May 26, 2009, (Doc. 37) Defendant Frontier Steel Buildings Corporation's ("Frontier") motion to dismiss the Amended Complaint filed by Plaintiff Davis Moreno Construction, Inc. ("Davis" or "DMCI") for lack of personal jurisdiction and for change of venue or to transfer was denied. The Order denying Frontier's motion was filed on June 10, 2009.

On June 23, 2009, Frontier filed a motion for reconsideration pursuant to Rules 52 and 59, Federal Rules of Civil Procedure. Davis contends that Frontier's reliance on Rule 52 and 59 in seeking reconsideration is misplaced. Rule 52 pertains to findings of fact and conclusions of law and judgment on partial findings. Rule 59 pertains to a new trial or altering or amending a judgment. The Court denied Frontier's motion to dismiss for lack of personal jurisdiction pursuant to Rule 12(b)(2), Federal Rules of Civil Procedure; there are no findings of fact and conclusions of law or judgment on partial findings, nor was there a trial or a judgment to be altered or amended. In addition, both of these rules contain time limits, i.e., motions under these rules must be filed no later than ten days after entry of judgment. Davis argues that Frontier's motion should have been based on Rule 60(b), Federal Rules of Civil Procedure.

Frontier replies that Rule 52 applies to Rule 12 motions. Frontier refers to Rule 52(a)(3):

The court is not required to state findings or conclusions when ruling on a motion under Rule 12 or 56 or, unless these rules provide otherwise, on any other motion.

Frontier also refers to Rule 52(b):

On a party's motion filed no later than 10 days after the entry of judgment, the court may amend its findings - or make additional findings - and may amend the judgment accordingly. The motion may accompany a motion for a new trial under Rule 59.

Frontier also refers to Rule 59(e): "A motion to alter or amend a judgment must be filed no later than 10 days after the entry of the judgment." Frontier construes these provisions as applying to a Rule 12 motion and cites Beentjes v. Placer County Air Pollution Control District, 254 F.Supp.2d 1159, 1161 n.2 (E.D.Cal.2003) for the proposition that Rule 59(e) permits motions for reconsideration even though no trial has taken place.

Frontier asserts that "[s]uch an application of the rule would permit additional evidence or hearing."

Beentjes involved a motion for reconsideration after denial of the defendant's motion for summary judgment. Judge Damrell stated:

Defendant's motion, brought pursuant to both Rule 59 and 60, is titled 'Notice of Motion and Motion to Alter Order and/or Motion for New Trial and/or Motion for Reconsideration.' While defendant periodically requests a 'new trial' in addition to relief from the court's December 23, 2002 order throughout its motion, the court notes that no trial has taken place in this action. Thus, the court disregards defendant's request for a new trial and interprets defendant's motion as one for reconsideration pursuant to either Rule 59(e) or 60(b).

Frontier also cites United States v. Westland Water District, 134 F.Supp.2d 1111 (E.D.Cal.2001), which considered Rules 59(e) and 60(b) in addressing a motion to reconsider a ruling on cross-motions for summary judgment. Frontier relies on this authority to argue that the Court need treat this motion for reconsideration as a Rule 60(b) motion.

Resolution of the appropriate procedural basis for this motion is unnecessary. Denial of a motion to dismiss for lack of personal jurisdiction is an interlocutory order; it is not immediately appealable absent certification by the District Court for interlocutory appeal. Cassirer v. Kingdom of Spain, 580 F.3d 1048 (9th Cir.2009); Lucas v. Natoli, 936 F.2d 432, 433 (9th Cir.1991), cert. denied, 502 U.S. 1073 (1992). Because the Memorandum Decision and the Order are interlocutory, discretion exists to reconsider. Kern-Tulare Water Dist. v. City of Bakersfield, 634 F.Supp. 656, 665 (E.D.Cal.1986), aff'd in part and rev'd in part on other grounds, 828 F.2d 514 (9th Cir.1987), cert. denied, 486 U.S. 1015 (1988). "[T]his Court's opinions are not intended as mere first drafts, subject to revision and reconsideration at a litigant's pleasure." Quaker Alloy Casting Co. v. Gulfco Indus., Inc., 123 F.R.D. 282, 288 (N.D.Ill.1988). "Courts have distilled various grounds for reconsideration of prior rulings into three major grounds for justifying reconsideration: (1) an intervening change in controlling law; (2) the availability of new evidence or an expanded factual record; and (3) need to correct a clear error or to prevent manifest injustice." Kern-Tulare Water Dist., id.. Pursuant to Rule 78-230(k)(3), Local Rules of Practice, the party seeking reconsideration has the duty to indicate "in an affidavit or brief, as appropriate," "what new or different facts or circumstances are claimed to exist which did not exist or were not shown upon such prior motion, or what other grounds exist for the motion,' and "why facts or circumstances were not shown at the time of the prior motion."

Davis does not respond to the substantive arguments made in the motion for reconsideration. Davis contends that the motion is procedurally defective because no affidavit has been submitted pursuant to Rule 78-230(k)(3) and that Frontier's motion is in essence re-arguing its prior motion, relying on the same evidence and arguments.

An affidavit is not necessarily required; Rule 78-230(k)(3) allows the basis for reconsideration to be stated in a brief.

Frontier further requests the Court take judicial notice of the affidavits and briefs filed in connection with the motion to dismiss.

Frontier seeks reconsideration of the decision not to enforce the choice of law clause in the final Purchase Order that "[t]his PURCHASE ORDER shall be construed and enforced under the laws of the State of Colorado." In denying Frontier's motion to transfer the action to the United States District Court for the District of Colorado pursuant to the doctrine of forum non conveniens, the Memorandum Decision ruled in pertinent part:

Colorado has a substantial relationship to the parties and to the transaction. Frontier is domiciled in Colorado, the engineering and fabrication of the steel building by Frontier occurred in Colorado.

Because Colorado has such a substantial relationship, it must be determined whether Colorado's law is contrary to a fundamental policy of California. Restatement Second of Conflict of Laws, § 187, Comment g, provides:

To be 'fundamental,' a policy must in any event be a substantial one. Except perhaps in the case of contracts relating to wills, a policy of this sort will rarely be found in a requirement, such as the statute of frauds, that relates to formalities... Nor is such a policy likely to be represented by a rule tending to become obsolete, such as a rule concerned with the capacity of married women..., or by general rules of contract law, such as those concerned with the need for consideration... On the other hand, a fundamental policy may be embodied in a statute which makes one or more kinds of contracts illegal or which is designed to protect a person against the oppressive use of superior bargaining power.

Statutes involving the rights of an individual insured as against an insurance company are an example of this sort... To be 'fundamental' within the meaning of the present rule, a policy need not be as strong as would be required to justify the forum in refusing to entertain suit upon a foreign cause of action under the rule of § 90.

Davis contends that California public policy favors the application of its own laws to those contracts which are to be performed in California, citing California Civil Code § 1646:

A contract is to be interpreted according to the law and usage of the place where it is to be performed; or, if it does not indicate a place of performance, according to the law and usage of the place where it is made.

Section 1646 does not articulate a fundamental policy of the state of California; Section 1646 may be negated by a valid choice-of-law provision in a contract. Davis, noting that the FAC alleges that Frontier did not possess a California contractor's license, contends that California public policy generally requires those who work in California to be licensed by California. California Business & Professions Code § 7026 provides that, for purposes of the license requirements:

'Contractor' for the purposes of this chapter, is synonymous with 'builder' and, within the meaning of this chapter, a contractor is any person who undertakes to or offer to undertake to, or purports to have the capacity to undertake to, or submits a bid to, or does himself or herself or by or through others, construct, alter, repair, add to, subtract from, improve, move, wreck or demolish any building... or other structure, project, development or improvement, or to do any part thereof, including the erection of scaffolding or other structures or works in connection therewith,... and whether or not the performance of work herein described involves the addition to, or fabrication into, any structure, project, development or improvement here described of any material or article of merchandise. 'Contractor' includes subcontractor and specialty contractor....

California Business & Professions Code § 7031 provides:

(a) Except as provided in subdivision (e), no person engaged in the business or acting in the capacity of a contractor, may bring or maintain any action, or recover in law or equity in any action, in any court of this state for the collection of compensation for the performance of any act or contract where is license is required by this chapter without alleging that he or she was a duly licensed contractor at all times during the performance of that act or contract, regardless of the merits of the cause of action brought by the person, except that this prohibition shall not apply to contractors who are each individually licensed under this chapter but who fail to comply with Section 7029. (b) Except as provided in subdivision (e), a person who utilizes the services of an unlicensed contractor may bring an action in any court of competent jurisdiction in this state to recover all compensation paid to the unlicensed contractor for performance of any act or contract....

(e) The judicial doctrine of substantial compliance shall not apply under this section where the person who engaged in the business or acted in the capacity of a contractor has never been a duly licensed contractor in this state. However, notwithstanding subdivision (b) of Section 143, the court may determine that there has been substantial compliance with licensure requirements under this section if it is shown at an evidentiary hearing that the person who engaged in the business or acted in the capacity of a contractor (1) had been duly licensed as a contractor in this state prior to the performance of the act or contract, (2) acting reasonably and in good faith to maintain proper licensure, (3) did not know or reasonably should not have known that he or she was not duly licensed when performance of the act or contract commenced, and (4) acted promptly and in good faith to reinstate his or her license upon learning it was invalid.

Waterpark,

In Hydrotech Systems, Ltd. v. Oasis 52 Cal.3d 370 (1991), the Supreme Court held that Section 7031 barred an action by an out-of-state corporation that subcontracted to provide labor and materials for a wavemaking machine in a water park project against the project's owners to recover its payment, regardless of the unique nature of the service provided or the fact that it was an isolated transaction in California. The Supreme Court explained: The purpose of the licensing law is to protect the public from incompetence and dishonesty in those who provide building and construction services... The licensing requirements provide minimal assurance that all persons offering such services in California have the requisite skill and character, understand applicable local laws and codes, and know the rudiments of administering a contracting business....

Section 7031 advances this purpose by withholding judicial aid from those who seek compensation for unlicensed contract work. The obvious statutory intent is to discourage persons who have failed to comply with the licensing law from offering or providing their unlicensed services for pay....

Hydrotech claims the law's interests in competence and public protection were not disserved in this case because its agreement to design and construct the surfing pool for Oasis was an 'isolated' California transaction. However, as the Court of Appeal observed, 'It is manifest that the concern for the public inherent in section 7031 is just as applicable to a project done by an out-of-state contractor with few jobs in California as to ...


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