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NutraGenetics, LLC v. Superior Court of Los Angeles County

November 17, 2009


ORIGINAL PROCEEDINGS in mandate. Holly E. Kendig, Judge. Petition denied. (Super. Ct. No. BC412005).

The opinion of the court was delivered by: Mohr, J.*fn11



This writ proceeding challenges the trial court's acceptance of a motion to disqualify the trial judge under Code of Civil Procedure section 170.6, which permits a "peremptory challenge" to the judge.*fn1

The plaintiff filed two successive lawsuits, some two and one-half months apart, against different defendants, alleging some identical and some different causes of action, but both arising from substantially the same underlying events. The two lawsuits were deemed related. When the second lawsuit was assigned to the same judge as the first, the plaintiff moved to disqualify the judge, who by then had made a ruling unfavorable to the plaintiff (granting a petition to compel arbitration) in the first lawsuit. The question is whether the second lawsuit against a different defendant constituted a continuation of the first lawsuit rather than a separate and independent action, thus rendering plaintiff's peremptory challenge untimely.

Because the second lawsuit (1) involves a different defendant and different causes of action asserted against that defendant, and (2) does not arise from conduct in, or involve enforcement or modification of an order in, the first lawsuit, we conclude that the second action cannot be considered a continuation of the first within the meaning of governing Supreme Court precedent. Accordingly, the trial court properly found the peremptory challenge to be timely, and we deny the writ petition.


On February 6, 2009, Robert Cavenah sued Dave Brubaker, Andrew Myers and Louis Ignarro (collectively, the Brubaker defendants), claiming they defrauded him of more than one million dollars, consisting of $500,000 in cash and more than two years of his time. Cavenah alleged Brubaker and Myers solicited him to invest in, and work full time for, NutraGenetics, a company the Brubaker defendants and others had organized in 2004. They formed NutraGenetics to develop and market nutritional supplements containing nitric oxide, utilizing the expertise of defendant Ignarro, who had won a Nobel Prize in 1998 for his work related to that chemical. Cavenah alleged the Brubaker defendants induced him to purchase an interest in NutraGenetics for $250,000, and he later purchased an additional interest from defendant Brubaker for another $250,000. Brubaker and Myers also promised him in writing that NutraGenetics could and would pay him a $250,000 annual salary beginning no later than January 1, 2007. Cavenah alleged he invested in and worked for the company in reliance on several misrepresentations and failures to disclose material facts, including a failure to disclose that Ignarro was prohibited from developing or promoting products for NutraGenetics by virtue of an earlier agreement with another company, and misrepresentations that NutraGenetics had been assured revenues from long term agreements with two other companies, when in fact those deals were actually contingent, doubtful, or terminable.

In the first lawsuit, which we refer to as Cavenah I or the first action, Cavenah alleged four causes of action against the Brubaker defendants: fraud and deceit, negligent misrepresentation, constructive fraud, and unlawful, unfair or fraudulent business practices under Business and Professions Code section 17200. Cavenah sought economic damages estimated at $1,125,000, consisting of the loss of his $500,000 investment and more than two years of working without compensation. He also asked for non-economic and punitive damages.

Cavenah I was assigned for all purposes to Judge Holly E. Kendig. Thereafter: * During the first half of March 2009, Cavenah served numerous discovery requests in Cavenah I. * On March 19, 2009, the Brubaker defendants filed a petition to compel arbitration. The petition was based on NutraGenetics' operating agreement, to which Cavenah and the Brubaker defendants were parties. The agreement provided that "[a]ny action to enforce or interpret this Agreement, or to resolve disputes with respect to this Agreement as between [NutraGenetics] and a Member, or between or among the Members, shall be settled by arbitration ...." At the same time, the Brubaker defendants filed an ex parte application to stay Cavenah I, including Cavenah's discovery requests. * On April 7, 2009, Judge Kendig stayed Cavenah I, "inclusive of discovery," pending a further hearing set for April 30, 2009, on the application to stay the litigation. The court's order also vacated the April 30, 2009 hearing date for the motion to compel arbitration and indicated a date for that motion would be set after the hearing on the stay request.

Two weeks later, on April 21, 2009, before any hearings on the stay application or the motion to compel arbitration, Cavenah filed a second lawsuit, this time against NutraGenetics (Cavenah II). Cavenah alleged causes of action for breach of written contract, violation of Labor Code section 203 (governing an employer's failure to pay wages of an employee who is discharged or who quits), quantum meruit, fraud, and violations of Business and Professions Code section 17200. Cavenah alleged the same underlying conduct as in Cavenah I, but additionally alleged that in September 2005, he had signed a letter agreement with NutraGenetics in which he agreed to work with the company full time for an annual wage of at least $250,000. He claimed that according to the letter agreement, he was to begin receiving this wage as a cash salary no later than January 1, 2007, and was to receive stock for his earlier work. He sought unpaid wages of "more than $650,000," pre-judgment interest, late penalties and attorney fees and costs under the Labor Code, $20,548 in Labor Code penalties for failure to pay wages earned for 30 days after his termination date (May 31, 2008), and punitive damages on his fraud claim. Cavenah II was assigned for all purposes to Judge James R. Dunn.

On the same day that he filed Cavenah II, Cavenah filed a "Notice of Related Case," indicating that Cavenah II and Cavenah I arose from "the same or substantially identical transactions, incidents, or events requiring the determination of the same or substantially identical questions of law or fact," and were "likely for other reasons to require substantial duplication of judicial resources if heard by different judges."

Then the following events occurred:

* On April 28, 2009, the Brubaker defendants and NutraGenetics filed statements of non-opposition to Cavenah's notice of related cases.

* On April 30, 2009, the trial court granted the Brubaker defendants' motion to stay Cavenah I, pending a May 14, 2009 hearing date for their motion to compel arbitration. (The court observed that it was continuing the stay it had already put in effect, "formalizing it" under section 1281.4 (which requires a stay, upon motion of a party, when a petition to compel arbitration is pending).)

* On May 14, 2009, the court granted the petition of the Brubaker defendants to compel arbitration in Cavenah I.

* On May 27, 2009, Judge Kendig ruled that Cavenah I was not related to Cavenah II. She observed that Cavenah I had been stayed, so there would be no duplication of judicial resources if the cases remained as they were then assigned.

* On June 1, 2009, Cavenah sent discovery requests to NutraGenetics in Cavenah II. These requests were substantially the same requests he had made to the Brubaker defendants in Cavenah I.

* On June 2, 2009, NutraGenetics and the Brubaker defendants moved for reconsideration and applied to deem the two actions related.*fn2 Cavenah filed an opposition to the motion for reconsideration on June 17, 2009, arguing (inter alia) that Judge Kendig's ruling that the cases were not related was "a practical and substantively proper" decision because Cavenah I was "arguably governed by the operating agreement pursuant to which that case was ordered to arbitration," while Cavenah II was "an employee's suit against his ...

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