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Ducoing Management Inc. v. Superior Court (Winston & Associates Insurance Brokers, Inc.)

California Court of Appeal, Fourth District, Third Division

February 10, 2015

DUCOING MANAGEMENT INC., Petitioner,
v.
THE SUPERIOR COURT OF ORANGE COUNTY, Respondent, WINSTON & ASSOCIATES INSURANCE BROKERS, INC., et al., Real Parties in Interest.

Original proceedings; petition for a writ of mandate to challenge an order of the Superior Court of Orange County, No. 30-2010-00361854 John C. Gastelum, Judge.

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COUNSEL

Foley Bezek Behle & Curtis, Roger N. Behle, Jr., Justin P. Karczag and Muhammed T. Hussain for Petitioner.

No appearance for Respondent.

Wood, Smith, Henning & Berman, Seymour B. Everett III, David L. Martin and Christopher C. Hossellman for Real Parties in Interest.

OPINION

THE COURT:[*]

INTRODUCTION

This writ petition demonstrates the importance of the disposition in an appellate opinion in determining the form of judicial relief, particularly when the disposition reverses a judgment and remands for retrial. The disposition articulates what the trial court should do, with clear and understandable instructions, and whether and how the trial court should exercise its discretion upon remand.

Here, this court issued an opinion in an appeal from two plaintiffs, represented by the same counsel, who were both nonsuited at trial. We affirmed the judgment of nonsuit as to the first plaintiff, but reversed the judgment "[i]n all other respects, ” and remanded the matter for a retrial by the second plaintiff. Essentially, we left plaintiffs’ claims intact, holding they properly were pursued in their entirety by the second plaintiff, the first plaintiff being superfluous for purposes of recovery. We awarded no costs on appeal. No party filed a petition for rehearing.

Are defendants automatically entitled to recover all their trial costs as prevailing parties from the first plaintiff, without further review by the trial court following the appellate judgment? If yes, defendants will succeed in recovering their very substantial trial costs from the first trial even though all plaintiffs’ original litigation objectives yet may be achieved by and through the one remaining plaintiff at the second trial.

In this writ proceeding, we apply the plain words of the disposition to preclude such an irrational outcome. Because we reversed the judgment "[i]n

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all other respects, ” our disposition reversed not only the judgment of nonsuit as to the second plaintiff, but also that portion of the judgment which assessed unapportioned costs against both plaintiffs. In accordance with our prior notification to the parties, we issue a peremptory writ in the first instance to effectuate the clear meaning of our disposition.

STATEMENT OF FACTS AND PROCEDURAL HISTORY

In Ducoing Enterprises, Inc. v. Winston & Associates Ins. Brokers, Inc. (Sept. 9, 2013, G046734) [nonpub. opn.] (hereafter Slip Opn.), we considered an appeal from a judgment of nonsuit in a trial against real parties in interest, an insurance broker and his insurance brokerage, who were sued for negligent failure to procure insurance coverage.

Brent and Ami Ducoing, a married couple, created a corporation, Ducoing Enterprises, Inc. (DEI), to provide painting services. At their accountant’s advice and with real parties in interest's assistance, the Ducoings later created another corporation, petitioner Ducoing Management, Inc. (petitioner), ostensibly to take advantage of lower rates for workers’ compensation insurance. Both petitioner and DEI do business under the fictitious name “Perfection Painting.” A dishonest payroll manager concocted a scheme to create so-called “ghost” employees and embezzled more than $90, 000, causing substantial losses. To their consternation, the Ducoings discovered their current insurance coverage did not include employee dishonesty coverage, even though real party in interest recalled that employee dishonesty coverage had been included in prior policies. (Slip Opn., supra, at pp. 2-7.)

In April 2010, petitioner and DEI filed suit against real parties in interest for negligence, negligent misrepresentation, and breach of fiduciary duty in failing to procure full insurance coverage with " 'all the bells and whistles,' " as allegedly promised by the insurance broker. (Slip Opn., supra, at p. 3.) Petitioner and DEI jointly pursued the same causes of action, and jointly sought the same damages from real parties in interest.

The matter came to jury trial over several days in January 2012. At the close of plaintiffs’ case-in-chief, the trial court (Judge David R. Chaffee) granted real parties in interest's motion for nonsuit against both petitioner and DEI. The trial court reasoned that DEI sustained no loss because the payroll manager only stole money from petitioner, not DEI, and because real parties in interest owed no duty to petitioner to provide employee dishonesty coverage; such duties, if any, were owed only to DEI. (Slip Opn., supra, at pp. 7-8.)

On March 28, 2012, the trial court entered judgment in favor of real parties in interest and against petitioner and DEI. ...


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