From Casetext: Smarter Legal Research

Pacific Trends Lamp & Lighting Products, Inc. v. J. White, Inc.

Court of Appeal of California, Fourth District, Division Three
Jul 29, 1998
65 Cal.App.4th 1131 (Cal. Ct. App. 1998)


G018024 (Super. Ct. Nos. 733065, 725183)

Filed July 29, 1998

Appeal from a judgment and sanction order of the Superior Court of Orange County, Eleanor M. Palk, Temporary Judge. (Pursuant to Cal. Const., art VI, § 21.) Judgment affirmed; sanction order reversed.

Shun C. Chen for the Plaintiff and Appellant.

Kathy W. Stein, Kathleen Mahon Isaac, Lillick Charles pand Michael W. Ecker for Defendants and Respondents.


Pacific Trends Lamp and Lighting Products, Inc. (Pacific) sought damages for the contents of two shipping containers stolen from a storage yard. Pacific sued two companies involved in shipping the containers, alleging it never authorized delivery to the storage yard and contending defendants remained responsible as common carriers until actual delivery of the containers to Pacific's premises, which never occurred. The trial court found Pacific had directed delivery to the storage yard, and concluded defendants' obligations as common carriers ceased when the containers reached that destination. Pacific appeals the judgment in favor of each defendant and its attorney appeals the court's imposition of sanctions against him. We find no error in the judgment and it is therefore affirmed.

However, the sanction order, which is based upon failure to comply with local Rule 504, is reversed. Rule 504, which requires the parties to meet and confer and report back to the court on their efforts prior to hearing on most motions, is inconsistent with the statutory right to pursue new trial motions. Moreover, Rule 504's provision for sanctions based upon the conclusion there was "no good reason for the refusal or failure to resolve the issue" improperly invades the province of Code of Civil Procedure sections 128.5 and 128.7.

We refer to the rule by its number at the time of the action, although it has been renumbered, effective July 1, 1998, as Rule 378.

* * *


The two containers belonging to Pacific arrived at Los Angeles Harbor in January 1994. Defendant NYK Line, Inc. (NYK) was responsible for shipping one of the containers. NYK's "pier-to-door" bill of lading covered shipment from Hong Kong to Pacific's premises. NYK allowed Pacific to choose an inland carrier to transport the container from the harbor. Pacific chose defendant and respondent, J. White Inc., doing business as U.S. Delivery (USD), which it had previously used for both inland delivery and storage. Pacific's customs broker instructed NYK to release the container to USD for delivery and also authorized USD to pick up the second container.

According to USD, Pacific requested it transport the containers back to its own facility for storage pursuant to the parties' storage agreement, rather than take them directly to Pacific. Pacific disputed that contention, claiming no storage instruction was issued. Pacific also claimed it was not aware of the arrival of the containers, despite the fact its customs broker issued the delivery orders for them.

A day or two after the delivery, USD's facilities were broken into and Pacific's two containers were stolen. Pacific sued USD for the loss of the two containers and sued NYK for the one delivered by it. The cases were consolidated in October 1994. USD filed a cross-complaint against Pacific for freight and storage charges. NYK filed a cross-complaint against USD for indemnity, contribution and cost of suit. After a bench trial, the court found in favor of both defendants and awarded USD freight and storage charges in the amount of $2,221.80.



Pacific contends NYK's "pier-to-door" bill of lading rendered it liable for the container it shipped until actual delivery to Pacific's premises. Despite the "to-door" provision of the bill of lading, however, Pacific was allowed to designate the area for unloading. Delivery to a new designated location would override the bill of lading requirement and would be a proper delivery. ( Tapco Nigeria, Ltd. v. M/V Westwind (5th Cir. 1983) 702 F.2d 1252 [proper delivery is not dependent on location, but rather on whether delivery was to a person authorized to receive cargo on behalf of consignee]; See also, Servicios-Expoarma, C.A. v . Industrial Maritime Carriers, Inc. (5th Cir. 1998) 135 F.3d 984, 992.) Thus, NYK's liability depends on whether, as the trial court found, Pacific instructed USD to deliver the container to USD's storage yard, rather than directly to Pacific.

Pacific itself relies upon A Shipper's Guide to Stowage of Cargo in Marine Containers (1982), published by the United States Department of Transportation, Maritime Administration, which defines "pier-to-house" as a shipment "which is loaded into a container at the pier or terminal then exported directly to the consignee's designated area for unloading." (Italics added.)

We are bound to uphold the trial court's factual conclusions as long as they are supported by the evidence. ( Watson v . Department of Rehabilitation (1989) 212 Cal.App.3d 1271. The testimony of a single witness is sufficient to constitute substantial evidence. ( Clark Equipment Co. v. Wheat (1979) 92 Cal.App.3d 503.) Here, two witnesses testified to Pacific's storage instruction. That evidence was sufficient to support the court's factual conclusion delivery occurred when the containers arrived at USD for storage.

Pacific makes a final attempt to pin liability on NYK by arguing a carrier is liable as an insurer of the goods during "free time," which is defined as the period of time cargo may be left in the possession of the carrier after arrival at its destination, without incurring storage charges. However, the concept of "free time" is inapplicable here, since NYK's possession ended when the containers arrived at the destination chosen by Pacific. Moreover, under its storage agreement with USD, Pacific was incurring storage charges during the relevant period.


Pacific's claim against USD also fails. As it did with regard to NYK, the trial court determined that USD's responsibility as a common carrier ended upon delivery of the containers to USD's own storage yard. From that point on, USD was simply a bailee of the containers pursuant to the parties' storage agreement. A bailee is not the insurer of goods and is responsible for their loss only if caused by its negligence. ( Gebert v. Yank (1985) 172 Cal.App.3d 544; Gardner v . Downtown Porsche Audi (1986) 180 Cal.App.3d 713.) There was sufficient evidence to support the trial court's determination the theft of the containers was not caused by USD's negligence.

C. Statement of Decision

Pacific also challenges the trial court's failure to issue a statement of decision. However, the court is required to issue a statement of decision only when properly requested. In this case the request was not properly made.

At the end of trial, Pacific's counsel made an oral request for a statement of decision, but did not specify the controverted issues. After Pacific declined the court's suggestion to use the Joint List of Controverted Issues, it was ordered to file a written request for statement of decision specifying the particular issues it wanted addressed. It failed to do so, filing a proposed statement of decision instead. The court found this insufficient, and issued a minute order deeming the request withdrawn.

Although both sides "may" make proposals as to the content of the statement of decision, the initial request itself "shall" include the list of controverted issues. Pacific made no such request. Moreover, Pacific's proposed findings did not serve that purpose, but instead detailed what it believed were the court's findings. Because Pacific failed to abide by the court's request, which was consistent with the requirements of Code of Civil Procedure section 632 and California Rules of Court, rule 232, the court's refusal to issue a statement of decision was not error.

"The request for a statement of decision shall specify those controverted issues as to which the party is requesting a statement of decision. After a party has requested such a statement, any party may make proposals as to the content of the statement of decision." (Code Civ. Proc., § 632)

Five days after the court issued its minute order, Pacific filed its list of controverted issues. This was untimely. The court is not required to make findings when the request is filed late. ( In re Marriage of Steinberg (1977) 66 Cal.App.3d 815. )


Pacific's counsel challenges the sanctions imposed against him under Orange County Superior Court Rules, former rule 504 (rule 504). Rule 504 requires counsel, before the hearing on most motions, to meet and confer "in a good faith effort to eliminate . . . as many of the disputes between the parties as possible." If a complete resolution of the motion is not attained, Rule 504 requires each counsel to file a sworn statement, at least five days prior to the hearing, summarizing the issues remaining in dispute and explaining why they could not be resolved. Rule 504 also provides that "[i]f the court finds that there was no good reason for the refusal or failure to resolve the dispute, it may order any persons at fault to pay to any party the amount of that party's reasonable expenses, including attorney fees, incurred in . . . making or resisting the motion." Finally, 504 authorizes the court to take the motion "off calendar" for failure to comply.

Pacific's counsel filed a motion for new trial, but failed to meet and confer and file a 504 statement in a timely fashion. Both NYK and USD filed 504 statements pointing out this omission, and USD requested monetary sanctions as provided in 504. At the hearing, the court stated it had the power to take the motion off calendar pursuant to Rule 504 but chose not to, noting that a 504 conference was not likely to be helpful. The court then denied the new trial and addressed the issue of sanctions.

USD argued that sanctions were appropriate under both Rule 504 and Code of Civil Procedure section 128.5, because Pacific had taken an unreasonable position in the motion and its counsel was responsible for the parties' failure to resolve it short of a hearing. USD acknowledged, however, that it had not complied with the notice requirements of section 128.5, and thus could not rely upon that section to support sanctions. Pacific's counsel argued compliance with Rule 504 is difficult in the context of new trial motions, because the deadline for filing a 504 statement is tied to the hearing date, and a hearing on a new trial motion is set only if the court requests it. Moreover, he noted that after defendants had spent an entire trial arguing against his position, it was unlikely that a meet and confer would be helpful in resolving the issue.

Finally, he argued that even if his motion was not meritorious, it was also not "frivolous" so as to justify sanctions. In response to this last point, the court noted that "frivolous" was the standard under Code of Civil Procedure, section 128.5, while Rule 504 has a "much lighter standard." After taking the matter under submission, the court issued an order imposing sanctions of $750 under 504. The order did not specify any reasons or outline the conduct justifying the sanction..

Pacific's counsel argues the 504 sanctions were improper, and we are compelled to the conclusion he is correct. We recognize the inherent power of trial courts to control litigation, and we are loathe to second-guess the exercise of that power, but there is "`no authority to issue courtroom local rules which conflict with any statute' or are `inconsistent with the law.'" ( Rutherford v. Owens-Illinois, Inc. (1997) 16 Cal.4th 953, 967, citations omitted.) Rule 504's "meet and confer" requirements are inconsistent with the detailed statutory procedures for new trial motions. Moreover, as this case illustrates, Rule 504 operates as a general sanction provision to punish unreasonable pursuit of a motion or opposition. It therefore addresses substantially the same conduct governed by Code of Civil Procedure section 128.5 (and § 128.7, as applicable), albeit with an inconsistently lower standard and less due process protection.

Code of Civil Procedure sections 655-662.5 specify the procedures for a new trial motion. These procedures must be strictly followed and the court has no jurisdiction to order a new trial except as provided in those sections. ( Sanchez-Corea v. Bank of America (1985) 38 Cal.3d 892.) However, a party who follows those procedures has a statutory right to have his or her motion considered, and the court cannot place additional restrictions on that right. (See Lokeijak v. City of Irvine (June 30, 1998, G018434) ___ Cal.App.4th ___, [holding invalid a courtroom policy which required advance consultation with the trial judge and opposing party before filing a motion for summary judgment or summary adjudication].)

Indeed, requiring the parties to confer in an attempt to "resolve" a motion for new trial makes little sense except as an obstacle to the moving party. It is hardly likely the party who prevailed at trial would ever agree a new trial is warranted, and even if he or she did, the statutory scheme does not allow a new trial to be granted on the basis of stipulation. The court would still have to evaluate the motion to determine substantive and procedural statutory compliance. Because the parties really have no power to "resolve" a motion for new trial, Rule 504's requirement they attempt to do so is inconsistent with the statutory scheme.

Unless, of course, the first trial was really fun. On a new trial motion, in contrast to other motions, the parties have no right to a hearing.

Additionally, the provision of rule 504 which requires meet and confer statements to be filed five court days before the hearing is inconsistent with new trial motion procedures. On a new trial motion, the parties have no right to a hearing. Instead, after both sides have filed their affidavits, the clerk brings the motion to the attention of the judge, who has discretion to set a hearing on five days notice to the parties, but is not required to do so. (Code of Civil Procedure section 661) Theoretically, then, the deadline for 504 statements on a new trial motion could be passed at the time the parties are notified of the hearing. Would the court then take off-calendar the hearing it called for?

The specific sanction provision of 504 is also inappropriate. It provides that if there was "no good reason" for failing to resolve the dispute, the court may order the party it determines is "at fault" to pay the reasonable expenses, including attorney fees, incurred by any other party in attending the meet and confer, and making or resisting the motion. In this regard, 504 almost directly duplicates the purpose of Code of Civil Procedure section 128.5

"Code of Civil Procedure section 128.5 authorizes the award of attorney fees as a sanction to control improper resort to the judicial process. The statute permits the award of attorney fees, not simply as appropriate compensation to the prevailing party, but as a means of controlling burdensome and unnecessary legal tactics. [Citation.]" ( Childs v. PaineWebber Incorporated (1994) 29 Cal.App.4th 982, 995-996.) However, 128.5 requires much more than a party acting with "no good reason" to justify an award of sanctions. "[T]he weight of authority presently requires a showing not only of a meritless or frivolous action or tactic, but also of . . . bad faith . . . ." ( West Coast Development v. Reed (1992) 2 Cal.App.4th 693, 702.) By its terms, section 128.5 requires advance notice and an opportunity to be heard before sanctions can be imposed. (Code Civ. Proc., § 128.5, subd. (c).) Moreover, "to impose sanctions pursuant to Code of Civil Procedure section 128.5, the trial court must (a) state specific circumstances giving rise to the award of attorney fees and (b) articulate with particularity the basis for finding the sanctioned party's conduct reflected tactics or actions performed in bad faith and that were frivolous or designed to harass or cause unnecessary delay." ( Childs v. PaineWebber Incorporated, supra, 29 Cal.App.4th at p. 996.)

Code of Civil Procedure section 128.7, which applies to cases filed on or after January 1, 1995, imposes even more procedural requirements on sanction awards than does 128.5. Under section 128.7, a motion for sanctions must be made separately from any other motion, and before such a motion can even be filed, the party subject to the sanction must be given 30 days to withdraw or correct the offending document. (Code Civ. Proc., § 128.7, subd. (c)(1).) Even the court must give the 30 day "cure" notice before imposing sanctions on its own initiative. (Code Civ. Proc., § 128.7, subd. (c)(2).)

These sanction statutes were crafted by the Legislature to strike a balance between competing interests: the need to control improper litigation "tactics" and the desire to avoid chilling vigorous advocacy. ( Lesser v. Huntington Harbor Corp. (1985) 173 Cal.App.3d 922.) That balance having been struck, there is no authority to strike a different one by local rule.

The judgment is affirmed but the sanction order is reversed. Respondents are to recover costs. Certified for Partial Publication

Pursuant to California Rules of Court, rule 976(b) and 976.1, this opinion is certified for publication with the exception of parts I and II.

____________________________ BEDSWORTH, J.


___________________________ SILLS, P. J.

___________________________ WALLIN, J.

Summaries of

Pacific Trends Lamp & Lighting Products, Inc. v. J. White, Inc.

Court of Appeal of California, Fourth District, Division Three
Jul 29, 1998
65 Cal.App.4th 1131 (Cal. Ct. App. 1998)
Case details for

Pacific Trends Lamp & Lighting Products, Inc. v. J. White, Inc.

Case Details

Full title:PACIFIC TRENDS LAMP LIGHTING PRODUCTS, INC., Plaintiff and Appellant, v…

Court:Court of Appeal of California, Fourth District, Division Three

Date published: Jul 29, 1998


65 Cal.App.4th 1131 (Cal. Ct. App. 1998)
76 Cal. Rptr. 2d 918

Citing Cases

People v. Smith

Government Code section 68070 generally authorizes courts to create local procedural rules, but those local…

Malovec v. Hamrell

In addition, in the federal rule the safe harbor provisions are applicable only to motions by a party, while…