Court Opinion

ID: 3172031
Source: CourtListenerOpinion
Date Created: 2016-01-26 01:02:14.963765+00
Date Added: 2024-06-11T11:57:00.992467
License: Public Domain

Filed 1/25/16 Vatuvei v. Citrus and Allied Essences CA4/3

                        NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for
publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication
or ordered published for purposes of rule 8.1115.

              IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                                     FOURTH APPELLATE DISTRICT

                                                 DIVISION THREE

TANU VATUVEI,

     Plaintiff and Respondent,                                         G051507

                   v.                                                  (Super. Ct. No. 30-2011-00518123)

CITRUS AND ALLIED ESSENCES,                                            OPINION
LTD.,

     Defendant,

ACE FIRE UNDERWRITERS,

     Intervener and Appellant.

                   Appeal from an order of the Superior Court of Orange County, Gail A.
Andler, Judge. Affirmed.
                   Bradford & Barthel and Kermit N. Sprang for Intervener and Appellant.
                   Lopez McHugh, Ramon Rossi Lopez, Matthew Ramon Lopez, Andrea Jo
Geiovannone; Torhoerman Law and Kenneth J. Brennan for Plaintiff and Respondent.
                   No appearance for Defendant.
                                             *               *               *
              Ace Fire Underwriters (Ace), a workers’ compensation insurance carrier,
appeals from the denial of its request to intervene in an action brought by its insured’s
employee against a third party for injuries he suffered from exposure to a hazardous
chemical while at work. Ace contends that it had an absolute right to intervene in the
underlying action because under Labor Code section 3853 (all further undesignated
statutory references are to this code) its ex parte application, albeit filed on the eve of
trial, was timely. In response, Vatuvei disputes Ace’s claim and seeks dismissal of the
appeal, arguing the trial court’s ruling is not an appealable order. We conclude the ruling
is appealable, but affirm the trial court’s denial of Ace’s ex parte request.

                     FACTS AND PROCEDURAL BACKGROUND

              In October 2011, plaintiff Tanu Vatuvei sued his employer, Mission
Flavors & Fragrances, Inc. (Mission), and several companies that manufactured a food
additive named diacetyl. One of the other named defendants was Citrus and Allied
Essences, Ltd (Citrus). Vatuvei alleged that while employed by Mission between 2000
and 2010, he contracted a lung disease called Bronchiolitis Obliterans, purportedly
triggered by exposure to diacetyl. He sought damages against Mission for fraudulent
concealment and for negligence and strict liability based on theories of manufacturing
defect, design defect, and failure to warn against Citrus and the other companies. Citrus
filed an answer that included an affirmative defense alleging Mission caused or
contributed to Vatuvei’s injuries, thereby entitling Citrus “to set off any [workers’]
compensation benefits” Vatuvei received.
              Trial in the underlying action was originally scheduled for February 2013.
Later, trial was continued to mid-July 2014. According to the superior court’s Register of
Actions, Vatuvei reached a settlement with Mission in April 2014.

                                               2
              In June, Ace filed an application for lien and a request for special notice in
the underlying action. (§ 3856.) The application alleged Ace was Mission’s workers’
compensation insurer, it had previously paid nearly $124,000 in benefits on Vatuvei’s
behalf and, because it continued to pay benefits on the claim, the “lien will be
increasing.” The trial, then scheduled to begin in July, was continued to mid-August.
              By late 2014, Citrus was the sole remaining defendant in the action. In
August, Vatuvei’s attorney sent Citrus an e-mail agreeing to withdraw the causes of
action for strict liability based on manufacturing defect and design defect. The court
continued trial in the underlying action one final time to Monday, January 5, 2015.
              On December 12, Ace filed a motion to intervene in the Vatuvei action.
Attached to the motion was a proposed complaint in intervention against Citrus that
alleged causes of action for negligence and strict liability based on theories of
manufacturing defect, design defect, and failure to warn. The motion was scheduled to
be heard on Monday, December 29. Ace acknowledged December 29 was “the last law
and motion date . . . prior to the scheduled trial date.”
              However, Ace withdrew the motion December 19 after learning that it had
failed to serve the motion on Citrus’s current attorney of record. On December 22, Ace
filed an ex parte application seeking leave to intervene in the underlying action. Citrus
opposed the request, arguing the application was untimely and it would cause prejudice
because Ace’s complaint in intervention contained causes of action on theories
previously withdrawn by Vatuvei. Ace’s attorney filed a supplemental declaration
expressing a willingness to withdraw his manufacturing defect and design defect claims.
              The trial court denied Ace’s ex parte application on December 23, finding it
was untimely because Ace “knew or should have known for years that this action by a
worker[s’] compensation payee was pending against third parties for injuries allegedly
sustained in the workplace.” In addition, the court concluded that granting the
application would cause prejudice, citing “the fact that the ex parte is being brought on

                                               3
Christmas Eve for a trial that had already been continued and is set to commence the first
Monday following New Year’s Day, particularly in light of the causes of action being
asserted by the proposed complaint in intervention which would necessitate additional
discovery, trial preparation, and potentially additional witnesses, including expert
witnesses.” Ace petitioned this court to stay trial and allow it to intervene in the
underlying action. The petition was summarily denied. Ace then filed its appeal.
                Trial of the underlying action proceeded. It resulted in a jury verdict for
Vatuvei that found his total damages exceeded $2.6 million, with Citrus assigned 60
percent of the fault and the remaining 40 percent assigned to Mission.

                                        DISCUSSION

1. Appealability of the Order Denying Ace’s Ex Parte Application
                The first issue concerns Vatuvei’s claim that we lack jurisdiction because it
involves a ruling on an ex parte application rather than a noticed motion. The law is to
the contrary.
                “[A]n order denying a request for leave to file a complaint in
intervention . . . has long been held appealable on the theory that the denial is a final
determination of the litigation as to the party seeking to intervene.” (Bowles v. Superior
Court (1955) 44 Cal. 2d 574, 582.) Noya v. A.W. Coulter Trucking (2006) 143
Cal. App. 4th 838 applied this rule to the denial of an ex parte application to intervene.
“Despite the ex parte nature of the motion in this case, plaintiffs filed a response and the
trial court ruled on the merits. The order was effectively a judgment against Zurich on its
right to intervene and it is appealable as such.” (Id. at p. 841.)
                Vatuvei relies on Marken v. Santa Monica-Malibu Unified School Dist.
(2012) 202 Cal. App. 4th 1250 to support his argument. That case concerned a parent’s
unsuccessful ex parte attempt to intervene in a teacher’s action that sought to enjoin the

                                               4
school district from disclosing documents contained in the teacher’s personnel file. The
Court of Appeal dismissed the appeal, concluding “it appears the trial court denied [the
parent’s] application . . . solely because it had been filed on an ex parte basis, rather than
by noticed motion, [and] not on the merits of [the parent’s] right to intervene in the
action.” (Id. at p. 1277.)
              Unlike Marken, it is clear Ace’s ex parte application was denied on the
merits. The court found the application was untimely under Code of Civil Procedure
section 387, noting Ace had known about Vatuvei’s pending case “for years,” but
delayed seeking intervention until “Christmas Eve” with a trial scheduled to begin in
early January. The court also held that granting Ace’s last minute intervention request
would prejudice the parties by further delaying the trial. Thus, this appeal is properly
before us.

2. Ace’s Right to Intervene
              This case involves the means by which an employer or its workers’
compensation insurer may seek reimbursement for benefits where an employee sues one
or more third parties alleging they are responsible for an injury that is also covered by
workers’ compensation insurance. (§ 3850 et seq.) Although the statutes in this chapter
of the Labor Code refer to the employer, that term is defined to include the employer’s
workers’ compensation insurer. (§ 3850, subd. (b).)
              Under this statutory scheme, where “a third party is liable in whole or in
part for the employee’s injuries, the Labor Code provides the employer with three basic
techniques for obtaining reimbursement from the third party for workers’ compensation
benefits the employer has paid or become obligated to pay: the employer ‘may bring an
action directly against the third party (§ 3852), join as a party plaintiff or intervene in an
action brought by the employee (§ 3853), or allow the employee to prosecute the action
himself and subsequently apply for a first lien against the amount of the employee’s

                                               5
judgment . . . (§ 3856, subd. (b)).’” (Associated Construction & Engineering Co. v.
Workers’ Comp. Appeals Bd. (1978) 22 Cal. 3d 829, 833.)
              However, to prohibit an employer profiting from its own wrong, the
employer’s or its insurer’s benefits reimbursement right is subject to being reduced or
eliminated where the employer’s negligence contributed to the employee’s injury.
(DaFonte v. Up-Right, Inc. (1992) 2 Cal. 4th 593, 599; Witt v. Jackson (1961) 57
Cal. 2d 57, 72-73.) In this circumstance, an employer or its insurer may recover benefits
only to the extent the benefits exceed the employer’s share of fault for the harm done.
(DaFonte v. Up-Right, Inc., supra, 2 Cal.4th at p. 599; Associated Construction &
Engineering Co. v. Workers’ Comp. Appeals Bd., supra, 22 Cal.3d at p. 842, fn. omitted.)
              Vatuvei sued Citrus, and several other diacetyl manufacturers, alleging they
were responsible for his contracting Bronchiolitis Obliterans. Citrus answered the
complaint alleging as a defense that Vatuvei’s injuries resulted, at least in part, from the
negligence of Mission, his employer. The record reflects Ace knew about this pending
action.
              Ace did file a notice of lien in the action. But in Aetna Casualty & Surety
Co. v. Superior Court (1993) 20 Cal. App. 4th 1502 (Aetna), we held that when the issue
of the employer’s negligence is “introduce[d] . . . into an [employee’s] action [against a
third party], the mere filing of a lien is insufficient to protect an employer’s claim of
reimbursement,” and “the employer must file a complaint in intervention.” (Id. at
p. 1507.)
              In Aetna, the petitioner paid workers’ compensation benefits to an
employee for injuries suffered when she fell in a parking lot upon leaving work. The
employee also sued several third parties over the fall. One defendant alleged the
plaintiff’s employer’s negligence as an affirmative defense. The petitioner filed a lien in
that action, but after the employee settled with the third parties, the trial court refused the
petitioner’s request to impress its lien on the settlement proceeds.

                                               6
              We upheld the trial court’s ruling, explaining that once the employer
negligence defense is raised “the complexion of the case [changes]. Until that time an
employee’s interests do not clash with the employer’s interests in a third party action;
each wants to be compensated for separate items of damage. However, once such a
defense is claimed, a conflict of interest between plaintiff and the employer arises.
[Citation.] Because of its alleged negligence, the amount due the employer becomes a
subject of considerable dispute and the employer cannot expect the employee to argue on
its behalf during any negotiations or at trial.” (Aetna, supra, 20 Cal.App.4th at p. 1508.)
Thus, “‘In such a case, the employer must file a complaint in intervention in order to
protect its rights.’” (Id. at p. 1509, quoting O’Dell v. Freightliner Corp. (1992) 10
Cal. App. 4th 645, 654.)
              Under Aetna, because Citrus asserted the employer-negligence defense,
Ace had to seek intervention in the lawsuit to protect its reimbursement rights. Section
3853 gave Ace the right to intervene, but Code of Civil Procedure section 387,
subdivision (b) obligates a court to grant intervention only “upon timely application”
              Ace responds that notwithstanding Code of Civil Procedure section 387’s
“timely application” requirement, section 3853 allows intervention “at any time before
trial on the facts.” Thus, Ace claims its ex parte application, filed before trial began in
the underlying action, was timely. We disagree.
              Even where “a party may assert it holds [an] unconditional right to
intervention, that right is not absolute. A court must initially determine whether the
petition is timely.” (Lohnes v. Astron Computer Products (2001) 94 Cal. App. 4th 1150,
1153; Sanders v. Pacific Gas & Elec. Co. (1975) 53 Cal. App. 3d 661, 668 [“it is the
general rule that a right to intervene should be asserted within a reasonable time and that
the intervener must not be guilty of an unreasonable delay after knowledge of the suit”].)
Thus, “Timeliness is . . . one of the prerequisites for granting an application to intervene.”
(Northern Cal. Psychiatric Society v. City of Berkeley (1986) 178 Cal. App. 3d 90, 109.)

                                              7
              Ace does not claim it was unaware that Citrus had alleged Mission’s
concurrent negligence as an affirmative defense in the underlying action. But it made no
attempt to intervene in this lawsuit before the original trial date. When Ace finally did
file its lien, trial was scheduled to begin in mid-July. Again, Ace did not move to
intervene, nor did it try to do so before the next scheduled trial date in August. Rather,
Ace waited until less than a month before the final trial date to seek intervention, setting a
hearing on the motion for the last possible date before trial, and submitting a proposed
complaint in intervention that alleged causes of action previously eliminated by Vatuvei.
Even then, Ace failed to properly serve its motion, triggering the necessity of filing a last-
minute ex parte application. Given the necessity of intervening in this action and Ace’s
procrastination in moving to do so, we conclude the trial court did not err in finding
Ace’s ex parte request to be untimely.
              Ace relies on Mar v. Sakti Internat. Corp. (1992) 9 Cal. App. 4th 1780 to
argue its ex parte intervention request filed on the verge of trial was timely. In Mar, a
bank employee was injured by masonry falling off a building. The bank’s workers’
compensation insurer paid the employee benefits and the bank paid him the difference
between those benefits and his full salary during his recovery. The employee sued the
building’s owner, manager, and the construction firms making repairs to the building
when the accident occurred. The insurer timely filed a complaint in intervention in the
personal injury action, but the bank merely submitted a settlement statement of the
amount it sought to recover. Shortly before trial, the employee settled with the
defendants. At that point the bank attempted to join the workers’ compensation insurer’s
complaint in intervention, but the trial court denied the request, finding it was untimely.
Without discussing the foregoing authorities concerning the need for a timely application
to intervene, the Court of Appeal reversed. It held section 3853’s authorization for
intervention “‘at any time before trial on the facts’” was “incorporated” into Code of

                                              8
Civil Procedure section 387 and “constitute[d] the governing rule of decision.” (Mar v.
Sakti Internat. Corp., supra, 9 Cal.App.4th at p. 1785.)
              But “the question of delay . . . is a question of fact” (In re Yokohama Specie
Bank, Ltd. (1948) 86 Cal. App. 2d 545, 555), and “[w]hether in a particular case
intervention should be allowed ‘is best determined by a consideration of the facts of that
case’ [citation], and the decision is ordinarily left to the sound discretion of the trial
court” (Fireman’s Fund Ins. Co. v. Gerlach (1976) 56 Cal. App. 3d 299, 302). In Mar, the
bank’s workers’ compensation insurer had timely intervened and, although the
underlying case settled, the insurer’s action for reimbursement of the benefits it had paid
on the employee’s behalf remained to be tried. Also, the bank had previously informed
the defendants of the amount of its reimbursement demand and there was no overlap
between that sum and the benefits sought by the insurer. Further, unlike the present case,
Mar did not involve an action where a defendant alleged employer negligence as an
affirmative defense. Here, Mission’s concurrent negligence was not only at issue, the
determination of that affirmative defense was one of the central considerations in
determining the scope of Citrus’s liability to Vatuvei.
              Furthermore, even if we were to follow Mar on the timeliness issue, we
note the trial court also denied intervention because of its concern that allowing Ace to
join the action on the eve of trial would cause further delay. Delay of trial is another
ground for denying a request to intervene in an action. (Willett v. Jordan (1934) 1
Cal. 2d 461, 465.) “It is also the general rule that an intervention will not be allowed
when it would retard the principal suit, or require a reopening of the case for further
evidence, or delay the trial of the action, or change the position of the original parties.”
(Sanders v. Pacific Gas & Elec. Co., supra, 53 Cal.App.3d at p. 669.) Standing alone,
the latter ground supports the trial court’s ruling. Ace’s failure to challenge this part of
the trial court’s ruling supports a conclusion that it has forfeited the issue. (Christoff v.
Union Pacific Railroad Co. (2005) 134 Cal. App. 4th 118, 125 [“an appellant’s failure to

                                               9
discuss an issue in its opening brief forfeits the issue on appeal”]; 9 Witkin, Cal.
Procedure (5th ed. 2008) Appeal, § 701, pp. 769-771.)
              Consequently, we conclude the trial court did not abuse its discretion by
denying Ace’s ex parte application to intervene in the underlying action.

                                       DISPOSITION

              The order is affirmed. Respondent shall recover his costs on appeal.

                                                  RYLAARSDAM, ACTING P. J.

WE CONCUR:

ARONSON, J.

IKOLA, J.

                                             10