City of Torrance v. Tobo Construction, Inc., et al.

Defendant is ordered to answer or announce that the previously filed answer is responsive to the FAC within 30 days. Plaintiff is ordered to give notice of ruling.

Moving Party: Defendant Vigilant Insurance Company Responding Party: Plaintiff City of Torrance

The court considered the moving papers, opposition, reply, and supplemental papers. Vigilant's Motion to Transfer Venue is DENIED.

PROCEDURAL BACKGROUND

On December 26, 2025, Plaintiff City of Torrance ("Plaintiff") filed a complaint against Defendants Tobo Construction, Inc. ("Tobo"), Vigilant Insurance Company ("Vigilant"), and DOES 1-200, inclusive, alleging four causes of action for: (1) Breach of Written Contract (Count 1); (2) Breach of Written Contract (Count 2); (3) Enforcement of Public Works Performance Bond; and (4) Declaratory Relief.

On March 5, 2026, Vigilant filed the instant motion. On June 15, 2026, Plaintiff filed an opposition. On June 23, 2026, Vigilant filed a reply. On June 30, 2026, the court continued Vigilant's motion to September 2, 2026. On July 21, 2026, Vigilant filed a supplemental declaration in support of its motion. On August 11, 2026, Plaintiff filed a supplemental opposition. On August 19, 2026, Plaintiff filed a first amended complaint ("FAC") against Defendants, alleging the same four causes of action. On August 27, 2026, Plaintiff filed a response to Vigilant's supplemental papers.

FACTUAL BACKGROUND

Plaintiff alleges that on March 20, 2018, it entered into a written contract (the "Tobo Contract") with Tobo for the construction of the Torrance Transit Park and Ride Regional Terminal (the "Project"). (FAC, P.P. 1, 7.) Plaintiff alleges that the Tobo Contract required the completion of the Project by no later than October 4, 2019, yet the Project was not completed until October 31, 2023. (FAC, P. 7.) Plaintiff alleges that the Tobo Contract included a liquidated damages provision that required Tobo to pay $3,000.00 for each day that Tobo was late in completing the Project. (FAC, P. 7.) Plaintiff alleges that it terminated the Tobo Contract on October 16, 2019 due to Tobo's failure to comply with the Project schedule. (FAC, P. 9.)

Next, Plaintiff alleges that on June 1, 2020, Plaintiff and Vigilant entered into an agreement for Vigilant to complete the Project (the "Takeover Agreement"). (FAC, P. 12.) Plaintiff alleges that the terms and conditions of the Tobo Contract applied, and the Takeover Agreement required Vigilant to complete the Project by August 8, 2021. (FAC, P. 12.) Plaintiff alleges that the Project was not completed until October 31, 2023. (FAC, P. 12.)

LEGAL STANDARD

"The court may, on timely motion, order transfer of an action '[w]hen the court designated in the complaint is not the proper court.' [Citations] The moving party must overcome the presumption that the plaintiff has selected the proper venue. [Citation] Thus, '[i]t is the moving defendant's burden to demonstrate that the plaintiff's venue selection is not proper under any of the statutory grounds.' [Citation] In opposing the motion to change venue, '[t]he plaintiff may bolster his or her choice of venue with counter-affidavits consistent with the complaint's theory of the type of action but amplifying the allegations relied upon for venue.' [Citation]" (Fontaine v. Superior Court (2009) 175 Cal.App.4th 830, 836.)

"A corporation or association may be sued in the county where the contract is made or is to be performed, or where the obligation or liability arises, or the breach occurs; or in the county where the principal place of business of such corporation is situated, subject to the power of the court to change the place of trial as in other cases." (Code Civ. Proc., Section 395.5; Rosas v. Superior Court (1994) 25 Cal.App.4th 671, 673-674 ["For purposes of venue, a corporation has been deemed bound by its designation of a principal place of business in corporate documents filed with the Secretary of State"].)

The burden is on the moving party to establish facts justifying the transfer. (Mission Imports, Inc. v. Superior Court (1982) 31 Cal.3d 921, 928.)

DISCUSSION

Moving Party's Argument

Vigilant seeks an order transferring this action to the Superior Court of California, County of Orange on the grounds that Code of Civil Procedure Section 394 requires transfer to a neutral county when a local agency is a party and a nonresident defendant moves for venue transfer. Vigilant states that it is a New York corporation with its principal place of business in New Jersey.

Opposing Party's Argument

Plaintiff argues that Vigilant has no standing to invoke Section 394 because it only applies to actions brought by a county, city, or local agency against a resident of another county, but here, Vigilant concedes that it is not a resident of any California city or county. Plaintiff also argues that Vigilant has not provided sufficient evidence to show that it lacks sufficient connection to Los Angeles County. Plaintiff argues that Vigilant has regular business activity in Los Angeles County such that it will not be prejudiced by the action proceeding in Los Angeles County Superior Court. Plaintiff argues that if the court determines that a change of venue is required, the action should be removed to Riverside County.

Reply Argument

Vigilant argues that Plaintiff has failed to present evidence showing that Vigilant is a resident of Los Angeles County or is doing business in Los Angeles County. Vigilant argues that it has standing to invoke CCP Section 394 because it is a New York corporation with no major branch offices in Los Angeles County and no substantial connections there. Vigilant argues that it would suffer prejudice if the action remains in Torrance because potential jurors may be employed by Plaintiff or would be affected by the Project at the heart of the action. Vigilant argues that based on the language of the Takeover Agreement, Los Angeles County is not the only venue where this action can be litigated.

Vigilant's Supplemental Declaration

Vigilant's supplemental declaration states that Vigilant does not maintain a branch office in Los Angeles County and Vigilant does not have substantial connections within Los Angeles County to be intimately identified with the affairs of the community, and thus Vigilant is a nonresident of Los Angeles County and has not conducted business within Los Angeles County. The declaration refers to the number of times Vigilant has appeared in local media and has been named as a party to a lawsuit in Los Angeles County, and refers to the amount of premium generated by Vigilant in California according to Schedule T. The declaration also states that Vigilant has no local employees in Los Angeles County, has no local ownership of property in Los Angeles County, and is not involved in civic, charitable, or governmental affairs in Los Angeles County.

Plaintiff's Supplemental Opposition

Plaintiff argues that Vigilant has not offered evidence regarding the number of contracts it has entered into in Los Angeles County, the amount of payments Vigilant has made to parties in Los Angeles County, the number of insurance policies Vigilant has drafted in Los Angeles County, or the number of bonds Vigilant has issued in Los Angeles County. Plaintiff argues that Vigilant only offers conclusory statements in an attempt to show that it is not doing business in Los Angeles County. Plaintiff argues that the evidence shows that Vigilant has regular business activity in Los Angeles County, because it has been a party to approximately 38 lawsuits in the Los Angeles Superior Court, Vigilant has provided Power of Attorney for its Los Angeles agents, and Vigilant is a subsidiary of Chubb, which maintains an office in Los Angeles County.

Evidentiary Objections

Plaintiff's evidentiary objection to Paragraph 5 of the Declaration of Morgan S. Fletcher is SUSTAINED on the grounds of constituting an inadmissible legal conclusion. Plaintiff's evidentiary objection to Paragraph 6 of the Supplemental Fletcher Declaration is SUSTAINED due to lack of foundation. Plaintiff's evidentiary objection to Paragraph 7 of the Supplemental Fletcher Declaration is SUSTAINED as an improper legal conclusion. Plaintiff's evidentiary objection to Paragraph 8 of the Supplemental Fletcher Declaration is SUSTAINED on the grounds of constituting an improper legal conclusion and due to lack of foundation. Plaintiff's evidentiary objection to Paragraph 9 is OVERRULED.

Plaintiff's evidentiary objection to Paragraph 12 of the Supplemental Fletcher Declaration is SUSTAINED due to lack of foundation. Plaintiff's evidentiary objection to Paragraph 13 of the Supplemental Fletcher Declaration is SUSTAINED in part, only as to the statements "It is clear from the above that Vigilant is a nonresident of Los Angeles County and has not conducted business within Los Angeles County" and "Vigilant is not intimately identified with the affairs or closely associated with the people of the Los Angeles County community" as improper legal conclusions. Plaintiff's evidentiary objection to Paragraph 10 of the Supplemental Fletcher Declaration is OVERRULED.

Vigilant's evidentiary objection No. 1 to Plaintiff's supplemental opposition is OVERRULED. Vigilant's evidentiary objections to Paragraphs 2, 4, and 5 of the Declaration of Jeffrey S. Flashman ("Flashman") is OVERRULED. Vigilant's evidentiary objection to Paragraph 6 of the Flashman Declaration is SUSTAINED due to lack of foundation. Vigilant's evidentiary objection to Paragraph 7 of the Flashman Declaration is SUSTAINED as an improper legal conclusion.

Merits of the Motion

Vigilant moves to transfer venue pursuant to Code of Civil Procedure Section 394(a), which provides, in pertinent part: "[A]ny action or proceeding brought by a county, city and county, city, or local agency within a certain county, or city and county, against a resident of another county, city and county, or city, or a corporation doing business in the latter, shall be, on motion of either party, transferred for trial to a county, or city and county, other than the plaintiff, if the plaintiff is a county, or city and county, and other than that in which the plaintiff is situated, if the plaintiff is a city, or a local agency, and other than that in which the defendant resides, or is doing business, or is situated." (Code Civ. Proc., Section 394(a).)

Section 394 is "designed to insure a fair trial by protecting against local bias. The legislation is based on the premise that there is a substantial risk of prejudice in favor of a local governmental entity." (Westinghouse Elec. Corp. v. Sup. Ct. (1976) 17 Cal.3d 259, 271.) A corporation sued by a local governmental entity is not entitled to a venue transfer pursuant to Section 394 if the corporation is "doing business" in the county. (Ibid.) According to the court, "a corporation is doing business in a county for purposes of section 394 only if its activities in the county are substantial enough that the corporation can reasonably be viewed as being intimately identified with the affairs or closely associated with the people of the community." (Ibid.)

"The burden of proof justifying a change of venue rests on the moving party." (Los Angeles v. Pacific Tel. & Tel. Co. (1958) 164 Cal.App.2d 253, 260.) In support of its motion, Vigilant offers the declaration of Morgan S. Fletcher ("Fletcher"), the Authorized Representative of Vigilant and an Assistant Vice President of Surety Claims for Vigilant. (Fletcher Decl., P.P. 1-2.) Fletcher has served as the "principal claim representative for Vigilant on the default of [Tobo] which occurred in 2019 and the investigation and resolution of payment bond claims and performance bond claims against the bond issued by Vigilant...for [Tobo]." (Fletcher Decl., P. 3.)

Fletcher declares that Vigilant is a New York Corporation with its principal executive office located in New Jersey. (Fletcher Decl., P. 4.) Fletcher declares that Vigilant does not maintain any major branch offices in Los Angeles County and is not a resident of Los Angeles County. (Fletcher Decl., P. 4.) Finally, Fletcher declares that Vigilant "does not have a substantial connection with Los Angeles County as to be intimately identified with the affairs of the community." (Fletcher Decl., P. 5.)

The court notes that while Vigilant has not filed a supplemental brief, Vigilant has filed a supplemental declaration of Fletcher. Fletcher contacted Vigilant's General Counsel's office and declares that based on this communication, Fletcher confirmed that Vigilant does not maintain any offices within Los Angeles County. (Supp. Fletcher Decl., P. 6.) Fletcher further declares that Vigilant produced a list of lawsuits in which Vigilant was named as a plaintiff or defendant, and out of the 28 listed lawsuits in which Vigilant was named as a defendant, 15 arise out of the default by Tobo. (Supp. Fletcher Decl., P. 9.)

The court notes that it has previously sustained Plaintiff's evidentiary objections to paragraphs 6 and 9 of the Supplemental Fletcher Declaration due to lack of foundation. Fletcher also declares that Vigilant has produced statistical information submitted to the California Department of Insurance, called Schedule T, which indicates that "the amount of premium paid to Vigilant nationwide as generated in California is 4 percent," and "the percentage of all premium generated by Vigilant in California in the area of surety bonds in 2025 was 8 percent of the total premium paid in the state of California." (Supp.

Fletcher Decl., P. 10.) Additionally, Fletcher declares that upon contacting Vigilant's General Counsel's office, Fletcher confirmed that Vigilant "has no local employees in the County of Los Angeles, has no local ownership of real property in the County of Los Angeles, is not involved in any civic, charitable, or governmental affairs within the County of Los Angeles and does not maintain and has never had any offices within the County of Los Angeles." (Fletcher Decl., P. 12.) The court refers to its previous ruling on Plaintiff's evidentiary objection to Paragraph 12 of the Supplemental Fletcher Declaration, in which the court sustained the objection due to lack of foundation.

The court finds that Vigilant's evidence is insufficient to enable Vigilant to meet is burden of establishing that Plaintiff's venue selection is improper. Vigilant's own evidence indicates that Vigilant conducts business activity in California, as demonstrated by Schedule T, and Vigilant has previously been involved in litigation proceedings in the Los Angeles County Superior Court. (Supp. Fletcher Decl., Exhs. 1-2.) Further, as noted by Plaintiff, Vigilant has failed to provide any evidence regarding the number of contracts it has entered into in Los Angeles County, the amount of payments Vigilant has made to parties in Los Angeles County, the number of insurance policies that Vigilant has drafted in Los Angeles County, or the number of bonds Vigilant has issued in Los Angeles County.

Therefore, Vigilant's evidence is insufficient to show that Vigilant is not "doing business" in Los Angeles County for the purposes of Code of Civil Procedure Section 394. Finally, Vigilant is not a resident of any county in California and thus Vigilant has failed to meet its burden of showing that Vigilant is entitled to a transfer of venue pursuant to Section 394. As a result, the court declines to address Plaintiff's evidence.

Accordingly, Vigilant's Motion to Transfer Venue is DENIED.

CONCLUSION

Based on the foregoing, Vigilant's Motion to Transfer Venue is DENIED. Prevailing party on motion is ordered to give notice of ruling.

Case Number: 26TRCV00294 Hearing Date: September 2, 2026 Dept: P Demurrer to Plaintiff's First Amended Complaint Moving Party: Defendants Rojoma Ventures, LLC, Red River Enterprises LLC, Rosalind Pennington (erroneously sued as "Roselind Pennington"), and John Meshack (erroneously sued as "John Meshach") Responding Party: Plaintiff David Beverly

RULING

The court considered the moving papers, opposition, and reply. Moving Defendants' Special Demurrer for Uncertainty is SUSTAINED with leave to amend. Any amended complaint is to be filed and served within 30 days.

PROCEDURAL ISSUES

Code of Civil Procedure Section 1005(b) provides that "papers opposing a motion so noticed shall be filed with the court and a copy served on each party at least nine court days...before the hearing." Here, the hearing on the instant Demurrer is scheduled on September 2, 2026. Plaintiff filed his opposition on August 24, 2026, which is less than nine court days before the hearing. However, the court exercises its discretion to consider Plaintiff's opposition.

PROCEDURAL BACKGROUND