Superior Court, State of California
DATE: Thursday, 27 May 2021
TIME: 9:00 A.M.
This Department prefers that litigants use Zoom for Law and Motion and for Case Management Calendars.
CourtCall is also acceptable.
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All Courts of California celebrate the diversity of the attorneys and the litigants who appear in our Courts. Do not hesitate to correct the Court or Court Staff concerning the pronunciation of any name or how anyone prefers to be addressed. As this Court is fond of saying, “with a name like mine, I try to be careful how I pronounce the names of others.” If your client is with you, please inform the Court how your client would prefer to be introduced. The Court encourages the use of diacritical marks, multiple surnames and the like for the names of attorneys, litigants and in court papers.
VIRTUAL ACCESS INTO THE COURTHOUSE WITH THE “ZOOM” VIRTUAL PLATFORM.
PLEASE READ THIS PAGE IN ITS ENTIRETY AS SOME OF THE PROTOCOLS HAVE CHANGED.
While the Court will still allow physical appearances, all litigants are encouraged to use the Zoom platform for Law & Motion appearances and Case Management Conferences. Use of other virtual platform devices will make it difficult for all parties fully to participate in the hearings. Please note the requirement of entering a password (highlighted above.)
SOCIAL DISTANCING PROTOCOLS
In light of COVID-19-related health concerns and due to the Order of the Public Health Department, Department 20 has resumed Law & Motion calendars but with safe-distancing protocols. Please check this tentative rulings page before making any appearance. Any uncontested matter or matters to which stipulations have been reached can be processed through the Clerk in the usual manner. Please include a proposed order.
Appearances.
Please notify this Court immediately if the matter will not be heard on the scheduled date. California Rules of Court, rule 3.1304(b). If a party fails to appear at a law and motion hearing without having given notice, this Court may take the matter off calendar, to be reset only upon motion, or may rule on the matter. California Rules of Court, rule 3.1304(d).
This Court expects all counsel and litigants to comply with the Tentative Rulings Procedures that are outlined in Local Civil Rule 7(E) and California Rules of Court, rule 3.1308. If the Court has not directed argument, oral argument must be permitted only if a party notifies all other parties and the court by 4:00 p.m. on the court day before the hearing of the party's intention to appear. A party must notify all other parties by telephone or in person. A failure to timely notify this Court and/or the opposing parties may result in the tentative ruling being the final order in the matter.
Entry into the Courthouse.
As for matters which require personal appearances, protocols concerning social distancing and facial coverings in compliance with the directives of the Public Health Officer will be enforced.
Individuals who wish to access the Courthouse are advised to bring a plastic bag within which to place any personal items that are to go through the metal detector located at the doorway to the courthouse.
Sign-ins will begin at about 8:30 AM. Court staff will assist you when you sign in. It will help if you “rename” yourself as follows: in the upper right corner of the screen with your name you will see a blue box with three horizontal dots. Click on that and then click on the “rename” feature. You may type your name as: Line #/name/party
If you are a member of the public who wishes to view the Zoom session and remain anonymous, you may simply sign in as “Public.”
The Santa Clara County Superior Court has established listen-only telephone Lines to allow remote access to public court proceedings. To listen to a public court proceeding in Department 20, you may dial 888-251-2909. When prompted, enter the access code number 4362730 when prompted, followed by the pound or hashtag (#) sign.
Court Reporters.
This session will not be recorded. No electronic recordings, video, still photography or audio capture of this live stream is allowed without the expressed, written permission of the Superior Court of California, County of Santa Clara. State and Local Court rules prohibit photographing or recording of court proceedings whether in the courtroom or while listening on the Public Access Line or other virtual platform, without a Court Order. See Local General Rule 2(A) and 2(B); California Rules of Court, rule 1.150.
This Court no longer provides for Court Reporters in civil actions except in limited circumstances. If you wish to arrange for a court reporter, please use Local Form #CV-5100. All reporters are encouraged to work from a remote location. Please inform this Court if any reporter wishes to work in the courtroom.
Counsel should meet and confer on the use of a court reporter. Occasionally each side will retain a court reporter which leaves this Court in a conundrum as to which reporter will be the official reporter for the purposes of the hearing.
Protocols during the Hearings.
During the calling of any hearing, this Court has found that the Zoom video platform works very well. But whether using Zoom or any telephone, it is preferable to use a landline if possible. IT IS ABSOLUTELY NECESSARY FOR ALL INDIVIDUALS TO SPEAK SLOWLY. Plaintiff should speak first, followed by any other person. All persons should spell their names for the benefit of Court Staff. Please do not use any hands-free mode if at all possible. Headsets or earbuds will be of great assistance to minimize feedback.
If you appear in person, it will be helpful if you wear a disposable paper mask while using the courtroom microphones so that your voice will not be muffled.
A party may give notice that he or she will not appear at a law and motion hearing and submit the matter without an appearance unless this Court orders otherwise. This Court will rule on the motion as if the party had appeared. California Rules of Court, rule 3.1304(c).
The Court will prepare the Final Order unless stated otherwise below or at the hearing. Counsel are to comply with California Rules of Court, rule 3.1312.
Troubleshooting Tentative Rulings.
If you see last week’s tentative rulings, you have checked prior to the posting of the current week’s tentative rulings. You will need to either “REFRESH” or “QUIT” your browser and reopen it. Another suggestion is to “clean the cache” of your browser. If you fail to do any of these, your browser may pull up old information from old cookies even after the tentative rulings have been posted.
Tentative Rulings Are Continued Below. Full Orders Are On The Following Pages.
|LINE # |CASE # |CASE TITLE |RULING |
|LINE 1 |20CV375097 |Donald Prange v. General Motors, LLC |Demurrer to the Complaint and Motion to Strike Portions of the |
| | | |Complaint by Defendant General Motors. |
| | | |The demurrer to the first, second, and third causes of action on the |
| | | |ground they fail to state a valid claim is OVERRULED. Defendant has 20|
| | | |days from the filing and service of this Order within which to ANSWER |
| | | |the complaint. |
| | | |The motion to strike the prayer for punitive damages is DENIED. |
| | | |SEE ATTACHED TENTATIVE RULING. |
|LINE 2 |20CV375097 |Donald Prange v. General Motors, LLC |SEE LINE #1. |
|LINE 3 |20CV367633 |Friendfinder Networks, Inc. v. Steelwave Inc. et al |Please check back at 4:15 PM |
|LINE 4 |17CV314755 |Subodip Mukherjee v. Northbound LLC |Motion of Nonparty Witness Quantum SDS Inc. to Quash or for Protective|
| | | |Order. |
| | | |The motion is DENIED and GRANTED as follows: The motion to quash is |
| | | |DENIED. The motion for a protective order is GRANTED as follows: the |
| | | |documents produced are to be used for this litigation only and may not|
| | | |be shown to third parties. The parties are to meet and confer upon a |
| | | |final protective order. |
| | | |NO FORMAL TENTATIVE RULING. If a party wishes to contest the tentative|
| | | |ruling please use the Tentative Ruling Protocol. |
|LINE 5 |20CV371299 |Petra Overlie v. General Motors, LLC |Motion of Plaintiff to Compel Deposition of Defendant’s PMK. |
| | | |The motion is DENIED as there is no good cause shown for the |
| | | |production of a PMK or production of documents that are not pertinent |
| | | |to plaintiff’s vehicle. The Order is WITHOUT PREJUDICE to a showing |
| | | |how or why the requested testimony is discoverable or essential to her|
| | | |claims. |
| | | |NO FORMAL TENTATIVE RULING. If a party wishes to contest the tentative|
| | | |ruling please use the Tentative Ruling Protocol. |
|LINE 6 |18CV328476 |Mary Fiorino v. Red Lobster Hospitality, LLC, et al. |Motion of Plaintiff to Reopen Discovery. |
| | | |The motion is DENIED for two reasons: |
| | | |First, it is true that this Court may hear a motion to reopen |
| | | |discovery pursuant to Code of Civil Procedure, § 2024.020. However, |
| | | |this Court also believes that it is without jurisdiction to compel |
| | | |further discovery, agreeing with the contention of defendant Almaden |
| | | |Plaza Shopping Center, Inc. that the 45-day time limit within which to|
| | | |bring a motion to compel further responses has elapsed. |
| | | |Second, and more to the point, the Court does not believe good cause |
| | | |has been shown pursuant to Code of Civil Procedure, §§ 2016.040 and |
| | | |2024.050. The passage of more than a year since the previous discovery|
| | | |cutoff supports this Court’s decision. |
|LINE 7 |18CV328476 |Mary Fiorino v. Red Lobster Hospitality, LLC, et al. |Motion of Plaintiff for Preferential Trial Setting. |
| | | |No opposition has been filed. |
| | | |The motion is GRANTED. Parties are to meet and confer and appear for a|
| | | |Trial Setting Conference on Thursday, 27 May 2021 at 9:00 AM in |
| | | |Department 20. |
|LINE 8 |17CV319507 |Joseph Cusimano v. Cusimano Family etc., Matthew |Motion of Plaintiffs/Cross-Defendants for Attorneys Fees and Costs. |
| | |Cusimano, Sherri Cusimano |There is no opposition in the file. |
| | | |This Court has reviewed papers supplied by counsel for the moving |
| | | |party. (cf. Acosta v. SI Corp. (2005) 129 Cal.App.4th 1370, where |
| | | |there was a statement by the trial court to the contrary and the |
| | | |denial of fees in its entirety was reversed by the Court of Appeal: |
| | | |“At oral argument, the trial court referred to the motion to tax and |
| | | |stated “What I don't want to do, . . . . . is go through this |
| | | |individually. I have done that too many times, and it's just as |
| | | |tedious as can be. I will do it if I have to, but I don't want to.” |
| | | |The matter was taken under submission. The trial court later denied |
| | | |the motion to tax costs in its entirety and did not specifically |
| | | |address the costs challenged by plaintiffs. Under these circumstances,|
| | | |we cannot say that the court fulfilled its obligation to determine |
| | | |whether SI was entitled to the disputed cost items. We remand for that|
| | | |determination.”) |
| | | |A verified fee bill is prima facie evidence the costs, expenses, and |
| | | |services listed were necessarily incurred. (Hadley v. Krepel (1985) |
| | | |167 Cal.App.3d 677, 682.) A declaration attesting to the accuracy of |
| | | |the fee bill is entitled to a presumption of credibility. (Horsford v.|
| | | |Board of Trustees of California State University (2005) 132 |
| | | |Cal.App.4th 359, 396.) |
| | | |A party “cannot litigate tenaciously and then be heard to complain |
| | | |about the time necessarily spent by the plaintiff in response.” |
| | | |(Serrano v. Priest (1982) 32 Cal.3d 621, 638; City of Riverside v. |
| | | |Rivera, 477 U.S. 561, 580 fn.11 (1986).) |
| | | |The motion of moving parties is GRANTED in its entirety. Counsel for |
| | | |moving party to prepare the formal order. |
|LINE 9 |18CV339179 |Midland Funding, LLC v. Mauricio Pinales |Motion of Plaintiffs/Cross-Defendants for Attorneys Fees and Costs. |
| | | |The motion is opposed. |
| | | |This Court has reviewed papers supplied by counsel for the moving |
| | | |party. (cf. Acosta v. SI Corp. (2005) 129 Cal.App.4th 1370, where |
| | | |there was a statement by the trial court to the contrary and the |
| | | |denial of fees in its entirety was reversed by the Court of Appeal: |
| | | |“At oral argument, the trial court referred to the motion to tax and |
| | | |stated “What I don't want to do, . . . . . is go through this |
| | | |individually. I have done that too many times, and it's just as |
| | | |tedious as can be. I will do it if I have to, but I don't want to.” |
| | | |The matter was taken under submission. The trial court later denied |
| | | |the motion to tax costs in its entirety and did not specifically |
| | | |address the costs challenged by plaintiffs. Under these circumstances,|
| | | |we cannot say that the court fulfilled its obligation to determine |
| | | |whether SI was entitled to the disputed cost items. We remand for that|
| | | |determination.”) |
| | | |A verified fee bill is prima facie evidence the costs, expenses, and |
| | | |services listed were necessarily incurred. (Hadley v. Krepel (1985) |
| | | |167 Cal.App.3d 677, 682.) A declaration attesting to the accuracy of |
| | | |the fee bill is entitled to a presumption of credibility. (Horsford v.|
| | | |Board of Trustees of California State University (2005) 132 |
| | | |Cal.App.4th 359, 396.) |
| | | |A party “cannot litigate tenaciously and then be heard to complain |
| | | |about the time necessarily spent by the plaintiff in response.” |
| | | |(Serrano v. Priest (1982) 32 Cal.3d 621, 638; City of Riverside v. |
| | | |Rivera, 477 U.S. 561, 580 fn.11 (1986).) |
| | | |However, a fee request that appears unreasonably inflated is a special|
| | | |circumstance permitting the trial court to reduce the award or deny |
| | | |one altogether. (See Serrano v. Unruh (1982) 32 Cal.3d 621, 635; |
| | | |Guillory v. Hill (2019) 36 Cal.App.5th 802, 806; Chavez v. City of Los|
| | | |Angeles (2010) 47 Cal.4th 970, 989-991.) In such an evaluation, this |
| | | |Court may consider “factors such as the complexity of the case and |
| | | |procedural demands, the skill exhibited and the results achieved.” |
| | | |(Goglin v. BMW of North America, LLC (2016) 4 Cal.App.5th 462, 470.) |
| | | |This Court generally agrees with plaintiff/cross-defendant about the |
| | | |fees claimed by counsel for Mr. Pinales. However, this Court will |
| | | |allow an hourly rate of fees for Mr. Roulston’s work at $475.00 an |
| | | |hour. |
| | | |The motion of counsel for Mr. Pinales is GRANTED as follows: counsel |
| | | |for Mr. Pinales. Is entitled to the sum of $22,940.00 and attorneys |
| | | |fees and costs. Counsel for moving party to prepare the formal order. |
|LINE 10 |20CV364435 |Arles Henriquez v. Thong Nguyen, et al. |Motion of Plaintiff to Amend the Complaint. |
| | | |The motion of plaintiff for leave to file his first amended complaint |
| | | |is GRANTED. Defendants are given 20 days leave from the date of this |
| | | |hearing within which to RESPOND. |
| | | |In their opposition, defendants argue that the damages are diminished |
| | | |and that the proposed complaint is barred by the statute of |
| | | |limitations. This Court believes that such contentions are better |
| | | |raised by demurrer and/or motion to strike. |
| | | |NO FORMAL ORDER. |
|LINE 11 |19CV359220 |U.S. National Bank Association, et al. Victor |Hearing on Claim of Right to Possession of Elena Khaziri. |
| | |Panteleoni |No opposition is seen in the court file. |
| | | |NO TENTATIVE RULING. The parties are to use the Tentative Ruling |
| | | |Protocol if they wish to appear and argue on the merits.. |
|LINE 12 | | |SEE ATTACHED TENTATIVE RULING. |
|LINE 13 | | |SEE ATTACHED TENTATIVE RULING. |
|LINE 14 | | |SEE ATTACHED TENTATIVE RULING. |
|LINE 15 | | |SEE ATTACHED TENTATIVE RULING. |
|LINE 16 | | |SEE ATTACHED TENTATIVE RULING. |
|LINE 17 | | |SEE ATTACHED TENTATIVE RULING. |
|LINE 18 | | |SEE ATTACHED TENTATIVE RULING. |
|LINE 19 | | |SEE ATTACHED TENTATIVE RULING. |
|LINE 20 | | |SEE ATTACHED TENTATIVE RULING. |
|LINE 21 | | |SEE ATTACHED TENTATIVE RULING. |
|LINE 22 | | |SEE ATTACHED TENTATIVE RULING. |
|LINE 23 | | |SEE ATTACHED TENTATIVE RULING. |
|LINE 24 | | |SEE ATTACHED TENTATIVE RULING. |
|LINE 25 | | |SEE ATTACHED TENTATIVE RULING. |
|LINE 26 | | |SEE ATTACHED TENTATIVE RULING. |
|LINE 27 | | |SEE ATTACHED TENTATIVE RULING. |
|LINE 28 | | |SEE ATTACHED TENTATIVE RULING. |
|LINE 29 | | |SEE ATTACHED TENTATIVE RULING. |
|LINE 30 | | |SEE ATTACHED TENTATIVE RULING. |
| | | |SEE ATTACHED TENTATIVE RULING. |
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Calendar Line 1
| | |
|SUPERIOR COURT, STATE OF CALIFORNIA | |
|COUNTY OF SANTA CLARA | |
| | |
|DEPARTMENT 20 | |
| | |
|161 North First Street, San Jose, CA 95113 | |
|408.882.2320 · 408.882.2296 (fax) | |
|smanoukian@ | |
| |(For Clerk's Use Only) |
|CASE NO.: |20CV375097 |Donald Prange v. General Motors, LLC |
|DATE: 27 May 2021 |TIME: 9:00 am |LINE NUMBERS:1- 2 |
This matter will be heard by the Honorable Judge Socrates Peter Manoukian in Department 20 in the Old Courthouse, 2nd Floor, 161 North First Street, San Jose. Any party opposing the tentative ruling must call Department 20 at 408.808.6856 and the opposing party no later than 4:00 PM on 26 May 2021. Please specify the issue to be contested when calling the Court and Counsel.
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Demurrer and Motion to Strike to the Complaint by
Defendant General Motors, LLC.
I. Statement of Facts.
Plaintiff Donald Prange (“Plaintiff”) filed this complaint on 21 December 2020.[1]
According to the complaint, on or about 1 December 2014, defendant General Motors, LLC (“GM”) manufactured and/or distributed into the stream of commerce a new 2014 GMC Yukon XL, VIN 1GKSZMEF3ER142437 (“Vehicle”) for its eventual sale/lease in California. (Complaint at ¶ 4.)
On or about 10 November 2017, Plaintiff purchased, for personal, family, and/or household purposes, the subject Vehicle with an existing 38,201 miles, from the seller for a total consideration over the term of the installment contract of $51,529.80. (Complaint at ¶ 5, Ex. 1.)
The subject Vehicle was a “new motor vehicle” under the Song-Beverly Warranty Act. (Complaint at ¶ 6.) Along with the purchase of the Vehicle, Plaintiff received written warranties and other express and implied warranties including, but not limited to, warranties from defendant GM and the seller that the Vehicle and its components would be free from all defects in material and workmanship; that the Vehicle would pass without objection in the trade under the contract description; that the Vehicle would be fit for the ordinary purposes for which it was intended; that the Vehicle would conform to the promises and affirmations of fact made; that defendants, and each of them, would perform any repairs, alignments, adjustments, and/or replacements of any parts necessary to ensure that the Vehicle was free from any defects in material and workmanship; that defendants, and each of them, would maintain the utility of the Vehicle for three (3) years or 36,000 miles and a Powertrain Warranty for five (5) years or 100,000 miles, defendant GM promised that they would conform the Vehicle to the applicable express warranties. (Id. at ¶ 7.)
According to the GM Warranty “GM backs your new vehicle with its no-deductible Bumper-to-Bumper Limited Warranty. The entire vehicle is warranted for repairs, including parts and labor, to correct any defect in materials or workmanship, for three (3) years or 36,000 miles, whichever comes first.” The Vehicle also had a Powertrain Warranty for five (5) years or 100,000 miles whichever comes first, that covers repairs due to defects in materials and/or workmanship for components including the Engine, Transmission/Transaxle, Transfer Case, Drive Systems, and others. (Complaint at ¶ 8.)
Plaintiff has delivered the Vehicle to defendant GM’s authorized service and repair facilities, agents and/or dealers, including seller, on at least six (6) occasions resulting in the Vehicle being out of service by reason of repair or nonconformities. (Complaint at ¶¶ 10, 54-59.) Defendants are in possession of repair orders/invoices. (Ibid.) Each time Plaintiff delivered the nonconforming Vehicle to a GM authorized service and repair facility, defendants, and each of them, represented to Plaintiff that they could and would conform the Vehicle to the applicable warranties, that in fact they did conform the Vehicle to said warranties, and that all the defects, malfunctions, misadjustments, and/or nonconformities have been repaired; however, defendant GM or its representatives failed to conform the Vehicle to the applicable warranties because said defects, malfunctions, misadjustments, and/or nonconformities continue to exist even after a reasonable number of attempts to repair was given. (Complaint at ¶ 13.)
The subject Vehicle was installed with a defective 6L80 MYC Hydra-Matic automatic transmission (“Hydramatic Transmission”). (Complaint at ¶ 15.) The Hydramatic Transmission was defective in that it causes reduced acceleration at low speed and/or the transmission slips at launch; sudden, hard shaking and violent jerking during acceleration; and complete failure to function. (Id. at ¶ 16.) The Hydramatic Transmission defect creates unreasonably dangerous situations while driving and increases the risk of a crash when trying to accelerate from a stop. (Id. at ¶ 17.)
Defendant GM knew or should have known about the safety hazard posed by the defective Hydramatic Transmission. (Complaint at ¶ 19.) Defendant GM has a long history of minimizing the significance of the Hydramatic Transmission defect. (Id. at ¶¶ 25-29.) Since at least 2010, defendant GM has received complaints of transmission defects and safety concerns related to the 2010-2018 GMC. (Id. at ¶¶ 35-37.) Despite knowing about the Hydramatic Transmission defect, defendant GM sold, leased, and continues to sell and lease vehicles equipped with the Hydramatic Transmission. (Id. at ¶¶ 20, 33.) Defendant GM concealed from and/or failed to disclose the existence of the Hydramatic Transmission defect to Plaintiff and other consumers. (Id. at ¶¶ 21, 38, 40.) Plaintiff would not have purchased the subject Vehicle, or would have paid significantly less for it, had he known of the transmission defect and the safety hazard it creates. (Id. at ¶ 43.)
On 21 December 2020, Plaintiff filed the operative complaint against defendant GM alleging causes of action for:
1) Breach of Implied Warranty of Merchantability under Song-Beverly Warranty Act
2) Breach of Express Warranty under Song-Beverly Warranty Act
3) Fraudulent Inducement – Concealment.
Currently before the court is a demurrer and motion to strike by defendant GM to the complaint. Plaintiff filed written oppositions. Defendant GM filed reply papers.
II. Demurrer.
A complaint must contain substantive factual allegations sufficiently apprising the defendant of the issues to be addressed. (See Williams v. Beechnut Nutrition Corp. (1986) 185 Cal.App.3d 135, 139, fn. 2 (Williams).)
A demurrer tests the legal sufficiency of a complaint. It is properly sustained where the complaint or an individual cause of action fails to “state facts sufficient to constitute a cause of action.” (Code of Civil Procedure, § 430.10, subd. (e).) “[C]onclusionary allegations . . . without facts to support them” are insufficient on demurrer. (Ankeny v. Lockheed Missiles and Space Co. (1979) 88 Cal.App.3d 531, 537.) “It is fundamental that a demurrer is an attack against the complaint on its face, it should not be sustained unless the complaint shows that the action may not be pursued.” (Yolo County Dept. of Social Services v. Municipal Court (1980) 107 Cal.App.3d 842, 846-847.)
“It is not the ordinary function of a demurrer to test the truth of the plaintiff’s allegations or the accuracy with which he describes the defendant’s conduct. A demurrer tests only the legal sufficiency of the pleading.” (Committee on Children's Television, Inc. v. General Foods Corp. (1983) 35 Cal.3d 197, 213 (Committee on Children's Television, Inc.).) “It ‘admits the truth of all material factual allegations in the complaint . . .; the question of plaintiff's ability to prove these allegations, or the possible difficulty in making such proof does not concern the reviewing court.’ [Citation.]” (Id. at pp. 213-214; see Cook v. De La Guerra (1864) 24 Cal. 237, 239: “[I]t is not the office of a demurrer to state facts, but to raise an issue of law upon the facts stated in the pleading demurred to.”)
III. Analysis.
A. First and Second Causes of Action: Breach of Warranty Claims.
The first and second causes of action are claims for breach of the implied warranty of merchantability and breach of express warranty under the Song-Beverly Act.
“The Song-Beverly Consumer Warranty Act provides a right of action for a buyer to recover damages and other relief when there has been a breach of the implied warranty of merchantability.” (Isip v. Mercedes-Benz USA, LLC (2007) 155 Cal.App.4th 19, 25, citing Civil Code, § 1794, subd. (a).) “Under the implied merchantability warranty, every sale of consumer goods that are sold at retail in this state shall be accompanied by the manufacturer’s and the retail seller’s implied warranty that the goods are merchantable. ” (Brand v. Hyundai Motor America (2014) 226 Cal.App.4th 1538, 1545 (Brand), internal quotation marks omitted.) The warranty arises by operation of law and thus applies despite its omission from a purchase agreement. (Ibid.) Merchantability, as relevant here, means that the goods pass without objection in the trade under the contract description, and are fit for the ordinary purposes for which such goods are used. (Ibid.)
“In order to plead a cause of action for breach of express warranty, one must allege the exact terms of the warranty, plaintiff’s reasonable reliance thereon, and a breach of that warranty which proximately causes plaintiff injury.” (Williams, supra, 185 Cal.App.3d at p. 142.)
Defendant GM argues the warranty claims are subject to demurrer as they arise from the Purchase Agreement where the material terms of the contract have not been pled nor is the alleged contract attached to the pleading. Even though Plaintiffs fail to address this argument in opposition, the court finds the contention lacks merit. First, a cause of action for implied warranty, as stated above, arises by operation of law and thus is not dependent on the purchase contract. (Brand, supra, 226 Cal.App.4th at p. 1545.) As to the express warranty claim, Plaintiff is required to allege the terms of the warranty which can be found in paragraphs 7-8 of the complaint. Plaintiff further alleges that defendant GM possesses a copy of the written warranty. (Complaint at ¶ 8.) The moving papers do not explain why these allegations do not support a breach of express warranty claim. Nor do the legal authorities cited by defendant GM examine the pleading requirements for a breach of implied or express warranty claim.
Consequently, the demurrer to the first and second causes of action on the ground that they fail to state a claim is OVERRULED.
B. Third Cause of Action: Fraudulent Inducement - Concealment.
1. Grounds for Demurrer.
Defendant GM demurs to the third cause of action on the ground that it fails to state a valid claim. (Code of Civil Procedure, § 430.10, subd. (e).) In doing so, GM raises the following arguments: (1) the fraud claim has not been pled with specificity; (2) Plaintiff does not allege a transactional relationship giving rise to a duty to disclose; and (3) the fraud claim is barred by the economic loss rule.
2. Lack of Specificity.
“Fraud must be pleaded with specificity rather than with general and conclusory allegations. The specificity requirement means a plaintiff must allege facts showing how, when, where, to whom, and by what means the representations were made, and, in the case of a corporate defendant, the plaintiff must allege the names of the persons who made the representations, their authority to speak on behalf of the corporation, to whom they spoke, what they said or wrote, and when the representation was made.” (West v. JPMorgan Chase Bank, N.A. (2013) 214 Cal.App.4th 780, 793 (West), citation and quotation marks omitted.)
Courts enforce the specificity requirement in consideration of its two purposes. (West, supra, 214 Cal.App.4th at p. 793.) The first purpose is to give notice to the defendant with sufficiently definite charges that the defendant can meet them. (Ibid.) The second is to permit a court to weed out meritless fraud claims on the basis of the pleadings; thus, the pleading should be sufficient to enable the court to determine whether, on the facts pleaded, there is any foundation, prima facie at least, for the charge of fraud. (Ibid.)
Defendant GM contends the third cause of action lacks the requisite specificity. In opposition, Plaintiff argues the specific pleading requirements ought to be relaxed.
Courts have recognized certain exceptions which mitigate the rigor of the rule requiring specific pleading of fraud. (Committee on Children's Television, Inc., supra, 35 Cal.3d at p. 217.) For example, less specificity is required when it appears from the nature of the allegations that the defendant must necessarily possess full information concerning the facts of the controversy. (Ibid.) Thus, even under the strict rules of common law pleading, one of the canons was that less particularity is required when the facts lie more in the knowledge of the opposite party. (Ibid.)
Relaxation of the specificity requirement is appropriate in a claim of nondisclosure/ concealment which is precisely what Plaintiff alleges in the complaint. (See Alfaro v. Community Housing Improvement System & Planning Assn., Inc. (2009) 171 Cal.App.4th 1356, 1384—“plaintiffs have apparently abandoned their earlier claims of intentional and negligent misrepresentations. As plaintiffs accurately respond, it is harder to apply this rule to a case of simple nondisclosure. “How does one show ‘how’ and ‘by what means’ something didn't happen, or ‘when’ it never happened, or ‘where’ it never happened?”) Plaintiff cannot be expected to plead the identity of a person who withheld a material fact.
The elements of fraudulent concealment are: (1) concealment or suppression of material fact, (2) duty to disclose the fact, (3) intent to conceal or suppress with intent to defraud, (4) plaintiff must have been unaware of the fact and would not have acted in such a manner had the plaintiff known of the concealment or suppression, and (5) resulting damage. (Jones v. ConocoPhillips (2011) 198 Cal.App.4th 1187, 1198; Marketing West, Inc. v. Sanyo Fisher (USA) Corp. (1992) 6 Cal.App.4th 603, 612-613.)
There is no requirement that a plaintiff asserting a claim for concealment identify matters upon which he relied. To the contrary, plaintiff must allege he was unaware of the concealed/suppressed fact(s) and would not have acted as he did if he had known of the concealed/suppressed fact(s). Here, Plaintiff makes such an allegation. (See Complaint at ¶43.) Defendant GM also contends Plaintiff has not alleged defendant GM’s intent to defraud. Such an allegation is found at paragraph 86—“GENERAL MOTORS, LLC intended to deceive Plaintiff by concealing the known issues with the 6L80 MYC Hydra-Matic automatic transmission in an effort to sell the Subject Vehicle at a maximum price.” (Cf. 5 Witkin, California Procedure (4th ed. 1997) Pleading, §684, p. 143—“Intent, like knowledge, is a fact. Hence, the averment that the representation was made with the intent to deceive the plaintiff, or any other general allegation with similar purport, is sufficient.”)
3. Duty to Disclose.
Defendant GM also argues there are no facts establishing a duty to disclose to support a claim for concealment.
“To maintain a cause of action for fraud through nondisclosure or concealment of facts, there must be allegations demonstrating that the defendant was under a legal duty to disclose those facts.” (Los Angeles Memorial Coliseum Commission, et al. v. Insomniac, Inc., et al. (2015) 233 Cal.App.4th 803, 831.)
Without a fiduciary relationship, the duty to disclose generally presupposes a relationship grounded in some sort of transaction between the parties. (LiMandri v. Judkins (1997) 52 Cal.App.4th 326, 336-337 (LiMandri).) “Thus, a duty to disclose may arise from the relationship between seller and buyer … or parties entering into any kind of contractual agreement.” (Id. at p. 337.) In transactions which do not involve fiduciary or confidential relations, a cause of action for non-disclosure of material facts may arise in at least three instances: “(1) the defendant makes representations but does not disclose facts which materially qualify the facts disclosed, or which render his disclosure likely to mislead; (2) the facts are known or accessible only to defendant, and defendant knows they are not known to or reasonably discoverable by the plaintiff; [or] (3) the defendant actively conceals discovery from the plaintiff.” (Warner Constr. Corp. v. City of Los Angeles (1970) 2 Cal.3d 285, 294 (Warner Constr. Corp.).)
Defendant GM relies principally upon Bigler-Engler v. Breg, Inc. (2017) 7 Cal.App.5th 276, 311-312 (Bigler) where the court wrote:
Our Supreme Court has described the necessary relationship giving rise to a duty to disclose as a “transaction” between the plaintiff and the defendant: “In transactions which do not involve fiduciary or confidential relations, a cause of action for non-disclosure of material facts may arise in at least three instances: (1) the defendant makes representations but does not disclose facts which materially qualify the facts disclosed, or which render his disclosure likely to mislead; (2) the facts are known or accessible only to defendant, and defendant knows they are not known to or reasonably discoverable by the plaintiff; (3) the defendant actively conceals discovery from the plaintiff.” (Warner Constr. Corp., supra, 2 Cal.3d at p. 294, italics added, fns. omitted.) Other cases have described the requisite relationship with the same term. (See, e.g., Hoffman v. 162 North Wolfe LLC (2014) 228 Cal.App.4t 1178, 1187; LiMandri, supra, 52 Cal.App.4th at p. 337 [“As a matter of common sense, such a relationship can only come into being as a result of some sort of transaction between the parties.”].) Such a transaction must necessarily arise from direct dealings between the plaintiff and the defendant; it cannot arise between the defendant and the public at large.
(Emphasis added.)
Defendant GM contends there is no direct relationship alleged between GM and Plaintiff because Plaintiff did not purchase the subject Vehicle directly from GM. But, earlier in Bigler, the court cites with approval the following:
A duty to disclose facts arises only when the parties are in a relationship that gives rise to the duty, such as seller and buyer, employer and prospective employee, doctor and patient, or parties entering into any kind of contractual arrangement. (Bigler, supra, 7 Cal.App.5th at p. 311, citation and quotation marks omitted; emphasis added.)
While Plaintiff does not allege he directly purchased the subject Vehicle from defendant GM, he has alleged the existence of a contractual agreement with GM; Plaintiff notified defendants of the defects, malfunctions, misadjustments, and/or nonconformities; and Plaintiff reviewed marketing brochures provided by GM, viewed television commercials and/or heard radio commercials about the qualities of the GMC Yukon XL. (See Complaint at ¶¶ 7, 8, 12, 47, 53; Cf. Bigler, supra, 7 Cal.App.5th at p. 314—“Breg did not transact with Engler or her parents in any way. Engler obtained her Polar Care device from Oasis, based on a prescription written by Chao, all without Breg’s involvement. The evidence does not show Breg knew—prior to this lawsuit—that Engler was a potential user of the Polar Care device, that she was prescribed the Polar Care device, or that she used the Polar Care device. The evidence also does not show that Breg directly advertised its products to consumers such as Engler or that it derived any monetary benefit directly from Engler's individual rental of the Polar Care device.”)
4. Economic Loss Rule.
Finally, defendant GM argues the fraud claim is barred by the economic loss rule.
The economic loss rule provides that “where a purchaser’s expectations in a sale are frustrated because the product he brought is not working properly, his remedy is said to be in contract alone, for he has suffered only economic losses.” (Robinson Helicopter Company v. Dana Corporation (2004) 34 Cal.4th 979, 988 (Robinson).) This doctrine hinges on a “distinction drawn between transactions involving the sales of goods for commercial purposes where economic expectations are protected by commercial and contract law, and those involving the sale of defective products to individual consumers who are injured in a manner which has traditionally been remedied by resort to the law of torts.” (Ibid.) The rule requires a purchaser to recover solely in contract for purely economic loss due to disappointed expectations, unless the purchaser can demonstrate harm above and beyond a broken contractual promise. (Ibid.)
In Robinson, the California Supreme Court carved out an exception to this rule, holding that it does not bar claims for fraud and intentional misrepresentations, which are independent of the contract that is alleged to have been breached. (Robinson, supra, 34 Cal.4th at p. 991.) The court reasoned that a breach of contract remedy assumes the parties to a contract can negotiate the risk occasioned by a breach; given this negotiation, it is “appropriate to enforce only such obligations as each party voluntarily assumed, and to give him only such benefits as he expected to receive …” (Ibid., citing Applied Equipment Corp. v. Litton Saudi Arabia Ltd. (1994) 7 Cal.4th 503, 517.) However, because a party to a contract could not “rationally calculate the possibility that the other party will deliberately misrepresent terms critical to that contract,” the court explained that public policy demanded that the party who is deceived be permitted to recover damages not limited to the contract. (Ibid.) Thus, where one party commits fraud during the contract formation or performance, the injured party may recover in contract and tort. (Ibid.; see Harris v. Atlantic Richfield Co. (1993) 14 Cal.App.4th 70, 78.) Defendant GM notes that the Robinson court’s ruling “is narrow in scope and limited to a defendant’s affirmative misrepresentations on which a plaintiff relies and which expose a plaintiff to liability for personal damages independent of the plaintiff’s economic loss.” (Robinson, supra, 34 Cal.4th at p. 993.)
Here, Plaintiff has sufficiently alleged defendant GM’s fraudulent concealment upon which he relied and that such concealment exposed Plaintiff to liability for personal damages independent of economic loss. (See Complaint at ¶¶17, 18, 20 - 45.) In addition, Plaintiff alleges that defendant GM’s deceit by nondisclosure induced him to purchase the subject Vehicle and long-standing case law provides that claims for fraudulent inducement are not barred by the economic loss rule. (Id. at ¶¶ 82-90; see also Erlich v. Menezes (1999) 21 Cal. 4th 543, 551-552 [“Tort damages have been permitted in contract cases ... where the contract was fraudulently induced.”]; United Guar. Mortg. Indem. Co. v. Countrywide Fin. Corp. (C.D. Cal. 2009) 660 F.Supp.2d 1163, 1188 [“The economic loss rule poses no barrier to a properly pled fraudulent inducement claim[.]”.)
Accordingly, the third cause of action is not barred by the economic loss rule.
Based on the foregoing, the demurrer to the third cause of action on the ground that it fails to state a claim is OVERRULED.
IV. Motion to Strike Prayer for Punitive Damages.
Defendant GM separately moves to strike the prayer for punitive damages in the complaint. As stated above, the court has overruled the demurrer with respect to the fraudulent concealment claim. As a consequence, the complaint properly supports Plaintiff’s prayer for punitive damages. (See Stevens v. Super. Ct. (1986) 180 Cal.App.3d 605, 610 [pleading of fraud is sufficient for punitive damages].)
Therefore, the motion to strike the prayer for punitive damages is DENIED.
V. Tentative Ruling.
The tentative ruling was duly posted.
VI. Case Management.
This Court will set a Case Management Conference for Tuesday, 16 November 2021 at 9:00 AM in this Department. The parties should consider any form of Alternate Dispute Resolution.
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VII. Conclusion and Order.
The demurrer to the first, second, and third causes of action on the ground they fail to state a valid claim is OVERRULED. Defendant has 20 days from the filing and service of this Order within which to ANSWER the complaint.
The motion to strike the prayer for punitive damages is DENIED.
|___________________________ |______________________________________________ |
|DATED: |HON. SOCRATES PETER MANOUKIAN |
| |Judge of the Superior Court |
| |County of Santa Clara |
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|SUPERIOR COURT, STATE OF CALIFORNIA | |
|COUNTY OF SANTA CLARA | |
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|DEPARTMENT 20 | |
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|161 North First Street, San Jose, CA 95113 | |
|408.882.2320 · 408.882.2296 (fax) | |
|smanoukian@ | |
| |(For Clerk's Use Only) |
|CASE NO.: |20CV367633 |FriendFinder Networks Inc. v. AG-SW Hamilton Plaza Owner, L.P., et al. |
|DATE: 27 May 2021 |TIME: 9:00 am |LINE NUMBER: 3 |
This matter will be heard by the Honorable Judge Socrates Peter Manoukian in Department 20 in the Old Courthouse, 2nd Floor, 161 North First Street, San Jose. Any party opposing the tentative ruling must call Department 20 at 408.808.6856 and the opposing party no later than 4:00 PM on 24 May 2021. Please specify the issue to be contested when calling the Court and Counsel.
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Order on Motion for Summary Judgment or, Alternatively,
Summary Adjudication, on First Cause of Action for Breach of Contract
and Second Cause of Action for Quantum Meruit in Defendant’s Cross-Complaint.
I. Statement of Facts.
Complaint
Plaintiff FriendFinder Networks Inc. (“FFN”) is a private membership-based technology and social networking company that runs numerous web-based social networking and dating platforms. (Complaint, ¶8.)
Defendant AG-SW Hamilton Plaza Owner, L.P. (“Landlord”) is the owner of property located at 910 E. Hamilton Avenue in Campbell. (Complaint, ¶9.) Defendant SteelWave, Inc. (erroneously sued as SteelWave, LLC; hereafter, “SteelWave”) is the manager of the property located at 910 E. Hamilton Avenue, Suite 600, in Campbell (“Subject Premises”). (Complaint, ¶10.)
On 22 January 2015, plaintiff FFN entered into a lease agreement with defendant Landlord’s predecessor, Legacy III Campbell, LLC, to lease the Subject Premises located on the sixth floor of the building at 910 E. Campbell Avenue. (Complaint, ¶11.)
Until March 2020, plaintiff FFN regularly had over 150 employees working during normal business hours at the Subject Premises. (Complaint, ¶12.) Beginning in approximately July 2018, plaintiff FFN experienced many issues surrounding the operation of the elevators in the building of the Subject Premises. (Complaint, ¶13.)
From 2018 to 2020, plaintiff FFN made multiple requests to defendants Landlord and SteelWave to fix the elevators or have them replaced. (Id.) Elevators are not all operational at the same time and it is common for only a single elevator to be functional. (Id.) In approximately February 2020, defendants Landlord and SteelWave acknowledged the issues and stated they would be replacing the elevators later in 2020 and had entered into a contract for such work. (Complaint, ¶14.)
On 17 March 2020, a Shelter in Place Order was issued to address the Covid-19 pandemic. (Complaint, ¶15.) This order required plaintiff FFN to close its office. (Id.)
Since that date to the present, plaintiff FFN has only had minimal use of the Subject Premises. (Id.) Defendants have put the building in “weekend mode” seven days a week which means all deliveries must be escorted by security with one security guard between two buildings. (Complaint, ¶16.)
Plaintiff FFN placed one “essential” employee stationed at the Subject Premises as allowed by local Santa Clara County ordinance (“Ordinance”). (Complaint, ¶17.) Pursuant to the Ordinance, one of the functions of this employee is to retrieve packages delivered by FedEx. (Id.) If security is unavailable at the time of delivery, FedEx is unable to deliver packages and plaintiff FFN’s employee is sent to FedEx to retrieve packages, disrupting plaintiff FFN’s business and exposing the FFN employee to unnecessary health risks. (Id.)
On 31 March 2020, plaintiff FFN contacted defendants requesting no rent payment be due for April and a credit for the two weeks in March when the Shelter in Place order began. (Complaint, ¶18.) Defendants responded stating plaintiff FFN is expected to meet all obligations stated under the lease agreement. (Complaint, ¶19.) Plaintiff FFN set aside funds for April 2020 rent. (Complaint, ¶20.) On 9 April 2020, defendants notified plaintiff FFN that they had taken plaintiff FFN’s April 2020 rent obligation out of the security deposit and directed plaintiff FFN to restore the security deposit. (Id.)
On 17 April 2020 and again on 1 May 2020, plaintiff FFN sent defendants a letter requesting to amend the lease agreement taking into consideration circumstances surrounding Covid-19 and inquiring about when defendants plan to replace the elevators as promised and what re-entry plans will be in place when the Shelter in Place order is lifted, but defendants’ response did not address any of plaintiff FFN’s key questions/ concerns. (Complaint, ¶¶21 and 23.)
On 27 April 2020, defendants sent an email to all tenants of the building with a proposal to limit the number of passengers in the elevators to as few as two persons at a time. (Complaint, ¶22.) If such restrictions were imposed and only one elevator is in operation, very few of plaintiff FFN’s employees would be able to reach their workplace and/or their workdays will be severely curtailed. (Id.)
On or about 23 June 2020, plaintiff FFN submitted checks in good faith to its’ attorney’s trust account with the view of demonstrating that plaintiff FFN was ready, willing, and able to pay rent and associated expenses upon reaching some reasonable accommodation that assured the health and safety of its employees. (Complaint, ¶24.) On 25 June 2020, plaintiff FFN requested defendants and their counsel engage in mediation (or non-litigation settlement) to expedite a resolution, but defendants ignored plaintiff FFN’s request. (Complaint, ¶25.)
On 25 June 2020[2], plaintiff FFN filed a complaint against defendants Landlord and SteelWave asserting a single cause of action for declaratory relief. Plaintiff FFN alleges:
…a set of disputes and disagreements has arisen between FFN and Defendants, and each of them, on whether or not the lease’s payment obligations are suspended or reduced during the period of the Shelter-in-Place Order, whether or not it is suspended during an [sic] subsequent period of threat to employee health due to post-pandemic defects, whether COVID-19 constitutes a force majeure under the Lease Agreement, and if the lease is terminated for cause due to the Defendants’ failure to correct or otherwise cure the defects of the elevators and other defects which exist in and about the building.
(Complaint, ¶28.)
On 14 July 2020, defendants Landlord and SteelWave filed an answer to plaintiff FFN’s complaint and defendant Landlord also filed a cross-complaint against FFN.
Cross-Complaint
The cross-complaint alleges Landlord is the owner of the Subject Premises. (Cross-Complaint, ¶1.) On or about 22 January 2015, Landlord and FFN entered into a lease (“Lease”). (Cross-Complaint, ¶10 and Exh. 1.) Pursuant to the Lease, FFN was to pay Landlord rent and operating expenses, as well as maintain a security deposit. (Cross-Complaint, ¶11.) Beginning 1 April 2020, FFN has failed to pay rent, failed to pay operating expenses, and has failed to replenish FFN’s security deposit after Landlord applied it to outstanding rent. (Cross-Complaint, ¶12.) FFN has failed and refused to pay Landlord the balance owed under the Lease. (Cross-Complaint, ¶13.)
Cross-complainant Landlord’s cross-complaint asserts causes of action for:
1) Breach of Written Contract
2) Quantum Meruit
On 11 August 2020, cross-defendant FFN filed its answer to Landlord’s cross-complaint.
On 27 October 2020[3], the court denied defendant/cross-complainant Landlord’s application for right to attach order and for issuance of an order for writ of attachment. The court indicated the matter would be better resolved by a bench trial on the merits of the complaint and cross-complaint. The court set the matter for trial on 14 December 2020.
On 14 December 2020, the court continued the trial to 25 January 2021 and ordered expert discovery to close on 8 January 2021.
On 19 January 2021, the court vacated the trial date of 25 January 2021 and set a trial setting conference for 26 January 2021. On 26 January 2021, the court continued the trial setting conference to 11 March 2021.
On 10 February 2021, plaintiff/cross-defendant FFN filed the motion now before the court, a motion for summary judgment/ adjudication of defendant/cross-complainant Landlord’s cross-complaint.
On 18 March 2021, the court set the matter for trial on 27 September 2021.
II. Motions for Summary Judgment.
Any party may move for summary judgment. (Code of Civil Procedure, § 437c, subd. (a); Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 843 (Aguilar).) The motion “shall be granted if all the papers submitted show that there is no triable issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” (Code of Civil Procedure, § 437c, subd. (c); Aguilar, supra, at p. 843.) The object of the summary judgment procedure is “to cut through the parties’ pleadings” to determine whether trial is necessary to resolve the dispute. (Aguilar, supra, at p. 843.)
The “party moving for summary judgment bears an initial burden of production to make a prima facie showing of the nonexistence of any triable issue of material fact…” (Aguilar, supra, 25 Cal.4th at p. 850; see Evidence Code, § 110.) “A prima facie showing is one that is sufficient to support the position of the party in question.” (Aguilar, supra, at p. 851.) A defendant moving for summary judgment may satisfy its initial burden either by producing evidence of a complete defense or by showing the plaintiff’s inability to establish a required element of the case. (Code of Civil Procedure, § 437c, subd. (p)(2); Aguilar, supra, at p. 853.)
If a moving defendant makes the necessary initial showing, the burden of production shifts to the plaintiff to make a prima facie showing of the existence of a triable issue of material fact. (Code of Civil Procedure, § 437c, subd. (p)(2); see Aguilar, supra, 25 Cal.4th at p. 850.) A triable issue of material fact exists “if, and only if, the evidence would allow a reasonable trier of fact to find the underlying fact in favor of the party opposing the motion in accordance with the applicable standard of proof.” (Aguilar, supra, at p. 850, fn. omitted.) If the plaintiff opposing summary judgment presents evidence demonstrating the existence of a disputed material fact, the motion must be denied. (Id. at p. 856.)
Throughout the process, the trial court “must consider all of the evidence and all of the inferences drawn therefrom.” (Aguilar, supra, 25 Cal.4th at p. 856.) The moving party’s evidence is strictly construed, while the opponent’s is liberally construed. (Id. at p. 843.)
Similarly, “[a] party may seek summary adjudication on whether a cause of action, affirmative defense, or punitive damages claim has merit or whether a defendant owed a duty to a plaintiff. A motion for summary adjudication…shall proceed in all procedural respects as a motion for summary judgment.” (California Bank & Trust v. Lawlor (2013) 222 Cal.App.4th 625, 630, internal citations and quotation marks omitted.)
III. Analysis.
A. Cross-defendant FFN’s motion for summary adjudication of the first cause of action [breach of contract] in cross-complainant Landlord’s cross-complaint is DENIED.
1. Lack of authority.
“To prevail on a cause of action for breach of contract, the plaintiff must prove (1) the contract, (2) the plaintiff's performance of the contract or excuse for nonperformance, (3) the defendant's breach, and (4) the resulting damage to the plaintiff.” (Richman v. Hartley (2014) 224 Cal.App.4th 1182, 1186; see also CACI, No. 303.) In moving for summary adjudication of cross-complainant Landlord’s first cause of action for breach of contract, cross-defendant FFN apparently contends Landlord cannot establish the existence of a valid binding contract.
Cross-defendant FFN contends the Lease is invalid and not binding because it is signed only by its president, but the Lease itself states:
*** If Tenant is a CORPORATION, the authorized officers must sign on behalf of the corporation and indicate the capacity in which they are signing. The Lease must be executed by the chairman of the board, president or vice president and the chief financial officer, secretary, assistant treasurer or assistant secretary, unless the bylaws or a resolution of the board of directors shall otherwise provide, in which event, the bylaws or a certified copy of the resolution, as the case may be, must be attached to this Lease.
FFN apparently relies upon Snukal v. Flightways Manufacturing, Inc. (2000) 23 Cal.4th 754, 779 (Snukal) where the court stated, “At common law, the party seeking to enforce a contract with a corporation generally has the burden of establishing the contracting officer's authority to bind the corporation.” According to FFN, Landlord “cannot carry [this burden] here as a matter of law because the requisite number of signatures do not even exist.”[4] This court finds cross-defendant FFN’s reliance on Snukal to be misplaced and/or that cross-defendant FFN misunderstands Snukal.
In Snukal, the plaintiff, an individual, leased a residence he owned in Malibu, California to defendant Flightways Manufacturing, Inc. (“Flightways”) for a two year term. “The residence was to be occupied by Kirt Lyle, who at that time was president, chief financial officer, and secretary of Flightways. On behalf of Flightways, Lyle alone executed the lease agreement, designating his title as president, without indicating that he also was chief financial officer and secretary of the corporation.” (Snukal, supra, 23 Cal.4th at p. 759.) Not long after commencement of the lease, Flightways was in arrears. Lyle eventually vacated the premises and plaintiff commenced an action to recover past due rent, among other things. “In its answer to the complaint, Flightways denied that Lyle was authorized to enter into the lease agreement on its behalf. Flightways filed a cross-complaint alleging that it had not authorized Lyle to enter into the lease agreement on its behalf, and seeking relief in the amount of the monthly rent payments previously made.” (Id.)
In a bench trial, the municipal court determined Flightways was bound by the lease agreement and entered judgment in favor of plaintiff and the parties stipulated to entry of judgment in favor of plaintiff on the cross-complaint. The appellate department affirmed the judgment of the municipal court concluding Corporations Code section 313 was dispositive. Corporations Code section 313 states:
Subject to the provisions of subdivision (a) of Section 208, any note, mortgage, evidence of indebtedness, contract, share certificate, initial transaction statement or written statement, conveyance, or other instrument in writing, and any assignment or endorsement thereof, executed or entered into between any corporation and any other person, when signed by the chairperson of the board, the president or any vice president and the secretary, any assistant secretary, the chief financial officer or any assistant treasurer of such corporation, is not invalidated as to the corporation by any lack of authority of the signing officers in the absence of actual knowledge on the part of the other person that the signing officers had no authority to execute the same.
The appellate department of the Superior Court certified the case for review by the Court of Appeal as necessary to determine "when the same person is president as well as secretary and chief financial officer of a corporation, whether it is necessary under . . . section 313 for the written contract to specifically reflect a corporate office designation in addition to that of President as signatory in order to bind the corporation under the written contract." (Snukal, supra, 23 Cal.4th at p. 761.)
The Court of Appeal reversed holding section 313 applies only when the signatures of two officers appear on the document and therefore inapplicable to the present case. The Snukal decision focused initially on the propriety of the appellate procedure, but in addressing Corporations Code section 313, the Snukal court reversed the Court of Appeal and affirmed the judgment of the municipal court. The Snukal court explained:
if its criteria are met, Corporations Code section 313 precludes the invalidation of an instrument entered into by a corporation, despite the presentation of evidence demonstrating that the signing officers lacked authority to execute the instrument on its behalf. Thus, the statute provides a conclusive, rather than a merely rebuttable, evidentiary presumption of authority to enter into the agreement on the part of the specified corporate officers.
…
At the same time, Corporations Code section 313 leaves intact the other party's ability to assert the validity of an instrument under existing common law doctrines when the signatory or signatories do not hold the corporate offices specified in that statute. The comment of the Assembly committee advises that Corporations Code section 313 “does not create any negative inference that a document executed by others than the specified officers without actual authority is invalid; the concepts of the apparent authority and inherent agency power and other validating concepts, where applicable, remain effective to prevent a defense against enforcement of a contract on grounds of lack of authority.” [Citations omitted.]
(Id. at pp. 782 – 783.)
In view of the statutory purpose, context, and derivation of Corporations Code section 313, we believe that the Legislature did not intend to limit the statute's application only to instances in which two corporate offices are set forth on the face of the instrument. Rather, the signature of one person alone is sufficient to bind a corporation, as long as he or she holds corporate offices in each of the two series or categories described in that statute. In the present case, therefore, because Lyle served both as Flightways's president and as its chief financial officer (and secretary), and because plaintiff did not have actual knowledge of any lack of authority on Lyle's part, the lease agreement was not invalidated by Lyle's lack of authority to enter into such an agreement on behalf of Flightways.
(Id. at pp. 786 – 787.)
Here, there is no indication Landlord is relying upon the conclusive presumption afforded by Corporations Code section 313 to overcome a defense against enforcement of the Lease on grounds of lack of authority. Nor has there been an assertion by FFN that the purported signatory on the Lease (Mallorie Burak, President) for FFN actually lacks authority.[5]
2. Condition precedent.
Alternatively, cross-defendant FFN contends the contract’s effectiveness is expressly conditioned upon Landlord’s receipt of written approval of the Lease from its lender, but that Landlord has not obtained such approval. In relevant part, cross-defendant FFN asserts, “Per its own terms, the Lease did not become effective because Defendants did not obtain lender approval.”[6] The underlying evidence to support this assertion is paragraph 24.32 of the Lease which states, in relevant part:
Landlord and Tenant acknowledge and agree that the effectiveness of this Lease is expressly conditioned and contingent on Landlord's receipt of written approval of the Lease from its lenders. Landlord shall diligently pursue such approvals but Landlord shall not be subject to any liability in the event Landlord is unable to obtain all such approvals.
“A condition is a fact, the happening or nonhappening of which creates (condition precedent) or extinguishes (condition subsequent) a duty on the part of the promisor. If the promisor makes an absolute or unconditional promise, he or she is bound to perform when the time arrives; but if the promisor makes a conditional promise, he or she is bound to perform only if the condition precedent occurs, or is relieved from the duty if the condition subsequent occurs. The condition may be the happening of an event, or an act of a party.” (1 Witkin, Summary of California Law (10th ed. 2010) Contracts, §776.) “A condition precedent is one which is to be performed before some right dependent thereon accrues, or some act dependent thereon is performed.” (Civ. Code, §1436.) “A plaintiff, however, cannot enforce the defendant’s obligation unless the plaintiff has performed the conditions precedent imposed upon him.” (Daum v. Superior Court (1964) 228 Cal.App.2d 283, 287 citing Civ. Code, §1439.)
Here, however, cross-defendant FFN does not submit any admissible evidence to support its assertion that defendant/cross-complainant Landlord did not obtain lender approval. “A defendant or cross-defendant has met his or her burden of showing that a cause of action has no merit if the party has shown that one or more elements of the cause of action, even if not separately pleaded, cannot be established, or that there is a complete defense to the cause of action.” (Code Civ. Proc., §437c, subd. (p)(2).) Cross-defendant FFN has not met its burden.
For the reasons discussed above, cross-defendant FFN’s motion for summary adjudication of the first cause of action [breach of contract] in cross-complainant Landlord’s cross-complaint is DENIED.
B. Cross-defendant FFN’s motion for summary adjudication of the second cause of action [quantum meruit] in cross-complainant Landlord’s cross-complaint is DENIED.
“The common count is a general pleading which seeks recovery of money without specifying the nature of the claim.” (Title Ins. Co. v State Board of Equalization (1992) 4 Cal.4th 715, 731.) “A common count is proper whenever the plaintiff claims a sum of money due, either as an indebtedness in a sum certain, or for the reasonable value of services, goods, etc., furnished. It makes no difference in such a case that the proof shows the original transaction to be an express contract, a contract implied in fact, or a quasi-contract.” (Utility Audit Co v. City of Los Angeles (2003) 112 Cal.App.4th 950, 958; see also CACI, No. 371.) The only essential allegations of a common count are “(1) the statement of indebtedness in a certain sum, (2) the consideration, i.e., goods sold, work done, etc., and (3) nonpayment.” (Farmers Ins. Exchange v. Zerin (1997) 53 Cal.App.4th 445, 460)
In moving for summary adjudication of cross-complainant Landlord’s second cause of action for quantum meruit, cross-defendant FFN asserts there has been an accord and satisfaction. “An accord is an agreement to accept, in extinction of an obligation, something different from or less than that to which the person agreeing to accept is entitled.” (Civ. Code, §1521.) “Acceptance, by the creditor, of the consideration of an accord extinguishes the obligation, and is called satisfaction.” (Civ. Code, §1523.)
“An accord and satisfaction is the substitution of a new agreement for and in satisfaction of a preexisting agreement between the same parties. The usual purpose is to settle a claim at a lesser amount. [Citations.] The elements of an accord and satisfaction are: (1) a bona fide dispute between the parties, (2) the debtor sends a certain sum on the express condition that acceptance of it will constitute full payment, and (3) the creditor so understands the transaction and accepts the sum.” (In re Marriage of Thompson (1996) 41 Cal.App.4th 1049, 1058.)[7]
In support of its request for summary adjudication of the second cause of action, cross-defendant FFN asserts, “The parties have resolved all outstanding value issues when Defendants accepted and deposited FFN’s check as payment in full for such matters.”[8] Cross-defendant FFN cites paragraphs 37, 38, 43, and 44 and exhibits 9 – 12 to the Declaration Buckheit as the underlying evidence to support this assertion. In reviewing this evidence, the court finds cross-defendant FFN has not met its burden.[9] Paragraph 37 of the Declaration Buckheit states, “On or about December 29, 2020 I sent Defendants a check in the amount of $124,780 enclosed with a letter to fully resolve, through an accord and satisfaction, a number of issues identified in that letter … attached hereto as Exhibit 9.” Nowhere in the attached letter (exhibit 9) is there an express condition that acceptance of the $124,780 check constitutes full payment. Nor is such an express condition found in exhibits 10 – 12 to the Declaration Buckheit. Likewise, there is no evidence that Landlord understood the transaction to be an accord. To the contrary, at exhibit 11 to the Declaration Buckheit, in email correspondence dated 2 February 2021 between Steve Dunn (“Dunn”) apparently of SteelWave and Jonathan Buckheit of FFN, Dunn states acceptance of the $124,780 check and that it “will be applied to the rent owed by FFN. No rights are waived. … All obligations per the terms, conditions, and covenants of the Lease remain in place.”
Accordingly, cross-defendant FFN’s motion for summary adjudication of the second cause of action [quantum meruit] in cross-complainant Landlord’s cross-complaint is DENIED.
C. Cross-defendant FFN’s motion for summary judgment of cross-complainant Landlord’s cross-complaint is DENIED.
1. Civil Code section 1511.
Cross-defendant FFN continues by asserting a series of arguments based upon Civil Code section 1511. That section states:
The want of performance of an obligation, or of an offer of performance, in whole or in part, or any delay therein, is excused by the following causes, to the extent to which they operate:
1. When such performance or offer is prevented or delayed by the act of the creditor, or by the operation of law, even though there may have been a stipulation that this shall not be an excuse; however, the parties may expressly require in a contract that the party relying on the provisions of this paragraph give written notice to the other party or parties, within a reasonable time after the occurrence of the event excusing performance, of an intention to claim an extension of time or of an intention to bring suit or of any other similar or related intent, provided the requirement of such notice is reasonable and just;
2. When it is prevented or delayed by an irresistible, superhuman cause, or by the act of public enemies of this state or of the United States, unless the parties have expressly agreed to the contrary; or,
3. When the debtor is induced not to make it, by any act of the creditor intended or naturally tending to have that effect, done at or before the time at which such performance or offer may be made, and not rescinded before that time.
a. Performance prevented by operation of law.
Cross-defendant FFN argues first, “The Lease is not enforceable and FFN’s performance is excused because in-person office work that could be performed remotely became unlawful under the State and County COVID pandemic laws.”[10] Cross-defendant FFN’s argument conflates the performance of its obligation to pay rent with its ability to perform (operate) its business at the Subject Premises.[11] The two are not one and the same. FFN’s payment of rent is an obligation of the Lease; operation of FFN’s business is not. To apply here, Civil Code section 1511(1) must be read: “Cross-defendant FFN’s want of performance of an obligation [failure to pay rent] is excused “when such performance [payment of rent] … is prevented … by the operation of law.” Cross-defendant FFN contends the 5 October 2020 order of the Santa Clara County Health Officer (“Health Order”) made it unlawful for FFN to use the Subject Premises if work could be performed remotely.[12] The Health Order does not prevent or make it unlawful for cross-defendant FFN to pay rent.[13]
In this same discussion, cross-defendant FFN argues further that the Lease is or has become an illegal contract. “Illegal contracts are void.” (Kolani v. Gluska (1998) 64 Cal.App.4th 402, 408; see also Yoo v. Jho (2007) 147 Cal.App.4th 1249, 1251—“the illegal object of the contract precludes any recovery.”) Cross-defendant FFN’s argument is, at best, underdeveloped. Without citation to any specific provision of the Lease, cross-defendant FFN asserts the purpose of the Lease was to have employees gather in one place which the Health Order made unlawful. In wholly conclusory fashion, cross-defendant FFN asserts the “object of the Lease is to exempt the Landlord from its demands that FFN engage in in-person office work.” The court finds no factual support for such an assertion.
b. Performance prevented by irresistible, superhuman cause.
Here again, cross-defendant FFN mistakes the contractual obligation at issue (payment of rent), confusing it with its own performance or ability to perform (operate) its business. (See page 22, lines 2 – 4 of FFN’s MPA—“FFN’s performance of the Lease is therefore excused because it is impossible for it to perform the Lease in a healthy manner…”) To apply Civil Code section 1511(2), cross-defendant FFN would have to establish that its payment of rent was “prevented or delayed by an irresistible, superhuman cause, or by the act of public enemies of this state or of the United States.” Cross-defendant FFN has not made such a preliminary showing.
c. Frustration of purpose.
“With respect to frustration of purpose, the doctrine applies when performance is possible but a supervening, fortuitous event has virtually destroyed the value of consideration to be rendered.” (Glendale Fed. Sav. & Loan Assn. v. Marina View Heights Dev. Co. (1977) 66 Cal.App.3d 101, 154.) To prevent the defense from interfering with the need for certainty, the defense is limited to cases of extreme hardship. (Lloyd v. Murphy (1944) 25 Cal.2d 48, 54.) Laws or other governmental acts that make performance unprofitable or more difficult or expensive do not excuse the duty to perform a contractual obligation. (Id. at p. 55.) The defense is also not available if the risk of the frustrating event was not reasonably foreseeable or controllable by the promisor. (Ibid.)
Again, cross-defendant merely raises the possibility of this defense without adequately developing the argument and without proffering sufficient facts or admissible evidence to support its application. Even if cross-defendant FFN had met its initial burden, cross-complainant Landlord proffers evidence in opposition which would create a triable issue of material fact with regard to whether the purpose of the Lease had been frustrated. For instance, cross-complainant Landlord proffers evidence that FFN employees worked in the offices—some everyday—performing necessary functions for FFN at the Subject Premises throughout 2020.[14] FFN occupied and utilized the premises from January 2015 through at least February 2021.[15]
2. Impossibility of Performance.
There is no liability for breach of a contract whose performance has been made impossible by operation of law. (Baird v. Wendt Enterprises, Inc. (1967) 248 Cal.App.2d 52, 55.) If it is impossible for a party to a contract to perform, then his or her performance is excused. (Oosten v. Hay Haulers Etc. Union (1955) 45 Cal.2d 784, 788 (Oosten).) “Impossibility means not only strict impossibility but also impracticability because of extreme and unreasonable difficulty, expense, injury or loss involved. [Citation.]” (Board of Supervisors v. McMahon (1990) 219 Cal.App.3d 286, 299-300.)
Based on the same evidence proffered in opposition on the issue of frustration of purpose, the court finds the existence of a triable issue of material fact with regard to whether cross-defendant’s performance was impossible.[16] Furthermore, cross-complainant Landlord proffers evidence that FFN admitted Covid-19 did not make it impossible for FFN to pay rent.[17] FFN was provided with an offer of accommodation by [Landlord], a rent relief program but FFN declined to participate, ostensibly because it would require FFN to disclose financial information.[18]
3. Penalty/ Forfeiture.
As its penultimate argument, cross-defendant FFN cites Magic Carpet Ride LLC v. Rugger Investment Group, L.L.C. (2019) 41 Cal.App.5th 357, 368 where the court wrote, “If the enforcement of an express provision causes an excessive penalty or an unjust forfeiture, equity will prevent enforcement. Thus equity limits our power to determine our own contractual rights and duties.” Cross-defendant FFN then goes on to point out in a footnote a number of provisions of the Lease which it contends amount to penalty/ forfeiture clauses. However, none concern the payment of rent which is the primary provision of the Lease that the cross-complaint seeks to enforce.[19] At best, cross-defendant references provisions of the Lease affecting tangential relief. Code of Civil Procedure section 437c, subdivision (f) does not authorize partial summary adjudication. “A motion for summary adjudication shall be granted only if it completely disposes of a cause of action, an affirmative defense, a claim for damages, or an issue of duty.” (Code Civ. Proc., §437c, subd. (f)(1).)
4. Taking.
Finally, cross-defendant FFN contends its obligations under the Lease have been fully or partially abated pursuant to sections 12.1 and 12.2 of the Lease which state, “If any part of the Premises shall be taken, and this Lease shall not be so terminated, the Base Rent and Tenant’s Share of Operating Expenses, Tax Expenses and Utilities Costs shall be proportionately abated” and “in the event of a temporary taking of all or any portion of the Premises for a period of one hundred and eighty (180) days or less, then this Lease shall not terminate but the Base Rent and Tenant’s Share of Operating Expenses, Tax Expenses and Utilities Costs shall be abated for the period of such taking...”
Cross-defendant FFN’s argument lacks any evidence to support an assertion that all or any portion of the Subject Premises have been taken, as that term is contemplated by the Lease.[20] Consequently, cross-defendant FFN has failed to meet its initial burden of demonstrating that its obligations under the Lease have been fully or partially abated by a taking.
5. Miscellaneous.
The court can only speculate but perhaps due to page limitations, in a lengthy footnote following its taking argument, cross-defendant writes, “This is by no means an exhaustive outline of the reasons why FFN is not liable to Defendants.” Cross-defendant FFN then proceeds to set forth at least four additional arguments in the footnote as bases for summary judgment/ adjudication.
Cross-defendant FFN argues Landlord has breached the covenant of quiet enjoyment and, therefore, cross-defendant FFN is not liable for breach of contract or quantum meruit. It is not entirely clear what fact(s) FFN is relying upon to establish such a breach or how such breach occurred, but FFN alludes to provisions of the Lease concerning the elevators.
The court finds this argument to be unsupported by sufficient admissible evidence and/or underdeveloped. Moreover, cross-defendant FFN provides no legal authority to support the assertion that a breach of the covenant of quiet enjoyment absolves cross-defendant FFN of liability. Cross-defendant FFN cites Kornoff v. Kingsburg Cotton Oil Co. (1955) 45 Cal.2d 265, 272 (Kornoff) for the proposition, “Once a cause of action for trespass or nuisance is established, an occupant of land may recover damages for annoyance and discomfort that would naturally ensue therefrom.” This statement is entirely inapposite here as neither trespass nor nuisance are at issue and establishing a cause of action for either gives rise to damages; it does not serve as an affirmative defense to breach of contract or quantum meruit.
Next, cross-defendant FFN contends it is entitled to rescind the Lease pursuant to Civil Code section 1689, subdivision (b) “because its consideration has materially failed on account of it being for being unlawful and the public interest will be prejudiced by letting it stand.”[21] Presumably, cross-defendant is referring to Civil Code section 1689, subdivision (b)(2) which states, “A party to a contract may rescind the contract … If the consideration for the obligation of the rescinding party fails, in whole or in part, through the fault of the party as to whom he rescinds.” Again, the court finds this argument to be unsupported by sufficient admissible evidence and/or underdeveloped. Among other things, Civil Code section 1689, subdivision (b)(2) requires the failure of consideration to be “through the fault of the party as to whom he rescinds.” Cross-defendant FFN makes no showing that the failure of consideration is through the Landlord’s fault.
Cross-defendant FFN also asserts cross-complainant Landlord failed to mitigate its damages. “ ‘ “The doctrine of mitigation of damages holds that ‘[a] plaintiff who suffers damage … has a duty to take reasonable steps to mitigate those damages and will not be able to recover for any losses which could have been thus avoided.” ’ Under the doctrine, ‘[a] plaintiff may not recover for damages avoidable through ordinary care and reasonable exertion.’ However, ‘[t]he duty to mitigate damages does not require an injured party to do what is unreasonable or impracticable.’ ” (Agam v. Gavra (2015) 236 Cal.App.4th 91, 111 (Agam); internal citations omitted; see also CACI No. 358.)
In Mayes v. Sturdy Northern Sales, Inc. (1979) 91 Cal.App.3d 69, 86 (overruled on other grounds in Applied Equipment Corp. v. Litton Saudi Arabia Ltd. (1994) 7 Cal.4th 503), the court wrote, “Failure to mitigate damages, however, is a matter of affirmative defense that must be pleaded and proved by appellants.” “Whether a plaintiff acted reasonably to mitigate damages … is a factual matter to be determined by the trier of fact … .” (Agam, supra, 236 Cal.App.4th at p. 111.)
In connection with this argument, cross-defendant FFN makes the unsupported assertion that Landlord did not avoid rental loss by renting to another party. Cross-defendant FFN provides no admissible evidence to support this assertion. Moreover, as the court understands the facts in this case, cross-defendant FFN retained possession of the Subject Premises through at least January 2021 which would preclude Landlord from renting to another party. (See ¶38 and Exh. 10 to the Declaration Buckheit—“In a letter of January 28, 2021 … I informed Defendants of the need to coordinate matters in relation to FFN’s departure from the Property.”)
Finally, cross-defendant FFN asserts the faulty elevators at the Subject Premises in combination with cross-complainant Landlord’s proposal to limit elevator usage to two persons at a time amounts to a constructive eviction.[22] “ ‘A constructive eviction occurs when the acts or omissions . . . of a landlord, or any disturbance or interference with the tenant’s possession by the landlord, renders the premises, or a substantial portion thereof, unfit for the purposes for which they were leased, or has the effect of depriving the tenant for a substantial period of time of the beneficial enjoyment or use of the premises.’ [Citations.] Abandonment of premises by the tenant within a reasonable time after the wrongful act of the landlord is essential to enable the tenant to claim a constructive eviction [citation]. Failure to repair and keep the premises in a condition suitable for the purposes for which they were leased has been held to constitute eviction [citation].” (Stoiber v. Honeychuck (1980) 101 Cal.App.3d 903, 925 – 926; emphasis added.)
As has been the pattern, cross-defendant FFN’s argument lack sufficient factual support and is underdeveloped. As emphasized above, to claim constructive eviction, cross-defendant FFN would have had to abandon the Subject Premises within a reasonable time after the alleged wrongful act(s). Cross-defendant FFN makes no such showing. Moreover, cross-defendant FFN makes no showing regarding the effective date of a constructive eviction and, thus, fails to establish that constructive eviction would completely absolve it of liability for payment of rent and/or other obligations under the Lease.
For all the reasons discussed above, plaintiff/cross-defendant FFN’s motion for summary judgment or, alternatively, summary adjudication, on first cause of action for breach of contract and second cause of action for quantum meruit in defendant’s cross-complaint is DENIED.
III. Tentative Ruling.
The tentative ruling was duly posted.
V. Case Management.
The matter is set for 2 June 2021 at 9:00 AM in this Department for the hearing on the petition of plaintiff for a writ of attachment. The matter will be heard by Judge Lie.
The settlement conference and jury trial (three-week estimate) are set for 22 September 2021 at 9:00 AM and 27 September 2021 at 8:45 AM.
VI. Order.
Plaintiff/cross-defendant FFN’s motion for summary judgment or, alternatively, summary adjudication, on first cause of action for breach of contract and second cause of action for quantum meruit in defendant’s cross-complaint is DENIED.
|___________________________ |______________________________________________ |
|DATED: |HON. SOCRATES PETER MANOUKIAN |
| |Judge of the Superior Court |
| |County of Santa Clara |
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[1] This Department intends to comply with the time requirements of the Trial Court Delay Reduction Act (Government Code, §§ 68600–68620). The California Rules of Court state that the goal of each trial court should be to manage limited and unlimited civil cases from filing so that 100 percent are disposed of within 24 months. (Ca. St. Civil Rules of Court, Rule 3.714(b)(1)(C) and (b)(2)(C).
[2] This Department intends to comply with the time requirements of the Trial Court Delay Reduction Act (Government Code, §§ 68600–68620). The California Rules of Court state that the goal of each trial court should be to manage limited and unlimited civil cases from filing so that 100 percent are disposed of within 24 months. (Ca. St. Civil Rules of Court, Rule 3.714(b)(1)(C) and (b)(2)(C).
[3] The formal order after hearing was filed 16 November 2020 and mistakenly refers to the trial date at 14 February 2020.
[4] See page 15, lines 8 – 9 of the Memorandum of Points and Authorities in Support of Plaintiff/Cross-Defendant FriendFinder Networks Inc.’s Motion for Summary Judgment, etc. (“FFN MPA”).
[5] Cross-defendant FFN’s proffered material fact actually misstates the evidence. In support of its motion for summary judgment/ adjudication, cross-defendant FFN asserts, “Per its own terms, the Lease has never been executed.” (See Separate Statement in Support of Plaintiff/Cross-Defendant FriendFinder Networks Inc.’s Motion for Summary Judgment, etc. (“FFN SS”), Issue No. 1, Fact No. 1.) To support this fact, cross-defendant FFN cites ¶10 and Exh. 1 to the Declaration of Jonathan Buckheit, PhD, in Support of Plaintiff/Cross-Defendant FriendFinder Networks Inc.’s Motion for Summary Judgment, etc. (“Declaration Buckheit”) which states, in relevant part, “A true and correct copy of that Lease is attached hereto as Exhibit 1. FFN’S corporate records do not contain a Lease with a second corporate officer signature(s) and/or explicit board of directors’ approval for this document.” Contrary to cross-defendant FFN’s assertion, the Lease attached as Exhibit 1 to the Declaration Buckheit is executed by Mallorie Burak, President on behalf of FFN.
[6] See FFN SS, Issue No. 1, Fact No. 2.
[7] Cross-defendant alludes to Civil Code section 1526, subdivision (b) which states, “the acceptance of a check or draft constitutes an accord and satisfaction if a check or draft is tendered pursuant to a composition or extension agreement between a debtor and its creditors, and pursuant to that composition or extension agreement, all creditors of the same class are accorded similar treatment, and the creditor receives the check or draft with knowledge of the restriction.
A creditor shall be conclusively presumed to have knowledge of the restriction if a creditor either:
(1) Has, previous to the receipt of the check or draft, executed a written consent to the composition or extension agreement.
(2) Has been given, not less than 15 days nor more than 90 days prior to receipt of the check or draft, notice, in writing, that a check or draft will be tendered with a restrictive endorsement and that acceptance and cashing of the check or draft will constitute an accord and satisfaction.”
Even under this statutory accord and satisfaction, the court finds cross-defendant has not met its initial burden as there is no evidence that the check was “tendered pursuant to a composition or extension agreement between a debtor and its creditors, and pursuant to that composition or extension agreement, all creditors of the same class are accorded similar treatment,” cross-complainant Landlord “[h]as, previous to the receipt of the check …, executed a written consent to the composition or extension agreement,” or cross-complainant “[h]as been given … notice, in writing, that a check … will be tendered with a restrictive endorsement and that acceptance and cashing of the check … will constitute an accord and satisfaction.”
[8] See FFN SS, Issue No. 2, Fact No. 1.
[9] “The burden on a defendant moving for summary judgment based upon the assertion of an affirmative defense is heavier than the burden to show one or more elements of the plaintiff's cause of action cannot be established. Instead of merely submitting evidence to negate a single element of the plaintiff's cause of action, or offering evidence such as vague or insufficient discovery responses that the plaintiff does not have evidence to create an issue of fact as to one or more elements of his or her case (see Certain Underwriter at Lloyd's of London v. Superior Court (1997) 56 Cal. App. 4th 952, 958-959 [65 Cal. Rptr. 2d 821]), "the defendant has the initial burden to show that undisputed facts support each element of the affirmative defense" (Bacon v. Southern Cal. Edison Co. (1997) 53 Cal. App. 4th 854, 858 [62 Cal. Rptr. 2d 16], italics added; accord, Huynh v. Ingersoll-Rand (1993) 16 Cal. App. 4th 825, 830-831 [20 Cal. Rptr. 2d 296]).” (Anderson v. Metalclad Insulation Corp. (1999) 72 Cal.App.4th 284, 289 [85 Cal.Rptr.2d 331].)
[10] See page 20, lines 14 – 16 of the FFN MPA.
[11] Alternatively, FFN’s argument conflates principles regarding excuse of performance with frustration of purpose.
[12] See ¶22 and Exh. 3 to the Declaration Buckheit.
[13] Cross-defendant FFN argues additionally that its performance is excused under Civil Code section 1511(1) “because Defendants have prevented or delayed FFN’s performance by not installing efficacious anti-COVID protections and by not maintaining the elevators.” Again, cross-defendant FFN conflates performance of its rent obligations under the Lease and its ability to perform (operate) its business, which is not an obligation under the Lease for which relief would be granted.
[14] See Response to Separate Statement in Support of Plaintiff/Cross-Defendant FriendFinder Networks Inc.’s Motion for Summary Judgment, etc. (“Response SS”), Issue No. 1, Fact No. 3.
[15] See Response SS, Issue No. 1, Fact No. 4. See also Response SS, Issue No. 2, Fact Nos. 3 – 4.
[16] See Response SS, Issue No. 1, Fact Nos. 3 – 4. See also Response SS, Issue No. 2, Fact Nos. 3 – 4.
[17] See ¶8 and Exh. E to the Declaration of John L. Fitzgerald in Support of Defendants AG-SW Hamilton Plaza Owner, L.P.’s Opposition, etc. (“Declaration Fitzgerald”), Reporter’s Transcript of Proceedings, December 4, 2020, page 54, lines 7 – 12.
[18] See Defendant AG-SW Hamilton Plaza Owner, L.P.’s Separate Statement of Disputed Facts in Opposition, etc., Fact No. 5 (erroneously numbered “4” a second time).
[19] See ¶20 of the Cross-Complaint—“Beginning April 1, 2020, Tenant breached the Lease by not paying rent and operating expenses.”
[20] Section 12 of the Lease is entitled, “Condemnation.” Intentionally or otherwise, cross-defendant FFN omits the portion of section 12.1 which reads, “If the whole or any part of the Premises, Building or Project shall be taken by power of eminent domain or condemned by any competent authority for any public or quasi-public use or purpose, or if any adjacent property or street shall be so taken or condemned, or reconfigured or vacated by such authority in such manner as to require the use, reconstruction or remodeling of any part of the Premises, Building or Project, or if Landlord shall grant a deed or other instrument in lieu of such taking by eminent domain or condemnation, …” Under rules of contract interpretation, “The whole of a contract is to be taken together, so as to give effect to every part, if reasonably practicable, each clause helping to interpret the other.” (Civil Code, §1641.)
[21] See page 24, lines 15 – 17 of the FFN MPA.
[22] Cross-defendant initially uses the term “constructive termination,” a term more frequently found in the employment context. “Constructive discharge occurs when the employer's conduct effectively forces an employee to resign. Although the employee may say “I quit,” the employment relationship is actually severed involuntarily by the employer's acts, against the employee's will. As a result, a constructive discharge is legally regarded as a firing rather than a resignation.” (Turner v. Anheuser-Busch, Inc. (1994) 7 Cal.4th 1238, 1244-1245.) In citing to Johnson v. Snyder (1950) 99 Cal.App.2d 86, 88, the court understands cross-defendant FFN to be asserting a constructive eviction. (“Where the landlord leases part of a building and permits unsanitary conditions amounting to a nuisance to exist in the portion of the building remaining under his control which operate to deprive the tenant of his beneficial enjoyment the tenant may treat this as a constructive eviction.”)
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TENTATIVE RULING PROTOCOL
Law & Motion matters are heard every Tuesday and Thursday at 9:00 a.m. Tentative rulings will be accessible on after 2:00 p.m. on the court date preceding the scheduled hearing at:
https: /wvvw.online services/tentatives/tentative rulings_Dept20.shtml
Tentative rulings will become Orders of the Court unless contested. See California Rules of Court, rules 3.1308(a)(l) and 3.1312.
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