Judge: Anne Richardson, Case: 22STCV14534, Date: 2024-01-18 Tentative Ruling

Case Number: 22STCV14534    Hearing Date: January 18, 2024    Dept: 40

Superior Court of California

County of Los Angeles

Department 40

Background

Pleadings Framing Motion

Plaintiff Samir Armaly (Armaly), in his capacity as cotrustee of the Samir B. Armaly and Kelly R. Armaly Revocable Trust (the Trust) sues Defendants Stephen L. Goodman (Goodman), Matthew Yang (Yang), Chris Chorebanian (Chorebanian), and Fidares Group, LLC (Fidares) pursuant to a June 22, 2022 First Amended Complaint (FAC) alleging claims of (1) Breach of Contract and (2) Fraud.

The claims arise from the following allegations. On February 20, 2020, Armaly, as trustee of the Trust, entered into a written agreement with Goodman, Yang, Chorebanian, Fidares, and three nonparty entities (collectively, the Buyers) (the Agreement). Goodman signed on his behalf and on behalf of the three nonparty entity Buyers, and Yang and Chorebanian signed on their own behalf and on behalf of Fidares. The purpose of the Agreement was for the Trust to loan $2 million to the Buyers in connection with a potential real-estate transaction involving the Insurance Exchange Building in downtown Los Angeles. The Agreement included a term pursuant to which the Buyers would indemnify Armaly for any breach of the agreement by any of the Buyers. The Agreement was amended at least twice to provide the Buyers with additional time to advance the real estate venture and make payments under the Agreements and its amendments, with the final amendment taking place in August 2020 (the August Amendment). Under that amendment, the Buyers were liable to the Trust in the amount of $2,607,500 in monies loaned to the Buyers. The Buyers failed to make payment under the August Amendment, prompting Armaly to send a demand letter to the Buyers on August 13, 2020. On August 28, 2020, Armaly entered into a partial settlement, specifically with the three entity Buyers, in the amount of $2,300,000, in exchange for a release of claims. The settlement reserved Armaly’s rights to pursue satisfaction against Defendants in this action for the outstanding obligations on the loan. Plaintiff prays for the difference between the loan and the settlement, i.e., $307,500, interest at a rate of 18% per annum, costs arising from Defendants’ breach of the Agreement and subsequent amendments, and attorneys’ fees and costs in drafting the amendments and prosecuting this action.

Motion Before the Court

On November 1, 2023, Plaintiff Armaly filed an affirmative motion for summary judgment directed solely at the FAC’s first cause of action for breach of contract as to all defendants.

On November 2, 2023, Plaintiff Armaly dismissed the fraud claim. The breach of guaranty claim is thus the only operative claim in this action.

On January 4, 2023, Defendants Yang, Chorebanian, and Fidares filed a 4 page opposition brief to Plainitff Armaly’s motion. No separate statement accompanies these Defendants’ opposition. No opposition was filed by Defendant Stephen Goodman.

On January 12, 2024, Plaintiff replied to the opposition.

Plaintiff Armaly’s motion is now before the Court.

Motion for Summary Judgment

Legal Standard

A motion for summary judgment shall be granted if all the papers submitted show that there is no triable issue as to any material fact for trial or that the moving party is entitled to a judgment as a matter of law. (Code of Civ. Proc., § 437c, subd. (c).) The moving party bears the initial burden of production to make prima facie showing no triable material fact issues. (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 850.) This burden on summary judgment “is more properly one of persuasion rather than proof, since he must persuade the court that there is no material fact for a reasonable trier of fact to find, and not to prove any such fact to the satisfaction of the court itself as though it were sitting as the trier of fact.” (Id. at p. 850, fn. 11.) If the moving party meets this burden, the burden shifts to the opposing party to make a rebuttal prima facie showing that a triable issue of material fact exists. (Id. at p. 849.) “[I]n ruling on motions for summary judgment courts are to ‘“liberally construe the evidence in support of the party opposing summary judgment and resolve doubts concerning the evidence in favor of that party.”’ [Citations].” (Cheal v. El Camino Hospital (2014) 223 Cal.App.4th 736, 760.)

I.

FAC, Breach of Guaranty: GRANTED.

The necessary elements for breach of written guaranty are: (1) that the defendant guaranteed payment of the indebtedness of the primary obligor to the plaintiff; (2) a default on the indebtedness; (3) that the plaintiff notified the guarantor of the default; and (4) that the guarantor did not remit funds to the plaintiff under the guaranty agreement. (See Torrey Pines Bank v. Superior Court (1989) 216 Cal.App.3d 813, 819 [elements drawn from court’s discussion as to why bank was entitled to summary judgment on two breach of guaranty claims].)

The FAC’s first cause of action for breach of contract is directed at all Defendants, incorporates prior allegations, and alleges that Defendants entered into the Agreement and subsequent amendments with Plaintiff Armaly, that Armaly performed his obligations under these agreements, that Defendants did not perform on the contract and are jointly and severally liable on damages arising from breach of the agreements, and that Plaintiff has been damaged in the amount of $307,500, plus interest, costs to Armaly, and fees and costs relating to counsel. (FAC, ¶¶ 42-47; see FAC, ¶¶ 9-41 [background allegations incorporated into first cause of action and summarized above in Background section].)

 In his motion, Plaintiff Armaly argues that he presents sufficient evidence to show a contract existed between the parties (the Agreement and its amendments), that Armaly performed his obligations under the contract (transfer of monies to Defendants), that Defendants breached the contract by failing to make payments on the loan underlying the Agreement and its amendments (despite their guaranty of those monies), and that Armaly has been damaged in the amount of $307,500 plus interest, totalling $537,611.39 as of the date of the hearing. (Motion (Mot.), pp. 3, 6-7, citing to Mot., Separate Statement (Sep. St.), Undisputed Material Fact (UMF) Nos. 2-4, 7-8.)

To show that a contract exists between the parties, Plaintiff cites UMF Nos. 2 and 3, which refer to the Agreement and its guaranty clause to indemnify Plaintiff for breach of the Agreement. (Mot., p. 6, citing Sep. St., UMF Nos. 2-3, in turn citing Mot., Armaly Decl., ¶¶ 8-12, Ex. A [copy of the Agreement, which contains indemnification clauses at page two and three (principally at three) and, at page five, the signatures of: Plaintiff Armaly, as Trustee of the Trust; Defendant Goodman, individually and on behalf of the three nonparty entity Buyers that have settled with Plaintiff Armaly; Defendant Yang, individually and on behalf of Fidares; and Defendant Chorebanian, individually and on behalf of Fidares]; see also Mot., Armaly Decl., Exs. C, D [copies of the May 2020 and August 2020 amendments to the Agreement, all signed by Plaintiff Armaly and Defendants Goodman, Yang, and Chorebanian, in the same capacities, and making modifications only to payment schedule], Ex. D cited in Mot., Sep. St., UMF No. 5.)

To show that Plaintiff performed his obligations under his contract with Defendants, Plaintiff cites UMF No. 4 to cite evidence showing that Plaintiff’s only obligation was to transfer $2,000,000 to the Buyers. (Mot., pp. 6-7, citing Mot., Sep. St., UMF No. 4, in turn citing Mot., Armaly Decl., ¶ 13 [Armaly causes wire transfer of $2 million to Yang on February 28, 2020], Ex. B [copy of email attaching confirmation of wire transaction].)

To show that Defendants breached the Agreement as modified by the August Amendment—thus triggering Defendants’ guaranty obligations—Plaintiff Armaly cites UMF No. 7 to show that Plaintiff was entitled to a payment of $2,607,500 from the Buyers by September 1, 2020 pursuant to the Agreement as modified by the August Amendment and that only $2,300,000 of those monies have since been received. (Mot., p. 7, citing Sep. St., UMF No. 7, in turn citing Mot., Armaly Decl., ¶¶ 20, 23-26, 28 [detailing nonpayment as of August 7, 2020, subsequent settlement with the three nonparty entity Buyers, and shortfall of $307,500 on loan as of September 3, 2020].)

To show damages, Plaintiff in part cites UMF No. 3, which refers to the indemnification clause in the Agreement, pursuant to which Defendants agreed to indemnify Plaintiff Armaly for any injuries arising from breach of the parties’ contract. Plaintiff also cites UMF No. 8 to refer to (1) the declaration of Plaintiff Armaly to show $537,611.39 in monies owed, in addition to entitlement to other relief, and (2) a printout of an online compound interest calculator output for the interest on a $307,500 judgment, at 18% per annum, for a period of 3.3753 years, yielding $230,111.30 in interest. (Mot., p. 7, citing Mot., Sep. St., UMF Nos. 3, in turn citing Mot., Armaly Decl., ¶ 11 [quoting indemnification clause in Agreement] & Ex. A, pp. 2, 3 [indemnification clauses in Agreement, with interest provision at p. 3]; Mot., p. 7, citing Mot., Sep. St., UMF No. 8, in turn citing Mot., Armaly Decl., ¶¶ 28-31 [discussion of principal owed, interest on that balance, and total monies owed as a result, i.e., $307,500 owed as of September 3, 2020, with 1,232 days between that date and January 18, 2024 (the hearing date), with an 18% contractual per annum interest rate, yielding $230,111.39 in interest, and a total amount owed of $537,611.39] & Ex. H [PDF printout of interest calculator output for interest on the sum of $307,500, compounded annually at an interest rate of 18%, for 3.3753 years, yielding $230,111.39 in interest].)

Plaintiff Armaly’s motion and separate statement frame the breach of guaranty claim within the elements of a breach of contract claim, i.e., contract, performance or excuse, breach, and damages. As to notice for breach of guaranty purposes, Plaintiff Armaly provides evidence to show that Plaintiff Armaly notified Defendants of their default on the Agreement and its amendments. (Mot., Armaly Decl., Ex. F [Aug. 14, 2020 letter from counsel for Armaly to Defendants Goodman, Yang, and Chorebanian, notifying that the Buyers were in breach of the Agreement, that the Buyers are jointly and severally liable for the debt, that an 18% per annum interest rate applies to the outstanding debt, and that Plaintiff is entitled to attorney’s fees, among other things].)

The Court finds that this showing carries Plaintiff Armaly’s burden for summary judgment of his FAC’s claim for breach of guaranty.

The evidence discussed above makes a prima facie showing of the elements of a breach of guaranty claim. The parties executed the Agreement in February 2020. Goodman signed on his behalf and on behalf of the three nonparty entity Buyers. Yang and Chorebanian signed on their behalf and on behalf of Fidares. (Mot., Armaly Decl., Ex. A.) The Agreements were later amended in May 2020 and August 2020, with the amendments only affecting the payment schedule in the original Agreement and the August 2020 amendment being controlling of the payment schedule. (Mot., Armaly Decl., Exs. C, D.) Plaintiff Armaly performed his obligations by transferring $2 million pursuant to the Agreement. (Mot., Armaly Decl., ¶ 13, Ex. B [copy of email attaching confirmation of February 28, 2020 wire transaction]; see Mot., Armaly Decl., Ex. A, p. 2 [requiring Plaintiff to make deposit of $2 million by February 29, 2020].) The August Amendment called for payments on the loan on August 7, August 20, and September 1, 2020. (Mot., Armaly Decl., Ex. D, p. 2, ¶¶ 1-4.) Defendants did not make their payment set for August 7, 2020, thus breaching the Agreement before altogether repudiating their duties under the Agreement and its amendments. (Mot., Armaly Decl., ¶ 23.) The Agreement contains indemnifications clauses applicable to all Defendants and to be triggered in the event of a breach of the Agreement, with interest to accrue at a rate of 18% per annum. (Mot., Armaly Decl., Ex. A, pp. 2, 3.) That clause was triggered by Defendants’ nonpayment and repudiation of their loan obligations. (Mot., Armaly Decl., ¶ 23.) Plaintiff Armaly made a demand for payment of the monies owed by Defendants. (Mot., Armaly Decl., ¶ 24 Ex. F [demand letter].) As of September 3, 2020—after the final payment date of September 1, 2020 and considering the settlement with the three nonparty entity Buyers—the outstanding balance on the loan was $307,500. (Mot., Armaly Decl., ¶¶ 24-28 [settlement with three nonparty entity Buyers reduced balance on loan by $2.3 million from $2,607,500 to $307,500].) Plaintiff also claims $230,111.39 in interest on the $307,500 in outstanding debt, for a total amount owed of $537,611.39. (Mot., Armaly Decl., ¶¶ 28-31, Ex. H.)

In opposition—and without submitting a separate statement or any supporting evidence—Defendants Yang, Chorebanian, and Fidares argue that the only “Buyer” contemplated in the Agreement was Defendant Goodman and that Yang, Chorebanian, and Fidares cannot be held liable under the Agreement because they do not stand to receive any benefit from the original contract, i.e., no consideration supports the Agreement as against Yang, Chorebanian, and Fidares. (Opp’n, pp. 3-4.)

In reply, Plaintiff Armaly argues that Defendants Yang, Chorebanian, and Fidares are, per the Agreement’s terms, some of the various Buyers contemplated in the Agreement, that the Agreement did not qualify the loan as being made to Defendant Goodman, and that consideration supported the Agreement ($2 million paid by Armaly per the Agreement) and the amendments (forbearance in exchange for interest payments). (Reply, pp. 2-4.)

The Court finds that Defendants Yang, Chorebanian, and Fidares do not carry their burden on summary judgment.

The Agreement clearly includes Defendants Yang, Chorebanian, and Fidares as “Buyers” within the meaning of the Agreement. (Mot., Armaly Decl., Ex. A, p. 2.) Those Buyers agreed to indemnify Plaintiff in the event of a breach of the Agreement. (Mot., Armaly Decl., Ex. A, pp. 2, 3 [interest at p. 3].) The Agreement was executed by Goodman, Yang, and Chorebanian, with the latter two signing on behalf of Fidares. (Mot., Armaly Decl., Ex. A, p. 5.) Goodman, Yang, and Chorebanian signed the amendments in the same capacities. (Mot., Armaly Decl., Exs. C, D.) Yet, Yang and Chorebanian have not filed declarations to challenge those signatures. Moreover, consideration clearly supported the Agreement and the amendments, as argued in the reply, and as shown by the Agreement and amendments themselves. (Mot., Armaly Decl., Exs. A, C, D.) Consequently, Yang, Chorebanian, and Fidares’ opposition provides no grounds for this Court to determine that they have made a prima facie showing that Yang, Chorebanian, and Fidares are not encompassed in the Agreement’s terms or are not liable to Plaintiff for the outstanding debt and interest owed on that Agreement, as modified.

Plaintiff’s motion is therefore GRANTED. 

Conclusion

Plaintiff Samir Armaly’s Motion for Summary Judgment is GRANTED, in favor of Plaintiff Armaly, as against Defendants Stephen L. Goodman, Matthew Yang, Chris Chorebanian, and Fidares Group, LLC, in the sum of $537,611.39.