Judge: Carolyn M. Caietti, Case: 37-2023-00016263-CU-BC-CTL, Date: 2024-03-22 Tentative Ruling

SUPERIOR COURT OF CALIFORNIA,

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HALL OF JUSTICE

TENTATIVE RULINGS - March 21, 2024

03/22/2024  10:30:00 AM  C-70 COUNTY OF SAN DIEGO

JUDICIAL OFFICER:Carolyn Caietti

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Civil - Unlimited  Breach of Contract/Warranty Summary Judgment / Summary Adjudication (Civil) 37-2023-00016263-CU-BC-CTL GOLD PROCESS LLC VS SCIENTIFIC SOLUTION INC [IMAGED] CAUSAL DOCUMENT/DATE FILED: Motion for Summary Judgment and/or Adjudication, 01/03/2024

Plaintiff Gold Process, LLC's Motion for Summary Adjudication is DENIED.

Plaintiff's request for judicial notice is granted and notice will be taken to the extent permitted.

Plaintiff's reply objections Nos. 1-3 are overruled. No. 4 is sustained. (Evid. Code, §§ 1152-1154 [settlement discussions].) A party may move for summary adjudication as to one or more causes of action within an action if the party contends the cause of action has no merit. (C.C.P., § 437c(f)(1).) A motion for summary adjudication shall be granted only if it completely disposes of a cause of action. (Ibid.) Summary adjudication motions are 'procedurally identical' to summary judgment motions. (Serri v. Santa Clara University (2014) 226 Cal.App.4th 830, 859.) A three-step analysis is employed in ruling on motions for summary judgment. (Kline v. Turner (2001) 87 Cal.App.4th 1369, 1373.) First, the court identifies the issues framed by the pleadings. (Pierson v. Helmerich & Payne Internat. Drilling Co. (2016) 4 Cal.App.5th 608, 617.) Second, the court determines whether the moving party has established facts justifying judgment in its favor. (Ibid.) Third, if the moving party carried its initial burden, the court decides whether the opposing party demonstrated the existence of a triable issue of material fact. (Id. at p. 618.) In conducting this analysis, the court must strictly construe the moving party's evidence and liberally construe the opposing party's evidence (Binder v. Aetna Life Ins. Co. (1999) 75 Cal.App.4th 832, 838-39), and may not weigh the evidence or conflicting inferences. (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 856.) A triable issue of material fact exists 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. (Id. at p. 850.) As a preliminary and problematic matter, Plaintiff's Notice of Motion does not state the issues for adjudication 'verbatim' in the Separate Statement as required by California Rules of Court, rule 3.1350(b).) Disputed facts exist on the first issue of whether 'Scientific breached its contract with Plaintiff by collecting funds for the sale of Plaintiff's equipment and retaining well over the 20% consignment fee set forth in the contract.' Generally, whether there is a material breach of a contract is a question of fact.

(Porter v. Arthur Murray, Inc. (1967) 249 Cal.App.2d 410, 421.) The evidence that creates this dispute includes the Declaration of John Cantil. The first dispute regarding breach is whether Defendants allowed for 'financing' because Abstrax required proof the equipment was operational prior to providing Calendar No.: Event ID:  TENTATIVE RULINGS

3033210  42 CASE NUMBER: CASE TITLE:  GOLD PROCESS LLC VS SCIENTIFIC SOLUTION INC  37-2023-00016263-CU-BC-CTL full payment. There is also a factual dispute on whether Scientific 'promptly' remitted payment to Plaintiff as, after receipt of the second payment from Abstrax, Scientific reduced the sales amount by its fee, remitted a partial payment to Plaintiff and Plaintiff did not accept the remaining funds. These facts could lead a trier of fact to find Defendants did not breach the contract.

The second issue is whether Plaintiff is entitled to summary adjudication on the fourth cause of action for violation of Penal Code section 496 against Scientific because Scientific embezzled funds from Plaintiff.

Penal Code section 496 creates a cause of action against a person 'who buys or receives any property that has been stolen or obtained in any manner constituting theft or extortion, knowing the property to be so stolen or obtained, or who conceals, sells, withholds, or aids in concealing, selling or withholding any property from the owner, knowing the property to be so stolen or obtained.' (Pen. Code, § 496(a), (c).) Essentially, a plaintiff may recover under section 496(c) 'when property has been obtained in any manner constituting theft.' (Siry Investment, L.P. v. Farkhondehpour (2022) 13 Cal.5th 333, 361.) 'Theft' is defined in Penal Code section 484.

Plaintiff maintains Scientific concealed and withheld funds from Plaintiff and relies on People v. Frazier (1948) 88 Cal.App.2d 99. Again, disputed facts exist. The declaration of John Cantil explains Abstrax did not wire the remaining 50% of the sale price until March 20, 2023. Thereafter, Scientific needed to deduct expenses and its consignment fee. On April 6, 2023, Scientific sent the first portion of funds to Plaintiff followed by the second payment on May 8, 2023, which Plaintiff refused to accept. A trier of fact could find a lack of fraudulent intent based on the timing of Abstrax' payments, Scientific's need to calculate expenses/fees and its payments of the sale to Plaintiff. Unlike Frazier, there is no evidence here Scientific: (i) told Plaintiff the equipment sold for a lower price than what it actually sold for; and (ii) pocketed the difference between the actual sales price and the sales price represented to Plaintiff.

The third issue is whether Cantril, co-founder and Chief Executive Officer of Scientific, aided Scientific in embezzling funds from Plaintiff. For the same reasons and evidence cited above, disputed facts exist.

The fourth issue is whether 'Scientific owed a duty to disclose the sale of the Equipment, the terms of that sale and to deliver the funds less its consignment fee to Plaintiff upon Scientific's receipt of such funds.' Defendants do not oppose Scientific owed Plaintiff this duty. (Opp., at p. 7:19-22 ['Defendant Scientific does not contest that it was acting in a fiduciary capacity during the sale of the Equipment, and further, that implicit in the obligatory language of the Consignment Agreement, Scientific owed Plaintiff a duty to disclose the sale of the Equipment, the terms of the sale, and to deliver the funds to Plaintiff 'promptly[.]'.) However, they contest the scope of the duty as the issue is phrased. Plaintiff has not met its burden. The Consignment Agreement does not state 'upon Scientific's receipt of such funds.' Rather, it states, 'Promptly after Dealer[']s receipt of payment for the sale of such Equipment item, Dealer shall subtract is consignment fee and remit the remaining amount to the Customer.' (Emphasis added.) So, while there is no dispute that Scientific had a duty to deliver the funds to Plaintiff, the timing of such delivery is hotly disputed. Thus, adjudication – as phrased - is not appropriate as to Issue 4.

Concluding Orders The motion is DENIED in its entirety.

If the tentative ruling is confirmed without modification, the minute order will be the Court's final ruling.

Plaintiffs are ordered to serve written notice of the Court's final ruling on all appearing parties by March 26, 2024.

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