Judge Christian R. Gullon, Case Number: 23PSCV02192, Date: 2024-02-20 Tentative Ruling

Judge: Christian R. Gullon, Case: 23PSCV02192, Date: 2024-02-20 Tentative Ruling

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Counsel may submit on the tentative rulings by calling the clerk in Dept. O at 909-802-1126 before 8:30 the morning of the hearing. Submission on the tentative does not bind the court to adopt the tentative ruling at the hearing should the opposing party appear and convince the court of further modification during oral argument.

The Tentative Ruling is not an invitation, nor an opportunity, to file any further documents relative to the hearing in question. No such filing will be considered by the Court in the absence of permission first obtained following ex-parte application therefore.

Preferred Bank’s Notice Of Motion And Motion For Summary Judgment Against Defendants Naum Neil Shekhter Individually And As Trustee Of The Nms Family Living Trust Dated November 29, 2000; Margot Shekhter Individually And As Trustee Of The Nms Family Living Trust Dated November 29, 2000 (collectively, “Defendants”) is GRANTED.[1]

This case arises from the breach of a promissory note. Plaintiff alleges the following against Defendants: On 2/25/2020, Defendants borrowed $2 million from Plaintiff for real estate business capital needs with a maturity date of 2/21/2021 (“Note”). The Note included interest and late charges. The parties entered into five modifications, whereby, among other things, the maturity date of the loan was extended, and the loan amount was changed. Defendants have defaulted on the Note, resulting in damages of $3 million in principal owed; accrued interest at the Note Rate of $48,854.17; plus $44,666.67 at the Default Rate; late charges $5,296.88; and attorney fees and costs.

On September 20, 2024, Defendants NAUM NEIL SHEKHTER AND MARGOT SHEKHTER filed their answer.[2]

The law of summary judgment provides courts “a mechanism to cut through the parties’ pleadings in order to determine whether, despite their allegations, trial is in fact necessary to resolve their dispute.” (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 843 (Aguilar).) In reviewing a motion for summary judgment, courts employ a three-step analysis: “(1) identify the issues framed by the pleadings; (2) determine whether the moving party has negated the opponent’s claims; and (3) determine whether the opposition has demonstrated the existence of a triable, material factual issue.” (Hinesley v. Oakshade Town Center (2005) 135 Cal.App.4th 289, 294.) “The motion for summary judgment 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 Civ. Proc., § 437c, subd. (c).)

A moving defendant bears the initial burden of production to show that one or more elements of the cause of action cannot be established or that there is a complete defense to the cause of action, at which point the burden shifts to the plaintiff to make a prima facie showing of the existence of a triable issue. (Code Civ. Proc., § 437c, subd. (p)(2).) “The motion shall be supported by affidavits, declarations, admissions, answers to interrogatories, depositions, and matters of which judicial notice shall or may be taken. The supporting papers shall include a separate statement setting forth plainly and concisely all material facts that the moving party contends are undisputed. Each of the material facts stated shall be followed by a reference to the supporting evidence. The failure to comply with this requirement of a separate statement may in the court’s discretion constitute a sufficient ground for denying the motion.” (Code Civ. Proc., § 437c, subd. (b)(1).)

The opposing party may not rely on the mere allegations or denials of the pleadings, but instead must set forth the specific facts showing that a triable issue exists as to that cause of action or a defense thereto. (Aguilar, supra, at p. 849.) Specifically, “[t]he opposition, where appropriate, shall consist of affidavits, declarations, admissions, answers to interrogatories, depositions, and matters of which judicial notice shall or may be taken.” (Code Civ. Proc., § 437c, subd. (2).)

Courts “liberally construe the evidence in support of the party opposing summary judgment and resolve doubts concerning the evidence in favor of that party.” (Dore v. Arnold Worldwide, Inc. (2006) 39 Cal.4th 384, 389; see also Hinesley, supra, 135 Cal.App.4th at p. 294 [The court must “view the evidence in the light most favorable to the opposing party and accept all inferences reasonably drawn therefrom.”].) In determining whether the papers show that there is a triable issue as to any material fact, the court shall consider all of the evidence set forth in the moving papers, except that as to which objections have been made and sustained, and all inferences reasonable deducible from such evidence. (Hayman v. Block (1986) 176 Cal.App.3d 629, 639.)

Plaintiff moves for summary judgment on its sole COA for breach of the Note/contract seeking judgment in the total sum of the unpaid principal plus interest and late fees.[3]

Plaintiff argues that Defendants have breached the Loan documents (referencing the multiple modifications) “by failing to make the payments due for June 11, 2023.” (Motion p. 3:14-15, emphasis added.)

The Fifth Modification, entitled ‘Change in Terms Agreement,’ was entered on 5/11/23. (See Complaint, Ex. 7, p.39 of 46 of PDF; see also ‘APPENDIX OF EXHIBITS IN SUPPORT OF PREFERRED BANK'S MOTION FOR SUMMARY JUDGMENT,’ Ex. 7, p. 32 of 59 of PDF.)[4] Specifically, the clause that references the June 11, 2023 date provides as follows:

1) Maturity Date. The Maturity Date of the Note is hereby changed from November 2, 2023 to May 11, 2026.

2) Principal Amount. The Principal Balance of the Note, $3,000,000.00 is termed out.

3) The Payment is changed as detailed within the "PAYMENT" paragraph below. 4) The Payment due date is changed as detailed within the "PAYMENT" paragraph below.

5) Effective May 11, 2023, the Interest Rate is changed as detailed within the "VARIABLE INTEREST RATE" paragraph below All other terms and conditions of the Note and all related documents shall remain unchanged

PAYMENT. Borrower will pay this loan in 35 principal payments of $83,333.33 each and one final principal and Interest payment of $83,941.09. Borrower's first principal payment is due June 11, 2023, and all subsequent principal payments are due on the same day of each month after that. In addition, Borrower will pay regular monthly payments of all accrued unpaid Interest due as of each payment date, beginning June 11, 2023, with all subsequent interest payments to be due on the same day of each month after that. Borrower’s final payment due May 11, 2026 will be for all principal and all accrued Interest not yet paid. (emphasis and underline added).

In conjunction with the foregoing provision, the original loan agreement provides that Defendants default on the loan should they “fail[] to make any payment when due under the Loan.” (Exhibit List, Ex. 2, p. 8 of 59 of PDF.) Upon default, “at Lender's option, all Indebtedness immediately will become due and payable.” (Ibid.) Consequently, as the first payment under the Fifth Modification was due 6/11/23 and Defendants failed to make said payments, they defaulted on the Loan, rendering the entire principal now due.

With that, the court finds that Plaintiff has met its evidentiary burden to show that there are no triable issues of material fact as to the breach of contract claim. Though the burden should shift to Defendants, Defendants have not filed an opposition and any attempt to do so one court date before the hearing would be grossly untimely.

[1] The court requests Plaintiff file a proposed judgment.

[2] The answer largely admits the allegations related the agreement/modifications, but denies allegations related to Plaintiff’s performance on the Loan and Defendants’ alleged default. No affirmative defenses are raised in the answer.

[3] The ‘conclusion’ section seeks a total judgment in the amount of $3,298,303.13 (Motion p. 8; see also p. 2 [“principal sum of $3,000,000.00, plus interest in the sum of $271,812.50 through and including November 20, 2023, and thereafter at the daily rate of $1,416.16, plus late fees in the sum of $26,490.63, plus attorney’s fees as an item of costs”].)

[4] The Fifth Modification contains a ‘Continuing Validity’ provision wherein the terms of the original obligations remain unchanged and in full force and effect. (Exhibit List, Ex. 7, p. 32 of 59 of PDF.)