Judge: Christopher K. Lui, Case: 19STCV09548, Date: 2022-08-23 Tentative Ruling
Case Number: 19STCV09548 Hearing Date: August 23, 2022 Dept: 76
Plaintiff alleges that Defendants advised Plaintiff and her mother to represent that the underlying loan was a commercial mortgage, even though it was a consumer credit transaction, which rendered the Truth in Lending Act inapplicable to the loan. Defendants allegedly knew Plaintiff did not qualify and could not afford the loan, which was for 11 months of interest only payments with a final balloon payment of $705,250.
Defendant UMRO Realty Corp., dba The Agency moves for summary judgment or, in the alternative, summary adjudication.
Plaintiff Robyn Pearlman moves for a continuance of the trial date.
TENTATIVE RULING
Defendant April Lopez and Defendants Alex Nelson, an Individual and 1st Point Lending, Inc.’s notices of joinder in the motion for summary judgment/summary adjudication filed by Defendant UMRO Realty Corp., dba The Agency are DENIED.
Defendant UMRO Realty Corp., dba The Agency’s
motion for summary judgment is DENIED.
Defendant’s motion for summary adjudication is DENIED as to Issues Nos. 1 – 4 and GRANTED as to Issue No. 5 re: punitive damages.
Plaintiff Robyn Pearlman’s motion to continue the trial date is GRANTED. The trial date is CONTINUED to April 10, 2023 at 8:30 AM. The final status conference is set for March 27, 2023 at 8:30 AM. All motion and discovery cutoff dates shall remain as set relative to the November 23, 2022 trial date.
ANALYSIS
Notices of Joinder
Defendant April Lopez and Defendants Alex Nelson, an Individual and 1st Point Lending, Inc.’s notices of joinder in the motion for summary judgment/summary adjudication filed byDefendant UMRO Realty Corp., dba The Agency are DENIED.
First, neither party filed a separate statement. A court may not grant summary judgment in favor of a party who only files a notice of joinder in another party’s motion for summary judgment. (Village Nurseries v. Greenbaum (2002) 101 Cal.App.4th 26, 46-47.) CCP § 437c requires that a party moving for summary judgment or summary adjudication must file a motion supported by evidence and a separate statement. (Id.)
Second, the Court is not convinced that these Defendants are similarly situated to UMRO/The Agency, as their liability may be independent from The Agency’s.
Motion For Summary Judgment
Documents Lodged Conditionally Under Seal
The documents lodged by Plaintiff conditionally under seal shall immediately be placed in the public record, as no motion to seal was filed. (Cal. Rules of Court, Rule 2.551(b)(3)(B).
Plaintiff’s Evidentiary Objections
Pursuant to CCP § 437c(q), the Court only rules upon the following objections to evidence which the Court deems to be material to the disposition of this motion:
Declaration of April Lopez
No. 4: OVERRULED. Permissible testimony
of lay witness based on industry usage of terms; goes to weight.
No. 5: OVERRULED. Permissible testimony
of lay witness based on industry usage of terms; goes to weight.
No. 6: OVERRULED. Permissible testimony of lay witness based on industry usage of terms; goes to weight.
Declaration of Doug Sandler
No. 9: OVERRULED. Permissible testimony
of lay witness based on industry usage of terms; goes to weight.
No. 11: OVERRULED. Permissible testimony
of lay witness based on industry usage of terms; goes to weight.
No. 12: OVERRULED. Permissible testimony
of lay witness based on industry usage of terms; goes to weight.
No. 13: OVERRULED. The lack of foundation may be remedied before trial. (Sweetwater Union High School Dist. v. Gilbane Building Co. (2019) 6 Cal.5th 931, 947-49.)
Defendant’s Evidentiary Objections
Pursuant to CCP § 437c(q), the Court only rules upon the following objections to evidence which the Court deems to be material to the disposition of this motion:
Declaration of Robin Pearlman
No. 2: SUSTAINED as to “all the
way”—improper lay opinion. Otherwise, OVERRULED. Relevant; hearsay exception—admission
by party opponent (Evid. Code § 1220.)
No. 3: OVERRULED. Relevant; hearsay
exception—authorized admission (Evid. Code § 1222.); not an improper legal
conclusion; best evidence rule was repealed in 1998.
No. 4: OVERRULED. Relevant; hearsay
exception—authorized admission (Evid. Code § 1222.); not an improper legal
conclusion.
No. 5: OVERRULED. Relevant; hearsay
exception—authorized admission (Evid. Code § 1222.); lack of foundation
may be remedied before trial. (Sweetwater
Union High School Dist., supra, 6 Cal.5th at 947-49.) Permissible lay
opinion; goes to weight.
No. 6: OVERRULED. Relevant,.
No. 7: OVERRULED. Relevant;
permissible lay opinion, as the term “agent” may be understood in lay terms;
goes to weight.
No. 8: OVERRULED. Relevant;
permissible lay opinion; goes to weight.
No. 9: OVERRULED. Lack of
foundation may be remedied before trial. (Sweetwater
Union High School Dist., supra, 6 Cal.5th at 947-49.) Permissible lay
opinion; goes to weight.
No. 10: OVERRULED. This generalized
objection to two pages of a declaration is not specific enough to formulate an
objection.
No. 21: OVERRULED. Relevant; not
hearsay; lack of foundation may be remedied before trial. (Sweetwater Union High School Dist., supra, 6
Cal.5th at 947-49.)
No. 22: OVERRULED. Relevant; not hearsay; permissible lay opinion;
lack of foundation may be remedied before trial. (Sweetwater Union High School Dist., supra, 6 Cal.5th at 947-49.);
goes to weight.
No. 23: OVERRULED. Relevant; not hearsay; lack of foundation
may be remedied before trial. (Sweetwater
Union High School Dist., supra, 6 Cal.5th at 947-49.); goes to weight.
No. 24: OVERRULED. Relevant; lack of foundation may be
remedied before trial. (Sweetwater Union
High School Dist., supra, 6 Cal.5th at 947-49.); goes to weight.
No. 25: OVERRULED. Relevant; lack of foundation may be
remedied before trial. (Sweetwater Union
High School Dist., supra, 6 Cal.5th at 947-49.); goes to weight.
No. 26: OVERRULED. Relevant; lack of foundation may be
remedied before trial. (Sweetwater Union
High School Dist., supra, 6 Cal.5th at 947-49.); goes to weight.
No. 27: OVERRULED. Relevant.
No. 28: OVERRULED. Authorized admission
(Evid. Code § 1222.); lack of foundation may be remedied before trial. (Sweetwater Union High School Dist., supra, 6
Cal.5th at 947-49.)
No. 29: OVERRULED. Relevant.
No. 30: OVERRULED. Relevant; not hearsay; goes to weight.
Request For Judicial Notice
Defendant requests that the Court take judicial notice of the following:
(1) Docket for U.S. Bankruptcy Court for the Central District for Case No. 2:17-bk-18835 WB, attached to the Compendium of Declarations and Exhibits (“Compendium”) as Exhibit V; (2) March 20, 2018, Grant Deed, attached to the Compendium as Exhibit W; (3) March 20, 2018, Deed of Trust, attached to the Compendium as Exhibit X; (4) Plaintiff’s original Complaint filed on March 20, 2019, attached to the Compendium Exhibit Y, taken from its own file in this case; (5) LexisNexis, Business and Professionals Code section 10166.02, attached to the Compendium as Exhibit Z.
Requests Nos. 1 and 4 are GRANTED. (Evid. Code § 452(d)(court records). Requests Nos. 2 and 3 are GRANTED. The Court may take judicial notice of recorded documents. (Evans v. California Trailer Court, Inc. (1994) 28 Cal.App.4th 540, 549, overruled on other grounds in Black Sky Capital, LLC v. Cobb (2019) 7 Cal.5th 156, 165; Alfaro v. Community Housing Improvement System & Planning Assn., Inc. (2009) 171 Cal.App.4th 263, 274). Request No. 5 is GRANTED. (Evid. Code § 452(b)(legislative enactments).
Discussion
Defendant UMRO Realty Corp., dba The Agency (hereinafter, “UMRO,” as referred to in the 4AC, or “The Agency” as referred to in the moving papers) moves for summary judgment or, in the alternative, summary adjudication.
The causes of action asserted against
moving party The Agency are: (1) first cause of action (violation of TILA, 15
U.S.C., § 1639b and 1639c, et seq.—failure to conduct an ability to repay
analysis); (2) second cause of action (violation of TILA, 15 U.C.S. § 1639b(c)(3),
et seq.—steering); (3) third cause of action (violation of 12 C.F.R. §
1026.32(a)(4)—credit extended without regard to the consumer’ repayment
ability); (4) fourth cause of action (violation of 12 C.F.R. § 1026.32(a)(8)—impermissible
late fee); (5) fifth cause of action (violation of 12 C.F.R. § 1026.32(d)(1)(i)—impermissible
balloon payment); (6) sixth cause of action (violation of 12 C.F.R. §
1026.32(a)(5)—failure to obtain written confirmation of pre-loan counseling); (7)
seventh cause of action (fraud); (8) eighth cause of action (negligent
misrepresentation); (9) ninth cause of action (breach of fiduciary duty); (10)
tenth cause of action (professional negligence); (11) eleventh cause of action
(predatory lending; B & P Code § 17200); (12) twelfth cause of action (unfair
and deceptive business act practices (UDAP); B & P Code § 17200).
(1) Plaintiff’s entire Fourth Amended
Complaint Fails as a matter of law due to The Doctrine Of Unclean Hands.
Defendant argues that summary
judgment is appropriate because Plaintiff comes to court with unclean hands in that
she knowingly applied for a commercial mortgage loan based on misrepresentations
in the loan application when she knew it was not for a business purpose, but
rather, that the property was Plaintiff’s residence.
“To prevail on a summary
judgment motion . . . the defendant must show conclusively that all of the
plaintiff's causes of action or legal theories fail as a matter of law.” (Slovensky v. Friedman (2006) 142 Cal.App.4th 1518, 1526.)
"'The [unclean hands] rule is
settled in California that whenever a party who, as actor, seeks to set
judicial machinery in motion and obtain
[*290] some remedy, has violated
conscience, good faith or other equitable principle in his prior conduct, then
the doors of the court will be shut against him in limine; the court will
refuse to interfere on his behalf to acknowledge his right, or to afford him
any remedy.'" (Moriarty v. Carlson (1960) 184 Cal.App.2d 51, 55 [7
Cal.Rptr. 282], citing Lynn v. Duckel (1956) 46 Cal.2d 845, 850 [299 P.2d
236].)
The rule is qualified by the
requirement that the party against whom the doctrine is sought to be invoked
directly "infected" the actual cause of action before the court, and
is not merely guilty of unrelated improper past conduct. ( Moriarity v.
Carlson, supra, 184 Cal.App.2d at p. 57.) The actions of the party alleged to
have soiled hands must relate "directly to the transaction concerning
which the complaint is made; i.e., it must pertain to the very subject matter
involved and affect the equitable relations between the litigants
(Fibreboard Papers Products Corp. v. East Bay Union of Machinists (1964) 227
Cal.App.2d 675, 728 [39 Cal.Rptr. 64].) The doctrine is not restricted,
however, to defense of suits in equity, but applies as well to suits at law.
(Ibid.)
(Pond v. Ins. Co. of N. Am. (1984) 151 Cal.App.3d 280, 289-90.)
The unclean hands defense cannot wholly defeat a B
& P Code § 17200 claim which is based on violation of a statute, although it
may be considered in fashioning a remedy:
[T]he equitable defense of unclean hands is
not available in this UCL action based on violation of statutes,
namely, sections 10113, 10381.5, and 10384. Courts have long held that the
equitable defense of unclean hands is not a defense to an unfair trade or
business practices claim based on violation of a statute. To allow such
a defense would be to judicially sanction the defendant for engaging in an act
declared by statute to be void or against public policy. (See Kofsky v.
Smart & Final Iris Co. (1955) 131 Cal. App. 2d 530, 532 [281 P.2d 5]
[holding unclean hands defense not available in an unfair practices act
violation under Bus. & Prof. Code, § 17000 et seq.].) It has long been the
law that H “[t]he equitable doctrine of the refusal of aid to anyone with
‘unclean hands,’ does not, as such, apply to actions under [the unfair
practices act].” (Page v. Bakersfield Uniform etc. Co. (1966) 239
[*544] Cal. App. 2d 762, 770 [49 Cal. Rptr. 46].) Kofsky
points out that the doctrine of refusing to aid a party with unclean hands has
no application where, as here “the failure to restrain an act because the
parties are in pari delicto would result in permitting an act declared
by statute to be void or against public policy. [Citations.]” (Kofsky, supra,
at p. 532; see also Stern, Bus. & Prof. C., § 17200 Practice, supra,
¶ 5:302, pp. 5-87 to 5-88; cf. Fletcher v. Security Pacific National Bank
(1979) 23 Cal.3d 442, 446 [153 Cal. Rptr. 28, 591 P.2d 51] [holding court may
order defendant bank to disgorge gains obtained from fraudulent business practice,
even without individualized proof of deception to prevent bank from retaining
benefits of its wrong and being insulated from any damages].)
More recently, our Supreme Court explained that “equitable
defenses may not be asserted to wholly defeat a UCL claim [under Business and
Professions Code section 17200] since such claims arise out of unlawful
conduct. …” (Cortez v. Purolator Air Filtration Products Co. (2000) 23
Cal.4th 163, 179 [96 Cal. Rptr. 2d 518, 999 P.2d 706].) In Cortez, the
plaintiff brought an action under the UCL seeking restitution of overtime wages
withheld from her and other employees. The defendant argued that where the UCL
sounded in equity, the trial court was obligated to consider equitable
defenses. The Supreme Court held that the equities may be considered when
the trial court exercises its discretion to fashion a remedy under
Business and Professions Code section 17203. (23 Cal.4th at p. 179.) But,
equitable defenses may not be used to defeat the cause of action under the
UCL. As more fully explained by Justice Werdegar in her concurrence in Cortez,
“in general, as between a person who is enriched as the result of his or her
violation of the law, and a person intended to be protected by the law who is
harmed by its violation, for the violator to retain the benefit would be
unjust.” (Cortez, supra, at p. 182 (conc. opn. of Werdegar, J.).)
Accordingly, Blue Shield Life should not be entitled to
raise the equitable defense of unclean hands to defeat plaintiff's motion for
class certification. To allow an insurer to argue as a defense to the UCL
claim that putative class plaintiffs have unclean hands because they
misrepresented material medical information on unattached and unendorsed
insurance applications, would be potentially to sanction the insurer's unlawful
and unfair conduct. (Cortez v. Purolator Air Filtration Products Co.,
supra, 23 Cal.4th at p. 182 (conc. opn. of Werdegar, J.); Page v.
Bakersfield Uniform etc. Co., supra, 239 Cal. App. 2d at p. 770; Kofsky
v. Smart & Final Iris Co., supra, 131 Cal. App. 2d at p. 532.) Of
course, the trial court has the discretion to consider [*545]
equitable defenses such as unclean hands in creating the remedies
authorized by Business and Professions Code section 17203. (Cortez, supra,
at p. 179.) Such defenses may not be used, however, to wholly defeat the UCL
cause of action (Cortez, supra, at p. 179), and so they may not be used
to prevent class certification.
(Ticconi v. Blue Shield of
California Life & Health Ins. Co. (2008) 160 Cal.App.4th 528, 543-45 [bold
emphasis added].)
As such, this ground for summary
judgment is not persuasive.
(2) Plaintiff’s entire Fourth Amended
Complaint Fails as a matter of law because April Lopez acted outside the scope
of her employment with The Agency.
Defendant argues that Lopez acted outside
the scope of her employment as a licensed real estate agent, so the entire action
against The Agency on the ground of vicarious liability fails.
This argument ignores the concept of
ostensible authority which does not require that the agent be acting within the
scope of actual authority. The question is whether The Agency was at least
negligent in permitting Lopez to hold herself out as having authority as an MLO
working for The Agency.
Appellant concedes that it is an independent
contractor. However, as independent contractor and agent are not mutually
exclusive legal categories, our inquiry does not end here. ( City of
Los Angeles v. Meyer Bros. Parking System, Inc. (1975)
54 Cal. App. 3d 135, 138 [126 Cal.Rptr. 545].) In Meyer Bros. it
was held an independent contractor is also an agent when it contracts to
act on behalf of a "principal" and is subject to the
"principal's" control except with respect to the "agent'
physical conduct. ( Id. at p. 138.)
(APSB Bancorp v. Thorton Grant (1994)
26 Cal.App.4th 926, 930.)
Ostensible authority is created when the acts
of the principal, either intentionally or by want of ordinary care, cause a
third person to believe another to be the agent of the principal. (Civ. Code, §
2300; 2 Witkin, Summary of Cal. Law (9th ed. 1987) Agency and Employment, § 40,
p. 52.) . . . "Ostensible agency cannot be established by the
representations or conduct of the purported agent; the statements or acts of
the principal must be such as to
cause the third party to believe that the agency exists." (2 Witkin,
Summary of Cal. Law, supra, Agency and Employment, § 40, p. 53, italics in
original.)
(Milrot v. Stamper Medical Corp. (1996) 44 Cal.App.4th 182, 187
[italics in original].)
In applying the above provisions of the
Civil Code, the courts of this state have adopted the principles expressed in
sections 261 and 262 of the Restatement Second of Agency ( Rutherford v.
Rideout Bank, 11 Cal.2d 479, 482-483 [80 P.2d 798, 117 A.L.R. 383]). Section
261 provides: "A principal who puts a servant or other agent in a position
which enables the agent, while apparently acting within his authority, to
commit a fraud upon third persons is subject to liability to such third persons
for the fraud." The principal is subject to liability although he is
entirely innocent and has received no benefit from the transaction. He is not
relieved from liability by the fact that the servant or other agent acts
entirely for his own purposes, unless the party defrauded has notice of this
( Rest.2d Agency, § 262).
Liability is based upon the fact
that the agent's position facilitates the consummation of the fraud in that
from the point of fact of the third person, the transaction seems regular on
its face and the agent appears to be acting in the ordinary course of the
business confided to him (Blackburn v. Witter, 201 Cal.App.2d 518, 521 [19
Cal.Rptr. 842]).
Partake's contention that there can
be no liability for the acts of an ostensible agent unless there is some actual
authority is entirely without merit. The doctrine establishing the principles
of liability for the acts of an ostensible agent rests on the doctrine of
estoppel ( Lee v. Helmco, Inc., 199 Cal.App.2d 820, 834 [19 Cal.Rptr.
413]). The essential elements are representations by the principal, justifiable
reliance thereon by a third party, and change of position or injury resulting
from such reliance ( Reusche v. California Pac. Title Ins. Co., 231 Cal.App.2d
731 [42 Cal.Rptr. 262].) Before recovery can be had against the principal
for the acts of an ostensible agent, the person dealing with an agent must do
so with belief in the agent's authority and this belief must be a reasonable
one. Such belief must be generated by some act or neglect by the principal
sought to be charged and the person relying on the agent's apparent authority
must not be guilty of neglect ( Hill v. Citizens Nat. Trust & Sav.
Bank, 9 Cal.2d 172 [69 P.2d 853]). Ostensible agency cannot be established by
the representations or conduct of the purported agent; the statements or
acts of the principal must be such as to cause the third party to believe the
agency exists ( Lee v. Helmco, supra, p. 834).
(Hartong v.
Partake, Inc. (1968) 266
Cal. App. 2d 942, 960 [bold emphasis added].)
The gist
of Plaintiff’s allegations against Defendants, including moving Defendant The
Agency, is that Defendants advised Plaintiff to misrepresent and acknowledge
what is in fact a consumer credit transaction as a commercial mortgage.
Specifically, defendants advised Plaintiff (a) to have [her mother] Cynthia
transfer the home to Plaintiff and (b) to state in Plaintiffs’ loan application
and other loan documents that she did not live in the home, that the home was a
rental and that the loan was therefore obtained for a business purpose. (4AC, ¶
1.) Plaintiff and her mother followed defendants' advice, even though Defendant
allegedly knew they lived in the home and did not rent the home to anyone at all.
(Id. at ¶ 2.)
Defendants allegedly concealed from Plaintiff
that by following Defendants' recommendations i.e., if the loan the loan were
regarded 18 as a commercial loan for business purposes, Plaintiff would be
deprived of her consumer protections
under the law, primarily those deriving from the Truth in
Lending Act ("TILA"). (2AC, ¶ 3.) Defendants allegedly knew that they
would be putting Plaintiff in an entirely unsuitable mortgage loan that she
could not afford, that the loan terms would violate limitations and protections
provided by TILA and consumer protection laws, and that the loan inevitably
would result in the very foreclosure that Plaintiff wanted to avoid. (Id.
at ¶ 3.)
Plaintiff alleges at
¶ 4 that: Defendants allegedly received substantial fees, onerous interest and other
charges, all at Plaintiffs’ expense. Ultimately, it was the lender defendants
who threatened foreclosure. As a result, on or about July 30, 2019, Plaintiff was
forced to sell the home. The lender defendants conditioned the reconveyance of
their deed of trust on a payoff demand determined pursuant to the loan documents.
The payment to defendants of the entire amount asserted in their payoff demand
was permitted by Plaintiff under protest.
Regarding
Lopez as agent for Defendant UMRO/The Agency, ¶ 18 alleges:
i. UMRO actually employed
LOPEZ as a representative, employee and agent of UMRO in real estate and real
estate related transactions;
ii. UMRO entrusted to LOPEZ
authority to act as UMRO's agent by
providing her with an office operated under the UMRO dba, 'The Agency
the office had no indicia available or apparent to the customer that the scope
of LOPEZ's agency was in any way limited and did not indicate to PLAINTIFF or
to any other customer that it was limited in any way or that LOPEZ was anything
other than an agent and representative of The Agency, and thereby also of UMRO,
in all real estate and real estate related transactions including in brokering,
arranging and otherwise acting on behalf of the customer as an agent of UMRO and
as the customer's agent with respect to mortgage loans.
iii. UMRO entrusted LOPEZ
with the indicia that, she was, in all of her realestate dealings, an
authorized agent of UMRO, by providing to her an office at The Agency, which
PLAINTIFF is informed and believes and thereupon alleges, was and is located at
331 Foothill Road, #100, Beverly Hills, CA 90210. In providing the office to
LOPEZ, UMRO did not provide any indication visible or available to customers or
to PLAINTlFF that scope of LOPEZ's agency was an any way limited and did not
indicate to PLAINTIFF or to any other customer that it was limited in any way or
that LOPEZ was anything other than an agent and representative of The Agency, and thereby also
of UMRO, in all real estate and real estate related transactions including in
brokering, arranging and otherwise acting on behalf of the customer as an agent
of UMRO and as the customer's agent with respect to mortgage loans.
iv. UMRO entrusted LOPEZ with
the stationery of The Agency, in letter, email and text message formats, which
represented LOPEZ to be an agent of The Agency and which did not indicate any
limitation whatsoever to the scope of said agency; in providing its stationery
for use by LOPEZ, UMRO did not provide any indication visible or available to
customers or to PLAINTIFF that scope of LOPEZ's agency was an any way limited
and did not indicate to PLAINTIFF or to any other customer that it was limited in
any way or that LOPEZ was anything other than an agent and representative of
The Agency, and thereby also of UMRO, in all real estate and real estate
related transactions including in brokering, arranging and otherwise acting on
behalf of the customer as an agent of UMRO and as the customer's agent with
respect to mortgage loans.
v. UMRO entrusted LOPEZ
with an office phone number at The Agency, which, when used, did not indicate
to PLAINTIFF or to any other customer that it was limited in any way or that
LOPEZ was anything other than an agent and representative of The Agency, and
thereby also of UMRO, in all real estate and real estate related transactions
including in brokering, arranging and
otherwise acting on behalf of the customer as an agent of UMRO and as the
customer's agent with respect to mortgage loans.
vi. At all times herein
material, UMRO knew, or should have known, that that there was a substantial
risk that LOPEZ would use her apparent and/or ostensible authority as an agent
of UMRO with respect to mortgage loan transactions because she had in the past
acted as a Mortgage Loan Originator ("MLO") and had been licensed
and/or endorsed as such.
vii. At all times herein material,
PLAINTIFF (ROBYN) was in the business of retail jewelry sales, was not in the
business of, or in any business related to, real estate or mortgage lending and
had no knowledge or awareness of licensing
or other requirements for MLOs and no awareness of DRE, NMLS or any other real
estate related sources or references.
viii.. At all times material
herein, PLAINTIFF reasonably assumed that
LOPEZ, as an agent of The Agency (and therefore as an agent of UMRO) was
acting within the scope of her agency and authority. PLAINTIFF reasonably
relied upon the indicia of authority described in i. through vii. above and was
unaware of any limitation as to the scope of LOPEZ'S authority to act as an
agent and employee of The Agency that would in any way affect her authority to
act on PLAINTIFF's behalf as an agent of the Agency in connection with the LOAN
herein.
ix. PLAINTIFF's reasonable reliance on the indicia
of authority described in, inter alia, i through vii above was reinforced by
the fact that, subsequent to the closing of the LOAN and as a result of
PLAINTIFF being unable to make the payments on the LOAN, LOPEZ assisted
PLAINTIFF, arranged for and acted as a broker and MLO for an additional
mortgage loan secured by the condominium that was owned by PLAINTIFF but which,
at all times material herein, was rented to a third party. Said mortgage loan
was arranged by LOPEZ in the same manner in which she had arranged the LOAN herein
and was accompanied by all of the indicia described in, inter alia, i through
vii above that LOPEZ was acting as an agent and employee of The Agency, and
therefore UMRO, and that LOPEZ was acting within scope of said agency.
(4AC, ¶ 18(i)-(ix) [bold emphasis
added].)
A summary
judgment or summary adjudication motion must address the “issues framed by the
pleadings since it is these allegations
to which the motion must respond by establishing a complete defense or
otherwise showing there is no factual basis for relief on any theory reasonably contemplated
by the opponent's pleading.” (Carleton
v. Tortosa (1993) 14 Cal.App.4th 745, 753 [bold emphasis and underlining
added].)
Here, Defendant The Agency presents evidence
that it never authorized Lopez to give Plaintiff, or any part, loan related
advice, originate a loan, procure a loan or conduct any loan related
activities. (UF No. 39; Sandler Decl., ¶ 8.) This goes to whether Lopez had
actual authority, but not whether Lopez had ostensible authority.
As to whether Defendant The Agency
was at least negligent in allowing Plaintiff to believe that Lopez was an
ostensible agent with authority to engage in mortgage loan transactions, Defendant’s
evidence is that when Lopez initially introduced herself to Plaintiff, she told
her she was a real estate agent with The Agency, and Plaintiff already had a
copy of her business card that showed she was a real estate agent only with The
Agency. (UF No. 27; Lopez Decl., ¶ 8; Exhibit T (April Lopez’s Business Card).)
Lopez holds only her real estate license with The Agency. (UF No. 33; Lopez
Decl., ¶ 15; Sandler Decl., ¶¶ 2 and 8.) Lopez does not and did not provide
loan services on behalf of The Agency, nor has she registered an MLO license
with the Agency. (UF No. 34; Lopez Decl., ¶ 15; Sandler Decl., ¶ 2.)
Moreover, Defendant cites evidence that Lopez
referred Plaintiff to 1st Point to secure the loan, but she never
acted as the loan originator. (UF No. 25; Lopez Decl., ¶¶ 1, 10; Exhibit T (April
Lopez’s Business Card); Exhibit K – Bates Stamp page LOP000383, LOP000400-401,
LOP000427, LOP000431.) Neither Lopez nor The Agency drafted or signed any loan
documents or received a commission from the loan. (UF No. 35; Lopez Decl., ¶¶
16, 18; Sandler Decl., ¶¶ 9-11.) The Agency has established policies, rules,
procedures and systems to monitor the conduct and actions of its agents,
including without limitation, the submission of documentation for each
transaction by its agents. Lopez never submitted any documentation with the
Agency regarding this matter because The Agency does not handle loans. (UF No.
36; Sandler Decl., ¶ 12.) The Agency was not aware of Plaintiff’s loan or the
subject property, nor was The Agency aware of any alleged advice (or any aspect
of it) that Lopez allegedly gave to Plaintiff. (UF No. 37; Sandler Decl., ¶ 7.)
The Agency’s files are completely void of any reference to the subject property.
(UF No. 38; Sandler Decl., ¶ 13.)
The foregoing evidence is sufficient to
demonstrate that Lopez did not provide any loan services to Plaintiff, nor did
The Agency act negligently in permitting Lopez to hold herself out as offering
loan services. As such, Lopez did not act as an actual or ostensible agent providing
loan services for which The Agency would be vicariously liable. The burden
shifts to Plaintiff to demonstrate that a triable issue of material fact exists
in this regard.
At Opp. Fact Nos. 24, 25 Plaintiff indicates
that: Lopez is the only profession with whom Plaintiff dealt regarding the
subject loan from the outset of the transaction on February 21, 2018 to the day
of closing on March 21, 2018, when she met and spoke with Alex Nelson for the
first time. The agreements cited by The Agency were not signed until the date
of closing. Plaintiff argues that Lopez performed mortgage loan origination
activities on the subject loan starting about a month before closing and at
least through the funding of the Loan on March 30, 2018, and received a $7,000
check from Nelson. Plaintiff argues that Lopez shopped around for a loan for Plaintiff,
took the loan application form, negotiated the loan terms on behalf of
Plaintiff, acted as liaison for Plaintiff with escrow, Nelson and the lender. Plaintiff
argues that the foregoing establishes that Lopez acted as an MLO on the loan. (Pearlman
Decl., ¶¶ 24-25; Exhs. 1009, 1011, 1012, 1014, 1015, 1017, 1018, 1020, 1024,
1025, 1026, 1030, 1041, 1058; Exh. 3 – Nelson Tr. 175.)
The foregoing evidence raises a triable
issue of material fact as to whether Lopez was involved in providing loan
services to Plaintiff. As to whether Lopez, in performing these loan services,
was acting as an ostensible agent on behalf of The Agency, Plaintiff cites the
following evidence:
The Agency did not publish any
policy prohibiting its sales persons from engaging in loan origination
activities, touted Lopez’s lending experience on The Agency’s website, and
failed to reasonably supervise its agents to not engage in lending activities.
(UF No. 31; Pearlman Decl., ¶¶ 17-20; Ex. 1007 (“real estate finance industry”
[bold emphasis added]; touting Lopez’s 21 years of experience in mortgage lending
and banking); Ex. 4 – Sandler Tr. 36-37, 40-42, 43:6-14, 44, 55, 61-63, 68, 77-78, 80, 103-104,
175, 179, 181 Ex. 1 - Lopez Tr. 55-56, 59, 62-64, 93, 103-04.
The foregoing evidence is sufficient
to raise a triable issue of material fact as to whether The Agency acted negligently in permitting
Lopez to hold herself out as offering loan services, and thus acted as an ostensible
agent providing loan services for which The Agency would be vicariously liable.
As such, this ground for summary
judgment is not persuasive.
Conclusion
As neither ground for summary
judgment is persuasive, the motion for summary judgment is DENIED.
Motion For Summary Adjudication
1. ISSUE 1:
Plaintiff cannot allege any violation of the Consumer Protection Laws by The Agency.
The Court has discretionary
power to deny summary adjudication for failure to comply with CRC Rule 3.1350. (Truong
v. Glasser (2009) 181 Cal.App.4th 102, 118.)
This
issue is not framed in a manner which identifies as to which causes of action
it is directed, as is required by CRC Rule 3.1350(b), which provides:
If made in the alternative, a motion for
summary adjudication may make reference to and depend on the same evidence submitted
in support of the summary judgment motion. If summary adjudication is sought,
whether separately or as an alternative to the motion for summary judgment, the specific cause of action,
affirmative defense, claims for damages, or issues of duty must be stated
specifically in the notice of motion and be repeated, verbatim, in the
separate statement of undisputed material facts.
(Calif. Rules of
Court, Rule 3.1350(b)[bold emphasis and underlining added].)
As such,
the motion for summary adjudication as to unspecified causes of action is DENIED.
2. ISSUE 2:
Plaintiff’s Ninth and Tenth causes of action for Breach of Fiduciary Duty and Professional
Negligence fail as a matter of law because The Agency did not owe a Fiduciary Duty
to Plaintiff.
First, whether or not The Agency
owed a fiduciary duty to Plaintiff would not dispose of the tenth cause of action
for professional negligence because the relevant duty for a professional
negligence cause of action is a duty of care of a reasonable professional, not
a heightened fiduciary duty.
The elements of a cause of action
for professional negligence are (1) the existence of the duty of the
professional to use such skill, prudence, and diligence as other members of the
profession commonly possess and exercise; (2) breach of that duty; (3) a causal
connection between the negligent conduct and the resulting injury; and (4)
actual loss or damage resulting from the professional negligence. (Ibid.)
(Oasis West Realty, LLC v. Goldman (2011)
51 Cal.4th 811, 821.)
Moreover, as
discussed above re: the motion for summary judgment, there is a triable issue
of material fact as to whether Lopez engaged in loan activities for which
Defendant The Agency could be held vicariously liable. The professional duty of
care imposed upon Lopez in such a circumstance would be imputed to The Agency.
On
the other hand:
A fiduciary must give “priority to the
best interest of the beneficiary. [Citation.]” (Committee on Children‘s
Television, Inc. v. General Foods Corp. (1983) 35 Cal.3d 197, 222 [197 Cal.
Rptr. 783, 673 P.2d 660] (Children’s Television).) In addition to this duty of
preference toward the beneficiary, the fiduciary also is required to manage the
subject matter of the relationship (or res) with due care, must account to the
beneficiary, and must keep the beneficiary fully informed as to all matters
pertinent to the beneficiary's interest in the res. (See Chodos, The Law of
Fiduciary Duties (2000) pp. LIV-LV.)
(Oakland Raiders v. National
Football League (2005) 131 Cal.App.4th 621, 631.)
As such, the
motion for summary adjudication as to Issue No. 2 re: the tenth cause of action
is DENIED.
As to the
ninth cause of action, it alleges that fiduciary duty arose out of Defendants
acting as brokers or agents of Plaintiff, and allegedly breached that duty by
failing to advise or notify Plaintiff when Defendants knew
or should have known that Plaintiff will or has a likelihood of defaulting on
the loan. With said knowledge, the Defendants allegedly had a fiduciary duty to
the Plaintiff not to place her in the loan. (2AC, ¶¶ 23, 24.)
Here,
Defendant has provided evidence that it did not enter into any contract with
Plaintiff. UF No. 38 is that “The Agency’s files are completely void of any
reference to the Subject Property.” (Sandler Decl., ¶ 13.) According to the
Declaration of Doug Sandler, the only agreement Plaintiff entered into with The
Agency was a listing agreement for the sale of a separate property, which
Plaintiff entered into with The Agency after Plaintiff entered into the loan
agreement for the subject loan. (Sandler Decl., ¶ 9.) As such, Defendant The Agency did not directly
undertake a fiduciary obligation to Plaintiff.
Second, as
the Lopez’s activities as a possible loan originator would not impose fiduciary
duties upon her or, vicariously, The Agency.
It is appropriate to look to the terms of the Agreement because "[u]nlike the
automatic, status-based fiduciary duty which exists, for example, between
attorney and client, fiduciary duties among loan participants depend upon the
terms of their contract." ( First Citizens Federal Sav. and Loan v. Worthen Bk. (9th
Cir. 1990) 919 F.2d 510, 513 (hereafter Worthen).)
(S. Pac. Thrift & Loan Ass'n v. Sav. Ass'n
Mortg. Co. (1999) 70 Cal.App.4th 634,
638.)
Lopez
states in her Declaration that Plaintiff did not sign an agreement with Lopez
or The Agency for the subject loan, and the only agreement Plaintiff ever
signed with Lopez and The Agency was a listing agreement at a later point in
time for the sale of her condo. (Lopez Decl., ¶ 14.) Thus, there is not contract
regarding loan activities which would give rise to a fiduciary duty owed by
Lopez and thus, vicariously, by The Agency.
As
such, the burden shifts to Plaintiff to demonstrate that a triable issue of material
fact exists as to the existence of a fiduciary duty owed by The Agency.
In
the Opposition, Plaintiff cites case law whereby Lopez can be found to have
acted as a mortgage loan broker on behalf of Plaintiff, thereby owing her a
fiduciary duty. The Court incorporates by reference its discussion regarding
the motion for summary judgment above, whereby the Court found that a triable
issue of material fact exists as to whether Lopez engaged in loan activities
for which The Agency could be held vicariously liable. Given the authorities
cited by Plaintiff, a triable issue of material fact also exists as whether Lopez
can be found to have acted as a mortgage loan broker on behalf of Plaintiff,
thereby owing her a fiduciary duty, which would be imputed to The Agency as
well.
A mortgage loan broker is customarily
retained by a borrower to act as the borrower's agent in negotiating an
acceptable loan. All persons engaged in this business in California are
required to obtain real estate licenses. (Bus. & Prof. Code, §§ 10130 and
10131, subd. (d).) Thus, general principles of agency (Civ. Code, §§ 2228 and
2322, subd.) combine with statutory duties created by the Real Estate Law (see
Bus. & Prof. Code, § 10176, subds. (a), (i)) to impose upon mortgage loan
brokers an obligation to make a full and accurate disclosure of the terms of a
loan to borrowers and to act always in the utmost good faith toward their
principals. "The law imposes on a real estate agent 'the same obligation
of undivided service and loyalty that it imposes on a trustee in favor of his
beneficiary.' [Citations.] This relationship not only imposes upon him the duty
of acting in the highest good faith toward his principal but precludes the
agent from obtaining any advantage over the principal in any transaction had by
virtue of his agency. [Citation.]" ( Batson v. Strehlow (1968) 68 Cal.2d
662, 674-675 [68 Cal. Rptr. 589, 441 P.2d 101].) A real estate licensee is
"charged with the duty of fullest disclosure of all material facts
concerning the transaction that might affect the principal's decision.
[Citations.]" ( Rattray v. Scudder (1946) 28 Cal.2d 214, 223 [169 P.2d
371, 164 A.L.R. 1356]; see also Realty Projects, Inc. v. Smith (1973) 32 Cal.
App. 3d 204, 210 [108 Cal. Rptr. 71]; Smith v. Zak (1971) 20 Cal. App. 3d 785,
792-793 [98 Cal. Rptr. 242].)
(Wyatt v. Union Mortg. Co. (1979) 24 Cal.3d 773, 782.)
(a) A mortgage broker providing mortgage brokerage
services to a borrower is the fiduciary of the borrower, and any violation of
the broker’s fiduciary duties shall be a violation of the mortgage broker’s
license law. This fiduciary duty includes a requirement that the mortgage
broker place the economic interest of the borrower ahead of his or her own
economic interest. A mortgage broker who provides mortgage brokerage services
to the borrower owes this fiduciary duty to the borrower regardless of whether
the mortgage broker is acting as an agent for any other party in connection
with the residential mortgage loan transaction.
(Civ. Code § 2923.1(a).)
A mortgage loan broker owes a fiduciary
duty of the "highest good faith toward his principal" and "is
'charged with the duty of fullest disclosure of all material facts concerning
the transaction that might affect the principal's decision.'" ( Wyatt v.
Union Mortgage Co. (1979) 24 Cal.3d 773, 782 [157 Cal.Rptr. 392, 598 P.2d 45],
citations omitted.)
(Barry v. Raskov (1991) 232 Cal.App.3d 447, 455.)
As
such, Plaintiff has demonstrated that a triable issue of material fact exists
as to the existence of a fiduciary duty owed by The Agency.
The
motion for summary adjudication as to Issue No. 2 re: the ninth and tenth
causes of action is DENIED.
3. ISSUE 3:
Plaintiff’s Fraud and [Negligent] Misrepresentation Claims [Seventh and Eighth Causes
of Action] Fail Because Plaintiff Cannot Show Reasonable Reliance.
Defendant argues that Plaintiff’s
alleged reliance was not reasonable because she cannot ignore the facts around
her and fail to read documents, participate in a fraudulent loan she believes
will improve her situation, then claim reliance and blame Defendants.
To recover for fraud in any case the
plaintiff must show that he reasonably relied on the defendant's
misrepresentations. The plaintiff cannot recover if his reliance was not
justified or reasonable. (Citations omitted.)
(Phillippe v. Shapell Indus.
(1987) 43 Cal.3d 1247, 1270.)
[T]he elements of a cause of action for fraud
based on concealment are: “ ‘(1) the defendant must have concealed or
suppressed a material fact, (2) the defendant must have been under a duty to
disclose the fact to the plaintiff, (3) the defendant must have intentionally
concealed or suppressed the fact with the intent to defraud the plaintiff, (4)
the plaintiff must have been unaware of the fact and would not have acted as he
did if he had known of the concealed or suppressed fact, and (5) as a result of
the concealment or suppression of the fact, the plaintiff must have sustained
damage. [Citation.]’ [Citation.]” (Citation omitted.)
(Kaldenbach v. Mutual of Omaha Life
Ins. Co. (2009) 178 Cal.App.4th 830, 850.)
"One party to a business transaction is under a duty to exercise reasonable care to disclose to the other before the transaction is consummated, . . . facts basic to the transaction, if he knows that the other is about to enter into it under a mistake as to them, and that the other, because of the relationship between them, the customs of the trade or other objective circumstances, would reasonably expect a disclosure of those facts." (Rest.2d Torts, § 551, subd. (2)(e); Wells v. John Hancock Mut. Life Ins. Co. (1978) 85 Cal.App.3d 66, 72, fn. 8 [149 Cal.Rptr.171]; Westrick v. State Farm Insurance (1982) 137 Cal.App.3d 685, 691, fn. 3 [187 Cal.Rptr.214].)
(Eddy v. Sharp (1988) 199 Cal.App.3d 858, 864.)
Here, the seventh cause of action for fraud is based upon a failure to disclose material facts to Plaintiff, namely, that the misrepresentation that Plaintiff did not reside in the family home/the subject property, would cause Plaintiff to lose the benefits of the consumer protection laws. (4AC, ¶ 104.) Plaintiff alleges that she suffered exorbitant interest finance charges, late charges and default finance interest, and delay of at least a year in the opportunity to sell the subject property. (Id. at ¶ 105.)
Defendants also allegedly concealed that Defendants concealed from Plaintiff that Defendants were required by law to conduct an ATR (ability to repay) analysis, but did not conduct an ATR analysis. (4AC, ¶ 105.ii.) Defendants allegedly concealed that, had an ATR analysis been conducted, it would be apparent that Plaintiff could not be expected to be able to repay the loan. (Id.) Defendants also allegedly steered Plaintiff to a “hard money,” high interest loan that would maximize Defendants’ profits rather than disclosing other possibility that might be more advantageous to Plaintiff. (Id. at ¶ 105.iii.) Defendants allegedly concealed the true costs and risks of the loan they provided to Plaintiff. (Id.)
The eighth cause of action for negligent misrepresentation is based upon similar allegations. (See 4AC, ¶¶ 115 – 116.)
Reliance
exists when the misrepresentation or nondisclosure was an immediate cause of
the plaintiff's conduct which altered his or her legal relations, and when without
such misrepresentation or nondisclosure he or she would not, in all
reasonable probability, have entered into the contract or other transaction. ( Spinks v. Clark
(1905) 147 Cal. 439, 444 [82 P. 45]; 5 Witkin, Summary of Cal. Law (9th ed.
1988) Torts, § 711, p. 810.) "Except in the rare case where the undisputed
facts leave no room for a reasonable difference of opinion, the question of
whether a plaintiff's reliance is reasonable is a question of fact." ( Blankenheim v. E. F. Hutton & Co. (1990) 217 Cal. App. 3d 1463, 1475 [266 Cal. Rptr.
593]; Gray v. Don Miller & Associates, Inc. (1984) 35 Cal. 3d 498, 503 [198 Cal. Rptr. 551,
674 P.2d 253, 44 A.L.R.4th 763] ["[w]hether reliance is justified is a
question of fact for the determination of the trial court"]; Guido v. Koopman
(1991) 1 Cal. App. 4th 837, 843 [2 Cal. Rptr. 2d 437] ["the reasonableness
of the reliance is ordinarily a question of fact"].) "However,
whether a party's reliance was justified may be decided as a matter of law
if reasonable minds can come to only one conclusion based on the facts." (
Guido v. Koopman, supra, 1 Cal. App. 4th at p. 843.)
(Alliance Mortgage Co. v. Rothwell (1995) 10 Cal.4th 1226, 1239.)
Here, Defendant’s Separate Statement at Issue No. 3 does not cite any evidence whereby the question of Plaintiff’s reliance on the nondisclosure of the material facts pled was unreasonable as a matter of law. In other words, triable issues of such material fact exist, and a jury must determine the reasonableness of Plaintiff’s reliance on Defendants’ alleged nondisclosure of material facts.
As such, the motion for summary adjudication as to Issue No. 3 re: the seventh and eighth causes of action is DENIED.
4. ISSUE 4: The Eleventh and Twelfth causes of action for Predatory Lending and Unfair and Deceptive Business Act Practices also fail.
Defendant simply argues that these causes of action fail because “[a]ll the defenses discussed herein apply to these claims and serve to eliminate these causes of action.” (MSJ, Page 20:10-11.) For the reasons discussed above, this argument is not persuasive.
The motion for summary adjudication as to Issue No. 4 re: the eleventh and twelfth causes of action is DENIED.
5. ISSUE 5: Plaintiff cannot recover punitive damages from The Agency.
A defendant is entitled to summary adjudication on “one or more claims for [punitive] damages” if he establishes “there is no merit to [the claim], as specified in Section 3294 of the Civil Code . . . .” (Code Civ. Proc., § 437c, subd. (f)(1)). A defendant establishes a claim has no merit by showing that an element of the claim cannot be established. (Code Civ. Proc., § 437c, subd. (p)(2).) To do so, a defendant must show that the plaintiff does not possess, and cannot reasonably obtain, needed evidence. (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 854.) To meet its burden, a defendant must present evidence; he may not simply point out that the plaintiff does not possess, and cannot reasonably obtain, needed evidence. (Id. at 854-55.) “Once the defendant . . . has met that burden, the burden shifts to the plaintiff . . . to show that a triable issue of one or more material facts exists . . . .” (Code Civ. Proc., § 437c, subd. (p)(2).)
“In the usual case, the question of whether the defendant's conduct will support an award of punitive damages is for the trier of fact, ‘since the degree of punishment depends on the peculiar circumstances of each case.’ [Citations.] [¶] But the issue may be resolved on summary judgment, giving due regard to the higher proof standard. While ‘the “clear and convincing” evidentiary standard is a stringent one, it does not impose on a plaintiff the obligation to “prove” a case for punitive damages at summary judgment.’ (American Airlines, Inc. v. Sheppard, Mullin, Richter & Hampton [(2002)] 96 Cal.App.4th [1017,] 1049 [117 Cal. Rptr. 2d 685].) ‘However, where the plaintiff's ultimate burden of proof will be by clear and convincing evidence, the higher standard of proof must be taken into account in ruling on a motion for summary judgment or summary adjudication, since if a plaintiff is to prevail on a claim for punitive damages, it will be necessary that the evidence presented meet the higher evidentiary standard.’ (Ibid.; [citations].) … [S]ummary judgment ‘on the issue of punitive damages is proper’ only ‘when no reasonable jury could find the plaintiff's evidence to be clear and convincing proof of malice, fraud or oppression.’ (Hoch v. Allied-Signal, Inc.[ (1994) 24 Cal.App.4th 48,] 60–61 [29 Cal. Rptr. 2d 615].)” (Spinks v. Equity Residential Briarwood Apartments (2009) 171 Cal.App.4th 1004, 1053 [90 Cal. Rptr. 3d 453].) In reviewing the trial court's denial of petitioners' motion for summary adjudication, we view the evidence with the higher burden of proof in mind.
(Johnson & Johnson v. Superior Court (2011) 192 Cal.App.4th 757, 762.)
Given the above discussion re: summary judgment, the Court finds that there is no triable issue of material fact as to whether Plaintiff can present clear and convincing evidence that an officer, director or managing agent of Defendant The Agency acted with malice, oppression or fraud toward Plaintiff, nor that it employed Lopez with advance knowledge of her unfitness and in conscious disregard of the rights of Plaintiff, nor that it ratified Lopez’s conduct in which she engaged with malice, oppression or fraud.
(b) An employer
shall not be liable for damages pursuant to subdivision (a), based upon acts of
an employee of the employer, unless the employer had advance knowledge of the
unfitness of the employee and employed him or her with a conscious disregard of
the rights or safety of others or authorized or ratified the wrongful conduct
for which the damages are awarded or was personally guilty of oppression,
fraud, or malice. With respect to a corporate employer, the advance knowledge
and conscious disregard, authorization, ratification or act of oppression,
fraud, or malice must be on the part of an officer, director, or managing agent
of the corporation.
(Civ. Code § 3294(b).)
Plaintiff’s argument that Defendant ratified Lopez’s conduct by failing to discipline her after being served with this lawsuit in March 2019 is not persuasive. There is no evidence that The Agency received any benefits from Lopez allegedly engaging in loan activities. As such, there can be no ratification if The Agency received no benefit that it could repudiate:
There is no ratification if, at the time it becomes known that the agent exceeded his authority, the principal has put it beyond his power to return or restore the benefits received, or if without his fault conditions are such that he cannot be placed in statu quo or repudiate the entire transaction without loss, or if the continued enjoyment of the benefits by the principal is unavoidable." Again, as stated in said section, the rule of ratification by the acceptance of benefits implies the power of agents to accept or reject what has been received.
(Pac. Bone Coal & Fertilizer Co. v. Bleakmore (1927) 81 Cal.App. 659, 664.)
As such, the motion for summary adjudication as to Issue No. 5 re: punitive damages is GRANTED.
Motion To Continue Trial Date
Plaintiff Robyn Pearlman moves for a continuance of the trial date from November 28, 2022 to April 3, 2023, or a later date that is convenient for the Court, with a corresponding continuance of the Final Status Conference. Plaintiff is not seeking a continuance of discovery and motion cut-off dates.
The basis for this motion is that Plaintiff’s counsel, Mr. Lefkowitz, is scheduled to be out of town on a long-planned 30th anniversary and 60~ Birthday trip with his wife (that has been postponed for two years due to the pandemic) during the time that the Court set this case for trial (sua sponte and without hearing). (Declaration of David Lefkowitz ("Lefkowitz Decl."), generally, and ¶ 4.)
Trial dates are firm and a request for continuance of trial is disfavored. (Cal. Rules of Court, Rule 3.1332(a) & (c).) CRC Rule 3.1332(c) requires an affirmative showing of good cause requiring the continuance.
Plaintiff has demonstrated the “unavailability of trial counsel because of . . . other excusable circumstances.” (Cal. Rules of Court, Rule 3.1332(c)(3).)
The Court finds that good cause exists for the requested trial continuance.
In ruling on a motion for continuance of the trial date, among the other factors the court is to consider are set forth in CRC Rule 3.1332(d)(1)-(11), and include as relevant to this motion:
· Whether there was any previous continuance, extension of time, or delay of trial due to any party – The trial date was originally set for July 25, 2022 (April 29, 2021 minute order), then to November 28, 2022 (June 8, 2022 minute order).
· The length of the continuance requested – about 4 months—from November 28, 2022 to April 3, 2023, which is the earliest date all parties’ counsel are available. The Court is dark the week of April 3, 2023, so the continuance will have to be thereafter.
· The availability of alternative means to address the problem that gave rise to the motion or application for a continuance – There does not appear to be any feasible means to address the problem.
· The prejudice that parties or witnesses will suffer as a result of the continuance – There does not appear to be any prejudice which would result from the continuance.
· Whether all parties have stipulated to a continuance – All parties have stipulated to the requested continuance.
· Whether the interests of justice are best served by a continuance, by the trial of the matter, or by imposing conditions on the continuance – This factor appears to be neutral.
· Any other fact or circumstance relevant to the fair determination of the motion or application – This action was filed on March 20, 2019. A trial date of April 3, 2023 would be 4 years and 14 days from the date of commencement.
Conclusion:
Given the existence of good cause
for the continuance, and taking into consideration the additional factors, the
motion to continue the trial date is GRANTED. The trial date is CONTINUED to April
10, 2023 at 8:30 AM. The final status conference is set for March 27, 2023 at
8:30 AM. All motion and discovery cutoff dates shall remain as set relative to
the November 23, 2022 trial date.