Judge: Craig Griffin, Case: "Balboa Capital Corporation vs. RRR Health, LLC", Date: 2022-11-21 Tentative Ruling
Plaintiff Balboa Capital Corporation’s (“Plaintiff”) Motion for Summary Adjudication (“Motion”) against Jeffrey Baker (“Baker” individually) is GRANTED.
“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. In determining if the papers show that there is no triable issue as to any material fact, the court shall consider all of the evidence set forth in the papers, except the evidence to which objections have been made and sustained by the court, and all inferences reasonably deducible from the evidence, except summary judgment shall not be granted by the court based on inferences reasonably deducible from the evidence if contradicted by other inferences or evidence that raise a triable issue as to any material fact.” (Civ. Proc. Code § 437c(c).)
“A party may move for summary adjudication as to one or more . . .issues of duty, if the party contends that the cause of action has no merit, that there is no affirmative defense to the cause of action, that there is no merit to an affirmative defense as to any cause of action, that there is no merit to a claim for damages, as specified in Section 3294 of the Civil Code, or that one or more defendants either owed or did not owe a duty to the plaintiff or plaintiffs. 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.” (Civ. Proc. Code § 437c(f)(1).)
“A plaintiff . . . has met his or her burden of showing that there is no defense to a cause of action if that party has proved each element of the cause of action entitling the party to judgment on the cause of action. Once the plaintiff or cross-complainant has met that burden, the burden shifts to the defendant or cross-defendant to show that a triable issue of one or more material facts exists as to the cause of action or a defense thereto. The defendant or cross-defendant shall not rely upon the allegations or denials of its pleadings to show that a triable issue of material fact exists but, instead, shall set forth the specific facts showing that a triable issue of material fact exists as to the cause of action or a defense thereto.” [Emphasis added.] (Civ. Proc. Code § 437c(p)(1).)
A, “plaintiff may. . . move for summary adjudication of a cause of action, if the plaintiff asserts there is “no defense” to that cause of action. Further, the plaintiff's burden of proof on such a motion is . . . [that] the plaintiff must “prove[ ] each element of the cause of action entitling the party to judgment on that cause of action.” (Paramount Petroleum Corp. v. Superior Court (2014) 227 Cal. App. 4th 226, 241.)
”[T]he function of the affidavits or declarations is to disclose whether there is any triable issue of fact within the issues delimited by the pleadings.“ [Citation omitted.] In this regard, the court construes the moving party's affidavits strictly, construes the opposing affidavits liberally, and resolves any doubt about the propriety of granting the motion in favor of the party opposing it.” (Marshak v. Ballesteros (1999) 72 Cal. App. 4th 1514, 1517.)
Plaintiff requests summary adjudication on causes of action (“COA”) No. 3 – Breach Of Guaranty, No. 4 – Conversion, No. 5 – Indebtedness.
1) COA No. 3 – Breach Of Guaranty
"A contract of guaranty gives rise to a separate and independent obligation from that which binds the principal debtor." (Security First National Bank v. Chapman (1940) 41 Cal.App.2d 219, 221.) "A surety or guarantor is one who promises to answer for the debt, default, or miscarriage of another, or hypothecates property as security therefor." (Civil Code § 2787.) “[G]uaranty contracts are construed according to the same rules as those used for other contracts, with a view to ascertaining the intent of the parties.” (River Bank Am. v. Diller (1995) 38 Cal. App. 4th 1400, 1415.)
“To state a cause of action for breach of contract, a party must plead the existence of a contract, his or her performance of the contract or excuse for nonperformance, the defendant's breach and resulting damage. [Citation.] If the action is based on alleged breach of a written contract, the terms must be set out verbatim in the body of the complaint or a copy of the written agreement must be attached and incorporated by reference.” (Harris v. Rudin, Richman & Appel (1999) 74 Cal. App. 4th 299, 307.)
Plaintiff produced a copy of the lease and the personal guaranty signed by Baker and Allison Guyen (“Guyen” individually). (Ngo Decl., Ex. 1.) The guaranty (among other things) states Baker is jointly and severally responsible for the terms of the lease, Baker will immediately pay all obligations under the lease upon defendant RRR Health, LLC’s (“RRR” individually; “Defendants” with Baker and Guyen) default, and Baker reimburse Plaintiff for all expenses. (Id.) Plaintiff produced evidence Defendants accepted delivery of the equipment covered by the Lease and Guaranty. (Ngo Decl., Ex. 2.) Plaintiff has shown the existence of the Guaranty and its terms, Plaintiff’s performance under the Lease and Guaranty, RRR and Baker’s failure to perform under the agreement terms by not paying for the debts incurred by RRR, and Plaintiff’s damages. Finally, Plaintiff has produced evidence wherein Baker admits he signed the guaranty covering the Lease. (Agbayani Decl. ¶ 5, Ex. 2.)
Plaintiff has met its initial burden on this cause of action by proving each element of the breach of guaranty cause of action and by showing Baker has no defense to this cause of action. The burden shifts to Baker to show triable issues of material fact exist.
The opposition states Baker severed ties with RRR and Guyen shortly after the Lease was signed. There is no declaration or evidence supporting this allegation. The opposition states Baker filed a cross-complaint against RRR and Guyen. Baker argues Plaintiff breached the implied covenant of good faith and fair dealing as Plaintiff made no mention of recovery efforts against Guyen or RRR. Nothing in the Guaranty requires Plaintiff to attempt recovery from any party prior to seeking it from Baker. The Guaranty specifically notes, “The Lease guaranty will be jointly and severally responsible.” (Ngo Decl., Ex. 1.) None of this meets Baker’s transferred burden of showing triable issues of material fact exists as to this COA.
The Motion is GRANTED as to this COA.
2) COA No. 4 – Conversion
“Conversion is the wrongful exercise of dominion over the property of another. The elements of a conversion claim are: (1) the plaintiff's ownership or right to possession of the property; (2) the defendant's conversion by a wrongful act or disposition of property rights; and (3) damages....[Citation omitted.]” (Lee v. Hanley (2015) 61 Cal. 4th 1225, 1240 (“Lee”).)
“Generally, taking property without consent or authority is not excused by the fact that the owner is indebted to the person taking it. [¶] “ ‘It is essential to the orderly administration of the law that a person be prevented from obtaining payment of a claim by the unlawful seizure of the property of his debtor and, consequently, as a general rule the taking of property without authority or consent is neither warranted nor excused by the fact that the owner is indebted to the person taking the property....’ ” [Citations.] [¶] Nor is a taking that is initially authorized necessarily insulated from a claim for conversion. “If a defendant is authorized to make a specific use of a plaintiff's property, use in excess of that authorized may subject the defendant to liability for conversion, if such use seriously violates another's right to control the use of the property.” ‘ “ (Duke v. Superior Ct. (2017) 18 Cal. App. 5th 490, 506.)
The Lease states Plaintiff would lease the equipment and Plaintiff was and still is the owner of the equipment. (Ngo Decl. ¶ 27, Ex. 1.) On 10/14/21, after failing to pay the lease amount, Defendants were deemed to have taken the equipment and converted it to Defendants’ own use and purpose. (Ngo Decl. ¶ 28.) Plaintiff has made repeated oral and written demands for the return of the Property, but Defendants have failed and refused to return the equipment. (Ngo Decl. ¶ 29.) Plaintiff has suffered damages of $49,069.34 (principal plus interest) for the conversion. (Ngo Decl. ¶ 30.) Although Plaintiff produced none of the written demands for the return of the equipment, it did produce the declaration of Ngo who is the Legal Collector and Custodian of Records for Plaintiff stating the actions of Plaintiff regarding the lease and equipment. Plaintiff has met its initial burden of proving the elements of conversion.
The opposition states Baker split with RRR and Guyen who were in possession of the equipment. Baker has produced no evidence supporting the split or that he is not in possession of the leased equipment. The opposition does not meet the transferred burden of showing there are triable issues of material facts as to this COA.
The Motion is GRANTED as to this COA.
3) COA No. 5 – Indebtedness
“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. Exch. v. Zerin (1997) 53 Cal. App. 4th 445, 460.)
Plaintiff contends Defendants are indebted to Plaintiff in the total amount of $173,151.92, based on a Lease between RRR and Plaintiff, the guaranty signed by Baker and Guyen, and Defendants failure to pay the amounts owed under the Lease. (Ngo Decl. ¶ 31.) Plaintiff has met its initial burden of proving the elements of this COA.
The opposition states Baker was not involved with the Lease after he left the partnership with RRR and Guyen. There is no evidence supporting Baker actually separated. Baker failed to show any of the payments had been made towards the amount identified by Plaintiff or that all payments were made on the Lease. Baker has failed to show there are triable issues of material facts as to this COA.
The Motion is GRANTED as to this cause of action.
Plaintiff to give notice and file an order granting summary adjudication, with proof of service, within 15 days..