Judge: Curtis A. Kin, Case: 19STCV26402, Date: 2022-08-11 Tentative Ruling

Case Number: 19STCV26402    Hearing Date: August 11, 2022    Dept: 72

MOTION FOR SUMMARY ADJUDICATION

Date:            8/11/22 (9:30 AM)                 

Case:            G. Bryan Brannan et al. v. Barry Allan Gross et al. 



TENTATIVE RULING:

Plaintiff G. Bryan Brannan’s Motion for Summary Adjudication is DENIED. 

A.    EVIDENTIARY OBJECTIONS

All evidentiary objections are OVERRULED.

Defendants Robert and Ruth Blank Family Trust, Susan Cohen, Barry Allan Gross, and Lili Gross’ requests for judicial notice are DENIED in their entirety as “unnecessary to the resolution of the appellate issues before” the Court. (Martinez v. San Diego County Credit Union (2020) 50 Cal.App.5th 1048, 1075.)

B.     FIRST CAUSE OF ACTION: BREACH OF CONTRACT

The Court finds that summary adjudication is unwarranted.

Defendants demonstrate triable facts concerning the meaning of the word “recovery” in the Attorney/Client Contingency Agreement (“Fee Agreement”) and the amount of damages to which plaintiff would be entitled under the breach of contract cause of action.

The Fee Agreement states: “Attorney will only be compensated for legal services rendered if a recovery is obtained for Client [i.e., The Blank Family Trust] . . . . Any funds paid or other non-monetary compensation given to the Client by any of the Debtors or Purchasers of the Debtors property, their agents or insurance companies shall be considered part of the recovery.” (PMF 19.) The Fee Agreement also provided: “In the event that Client receives any recovery directly or indirectly from any of the Debtors or Purchasers of the Debtors property or as a result of a court order or judgment, Client shall immediately disclose the amount and nature of the compensation to Attorney [i.e., Brannon Law Offices].” (PMF 20.) Plaintiff also notes that the term “net recovery,” from which a contingency fee is calculated under paragraph 4 of the Fee Agreement, means “the total of all amounts recovered in the Dispute [i.e., Motion to Sell filed by the Kavanaghs in the bankruptcy matter referenced in paragraph 2 of the Fee Agreement] from any source whatsoever, including any award of attorney’s fees.” (PMF 23.)

“Recovery” as used in the Fee Agreement is not defined. According to defendants, recovery may be defined as: (1) the “regaining or restoration of something lost or taken away”; (2) the “obtainment of a right to something (esp. damages) by a judgment or decree”; or (3) an “amount awarded in or collected from a judgment or decree.” (RECOVERY, Black's Law Dictionary (11th ed. 2019).)

According to plaintiff, defendants received the value of the Parking Covenant when defendants sold the subject Property. (PMF 32-34.) Plaintiff contends that, because the Parking Covenant was left intact due to his legal services, a contingency fee should be awarded to plaintiff based on the value of the Parking Covenant calculated pursuant to the formula in paragraph 4 of the Fee Agreement. (PMF 29, 34, 35.) As such, plaintiff would have the Court find as a matter of law that the term “recovery” in the Fee Agreement includes preserving the Parking Covenant through the denial of the Motion to Sell in the bankruptcy matter. (Cf. Cordes v. Harding (1915) 27 Cal.App. 474, 479 [“Anderson's Law Dictionary declares that recovery means ‘to obtain by judicial action or proceeding.’”]; see also Reyes v. Beneficial State Bank (2022) 76 Cal.App.5th 596, 614 [“Merriam-Webster's online dictionary includes the following legal definition of recovery: “2[.]a: the obtaining, getting back, or vindication of a right or property by judgment or decree”].)

Further muddying the waters with respect to the definition of “recovery” in the Fee Agreement is the fact that the proceeds of the subject Property owned by defendants arguably were not obtained from the Kavanagh debtors or purchasers of the Kavanaghs’ property, but from the sale of defendants’ subject Property years after the bankruptcy proceedings concluded.

“When two equally plausible interpretations of the language of a contract may be made, as in our case, parol evidence is admissible to aid in interpreting the agreement, thereby presenting a question of fact which precludes summary judgment if the evidence is contradictory.” (Walter E. Heller Western, Inc. v. Tecrim Corp. (1987) 196 Cal.App.3d 149, 158.) The parties’ respective definitions of “recovery” are plausible. Accordingly, summary adjudication of the first cause of action is precluded.

“Parol or extrinsic evidence is admissible to resolve an ambiguity.” (WYDA Associates v. Merner (1996) 42 Cal.App.4th 1702, 1710.) Defendant Barry Gross avers that, when he signed the Fee Agreement, he thought that the contingency fee would have to be paid only if the Kavanaghs paid for the extinguishment of the Parking Covenant, which did not happen here. (Gross Decl. ¶ 14.) By contrast, plaintiff maintains that Mr. Gross agreed plaintiff would be paid from the proceeds of the sale of the subject Property. (Brannan Decl. ¶ 23.)  “[W]here the parol evidence is in conflict, the trial court's resolution of that conflict is a question of fact . . . .” (WYDA, 42 Cal.App.4th at 1710.) Based on the conflicting extrinsic evidence, the definition of “recovery” must be resolved at trial.

Even if recovery were to include the value of the Parking Covenant, the value is also in dispute. Invoking the doctrine of judicial estoppel, plaintiff points to a declaration from Mr. Gross in which he valued the Parking Covenant between $600,000 and $720,000. (PMF 16, 36.) “The elements of judicial estoppel are ‘(1) the same party has taken two positions; (2) the positions were taken in judicial or quasi-judicial administrative proceedings; (3) the party was successful in asserting the first position (i.e., the tribunal adopted the position or accepted it as true); (4) the two positions are totally inconsistent; and (5) the first position was not taken as a result of ignorance, fraud, or mistake.’ [Citations.] Even if the necessary elements of judicial estoppel are satisfied, the trial court still has discretion to not apply the doctrine. [Citation]” (Owens v. County of Los Angeles (2013) 220 Cal.App.4th 107, 121.)

Plaintiff’s argument fails, because plaintiff fails to demonstrate that the Kavanaghs’ Motion to Sell was denied due to Mr. Gross’ valuation of the Parking Covenant. The bankruptcy order does not refer to Mr. Gross’ valuation. (Brannan Decl. ¶ 36 & Ex. 7.) Even if the bankruptcy court based its denial on the valuation of the Parking Covenant from Mr. Gross, defendants reference an alternative valuation of the Parking Covenant from David Gribin filed in the bankruptcy matter. Gribin, a real estate broker, valued the Parking Covenant at $351,000. (DMF 59, 61.) Although Gribin stated that he did not consider the impact on defendants’ tenant, interpreting the evidence in the light most favorable to the opposing parties, the declaration of Gribin demonstrates that Mr. Gross’ valuation of the Parking Covenant may have been wrong, which means judicial estoppel may not apply due to Mr. Gross’ mistake in the earlier proceeding.  Indeed, Mr. Gross stated in his declaration that he was “currently obtaining an appraisal of the parking covenants that are seeking to be extinguished by the Reorganized Debtors in the motion,” thereby allowing for the possibility that his appraisal was wrong. (DMF 55.) Lastly, under such circumstances, this Court does not exercise its discretion to find that defendants are judicially estopped from disputing the value of the Parking Covenant in connection with the instant motion.  Defendants thus demonstrate a triable issue as to the damages that plaintiff should be awarded for breach of contract. (Paramount Petroleum Corp. v. Superior Court (2014) 227 Cal.App.4th 226, 241 [because damages are an element of a breach of contract cause of action, a triable issue as to damages must not exist to grant summary adjudication].)

The motion as to Issue No. 1 is DENIED.

C.    FIFTH CAUSE OF ACTION: UNJUST ENRICHMENT

The elements of unjust enrichment are receipt of a benefit and unjust retention of the benefit at the expense of another. (Lyles v. Sangadeo-Patel (2014) 225 Cal.App.4th 759, 769.)

For the reasons stated in Issue No. 1, a triable issue exists as to whether plaintiff is entitled to any recovery based on the valuation of the Parking Covenant. Further, Mr. Gross avers that, when the subject Property was sold, the Property was not advertised as benefitted by the Parking Covenant and the buyer did not inquire or make any indication that the Parking Covenant was of interest to them. (Resp. to UMF 32.) It is therefore unclear whether the proceeds of the sale included the value of the Parking Covenant. Accordingly, a triable issue exists as to whether defendants are “unjustly” retaining and withholding a portion of the sale of the subject Property.

The motion as to Issue No. 2 is DENIED.