Judge: Cynthia A Freeland, Case: 37-2023-00001817-CU-CO-NC, Date: 2024-01-26 Tentative Ruling

SUPERIOR COURT OF CALIFORNIA,

DEPT.:

EVENT DATE:

EVENT TIME:

SOUTH BUILDING TENTATIVE RULINGS - January 25, 2024

01/26/2024  01:30:00 PM  N-27 COUNTY OF SAN DIEGO

JUDICIAL OFFICER:Cynthia A. Freeland

CASE NO.:

CASE CATEGORY:

EVENT TYPE:

CASE TITLE: CASE TYPE:

Civil - Unlimited  Contract - Other Summary Judgment / Summary Adjudication (Civil) 37-2023-00001817-CU-CO-NC CRAMER VS GARST [IMAGED] CAUSAL DOCUMENT/DATE FILED: Amended Motion, 10/26/2023

Plaintiff/Cross-Defendant Winthrop Cramer ('Cross-Defendant')'s motion for summary adjudication is denied.

Initial Considerations Cross-Defendant's request that the court take judicial notice of: (1) the Stop Work Notice Cross-Defendant received from the City of Carlsbad on October 20, 2022 (see Cross-Defendant's Appendix of Evidence, Ex. B), and (2) the Notice of Violation Cross-Defendant received from the City of Carlsbad on October 21, 2022 (see Cross-Defendant's Appendix of Evidence, Ex. C), is granted.

However, the court may only take judicial notice of the documents' existence, not the truth of any statements contained therein. See Aquila, Inc. v. Sup. Ct. (2007) 148 Cal. App. 4th 556, 569; Lockley v. Law Office of Cantrell (2001) 91 Cal. App. 4th 875, 885. Cross-Defendant's request that the court take judicial notice of: (1) a copy of the mechanic's lien Defendant/Cross-Complainant Shane Garst ('Cross-Complainant') allegedly recorded against the subject property on November 28, 2022 (see Cross-Defendant's Appendix of Evidence, Ex. D), and (2) a copy of the release of the mechanic's lien Cross-Complainant allegedly recorded on February 10, 2023 (see Cross-Defendant's Appendix of Evidence, Ex. E), is denied as those records are not relevant to the motion's disposition. See Stockton Citizens for Sensible Planning v. City of Stockton (2012) 210 Cal. App. 4th 1484, 1500, fn. 3.

Cross-Complainant's request that the court take judicial notice of: (1) Carlsbad Municipal Code 18.20.030 § R105.2 (see Cross-Complainant's Request for Judicial Notice, Ex. 16), and (2) City of Carlsbad Work Exempt from Permitting Notice (see Cross-Complainant's Request for Judicial Notice, Ex. 17), is granted. See The Kennedy Com. v. City of Huntington Beach (2017) 16 Cal. App. 5th 841, 852. Cross-Complainant's request that the court take judicial notice of the licensing status of Resendiz Construction taken from the California Contractors State License Board website is denied as irrelevant to the motion's disposition. See Stockton Citizens for Sensible Planning, 210 Cal. App. 4th at 1500, fn. 3.

The court rules on Cross-Complainant's objections to Cross-Defendant's declaration as follows: Objection No. 1: sustained to the extent Cross-Defendant asserts that the subject property is a new home residential project (improper opinion testimony, relevance).

Objection No. 2: overruled.

Objection No. 3: overruled.

Objection No. 4: sustained (improper opinion testimony).

Objection No. 5: sustained (lacks foundation).

Calendar No.: Event ID:  TENTATIVE RULINGS

3044480 CASE NUMBER: CASE TITLE:  CRAMER VS GARST [IMAGED]  37-2023-00001817-CU-CO-NC Objection No. 6: sustained (relevance).

Objection No. 7: sustained (relevance).

Cross-Defendant's evidentiary objections are denied as procedurally deficient. Evidentiary objections must be submitted either: (1) in writing under California Rules of Court ('CRC'), Rule 3.1354, or (2) at the hearing in the presence of a court reporter. See Cal. R. Ct. 3.1352. Notably, CRC, Rule 3.1354(b) prescribes the format that evidentiary objections must take. Cross-Defendant's evidentiary objections do not conform to CRC, Rule 3.1354(b)'s formatting requirements. Additionally, Cross-Defendant did not submit a proposed order with his evidentiary objections. See Cal. R. Ct. 3.1354(c).

The court further notes that the motion itself is procedurally deficient in at least two respects. First, Cross-Defendant did not include with his Memorandum of Points and Authorities a table of contents and table of authorities even though the Memorandum exceeds 10 pages in length. See Cal. R. Ct.

3.1113(f). Second, and more notably, Cross-Defendant's Notice of Motion does not state all the grounds upon which Cross-Defendant seeks relief. See Cal. R. Ct. 3.1110(a); Cal. Code Civ. P. § 1010. More specifically, Cross-Defendant's October 6, 2023 Notice of Motion (see ROA No. 115) and October 26, 2023 Amended Notice of Motion (see ROA No. 132) both indicate that Cross-Defendant is seeking summary adjudication as to the first, second, third, and fourth causes of action on the sole ground that those claims are 'barred as Cross-Complainant is a non-licensed individual performing construction services under Business and Professions Code section 7031(a).' Clearly, the pending motion is predicated upon additional theories beyond Cross-Complainant's licensure status. Cross-Defendant is reminded that the purpose of the Notice of Motion is to 'sufficiently define the issues for the information and attention of the adverse party and the court.' Hernandez v. National Dairy Products (1954) 126 Cal. App. 2d 490, 493. Moreover, as a general rule, the court may consider only the grounds stated in the Notice of Motion. See Gonzales v. Sup. Ct. (1987) 189 Cal. App. 3d 1542, 1545. In this instance, the court exercises its discretion and will overlook this procedural deficiency because: (1) Cross-Complainant has not demonstrated any resulting prejudice (indeed, his opposition addresses the argument and evidence submitted with the moving papers), and (2) Cross-Defendant's Memorandum of Points and Authorities is clear enough as to the grounds for the relief sought. See Luri v. Greenwald (2003) 107 Cal. App. 4th 1119, 1125. However, Cross-Defendant is on notice that future failures to comply with the applicable Rules of Court or Code of Civil Procedure may result in denial of the motion.

Factual Background and Procedural History Cross-Complainant is a real estate agent who does not currently hold a contractor's license through the State of California. On January 11, 2021, Cross-Complainant purchased the real property located at 3357 Adams Street, Carlsbad, CA 92008 (the 'Property') with the intent to remodel the Property and various additions to the home unit (the 'Remodel'). Cross-Complainant retained Cross-Defendant/Cross-Complainant Rivera Construction Inc. ('Rivera') as the general contractor for the Remodel, which began in May 2021.

On February 11, 2022, Cross-Complainant and Cross-Defendant entered into a New Construction Purchase Agreement and Joint Escrow Instructions (the 'Purchase Agreement') under which Cross-Defendant agreed to purchase the Property from Cross-Complainant for $4,500,000.00. The close of escrow was scheduled for August 8, 2022. Relevant to the pending motion are three Addendums to the Purchase Agreement which the parties entered into between February 11 and August 8, 2022. More specifically, on February 11, 2022, the parties entered into Addendum No. 1 which provides, in pertinent part, that: (1) the purchase price will be $4,500,000.00 for a new custom home; (2) the purchase price includes a four-car tandem garage, pickleball court, covered cabana, built-in ice maker, built-in Miele plumbed coffee maker, and the features discussed on plans and artist renderings; (3) Cross-Complainant intends to obtain a certificate of occupancy and then complete the garage, pickleball court, and cabana (estimated at an additional 30 days to complete); and (4) at Cross-Defendant's option, close of escrow will be: (a) within 10 days of completion of all improvements, or (b) within 10 days of Cross-Complainant obtaining a certificate of occupancy, with a $200,000.00 holdback in escrow until completion of all items.

Calendar No.: Event ID:  TENTATIVE RULINGS

3044480 CASE NUMBER: CASE TITLE:  CRAMER VS GARST [IMAGED]  37-2023-00001817-CU-CO-NC On August 8, 2022, the parties entered into Addendum No. 2 under which they agreed that: (1) Cross-Complainant is the Property's owner/seller, and (2) Cross-Defendant would pay Cross-Complainant $100,000.00 in upgrades after close of escrow. That same day, the parties entered into Addendum No. 3 wherein they agreed, in relevant part, that the $200,000.00 holdback would remain in escrow 'until Pickleball Court and Cabana are completed as discussed by Winthrop Cramer and Shane Garst. Funds released upon completion as discussed by Winthrop Cramer and Shane Garst.' On October 20, 2022, the City of Carlsbad sent Cross-Defendant a Stop Work Notice pertaining to the construction of the cabana. The next day, the City of Carlsbad issued a Notice of Violation under Carlsbad Municipal Code § 18.04.015.

On January 11, 2023, Cross-Defendant commenced this action by filing a Complaint against Cross-Complainant for: (1) construction defects; (2) breach of contract; (3) fraudulent misrepresentation; (4) negligent misrepresentation; (5) fraudulent concealment; (6) conversion; (7) negligence; (8) strict liability; and (9) breach of express and implied warranties. See ROA No. 1. The Complaint alleges, among other things, that, after close of escrow on August 8, 2022, Cross-Defendant discovered a series of latent defects and construction deficiencies with the Property which Cross-Complainant allegedly failed to repair and/or replace.

On February 21, 2023, Cross-Complainant filed his initial Cross-Complaint against Cross-Defendant, Rivera, and various subcontractors who were involved with the Remodel. See ROA No. 12. The operative First Amended Cross-Complaint (the 'FACC') filed on July 31, 2023 alleges causes of action for: (1) breach of contract; (2) common counts (unjust enrichment); (3) common counts (account stated); (4) common counts (open book account); (5) defamation; (6) misappropriation of likeness; (7) intentional interference with prospective economic advantage; (8) negligent interference with prospective economic advantage; (9) breach of contract; (10) implied indemnity; (11) negligence; (12) apportionment of responsibility; (13) breach of express warranties; (14) breach of implied warranties; (15) tort of another; and (16) declaratory relief. See ROA No. 72. Cross-Defendant is named as a cross-defendant as to the first through eighth and sixteenth causes of action. For the present motion's purposes, Cross-Defendant is seeking summary adjudication as to only the first through fourth causes of action. Toward that end, the FACC alleges that Cross-Defendant breached the Purchase Agreement by: (1) not releasing the $200,000.00 holdback from escrow upon completion of construction of the cabana and pickleball court as contemplated in Addendum No. 3 (collectively, the 'Addendum Items'), and (2) not fully compensating Cross-Complainant for all upgrades Cross-Defendant requested during the Remodel (collectively, the 'Property Upgrades').

Legal Analysis Motions for summary judgment and adjudication are subject to the same rules and procedures. See Lunardi v. Great-West Life Assurance Co. (1995) 37 Cal. App. 4th 807, 819; Cal. Code Civ. P. § 437c(f)(2). The court applies a three-step analysis when ruling on a motion for summary judgment or adjudication: (1) identify the causes of action, issue(s) of duty or defense framed by the pleadings; (2) determine whether the movant has satisfied his or her burden of showing the defense or causes of action have no merit because one or more elements cannot be established, or that there is a complete defense to the cause or causes of action, or that a duty exists or does not exist; and (3) if the movant has made a prima facie showing that he or she is entitled to judgment as a matter of law, the burden shifts and the court determines whether the opposing party has provided evidence of a triable material fact as to the cause of action, issue of duty or defense. See Linden Partners v. Wilshire Linden Assocs.

(1998) 62 Cal.4th 508, 518; Choi v. Sagemark Consulting (2017) 18 Cal. App. 5th 308, 318 (citing Cal. Code Civ. P. §§ 437c(o), (p)(2); Pipitone v. Williams (2016) 244 Cal. App. 4th 1437, 1449). The opposing party 'must set forth specific facts beyond the pleadings to show the existence of a triable issue of material fact.' Choi, 18 Cal. App. 5th at 318 (citing Cal. Code Civ. P. § 437c(p)(2)). 'There is a triable issue of fact if, and only 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.' Aguilar v. Calendar No.: Event ID:  TENTATIVE RULINGS

3044480 CASE NUMBER: CASE TITLE:  CRAMER VS GARST [IMAGED]  37-2023-00001817-CU-CO-NC Atlantic Richfield Co. (2001) 25 Cal. 4th 826, 850. The court must 'liberally construe the evidence in support of the [opposing party] and resolve doubts concerning the evidence in favor of that party.' Dore v. Arnold Worldwide, Inc. (2006) 39 Cal. 4th 384, 389.

Cross-Defendant's motion for summary adjudication as to the first cause of action for breach of contract, the second cause of action for common counts (unjust enrichment), third cause of action for common counts (account stated), and fourth cause of action for common counts (open book account) is denied.

As to the first cause of action, the elements for a breach of contract claim are: '(1) the existence of the contract, (2) plaintiff's performance or excuse for nonperformance, (3) defendant's breach, and (4) the resulting damages to the plaintiff.' Oasis West Realty, LLC v. Goldman (2011) 51 Cal. 4th 811, 821. As to the second cause of action, '[t]he elements of an unjust enrichment claim are the receipt of a benefit and [the] unjust retention of the benefit at the expense of another.' Peterson v. Cellco Partnership (2008) 164 Cal. App. 4th 1583, 1593 (quotation omitted). As to the third cause of action, '[t]he essential elements of an account stated are: (1) previous transactions between the parties establishing the relationship of debtor and creditor; (2) an agreement between the parties, express or implied, on the amount due from the debtor to the creditor; (3) a promise by the debtor, express or implied, to pay the amount due.' Zinn v. Fred R. Bright Co. (1969) 271 Cal. App. 2d 597, 600. As to the fourth cause of action, '[t]he elements of an open book account cause of action are:1. That [plaintiff] and [defendant] had financial transactions ... ; [¶] 2. That [plaintiff] ... kept [an] account of the debits and credits involved in the transactions; [¶] 3. That [defendant] owes [plaintiff] money on the account; and [¶] 4. The amount of money that [defendant] owes [plaintiff].' State Compensation Insurance Fund v. ReadyLink Healthcare, Inc. (2020) 50 Cal. App. 5th 422, 449 (quotation omitted).

Cross-Defendant's motion for summary adjudication is denied owing to multiple triable issues of material fact. First, the court finds a triable issue of material fact as to whether Cross-Complainant satisfied all conditions precedent to trigger Cross-Defendant's release of the $200,000.00 in escrow relating to the Addendum Items. Cross-Defendant argues that one of the Addendum Items, namely the cabana, was never completed per the terms of the Purchase Agreement because Cross-Complainant failed to obtain the necessary building permit(s). As the parties agree, this issue is one of contract interpretation. 'The fundamental goal of contractual interpretation is to give effect to the mutual intention of the parties....If contractual language is clear and explicit, it governs.' Hotels Nevada, LLC v. Bridge Banc, LLC (2005) 130 Cal. App. 4th 1431, 1435. See also Cal. Civ. Code § 1636. Such intent is to be inferred, if possible, solely from the contract's written provisions. See Cal. Civ. Code § 1639. The 'clear and explicit' meaning of these provisions, interpreted in their 'ordinary and popular sense,' unless 'used by the parties in a technical sense or a special meaning is given to them by usage', control judicial interpretation. See Cal. Civ. Code §§ 1638, 1644. See also Wolf v. Sup. Ct. (2004) 114 Cal. App. 4th 1343, 1356 ('The mutual intention to which the courts give effect is determined by objective manifestations of the parties' intent, including the words used in the agreement, as well as extrinsic evidence of such objective matters as the surrounding circumstances under which the parties negotiated or entered into the contract; the object, nature and subject matter of the contract; and the subsequent conduct of the parties.').

A contractual provision is ambiguous if it is capable of two or more constructions, both of which are reasonable; however, the contractual language must be interpreted as a whole, and in the circumstances of the case, and cannot be found to be ambiguous in the abstract. See MacKinnon v. Truck Ins. Exchange (2003) 31 Cal. 4th 635, 648; Cal. Civ. Code § 1641. In determining whether a contractual provision is ambiguous, the court provisionally receives (without actually admitting) all credible evidence concerning the parties' intentions. If the court determines that the proffered extrinsic evidence renders the contract reasonably susceptible to the interpretation urged, it is admitted to aid the court in interpreting the contract. If there is no material conflict in the extrinsic evidence, the court interprets the contract as a matter of law. If there is a conflict in the extrinsic evidence, however, the conflict must be resolved by the trier of fact. See Winet v. Price (1992) 4 Cal. App. 4th 1159, 1165-1166.

See also Walter E. Heller Western, Inc. v. Tecrim Corp. (1987) 196 Cal. App. 3d 149, 158 ('When two equally plausible interpretations of the language of a contract may be made . . . parol evidence is admissible to aid in interpreting the agreement, thereby presenting a question of fact which precludes summary judgment if the evidence is contrary.').

Calendar No.: Event ID:  TENTATIVE RULINGS

3044480 CASE NUMBER: CASE TITLE:  CRAMER VS GARST [IMAGED]  37-2023-00001817-CU-CO-NC Addendum No. 1 provides that the Addendum Items would not be built/completed until the certificate of occupancy was issued for the Property. Moreover, Cross-Defendant had the option to close escrow either: (1) within 10 days of completion of all improvements, or (2) within 10 days of Cross-Complainant obtaining the certificate of occupancy. The parties further agreed that the $200,000.00 holdback would remain in escrow 'until completion of all items.' Addendum No. 3 provides clarity on this provision, stating that the fund would be released upon completion of the cabana and pickleball court. In this case, the court finds that the Purchase Agreement is ambiguous because the terms 'completed' and 'completion' are reasonably susceptible to two interpretations. Indeed, the Purchase Agreement does not define those terms. It is Cross-Complainant's position that the cabana was completed as of October 28, 2022 and that the term 'completion' simply means the completed construction of the Addendum Items and nothing more. See Cross-Complainants' Notice of Lodgment ('NOL'), Ex. 10; Garst Decl., ¶ 13. Cross-Complainant further believes, based on conversations with Cross-Defendant before, during, and after close of escrow, that Cross-Defendant knew he would be responsible for obtaining any necessary permit(s) if he chose to close escrow before the Addendum Items were completed because, at that point, Cross-Complainant would no longer own the Property and thus would be unable to obtain the permits. See Garst Decl., ¶ 13. On the other hand, it is Cross-Defendant's belief, based on the Stop Work Notice and Notice of Violation he received from the City of Carlsbad, that the cabana was not completed because the appropriate permit was never obtained. See Cramer Decl., ¶¶ 4-6. Moreover, the Purchase Agreement itself is silent as to whether 'completion' includes obtaining permits. Consequently, this issue must be presented to the trier of fact.

Second, the court finds a triable issue of material fact as to whether Cross-Defendant was contractually obligated to pay for all Property Upgrades. This is, again, a question of contract interpretation.

Cross-Complainant is correct that, based on ¶ 2.B. of the Purchase Agreement, the parties contemplated that Cross-Defendant may request changes or extra upgrades from Cross-Complainant either concurrent with or subsequent to the Purchase Agreement's execution; however, no Options and Upgrades addendum (C.A.R. Form NCOU) was attached to the Purchase Agreement. Under Addendum No. 2, however, the parties agreed that Cross-Defendant would pay Cross-Complainant $100,000.00 directly for 'upgrades after close of escrow.' The Purchase Agreement is silent as to what the parties' meant by 'upgrades.' It is Cross-Defendant's position that he was obligated to pay Cross-Complainant $100,000.00 for all upgrades completed at close of escrow. See Cramer Decl., ¶ 3. Cross-Complainant disagrees with Cross-Defendant's interpretation of that provision. More specifically, Cross-Complainant categorizes the $100,000.00 payment as a 'progress payment' for the Upgraded Items, not a full payment for all Upgraded Items since Cross-Defendant allegedly requested upgrades that exceeded $100,000.00. See Garst Decl., ¶¶ 17-20. Cross-Complainant also provides evidence of e-mail communications between Cross-Complainant and Cross-Defendant occurring between June and August 2022 wherein Cross-Defendant purportedly requested additional upgrades and agreed to 'pay for above and beyond upgrades.' See Cross-Complainant's NOL, Exs. 12-14. Consequently, this issue must be presented to the trier of fact.

In sum, while the court agrees that contract interpretation is a question of law for the court, such determination by the court will require an assessment of the parties' credibility so the court cannot make the requested determination(s) on the pending motion as to the above issues.

Finally, Cross-Defendant's contention that California Business and Professions Code ('BPC') § 7031(a) bars Cross-Complainant from seeking compensation for construction services because he failed to plead that he was a licensed contractor is not well taken. BPC § 7031(a) provides that: Except as provided in subdivision (e), no person engaged in the business or acting in the capacity of a contractor, may bring or maintain any action, or recover in law or equity in any action, in any court of this state for the collection of compensation for the performance of any act or contract where a license is required by this chapter without alleging that they were a duly licensed contractor at all times during the performance of that act or contract regardless of the merits of the cause of action brought by the person, except that this prohibition shall not apply to contractors who are each individually licensed under this Calendar No.: Event ID:  TENTATIVE RULINGS

3044480 CASE NUMBER: CASE TITLE:  CRAMER VS GARST [IMAGED]  37-2023-00001817-CU-CO-NC chapter but who fail to comply with Section 7029.

Cal. Bus. & Prof. Code § 7031(a).

In this case, it is undisputed that Cross-Complainant: (1) does not hold a contractor's license, and (2) did not plead in his FACC that he was a duly licensed contractor during the Remodel or for work that occurred after the close of escrow. However, BPC § 7026 provides that: 'Contractor,' for the purposes of this chapter, is synonymous with 'builder' and, within the meaning of this chapter, a contractor is any person who undertakes to or offers to undertake to, or purports to have the capacity to undertake to, or submits a bid to, or does himself or herself or by or through others, construct, alter, repair, add to, subtract from, improve, move, wreck or demolish any building, highway, road, parking facility, railroad, excavation or other structure, project, development or improvement, or to do any part thereof, including the erection of scaffolding or other structures or works in connection therewith, or the cleaning of grounds or structures in connection therewith, or the preparation and removal of roadway construction zones, lane closures, flagging, or traffic diversions, or the installation, repair, maintenance, or calibration of monitoring equipment for underground storage tanks, and whether or not the performance of work herein described involves the addition to, or fabrication into, any structure, project, development or improvement herein described of any material or article of merchandise. 'Contractor' includes subcontractor and specialty contractor. 'Roadway' includes, but is not limited to, public or city streets, highways, or any public conveyance.

Cal. Bus. & Prof. Code § 7026.

In this case, the evidence shows that Cross-Complainant is exempt from BPC 7031(a)'s requirements under BPC § 7044(a). BPC § 7044(a) provides, in relevant part, that the chapter does not apply to: (2) An owner who builds or improves a structure on his or her property, provided that both of the following conditions are met: (A) The owner directly contracts with licensees who are duly licensed to contract for the work of the respective trades involved in completing the project.

(B) For projects involving single-family residential structures, no more than four of these structures are intended or offered for sale in a calendar year. This subparagraph shall not apply if the owner contracts with a general contractor for the construction.

Cal. Bus. & Prof. Code § 7044(a)(2).

In this case, the undisputed evidence demonstrates that Cross-Complainant was not required to plead that he was a duly licensed contractor during the Remodel or for post-escrow upgrades because he directly contracted with licensees who were licensed to contract for the work for which they were retained. More specifically, the evidence shows that Cross-Complainant retained: (1) Rivera as his licensed general contractor for the Remodel, and (2) Resendiz Construction as his licensed general contractor to complete the construction of the cabana after the close of escrow.

Accordingly, the court denies Cross-Defendant's motion for summary adjudication.

Conclusion In light of the foregoing, the court denies Cross-Defendant's motion for summary adjudication.

This is the tentative ruling for the hearing at 1:30 p.m. on Friday, January 26, 2024. If no party appears at the hearing, this tentative ruling will become the order of the court as of January 26, 2024. If the parties are satisfied with the court's tentative ruling or do not otherwise wish to argue the motion, they Calendar No.: Event ID:  TENTATIVE RULINGS

3044480 CASE NUMBER: CASE TITLE:  CRAMER VS GARST [IMAGED]  37-2023-00001817-CU-CO-NC are encouraged to give notice to the court and each other of their intention not to appear, though this notice is not required.

Calendar No.: Event ID:  TENTATIVE RULINGS

3044480