Judge: Daniel M. Crowley, Case: 22STCV25657, Date: 2023-08-18 Tentative Ruling

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Case Number: 22STCV25657    Hearing Date: February 22, 2024    Dept: 71

Superior Court of California

County of Los Angeles

DEPARTMENT 71

TENTATIVE RULING

Defendants Pinnacle Estate Properties, Inc.’s and Jeremy Rodriguez’s motion for summary judgment of Plaintiffs Teodulo Castellanos’ and Maria Castellanos’ first amended complaint is denied.   

Defendants Pinnacle Estate Properties, Inc.’s and Jeremy Rodriguez’s motion in the alternative for summary judgment adjudication is denied as to the 1st, 2nd, 3rd, 4th, 5th, and 6th causes of action.

Defendants Pinnacle Estate Properties, Inc. (“Pinnacle”) and Jeremy Rodriguez (“Rodriguez”) (collectively, “Pinnacle Defendants”) move for summary judgment of Plaintiffs Teodulo Castellanos’ (“Teodulo”) and Maria Castellanos’ (“Maria”) (collectively, “Plaintiffs”) first amended complaint (“FAC”) alleged against Pinnacle Defendants and Non-moving Defendants Efrain Flores-Yanez (“Yanez”) and Jose Valentin Ramirez Solano (“Solano”) (collectively, “Defendants”).  (Notice of Motion, pg. 2.)

Pinnacle Defendants move in the alternative for summary adjudication of eight issues: (1) Plaintiffs cannot prevail on their cause of action for professional negligence [Issue 1]; (2) Plaintiffs cannot prevail on their cause of action for breach of fiduciary duty [Issue 2]. (3) Plaintiffs cannot prevail on their cause of action for breach of fiduciary duty [Issue 3]; (4) Plaintiffs cannot prevail on their cause of action for fraudulent concealment [Issue 4]; (5) Plaintiffs cannot prevail on their cause of action for aiding and abetting [Issue 5]; and (6) Plaintiffs cannot prevail on their cause of action for conspiracy [Issue 6].  (Notice of Motion, pgs. 2-3.)

Evidentiary Objections

Pinnacle Defendants’ 2/16/24 evidentiary objections to the Declaration of Frank J. Lozoya IV (“Lozoya”) are sustained as to Nos. 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, and 13.

Pinnacle Defendants’ 2/16/24 evidentiary objections to the Declaration of Christopher DN Hanson (“Hanson”) are denied as to Nos. 14, 15,[1] 16, 17, 18, 19, 20, 21, 22, 23, 24, and 25.

Plaintiffs’ 2/20/24 evidentiary objections to Pinnacle Defendants’ reply are sustained as to Nos. 1, 2, 3, 4, and 5.

Request for Judicial Notice

Pinnacle Defendants’ 12/8/23 request for judicial notice of (1) Grant Deed for 8224 Geyser Avenue, Reseda, California 91335 from Steve Swaner to Jessica Oliva dated August 3, 2022, and recorded with the Los Angeles County Recorder’s Office on or about August 16, 2022, (D-RJN, Exh. 3); and (2) Deed of Trust for 8224 Geyser Avenue, Reseda, California 91335, for borrower Jessica Oliva and Mortgage Research Center, LLC dba Veterans United Home Loans dated August 12, 2022, and recorded with the Los Angeles County Recorder’s Office on or about August 16, 2022, (D-RJN, Exh. 4), is granted.

Pinnacle Defendants’ 12/8/23 request for judicial notice of Plaintiffs’ complaint and FAC is denied, as this Court does not need to take judicial notice of filings on this case’s docket.

Procedural Background

On August 9, 2022, Plaintiffs filed their initial complaint in the instant action.  On May 4, 2023, Plaintiffs filed the operative FAC against Defendants alleging eight causes of action (1) professional negligence [against Pinnacle Defendants and Yanez]; (2) breach of fiduciary duty [against Pinnacle Defendants and Yanez]; (3) breach of fiduciary duty [against Defendants]; (4) fraudulent concealment [against Defendants]; (5) aiding and abetting [against Defendants]; (6) conspiracy [against Defendants]; (7) declaratory relief [against Defendants];[2] and (8) injunctive relief [against Defendants].  (See FAC.) 

On December 8, 2023, Pinnacle Defendants filed the instant motion.  Plaintiffs filed their opposition on February 8, 2024.  Pinnacle Defendants filed their reply on February 16, 2024.

Legal Standard

Summary judgment may be granted where it is shown that the “action has no merit or that there is no defense to the action or proceeding.”  (C.C.P. §437c(a).)  Summary judgment is properly granted if the evidence presented to the Court demonstrates that there is no triable issue as to any material fact and the moving party is entitled to a judgment as a matter of law.  (C.C.P. §437c(c).)

A motion for summary adjudication may be made by itself or as an alternative to a motion for summary judgment and shall proceed in all procedural respects as a motion for summary judgment.   (C.C.P. §437c(f)(2).)   A party may move for summary adjudication as to one or more causes of action within an action if that 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.  (C.C.P. §437c(f)(1).)  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.   (C.C.P. §437c(f)(1).) 

A defendant has met his or her burden of showing that a cause of action has no merit if the party has shown that one or more elements of the cause of action, even if not separately pleaded, cannot be established, or that there is a complete defense to the cause of action. Once the defendant or cross-defendant has met that burden, the burden shifts to the plaintiff to show that a triable issue of one or more material facts exists as to the cause of action or a defense thereto. The plaintiff 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.  (C.C.P. §437c(p)(2).)

Professional Negligence (1st COA)

“The elements of a cause of action in tort for professional negligence are (1) the duty of the professional to use such skill, prudence, and diligence as other members of his profession commonly possess and exercise; (2) a breach of that duty; (3) a proximate causal connection between the negligent conduct and the resulting injury; and (4) actual loss or damage resulting from the professional’s negligence.”  (Budd v. Nixen (1971) 6 Cal.3d 195, 200.)

“To establish a [professional] malpractice claim, a plaintiff is required to present expert testimony establishing the appropriate standard of care in the relevant community. ‘Standard of care “is a matter peculiarly within the knowledge of experts; it presents the basic issue in a malpractice action and can only be proved by their testimony.” [Citation.]’”  (Quigley v. McClellan (2013) 214 Cal.App.4th 1276, 1283, internal citations omitted.)

“California law does not require an expert witness to prove professional malpractice in all circumstances. ‘In professional malpractice cases, expert opinion testimony is required to prove or disprove that the defendant performed in accordance with the prevailing standard of care [citation], except in cases where the negligence is obvious to laymen.’”  (Ryan v. Real Estate of the Pacific, Inc. (2019) 32 Cal.App.5th 637, 644-645.)

Plaintiffs’ argument that Pinnacle Defendants’ failure to provide expert opinion testimony regarding the issue of causation is well taken.  Pinnacle Defendants frame their argument as one of damages, stating such damages were not “caused” to Plaintiffs but rather Jessica Oliva.  (Motion, pg. 17.)  The Court interprets this argument as one necessarily implicating the element of causation.

The “common knowledge” exception, which Pinnacle Defendants invoke, is principally limited to situations in which the plaintiff can invoke the doctrine of res ipsa loquitur, i.e., when a layperson “is able to say as a matter of common knowledge and observation that the consequences of professional treatment were not such as ordinarily would have followed if due care had been exercised.”  (Flowers v. Torrance Memorial Hospital Medical Center (1994) 8 Cal.4th 992, 1001.)   The classic example, of course, is the X-ray revealing a scalpel left in the patient’s body following surgery.  (Id.)  Otherwise, “expert evidence is conclusive and cannot be disregarded.”  (Id., quoting Starr v. Mooslin (1971) 14 Cal.App.3d 988, 999.)  Pinnacle Defendants make no demonstration that the instant scenario is one akin to res ipsa loquitor.

Pinnacle Defendants failed to meet their burden of proof by failing to submit expert testimony on the issue of causation, and submitted instead evidence that Plaintiffs’ claims against Pinnacle Defendants for damages were not caused to them and were instead “caused” to Jessica Oliva (“Oliva”), who was never a client of Pinnacle, and who ultimately purchased the Subject Property from Steve Swaner.  (Defendants’ Disputed Separate Statement of Fact [“D-DSSF”] 30; Decl. of Hawatmeh [“D-COE”] Exh. 3 at 72:7-11, 73:12-25, 74:10-13, 74:20-25, 76:1-25, 78:3-4, 92, 93:15-18; Exh. 7 at 54-55, 63-65; D-RJN Exhs. 3-4.)   Pinnacle Defendants submitted evidence that Oliva, rather than Plaintiffs, purchased the Subject Property.  (D-DSSF 31; D-COE Exh. 3 at 72:7-11, 73:12-25, 74:10-13, 74:20-25, 76:1-25, 78:3-4, 92, 93:15-18; Exh. 4 at Vol. I 14:6-14, 15:10-11; Exh. 7 at 54-55, 63-65; D-RJN Exhs. 3-4.)  Pinnacle Defendants failed to meet their burden on summary adjudication and do not shift the burden to Plaintiffs to raise a triable issue of material fact as to the issue of causation in the 1st cause of action.

Assuming, arguendo, Pinnacle Defendants met their burden, Plaintiffs raised an issue of material fact as to the issue of causation by way of expert testimony.  Specifically, Plaintiffs submitted the declaration of Hanson that Pinnacle Defendants’ conduct as Plaintiffs’ real estate broker violated the standard of care, which was a substantial factor in causing Plaintiffs’ damages.  (Plaintiffs’ Disputed Separate Statement of Fact [“P-DSSF”] 30; Decl. of Hanson ¶¶7-11, 94, 96A-D, 96R, 97-107.)

Accordingly, Pinnacle Defendants’ motion for summary adjudication of the 1st cause of action is denied.

Breach of Fiduciary Duty (2nd & 3rd COAs)

The elements of a cause of action for breach of fiduciary duty are the existence of a fiduciary relationship, its breach, and damage proximately caused by that breach.  (Knox v. Dean (2012) 205 Cal.App.4th 417, 432-433; CACI 4100.)

Pinnacle Defendants present the same argument stated in the 1st cause of action in support of summary adjudication of the 2nd and 3rd causes of action.  However, unlike the cause of action for professional negligence, Pinnacle Defendants had no burden to present expert testimony regarding causation for a cause of action for breach of fiduciary duty.  (See CACI 4100.)

Pinnacle Defendants met their burden of proof by submitting evidence that Plaintiffs’ claims against Pinnacle Defendants for damages were not caused to them and were instead “caused” to Oliva, who was never a client of Pinnacle, and who ultimately purchased the Subject Property from Swaner.  (D-DSSF 30.)   Pinnacle Defendants submitted evidence that Oliva, rather than Plaintiffs, purchased the Subject Property.  (D-DSSF 31.)  Pinnacle Defendants met their burden on summary adjudication, shifting the burden to Plaintiffs to raise a triable issue of material fact as to the issue of causation in the 2nd and 3rd causes of action.

Plaintiffs met their burden to raise a triable issue of material fact as to whether Pinnacle Defendants owed Plaintiffs a fiduciary duty, whether the duty was breached, and whether Pinnacle Defendants proximately caused the breach.  Specifically, Plaintiffs submitted evidence from expert testimony stating Pinnacle Defendants’ conduct with regard to the land sale contract divested Plaintiffs of their vested ownership rights and fell below the standard of care due a licensee to a client.  (P-DSSF 13, 31; Decl. of Hanson ¶¶96A-E, 96J, 96O, 96Q, 107.)

Accordingly, Pinnacle Defendants’ motion for summary adjudication of the 2nd and 3rd causes of action is denied.

Fraudulent Concealment, Aiding and Abetting, and Conspiracy (4th, 5th, and 6th COAs)

“[T]he elements of an action for fraud and deceit based on a 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.”  (Boschma v. Home Loan Center, Inc. (2011) 198 Cal.App.4th 230, 248.)

“The elements of a claim for aiding and abetting a breach of fiduciary duty are: (1) a third party’s breach of fiduciary duties owed to plaintiff; (2) defendant’s actual knowledge of that breach of fiduciary duties; (3) substantial assistance or encouragement by defendant to the third party’s breach; and (4) defendant’s conduct was a substantial factor in causing harm to plaintiff.”  (Nasrawi v. Buck Consultants LLC (2014) 231 Cal.App.4th 328, 343; CACI 3610.)

“To support a conspiracy claim, a plaintiff must allege the following elements: ‘(1) the formation and operation of the conspiracy, (2) wrongful conduct in furtherance of the conspiracy, and (3) damages arising from the wrongful conduct.’”  (AREI II Cases (2013) 216 Cal.App.4th 1004, 1022.)

Pinnacle Defendants argue Plaintiff’s cause of action for fraudulent concealment fails because Pinnacle Defendants were entirely unaware of the facts that would warrant disclosure related to Yanez’s allegedly fraudulent Promissory Note and did not cause the damages from the Promissory Note.  (Motion, pgs. 21-22.)  Pinnacle Defendants repeat their earlier argument that Plaintiffs never owned the Subject Property and therefore cannot demonstrate damages due to the Promissory Note.  (Motion, pg. 23.)

Pinnacle Defendants further argue they cannot be found vicariously liable for Yanez’s alleged criminal acts because there is no actual connection between Yanez’s superseding criminal acts and Pinnacle Defendants where Pinnacle Defendants had nothing to gain from the Promissory Note transaction.  (Motion, pgs. 23-24.)

Pinnacle Defendants demonstrate they are entitled to judgment as a matter of law on the last three causes of action alleged against them based on a failure of Plaintiffs to allege Pinnacle Defendants proximately caused damages, as stated with regard to the cause of action for breach of fiduciary duty, shifting the burden to Plaintiffs, and Plaintiffs sufficiently met their burden to demonstrate there exists a triable issue of material fact as to Pinnacle Defendants proximately causing their damages.

Further, Pinnacle Defendants submitted evidence that they did not conceal or suppressed a material fact from Plaintiffs.  Specifically, Pinnacle Defendants submitted evidence that they were unaware of Promissory Note in March 2022.  Specifically, Pinnacle Defendants submitted evidence of Solano’s deposition testimony stating that he believed Yanez was going to be his agent for the sale of the Subject Property, not Rodriguez or Pinnacle.  (D-DSSF 45; D-COE Exh. 1 at Vol. 1 62:2-24; Exh. 8 at Vol. 2 145:19-146:1.)  Pinnacle Defendants submitted evidence that their names were not included on the Promissory Note.  (D-USSF 44.)  Pinnacle Defendants submitted evidence that Oliva provided Yanez with Plaintiffs’ personal information before Plaintiffs ever signed with Pinnacle or spoke with Rodriguez.  (D-DSSF 51; D-COE Exh. 2 at 33:22-25, 34:1-16, 68:10-19, 147:4-14; Exh. 7 at 72:20-25, 73, 192:6-9; Exh. 13.)  Pinnacle Defendants submitted evidence that the first time Rodriguez saw the Promissory Note was when he was first served with the instant lawsuit.  (D-USSF 54.)  Pinnacle Defendants met their burden to demonstrate they did not conceal or suppressed a material fact from Plaintiffs, shifting the burden to Plaintiffs to raise a triable issue of material fact.

Plaintiffs met their burden to raise a triable issue of material fact as to whether Pinnacle Defendants concealed or suppressed a material fact from Plaintiffs.  Specifically, Plaintiffs submitted evidence that Pinnacle Defendants failed to advise Plaintiffs of the legal limitations of Yanez’s role.  (P-DSSF 51; Decl. of Hanson ¶96F.)

Accordingly, Pinnacle Defendants’ motion for summary adjudication of the 4th, 5th, and 6th causes of action is denied.

Conclusion

Pinnacle Defendants’ motion for summary judgment is denied.

Pinnacle Defendants’ motion in the alternative for summary adjudication is denied as to the 1st, 2nd, 3rd, 4th, 5th, and 6th causes of action.

Moving Party to give notice.

Dated:  February _____, 2024