Judge: David A. Hoffer, Case: 30-2021-01203514, Date: 2023-08-21 Tentative Ruling
Plaintiff and Cross-Defendant Primevere LLC’s (“Plaintiff”) Motion for Summary Adjudication (“Motion”) is DENIED.
Plaintiff requests summary adjudication as to cause of action (“COA”) No. 1 – Breach of Contract on the Park property.
“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 has pled the existence of a valid contract between it and defendant/cross-complainant Rezidential Development, Inc. (“RDI”). (Motion, Ex. B – “Park Contract”.) However, Plaintiff failed to provide any evidence that it either performed under the terms of the Park Contract or that it had a valid excuse for nonperformance. The only “evidence” produced by Plaintiff that it performed under the Park Contract was a single self-serving sentence by Plaintiff’s manager Alex Mortazavi (“Mortazavi”), wherein Mortazavi states, “Primevere paid RDI all invoices for the Park Project which included $399,106.45 for labor costs.” (Mortazavi Decl. ¶ 6.) Plaintiff produced no evidence such as copies of cancelled checks, credit card statements, or invoices showing any payments having been made to RDI. A single sentence does not support Plaintiff’s initial burden especially given that RDI has filed a cross-complaint against Plaintiff alleging Plaintiff failed to pay all sums due and owing on the construction. (ROA #37.)
As Plaintiff failed to meet its initial burden, the Motion must be denied.
Even if the court were to consider the single sentence in the Mortazavi declaration as sufficient evidence that Plaintiff met the initial burden, RDI has met the transferred burden of showing there are triable issues of material fact relating to the breach of contract COA.
RDI produced a declaration of its owner, president, and principal Reza Dadashi (“Dadashi”), as well as a declaration of forensic accountant Deborah Dickson, CPA, CFE, CFF, MAFF (“Dickson). Dadashi states there is a final outstanding invoice that Plaintiff has not paid in the amount of $105,627.40. (Dadashi Decl. ¶ 6, Ex. 2.) This statement alone is sufficient to meet the transferred burden as Plaintiff relies solely on a statement from its manager that it paid all of the invoices. However, the Dickson declaration also supports triable issues of material fact.
Dickson and Dadashi both noted that the check copies and labor logs do not include RDI’s overhead costs of labor such as costs for liability insurance, Workers’ Compensation insurance, sick and vacation pay, and travel expenses. (Opposition Appendix p. 85 – “Overhead for Labor”; Dadashi Decl. ¶¶ 7-8.) Overhead percentage applied to labor varies between 25% - 50%. (Opposition Appendix p. 85 – “Overhead for Labor.”) Dickson also noted that the $32,439.50 identified by Plaintiff would equal only 1% of the entire project, which was excessively low given labor costs on homebuilding usually run between 20% - 40% of a project’s total budget. (Dickson Decl. ¶ 22; (Opposition Appendix p. 86 – “Construction Labor Costs and Overhead Variance.”)
Dickson determined the total labor cost incurred for Park, not including overhead costs, was $265,102. (Opposition Appendix p. 86 – “Comparison of Labor Charges.”) Dickson’s final determination was that there was evidence of $265,102.00 in direct payments made by RDI to laborers, with a weighted average of 45% overhead charge of $119,296 added, for a total costs of labor being $384,398. (Opposition Appendix p. 88 – “Conclusions.”) While there is a $4,505 variance between that total and the $399,106.45 billed to Plaintiff, Dickson indicated the variance was immaterial. (Id.) Dickson’s declaration sufficiently put at issue whether the amounts billed were correct and whether or not he “cost plus 15%” referred only to the direct costs of labor or the direct costs plus overhead costs. The Park Contract is silent as to overhead costs and/or how labor costs are to be determined.
Even if the court were to consider Plaintiff to have met its initial burden, which it did not, RDI has put forth sufficient facts, evidence, and opinions to show triable issues of material fact exist. Plaintiff failed to produce any expert testimony rebutting Dickson.
The Motion is denied. Plaintiff is ordered to give notice of this ruling.
RDI’s Objections:
Overrule as to No. 1 (not hearsay)
Remaining objections are not material to disposition of the Motion. (Civ. Proc. Code § 437c(q).)
Plaintiff’s Objections:
Overrule as to: Exhibit – No. 1 (relevant to show expertise); Dadashi – Nos. 1 – 8 (relevant to show knowledge and/or foundation and verification of evidence/documents); Dickson – No. 1 (relevant to show expertise), Nos. 4 – 11 and 13 – 16 (foundation provided and not speculative or hearsay).
Remaining objections are not material to disposition of the Motion. (Civ. Proc. Code § 437c(q).)