Judge Elaine W. Mandel, Case Number: 23SMCV05027, Date: 2024-07-17 Tentative Ruling

Judge: Elaine W. Mandel, Case: 23SMCV05027, Date: 2024-07-17 Tentative Ruling

Case Number: 23SMCV05027 Hearing Date: July 17, 2024 Dept: P

Tentative Ruling

E-Advance Services, LLC v. Healthymouth, LLC, et al., Case No. 23SMCV05027

Hearing Date 7/17/2024

Plaintiff’s Motion for Summary Judgment

Plaintiff entered into a credit card receivable agreement (“Agreement”) with defendant Healthymouth, guaranteed by defendant Albert. Compl. Exh. 1. Plaintiff alleges defendants modified credit card processing operations, so it could not collect receivables, as per the Agreement. Plaintiff alleges damages of $107,414.

Plaintiff propounded requests for admissions to defendant Albert. See Plaintiff’s RFA Facts, Mulhorn Decl. Exh. 5-8. Per RFA responses, defendants admitted: Albert, on behalf of Healthymouth, entered into the Agreement and agreed to remit credit card receivables of $224,850 in exchange for plaintiff’s payment of $150,000, which Albert personally guaranteed; the remaining balance owed is $107,414; and the agreement provides for attorney’s fees and costs.

Defendants admitted the genuineness of: (1) the Agreement, (2) the Personal Guaranty, and (3) an authorization agreement for automatic withdrawal of funds. See Defendants’ Responses to RFA Documents, Mulhorn Decl. Exh. 8. Plaintiff moves for summary judgment.

Evidentiary Objections

Defendants’ objection no. 1 is OVERRULED.

Defendants’ objections nos. 2 to 3 are MOOT because defendants admitted the genuineness of the documents.

Defendants’ objection no. 4 is MOOT because defendants admitted that the remaining balance owed is $107,414.

Defendants inserted improper objections and argument in responses to plaintiff’s separate statement of material facts. The separate statement is supposed to “unequivocally state whether the fact is ‘disputed’ or ‘undisputed.’ An opposing party who contends that a fact is disputed must state, on the right side of the page directly opposite the fact in dispute, the nature of the dispute and describe the evidence that supports the position that the fact is controverted. Citation to the evidence in support of the position that a fact is controverted must include reference to the exhibit, title, page, and line numbers.” Cal. Rules of Court, rule 3.1350(f)(2).

Motion for Summary Judgment

A plaintiff moving for summary adjudication must satisfy the initial burden of proof by proving each element of a cause of action. Code Civ. Proc. §437c(p)(1). Then the burden shifts to the defendant to show a triable issue of material fact exists as to the cause of action or a defense. Code Civ. Proc. §437c(p)(2). To establish a triable issue of material fact, the party opposing must produce “substantial responsive evidence.” Sangster v. Paetkau (1998) 68 Cal.App.4th 151, 162-163.

A request for admission that is admitted removes the need for evidence on the admitted issue. Brigante v. Huang (1993) 20 Cal.App.4th 1569, 1577-1578, overruled on other grounds in Wilcox v. Birtwhistle (1999) 21 Cal.4th 973, 983, fn. 12. Further, a party may not contradict these admissions. See Code Civ. Proc. §2033.410(a).

Breach of Agreement

The elements of a claim for breach of contract are (1) the contract, (2) plaintiff’s performance or excuse for nonperformance, (3) defendant’s breach, and (4) damage to plaintiff therefrom. Wall Street Network, Ltd. v. New York Times Co. (2008) 164 Cal.App.4th 1171, 1178.

The elements of breach are established via defendants’ admissions, in which defendants concede they entered into the Agreement, plaintiff performed all obligations, Healthymouth remitted $117,436, and the remaining balance is $107,414. These admissions are sufficient to establish breach; plaintiff meets its initial burden of proof on summary judgment. The burden shifts to defendants to show a triable issue of material fact.

Defendants argue the motion is based on a hearsay declaration because Marmott lacks personal knowledge. Marmott is a qualified witness. Any “qualified witness” who is knowledgeable about the documents may lay the foundation for introduction of business records—the witness need not be the custodian or the person who created the record. Jazayeri v. Mao (2009) 174 Cal.App.4th 301, 324. Marmott's declaration states (A) he is responsible for collection of defendants’ obligation, (B) his responsibilities include knowledge of plaintiff’s bookkeeping procedures and control of plaintiff’s employees, and (C) the documents and records were prepared in the ordinary course of business by employees with personal knowledge.

Defendants argue the declaration does not authenticate the Agreement nor Albert’s signature. This is contradicted by defendants’ admissions that Albert executed the Agreement and that the document is genuine. Defendants fail to raise a triable issue of material fact or a defense.

Breach of Guaranty

The second cause of action alleges Albert breached the Personal Guaranty, under which she would be responsible in the event of default by Healthymouth. The Personal Guaranty stated Albert “irrevocably, absolutely and unconditionally guarantees to Buyer prompt and complete performance of all of the obligations of Seller.” Personal Guaranty, Marmott Decl. Exh. 3, ¶C.

Healthymouth agreed to exclusively use plaintiff’s credit card processor for processing credit card payments. Plaintiff’s Separate Statement (PSSMF) 4. Pursuant to paragraph 14 of the Agreement “Events of Default,” an event of default includes Healthymouth “chang[ing] its depositing account or its payment card processor without the prior written consent.” Marmott Decl. ¶10, Exh. 2, ¶14. Plaintiff contends defendants ceased processing credit cards with plaintiff’s credit card processor, which prevented plaintiff from collecting the receivables due. PSSMRF 5-6; Brown Decl. ¶11; Marmott Decl. ¶12.

Through their responses to the RFAs, defendants admit Albert executed the Personal Guaranty. Plaintiff contends defendants breached by failing to pay all sums due under the Agreement. PSSMF 24. Plaintiff established Albert guaranteed, in writing, Healthymouth’s obligations to plaintiff. Plaintiff provides evidence defendants failed to pay the sums due, and plaintiff has been damaged in the amount of the balance of $107,414. Plaintiff met its initial burden on summary judgment, which shifts defendants to show a triable issue of material fact.

Defendants argue the declaration does not authenticate the Personal Guaranty nor Albert’s signature. This is contradicted by defendants’ admissions; defendants failed to raise a triable issue of material fact or defense.

Breach of Implied Covenant of Good Faith and Fair Dealing

“The covenant of good faith and fair dealing, implied by law in every contract, exists merely to prevent one contracting party from unfairly frustrating the other party’s right to receive the benefits of the agreement actually made.” Guz v. Bechtel National, Inc. (2000) 24 Cal.4th 317, 349-350.

Plaintiff reasserted the first cause of action for breach of contract. Where a plaintiff pleads both causes of action on the same facts, the breach of the covenant of good faith and fair dealing is superfluous and is properly disregarded. Careau & Co. v. Security Pacific Business Credit, Inc. (1990) 222 Cal.App.3d 1371, 1395.

Unjust Enrichment

Unjust enrichment “applies where the plaintiffs, while having no enforceable contract, nonetheless have conferred a benefit on the defendant which the defendant has knowingly accepted under circumstances that make it inequitable for the defendant to retain the benefit without paying for its value.” Hernandez v. Lopez (2009) 180 Cal.App.4th 932, 938, emphasis added. “The defendant in an unjust enrichment claim must pay the amounts necessary to place the plaintiff in as good a position as he or she would have been had no contract been made.” Id. Here, the parties have an enforceable written contract, rather than a claim for unjust enrichment.

Summary Judgment/Adjudication

Plaintiff moved only for summary judgment, not summary adjudication, so the court cannot rule on individual causes of action. Jimenez v. Protective Life Ins. Co. (1992) 8 Cal.App.4th 528, 534. “To prevail on a summary judgment motion that does not request summary adjudication in the alternative, the defendant must show conclusively that all of the plaintiff’s causes of action or legal theories fail as a matter of law.” Slovensky v. Friedman (2006) 142 Cal.App.4th 1518, 1527. Plaintiff has not done so here. Plaintiff met its burden on the first and second causes of action and did not meet its burden for the third and fourth causes of action.

“Only the grounds specified in the notice of motion may be considered by the trial court. [Citation.] This rule has been held to be especially true in the case of motions for summary adjudication of issues.” Gonzales v. Superior Court (1987) 189 Cal.App.3d 1542, 1545.

The court cannot grant summary judgment, as moving party did not meet its burden of proof on causes of action three and four. DENIED.