Judge: H. Jay Ford, III, Case: 23SMCV03088, Date: 2023-12-07 Tentative Ruling

Case Number: 23SMCV03088    Hearing Date: December 7, 2023    Dept: O

  Case Name:  Hillgreen Capital, LLC, et al. v. Student Debt Services, LLC, et al.

SUBJECT:                 MOTION FOR JUDGMENT ON THE PLEADINGS

MOVING PARTY:   Defendants Student Debt Services, LLC; Jeffrey DaPra; and Nicole Pierce

RESP. PARTY:         Plaintiffs Hillgreen Capital, LLC; Renee Esebad, trustee of the Trevis Trust

TENTATIVE RULING

            Defendants Student Debt Services, LLC, Jeffrey DaPra, and Nicole Pierces’ Motion for Judgment on the Pleadings as to the First Cause of Action for Breach of Written Amended Guaranty Agreement is DENIED. Plaintiffs have successfully pled all the elements of the first cause of action. The note at issue was allegedly not fully extinguished through completing one of multiple elements involved in the Amended Guaranty Agreement.

            Defendants RJN is GRANTED.

            “A motion for judgment on the pleadings performs the same function as a general demurrer, and hence attacks only defects disclosed on the face of the pleadings or by matters that can be judicially noticed. Presentation of extrinsic evidence is therefore not proper on a motion for judgment on the pleadings.” (Cloud v. Northrop Grumman Corp  (1998) 67 Cal.App.4th 995, 999.)

            A motion for judgment on the pleadings is properly granted when the “complaint does not state facts sufficient to constitute a cause of action against that defendant.” (Code Civ. Proc., § 438, subd. (c)(1)(B)(ii).) The grounds for the motion must appear on the face of the challenged pleading or from matters that may be judicially noticed. (Code Civ. Proc., § 438, subd. (d).) 

            The trial court must accept as true all material facts properly pleaded, but does not consider conclusions of law or fact, opinions, speculation, or allegations contrary to law or facts that are judicially noticed. (Stevenson Real Estate Services, Inc. v. CB Richard Ellis Real Estate Services, Inc. (2006) 138 Cal.App.4th 1215, 1219–1220.)

            Defendants Student Debt Services, LLC, et al.’s (“SDS”) requests a Judgment on the Pleadings as to the First Cause of Action for Breach of Written Amended Guaranty Agreement. An amended guaranty agreement is a contract, so the cause of action is essentially for breach of a written contract. (See Series AGI West Linn of Appian Group Investors DE, LLC v. Eves (2013) 217 Cal.App.4th 156, 163 [“A guaranty is a form of contract and subject to the usual rules governing contract interpretation.”]; see also Civ.Code, § 2837; Rest.3d Suretyship and Guaranty, § 14, p. 69.)  The essential elements of breach of contract 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." (D'Arrigo Bros. of California v. United Farmworkers of America (2014) 224 Cal.App.4th 790, 800.)

            Here, Plaintiffs Hillgreen Capital, LLC, et al. (“Hillgreen”) sufficiently state the facts within their complaint in order to constitute a cause of action for breach of amended guaranty agreement.

1.     Hillgreen alleges the parties entered into an amended Guaranty Agreement on 4-22-20 which provided for additional conditions than the previous guaranty agreement entered into on 11-2-16. (Compl., ¶ 15, Ex. 3.)

2.     Hillgreen alleges Hillgreen performed all the conditions precedent as to all the agreements between the parties including the amended guaranty agreement at issue. (Compl., ¶ 17.)

3.     Hillgreen alleges SDS breached the Amended Guaranty Agreement by failing to pay Hillgreen either “any part of the $150,000 yearly payment due; or ten percent (10%) of the total profits of Guarantor in the venture's known as RWC Group, LLC, and Lantorganics, LLC; and ten percent (10%) of any proceeds provided to Defendants as result of the sale, exchange or conveyance of the operations known as RWC Group, LLC & Lantorganics, LLC.” (Compl., ¶ 18.)

4.     Hillgreen alleges Hillgreen was damaged in an “amount exceeding the jurisdictional limit of this Court, in accordance to proof at trial, plus interest at the statutory rate.” (Comp., ¶ 19.)  

            Thus, all the essential elements of breach of contract were properly plead within the complaint.

            SDS argues the Amended Guaranty was extinguished as a result of SDS paying off the underlying loan in August of 2022, citing to Civil Code §§ 1473 and 1474, and as a result Hillgreen “cannot maintain a claim on the note itself.” (Motion, pp. 7–8.) However, as argued and alleged by Hillgreen, SDS did belatedly repay the loan, but SDS allegedly did not perform on another portion of the amended guaranty—paying a specific amount of profits to Hillgreen from SDS’s “cannabis businesses. (Oppo, pp. 3–4.) Thus, SDS allegedly did not fully perform on their obligations under the Guaranty and Amended Guaranty Agreements.

            SDS argues Department K of the Superior Court has exclusive jurisdiction over the matter, but this argument is incorrect. Department K reserved jurisdiction only to enforce the settlement of an earlier lawsuit involving the repayment of the loan within the same guaranty at issue here. (See RJN, Ex. A.) Department K did not reserve jurisdiction over the issue here, the interest payments related to SDS businesses, also included in the Amended Guaranty. (See Compl., Ex. 3, ¶ 2.)