Judge: Helen Zukin, Case: 21SMCV00756, Date: 2023-03-16 Tentative Ruling

Case Number: 21SMCV00756    Hearing Date: March 16, 2023    Dept: 207

Background

This case arises from the sale of real property located at 2478 Glyndon Avenue, Los Angeles, CA 90291. Defendant Allstar Financial Services, Inc., the lender on a loan secured by the property, sought to sell the property at a non-judicial foreclosure sale. Plaintiff Sunrise Projects, LLC (“Sunrise”) and Plaintiff/Cross-Complainant Alvin Cox (“Cox”) each claim to be the highest bidder for the property under the provisions of a recently enacted statutory scheme which changes the procedures for certain non-judicial foreclosure sales as codified by the Legislature at Civil Code § 2924m. The property and Defendant Allstar’s attempted sale have given rise to multiple lawsuits which have been consolidated in whole or in part with this action.

Cox initiated his own action against Allstar, Case No. 21SMCV01011, and has filed a Cross-Complaint in this 21SMCV00756 action. Allstar previously moved for and was granted summary judgment on Cox’s claims against it in the 21SMCV01011. Allstar now moves for summary judgment on the sole cause of action for quiet title asserted against it in Cox’s Cross-Complaint in the 21SMCV00756 action. Cox opposes Allstar’s motion.

Objections to Evidence

Cox’s objections to the Declaration of Alfred Haberstroh are OVERRULED.

Summary Judgment Standard

Motions for summary judgment are governed by Code Civ. Proc. § 437c, which allows a party to “move for summary judgment in an action or proceeding if it is contended that the action has no merit or that there is no defense to the action or proceeding.” (C.C.P. § 437c(a)(1).) The function of a motion for summary judgment or adjudication is to allow a determination as to whether an opposing party cannot show evidentiary support for a pleading or claim and to enable an order of summary dismissal without the need for trial. (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 843.) Code Civ. Proc. § 437c(c) “requires the trial judge to grant summary judgment if all the evidence submitted, and ‘all inferences reasonably deducible from the evidence’ and uncontradicted by other inferences or evidence, show that there is no triable issue as to any material fact and that the moving party is entitled to judgment as a matter of law.” (Adler v. Manor Healthcare Corp. (1992) 7 Cal.App.4th 1110, 1119.) “The function of the pleadings in a motion for summary judgment is to delimit the scope of the issues; the function of the affidavits or declarations is to disclose whether there is any triable issue of fact within the issues delimited by the pleadings.” (Juge v. County of Sacramento (1993) 12 Cal.App.4th 59, 67, citing FPI Development, Inc. v. Nakashima (1991) 231 Cal. App. 3d 367, 381-382.) Courts “liberally construe the evidence in support of the party opposing summary judgment and resolve doubts concerning the evidence in favor of that party.” (Dore v. Arnold Worldwide, Inc. (2006) 39 Cal.4th 384, 389.)

As to each claim as framed by the complaint, the defendant moving for summary judgment must satisfy the initial burden of proof by presenting facts to negate an essential element, or to establish a defense. (C.C.P. § 437c(p)(2); Scalf v. D. B. Log Homes, Inc. (2005) 128 Cal.App.4th 1510, 1520.) Courts “liberally construe the evidence in support of the party opposing summary judgment and resolve doubts concerning the evidence in favor of that party.” (Dore v. Arnold Worldwide, Inc. (2006) 39 Cal.4th 384, 389.) Once the 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 that cause of action or a defense thereto. To establish a triable issue of material fact, the party opposing the motion must produce substantial responsive evidence. (C.C.P. § 437c(p)(2); Sangster v. Paetkau (1998) 68 Cal.App.4th 151, 166.)

Summary Adjudication Standard

A party may move for summary adjudication as to one or more causes of action, affirmative defenses, claims for damages, or issues of duty if that party contends there is no merit to the cause of action, defense, or claim for damages, or there is no duty owed. (See CCP §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.” (Ibid.) A party moving for summary adjudication bears the burden of persuasion that there are no triable issues of material facts. Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 850.

In analyzing motions for summary adjudication, the court must “view the evidence in the light most favorable to the opposing party and accept all inferences reasonably drawn therefrom.”  (Hinesley v. Oakshade Town Center (2005) 135 Cal.App.4th 289, 294; Dore v. Arnold Worldwide, Inc. (2006) 39 Cal.4th 384, 389 (Courts “liberally construe the evidence in support of the party opposing summary judgment and resolve doubts concerning the evidence in favor of that party”).) A motion for summary adjudication must be denied where the moving party's evidence does not prove all material facts, even in the absence of any opposition (Leyva v. Sup. Ct. (1985) 164 Cal.App.3d 462, 475) or where the opposition is weak (Salasguevara v. Wyeth Labs., Inc. (1990) 222 Cal.App.3d 379, 384, 387).

Analysis

On January 24, 2023, the Court granted Allstar’s motion for summary judgment as to Cox’s First Amended Complaint in the 21SMCV01011 action, finding Cox could not claim the benefit of section 2924m because he had not complied with the statutory requirements of section 2924m in tendering his bid to Allstar. Cox’s Cross-Complaint in this action asserts one cause of action against Allstar to quiet title on the subject property. It is undisputed Cox’s claim for quiet title relies on his alleged rights to purchase the property pursuant to Civil Code § 2924m.

In granting Allstar’s prior summary judgment motion on Cox’s First Amended Complaint in the 21SMCV01011 action, the Court found Allstar had presented evidence that Cox had failed to satisfy the statutory requirements imposed by section 2924m, specifically the requirement that Cox tender cash or a cashier’s check to Allstar at the time he made his final bid for purchase. In response, Cox argued his compliance with that requirement was futile. The Court rejected Cox’s futility argument for several bases. First, the Court noted the authority submitted by Cox as to futility all required some element of active inducement by the defendant before the time for plaintiff’s performance. The Court found Cox had failed to put forth any evidence of such inducement so as to create a triable issue of material fact.

The Court also found Cox’s futility argument was premised on Allstar’s execution and recording of a Trustee’s Deed Upon Sale prior to the statutory period for notices of intent to bid under section 2924m. The Court held Cox had failed to establish these actions rendered his own performance under section 2924m futile:

Plaintiff claims his tender was rendered futile by Defendant’s execution and recording of a Trustee’s Deed Upon Sale prior to the statutory 15-day period for eligible bidders to submit notices of intent to bid under section 2924m. Plaintiff does not explain why the execution and recording of this deed rendered tender futile. Indeed, Plaintiff’s entire case is premised on the notion that the execution and recording of the deed did not deprive Plaintiff of the right to purchase the subject property pursuant to section 2924m. In the May 26, 2021, order granting Sunrise’s request for a preliminary injunction in this action, the Court noted that if section 2924m applied to the sale of the property, then the execution of the deed in contravention of the statutory waiting period requirements “is of no effect.” (Order at 5.)

(January 24 Order at 6.) The Court also determined it must strictly construe the requirements imposed by section 2924m:

The Court also notes the rights and procedures outlined in section 2924m are purely legislative creations and thus must be strictly construed. (See e.g. Landstar Global Logistics, Inc. v. Robinson & Robinson, Inc. (2013) 216 Cal.App.4th 378, 390 [statutory provisions governing enforcement of judgments must be strictly construed because they are “purely legislative creations”]; Vershbow v. Reiner (1991) 231 Cal.App.3d 879, 882 [statutes concerning prejudgment attachment “are subject to strict construction because they are purely the creation of the Legislature”]; C. I. T. Corp. v. Commercial Bank of Patterson (1944) 64 Cal.App.2d 722, 727 [“In a supplemental brief filed by appellant bank subsequent to the oral argument the contention is made that the Trust Receipt Law has been legislatively approved by codification; that it is a creature of statute and should therefore be strictly construed. As a general principle we agree with this contention”].) As set forth above, section 2924m expressly requires an eligible bidder to tender a bid which includes the full amount of a higher bid in cash or cashier’s check within 45 days of the date of sale.

(Id. at 7.)

In arguing for a different result here, Cox points to his March 29, 2021, formal bid to Allstar. This bid states in pertinent part:

I hereby tender cash in the full amount of the bid, Three Hundred Sixty-Nine Thousand Seven Hundred Seventy Dollars ($369,770). According to the public records, you issued a Trustee’s Deed Upon Sale and recorded the deed as document number 20210377262 on September 9, 2021. As the trustee, please immediately take all necessary steps to set aside this deed as it violates Civil Code 2924m.

(Ex. 6 to Cox Decl.) However, this letter undercuts Cox’s futility argument rather than supports it. The letter shows Cox was aware of the deed but believed it to be null and void under section 2924m. Cox thus understood the existence and recording of the deed did not negate his purported rights under section 2924m. Cox’s bid did not assert the deed obviated any need to comply with the statutory requirements of section 2924m by tendering cash or cashier’s check in the full amount. Rather, Cox’s bid indicates the deed did not render his compliance futile because the deed violated section 2924m. This is entirely in keeping with the Court’s own analysis, set forth above, that the execution of the deed in contravention of the statutory waiting period requirements is of no effect and did not render Cox’s performance futile. (January 24 Order at 6-7.)

The Court finds summary judgment for Allstar is proper on Cox’s Cross-Complaint for the same reasons as set forth in the Court’s January 24 Order on Allstar’s motion for summary judgment on Cox’s First Amended Complaint. If the Court were to adopt Cox’s argument that his compliance with the tender requirements of section 2924m were excused for futility, any person or entity meeting the requirements for an eligible bidder under the statute could claim a right to purchase the property pursuant to section 2924m by claiming the submission of a bid was rendered futile by Allstar’s recording of the deed before the statutory timeline had run. Cox Cross-Complaint is based on the assumption that his submission of a notice of intent to bid and a final bid pursuant to section 2924m were sufficient to perfect his rights under the statute, but Cox offers no reasoned distinction as to why compliance with the tender requirement was rendered futile but the submission of a notice of intent to bid and final bid were not.

The Court finds Allstar has submitted evidence showing Cox failed to comply with the statutory requirements imposed by section 2924m and Cox has failed to carry the burden shifted to him to show a triable issue of material fact remains as to his failure to meet these burdens. The Court finds Cox has not demonstrated his failure to comply with the tender requirements of section 2924m were excused on the basis of futility. The Court thus GRANTS Allstar’s motion for summary judgment on Cox’s Cross-Complaint.

Conclusion

Allstar’s motion for summary judgment, or, alternatively, summary adjudication is GRANTED.