Judge: Holly J. Fujie, Case: 22STCV33012, Date: 2025-03-05 Tentative Ruling

Case Number: 22STCV33012    Hearing Date: March 5, 2025    Dept: 56

SUPERIOR COURT OF THE STATE OF CALIFORNIA

FOR THE COUNTY OF LOS ANGELES - CENTRAL DISTRICT

MOVING PARTY: Plaintiff/Cross-Defendant Bo Zhang (“Zhang”) and Cross-Defendants Eva Neumann (“Neumann”), Jianying Wu, United Premier Development LLC, and Yukee Architectural Design Corp. (“Yukee”) (collectively, “Moving Parties”)

RESPONDING PARTY: Defendants/Cross-Complainants Dvir Cohen and Yafit Cohen (“Defendants”)

            The Court has considered the moving, opposition and reply papers.

BACKGROUND

             This action arose out of a dispute over the August 22, 2022 foreclosure sale of a real property located at 611 West Lemon Avenue, Arcadia, CA 91007 (the “Property”).  On October 7, 2002, Plaintiff/Cross-Defendant Bo Zhang (“Zhang”) brought a complaint against Defendants alleging causes of action for: (1) fraudulent misrepresentation; and (2) violation of Business and Professions Code section 17200. 

            On January 26, 2024, the parties to this action signed a Settlement Agreement and Mutual Release (“Settlement Agreement”). On March 25, 2024, Defendants filed a motion to enforce the Settlement Agreement, specifically the provision requiring Zhang to move to dissolve the November 8, 2022 preliminary injunction.  On June 21, 2024, the Court granted the motion. (6/21/24 Minute Order)

            On August 6, 2024, Yukee filed a motion to enforce the Settlement Agreement, specifically seeking to order Defendants to cooperate with opening escrow and proceeding with the sale of the Property. On October 25, 2024, the Court denied the motion, without prejudice, upon finding that Yukee had not complied with the conditions required of it under the Settlement Agreement.

            On December 17, 2024, Moving Parties filed the instant motion to enforce settlement (the “Motion”). On February 14, 2025, Defendants filed an opposition (the “Opposition”). On February 26, 2025, Moving Parties filed a reply (the “Reply”).

EVIDENTIARY OBJECTIONS

             Defendants object to the Declaration of Carol Poh submitted with the Moving Parties’ Reply.          

For reasons of fairness, points raised for the first time in a reply brief will ordinarily not be considered. (See Reichardt v. Hoffman (1997) 52 Cal.App.4th 754, 764–765.) Thus, Defendants’ objection is SUSTAINED.

DISCUSSION

            “If parties to pending litigation stipulate, in a writing signed by the parties outside of the presence of the court or orally before the court, for settlement of the case, or part thereof, the court, upon motion, may enter judgment pursuant to the terms of the settlement. If requested by the parties, the court may retain jurisdiction over the parties to enforce the settlement until performance in full of the terms of the settlement.” (Code of Civil Procedure (“CCP”), § 664.6, subd. (a).) 

            Moving Parties argue that Yukee has complied with the terms of the Settlement Agreement and again seeks to order Defendants to cooperate with opening escrow and proceed with the sale of the Property. Specifically, Yukee asserts first that it never received the February 7, 2024 Notice to Perform letter stating that Yukee must take certain contractual actions within 2 days or else Defendants may cancel the purchase agreement. (Mot., pp. 4:23-5:13; Ex. 7.) Yukee notes that on June 21, 2024, the Court granted Defendants’ motion to enforce the Settlement Agreement, specifically the request to modify the preliminary injunction so that sale of the Property could proceed. (6/21/2024 Minute Order) On June 28, 2024, Neumann emailed the escrow officer coordinating the sale of the Property requesting that they open escrow; however, the escrow officer responded that it was not able to do so absent a court order. (Mot., pp. 6:9-27, Ex. 12.) Lastly, Moving Parties assert that Yukee and Neumann have provided proof of funds evidencing sufficient funds to purchase the Property. (Mot., pp. 7: 1-27; Exs. 13-19.) Thus, Moving Parties argue that they have complied with all conditions outlined in the Settlement Agreement and that Defendants should be ordered to proceed with the sale.

            In opposition, Defendants argue that they are not obligated to sell the Property to Yukee unless the purchase is made in cash. Therefore, they contend that the proffered proof of funds—a lender’s letter stating that financing has been secured for Yukee to acquire the Property—is insufficient. (Opp., pp. 4:18-6:13; Mot. Ex. 13.) Defendants assert that they have also requested additional conditions precedent to Yukee’s purchase of the Property, but that Moving Parties have failed to comply. (Opp. pp. 6:23-27.)

            Upon review of the Settlement Agreement, it does not require Yukee to purchase the Property in cash. The Settlement Agreement states, in relevant part, as follows:

Thus, the Settlement Agreement explicitly states that the purchase agreement shall not include any non-loan contingencies plainly reserving buyer’s option to include a loan contingency. Regardless, the purchase agreement provided by the parties does not include a loan contingency. (Mot., Ex. 5.) Defendants argue that a lender's approval letter does not constitute sufficient proof of funds because the purchase agreement does not include a loan contingency. This argument, however, misconstrues the meaning of a loan contingency. A purchase agreement with a loan contingency allows the buyer to cancel the agreement and receive a refund of their earnest money deposit if they are unable to secure a satisfactory loan. The absence of a loan contingency does not prevent the buyer from obtaining financing or require an all-cash purchase; it simply means the sale is not dependent on loan approval. Thus, there are no terms in the Settlement Agreement which preclude Yukee from obtaining a loan.

Furthermore, the Settlement Agreement clearly anticipates that the buyer’s proof of funds may come directly from a lending institution. Yukee has provided a letter from a lending institution stating: “We have secured private financing to fund the loan for Yukee Architecture & Design Corp and or its assignee to acquire the property of 661 Lemon Avenue, Arcadia, CA 91007.” (Mot., Ex. 13.) Thus, Yukee has provided proof of funds within the terms of the Settlement Agreement.

            The parties also dedicate much of their arguments to a Notice to Perform letter signed by Defendants on February 5, 2024. The Notice states that if the buyer, Yukee, does not provide the initial deposit, a verification of funds, and evidence of authority to act within 2 days after delivery of the Notice to Perform, that Defendants, as sellers, may cancel the purchase agreement. (Mot., Ex. 7.) However, as escrow had apparently not been opened as of June 2024, it is not clear what contingencies or contractual actions the February 2024 Notice to Perform could purport to enforce. (Mot., Ex. 12.) The Court will thus not consider the parties' arguments regarding the document's authenticity or lack thereof as it is not relevant to this Motion.

            The Motion to Enforce Settlement is GRANTED.