Judge: John J. Kralik, Case: 22BBCV00157, Date: 2022-10-28 Tentative Ruling

Case Number: 22BBCV00157    Hearing Date: October 28, 2022    Dept: NCB

 

Superior Court of California

County of Los Angeles

North Central District

Department B

 

 

JPMorgan chase bank, n.a.,

 

                        Plaintiff,

            vs.

 

dowel tex inc., et al.,

 

                        Defendants.

 

  Case No.:  22BBCV00157

 

  Hearing Date:  October 28, 2022

 

[TENTATIVE] order RE:

motion for summary judgment

 

Background

A.    Allegations

Plaintiff JPMorgan Chase Bank, N.A. (“Plaintiff”) alleges that Defendant Dowel Tex Inc. (“Dowel”) entered into a Credit Agreement with Chase on December 3, 2015 and Dowel also signed a Term Note for $1,799,855.72.  Plaintiff alleges that on December 3, 2015, Defendant Bonjun Koo (“Koo”) signed a Continuing Guaranty for Dowel’s obligation under the agreements with Plaintiff.  Plaintiff alleges that same day, Dowel entered into a Continuing Security Agreement with Chase and the agreement was signed by Koo on behalf of the borrower.  Plaintiff alleges that the loans and agreements between borrower and Plaintiff are currently in default and that the last payment was received on March 8, 2021.  Plaintiff alleges that as of February 18, 2022, the principal amount due and owing on the loans and other agreements was $136,374.24. 

This complaint, filed March 8, 2022, alleges causes of action for: (1) breach of written contract against all Defendants; and (2) breach of guaranty against Koo.

B.     Motion on Calendar

On August 11, 2022, Plaintiff filed a motion for judgment in its favor and against Defendants Dowel and Koo on both Plaintiff’s complaint and Defendants’ answer.  Specifically, Plaintiff seeks adjudication of the following issues:

·         Issue 1: Plaintiff is entitled to summary adjudication on its 1st cause of action because it is undisputed that Defendant entered the Credit Agreement with Plaintiff, a Term Note, and a Security Agreement with Plaintiff on December 3, 2015 and Plaintiff performed its obligations but Defendants defaulted.

·         Issue 2: Plaintiff is entitled to summary adjudication on its 2nd cause of action because it is undisputed that Koo entered the Continuing Guaranty (guarantying payment under the Credit Agreement and Term Note) with Plaintiff on December 3, 2015, but Koo failed to remit funds to Plaintiff accordingly.

The Court is not in receipt of an opposition brief.

DISCUSSION

The essential elements of a cause of action for 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 plaintiff.”  (Oasis West Realty, LLC v. Goldman (2011) 51 Cal.4th 811, 821.) 

Plaintiff provides the following undisputed material facts.  On December 3, 2015, Dowel entered into the Credit Agreement with Plaintiff.  (Fact 1.)  That same day, Dowel entered into a Line of Credit Term Note (“Note”) for $1,799,855.72 with Plaintiff in connection with the Credit Agreement.  (Fact 2.)  The Note was to become due on December 15, 2020 and provided the following payment terms:

Dowel Tex., Inc. (the “Borrower”) promises to pay to JPMorgan Chase Bank, N.A. … the sum of One Million Seven Hundred Ninety-Nine Thousand Eight Hundred Fifty-Five and 72/100 Dollars ($1,799,855.72) or so much thereof as may be advanced and outstanding, plus interest on the unpaid principal balance computed on the basis of the actual number of days elapsed in a year of 360 days at the rate of 6.00% Per Annum (the “Note Rate”) and at the rate of 3.00% Per Annum above the Note Rate, at the Bank’s option, upon the occurrence of any default under this note, whether or not the bank elects to accelerate the maturity of this Note … from the date such increased rate is imposed by the Bank.

(Fact 3; Diamond Decl., Ex. A [Term Note and Credit Agreement at p.1].)  On December 3, 2015, Dowel entered into a Security Agreement with Chase, which provided that borrower Dowel “pledges and assigns to the Bank all of the Collateral … owned by the Borrower, all of the collateral in which the Borrower has rights or power to transfer rights and all Collateral in which the Borrower later acquires ownership, other rights or rights or power to transfer rights to secure the payment and performance of the Liabilities.”  (Fact 4-5; Diamond Decl., Ex. C [Continuing Security Agreement at p.1].)  Ray Diamond (a Special Credit Recovery Analyst for Plaintiff) states that Plaintiff fully performed its obligations under the Note by extending credit to Defendants in the specified loan amount.  (Fact 6; Diamond Decl., ¶¶3, 8, Ex. D [Account Transaction History].)  Mr. Diamond states that as of November 2020, Defendants were in default.  (Fact 7; Diamond Decl., ¶¶6, 9.)  He states that as of July 19, 2022, the outstanding balance due under the contract is $136,374.24, plus late fees and costs of $525.00.  (Fact 10; Diamond Decl., ¶¶6-7, Ex. C.) 

            With respect to the 2nd cause of action, Plaintiff provides the following facts.  On December 3, 2015, Koo signed a Continuing Guaranty for Dowel’s debts arising out of the loan, unconditionally guarantying payment and performance under the Term Note and Credit Agreement.  (Fact 11; Diamond Decl., ¶4, Ex. B [Guaranty].)  Koo “absolutely” and “unconditionally guarantees to the Bank the performance of and full and prompt payment of the Liabilities when due….”  (Fact 12; Guaranty at p.1.)  As of November 2020, Defendants were in default because Defendants/Guarantor each failed to pay the amount owed to Plaintiff in connection with the defaulted loan.  (Fact 14-15.)

Based on the facts and cited evidence provided by Plaintiff, Plaintiff has shown that it entered into the Term Note, Credit Agreement, and Security Agreement with Dowel and that Koo executed the Guaranty for Dowel’s loan and obligations.  Plaintiff has shown that it funded the loan, but that Defendants defaulted on the agreements in November 2020 by failing to make payments. 

As Plaintiff has upheld its initial burden on summary judgment as to the 1st and 2nd causes of action for breach of written contract and the guaranty, the burden shifts to Defendants to raise a triable issue of material fact as to the causes of action or a defense thereto.  As the motion is unopposed, Defendants have not upheld their shifted burden. 

Accordingly, the motion for summary judgment on the 1st and 2nd causes of action is granted.   

CONCLUSION AND ORDER

Plaintiff JPMorgan Chase Bank, N.A.’s motion for summary judgment on the complaint is granted.  Plaintiff is ordered to lodge with the Court and serve on Defendants a proposed judgment within ten (10) days and to provide notice of this order.

Plaintiff shall provide notice of this order.