Judge: Katherine Chilton, Case: 22NWLC08651, Date: 2023-05-17 Tentative Ruling

Case Number: 22NWLC08651    Hearing Date: May 17, 2023    Dept: 25

PROCEEDINGS:      MOTION FOR SUMMARY JUDGMENT OR, IN THE ALTERNATIVE, SUMMARY ADJUDICATION

MOVING PARTY:   Defendant Loyst P. Fletcher

RESP. PARTY:         Plaintiff Veritext LLC

MOTION FOR SUMMARY JUDGMENT

(CCP § 437c)

TENTATIVE RULING:

Defendant Loyst P. Fletcher’s Motion for Summary Judgment is DENIED.

Defendant Fletcher’s Motion for Summary Adjudication of the first cause of action for breach of contract is GRANTED.

Defendant Fletcher’s Motion for Summary Adjudication of the second and third causes of action for common counts is DENIED.

SERVICE: 

[X] Proof of Service Timely Filed (CRC 3.1300)             OK

[X] Correct Address (CCP 1013, 1013a)                                     OK

[X] 75/80 Day Lapse (CCP 12c and 1005 (b))                     OK

OPPOSITION:          Filed on January 31, 2023.                                    [   ] Late                      [   ] None

REPLY:                     Filed on February 8, 2023.                                    [   ] Late                      [   ] None

ANALYSIS:

I.                Background

On April 18, 2022, Plaintiff Veritext LLC (“Plaintiff”) filed an action against Defendant Loyst P. Fletcher d/b/a Law Offices of Loyst P. Fletcher (“Fletcher”) (“Defendant”) for (1) breach of contract, (2) common counts, and (3) common counts.  On June 1, 2022, Defendant filed an Answer.

On October 19, 2022, the Court determined that the case is not a “collection hub” matter and ordered the case transferred to Department One for reassignment.  (10-19-22 Minute Order.)  On November 1, 2022, the case was assigned to Judge Katherine Chilton in Department 25 at the Spring Street Courthouse.  (11-1-22 Minute Order.)

On November 7, 2022, Defendant filed the instant Motion for Summary Judgment, or in the Alternative, Summary Adjudication (“Motion”) on the ground that Plaintiff’s claims are barred by the statute of limitations because Plaintiff admitted that the alleged breach occurred on April 24, 2018, and the underlying Complaint was not filed until April 18, 2022.

On January 31, 2023, Plaintiff filed a Notice of Errata, indicating an error as to the date of breach listed in the Complaint and the intention of correcting this error through a motion for leave to amend.  On the same day, Plaintiff filed an Opposition to Defendant’s Motion for Summary Judgment, indicating the same.

On February 1, 2023, Defendant filed a Notice of Non-Opposition to Motion for Summary Judgment.  Defendant filed a Reply to the Opposition (“Reply”) on February 8, 2023.

On February 14, 2023, the Court continued the hearing on the Motion for Summary Judgment as it had not received the reply in a timely fashion.  (2-14-23 Minute Order.)  On the same day, Plaintiff filed a Motion for Leave to File First Amended Complaint, along with a copy of the First Amended Complaint, with a hearing reserved for May 8, 2023.

On February 22, 2023, the Court again continued the hearing on the Motion for Summary Judgment to allow for Plaintiff’s Motion for Leave to File First Amended Complaint to be heard.  (2-22-23 Minute Order.)

On May 8, 2023, the Court denied Plaintiff’s Motion for Leave to File First Amended Complaint.

II.              Legal Standard

A party seeking summary judgment has the burden of producing evidentiary facts sufficient to entitle him/her to judgment as a matter of law.  (Code Civ. Proc. § 437c(c).)  The moving party must make an affirmative showing that he/she is entitled to judgment irrespective of whether or not the opposing party files an opposition.  (Villa v. McFerren (1995) 35 Cal.App.4th 733, 742-743.)  Thus, “the initial burden is always on the moving party to make a prima facie showing that there are no triable issues of material fact.”  (Scalf v. D. B. Log Homes, Inc. (2005) 128 Cal.App.4th 1510, 1519 (citing Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 850.).  When a defendant seeks summary judgment, he/she must produce admissible evidence showing “that one or more elements of the cause of action, even if not separately pleaded, cannot be established, or that there is a complete defense to the cause of action.”  (Code Civ. Proc., § 437c(p)(2).)  The moving party’s “affidavits must cite evidentiary facts, not legal conclusions or ‘ultimate’ facts” and the courts must construe the evidence in support of the opposing party, resolving any doubts in favor of the opposing party.  (Hayman v. Block (1986) 176 Cal.App.3d 629, 639; Scalf, 128 Cal.App.4th at 1519; Dore v. Arnold Worldwide, Inc. (2006) 39 Cal.4th 384, 389.)

The opposing party on a motion for summary judgment is under no evidentiary burden to produce rebuttal evidence until the moving party meets his or her initial movant’s burden.  (Binder v. Aetna Life Insurance Company (1999) 75 Cal.App.4th 832, 840.)  Once the initial movant’s burden is met, then the burden shifts to the opposing party to show, with admissible evidence, that there is a triable issue requiring the weighing procedures of trial.  (Code Civ. Proc. § 437c(p).)  The opposing party may not simply rely on his/her allegations to show a triable issue but must present evidentiary facts that are substantial in nature and rise beyond mere speculation.  (Sangster v. Paetkau (1998) 68 Cal.App.4th 151, 162.)  Summary judgment must be granted “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.)

As to any alternative request for summary adjudication of issues, such alternative relief must be clearly set forth in the Notice of Motion and the general burden-shifting rules apply but the issues upon which summary adjudication may be sought are limited by statute.  (Code Civ. Proc., § 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.)

III.            Discussion

Defendant moves for summary judgment against Plaintiff or in the alternative, summary adjudication, as to the first cause of action for breach of contract, second cause of action for common counts, and third cause of action for common counts.  (Mot. p. 2.)

a.      First Cause of Action - Breach of Contract

Plaintiff alleges that Defendant asked Plaintiff “to render services and provide goods, materials and services, including court reporting services.”  (Compl. p. 6 – Attach. BC-1.)  Defendant also asked Plaintiff to “advance monies and/or pay monies to out-of-state court reporting agencies.”  (Ibid.)  After providing the services requested, Plaintiff was to prepare invoices and send them to Defendant.  (Ibid.)  Upon receipt of the invoices, Defendant would pay the full amount of the invoices to Plaintiff.  (Ibid.)  Plaintiff complied with all the terms of the agreement – it “competently rendered all services and provided court reporting services, and advanced money to out-of-state court reporting agencies.”  (Ibid. – Attach. BC-2.)  Subsequently, Plaintiff submitted invoices with the requested payments to Defendant.  (Ibid.)  Defendant breached the agreement because he “failed to pay for some or all of the services and money advanced, including court reporting services.”  (Ibid. – Attachs. BC-2, BC-4.)  Plaintiff requests damages for the sum that Defendant has not paid, as well as “accrued interest at the stated invoice rate of 10% per annum.”  (Ibid.)

Defendant moves for summary judgment as to the breach of contract cause of action.  (Mot. p. 2.)  Defendant produces Plaintiff’s responses to Requests for Admission, served on August 31, 2022.  (Fletcher Decl., Exs. C-D.)  Plaintiff’s responses indicate that it admits that 1) it filed the complaint on April 18, 2022, 2) the debt involves an oral, not written contract, and 3) the alleged debt was incurred on or about April 24, 2018.  (Ibid. – RFA Nos. 1-4.)  Defendant argues that these admissions “must be deemed ‘evidentiary facts’ and cannot be controverted by Defendants’ counter affidavit in determining if a triable issue of fact exists” and cites to case law to demonstrate the high evidentiary value of such admissions.  (Mot. pp. 8-11.)  Given that Plaintiff admits that the alleged debts were incurred on April 24, 2018, and that there is two-year statute of limitations for quasi-contractual actions, set forth by Code of Civil Procedure § 339, the statute of limitations for the instant case has lapsed.  (Ibid. at p. 11.)  Thus, there is no triable issue of material fact as to the breach of contract cause of action.  (Ibid. at p. 12.)

Plaintiff opposes Defendant’s Motion.  Plaintiff does not dispute that the debt arises out of an oral contract and that the Complaint was filed on April 18, 2022.  (Plaintiff’s Sep. St.)  However, Plaintiff does dispute Defendant’s statement that the debt was incurred on or about April 24, 2018.  (Ibid.)  Plaintiff states that the Complaint “incorrectly stated that the debt was incurred on April 24, 2018, and that the Defendant's date of breach was April 24, 2018.”  (Oppos. pp. 1-2.)  According to Plaintiff’s counsel, the date of breach was incorrectly entered into his collection system and subsequently transferred into the Complaint and Plaintiff’s responses to Requests to Admission.  (Landsman Decl. ¶¶ 5-9.)  Defendant requested Plaintiff’s services between April 12, 2018, and June 3, 2021.  (Medina Decl. ¶ 8.)  Plaintiff sent account statements to Defendant on January 22, 2020.  (Ibid. at ¶ 14, Exs. 1-2.)  Plaintiff also sent invoices to Defendant on the following dates: April 24, May 8, May 22, June 7, and November 14, 2018, and June 7 and August 31, 2021.  (Ibid. at ¶ 15, Exs. 3-14.)  Defendant did not dispute the account statements or invoices at any point.  (Ibid. at ¶¶ 20-25.)  Defendant made payments on November 28, 2017, May 23, 2018, July 31, 2019, and October 9, 2019.  (Ibid. at ¶ 26.)  Defendant breached the agreement on or about October 9, 2019, when his last payment was received by Plaintiff.  (Ibid. at ¶¶ 27; Landsman Decl. ¶ 8.)  The last date of services rendered by Plaintiff was June 8, 2021.  (Medina Decl. ¶ 26.)  Subsequently, between July 24, 2018, and January 29, 2020, Plaintiff sent several emails and made phone calls demanding payment.  (Ibid. at ¶¶ 30-33.)

Plaintiff argues that the debt arises from a continuing agreement between the parties.  (Oppos. p. 2.)  The date of breach is either the date of last payment or the date of last services provided by Plaintiff.  (Ibid.)  Here, “[b]oth the last payment and the last date of service occurred less than 2 year[s] before the lawsuit was filed.”  (Ibid. at p. 1.)  Plaintiff has corrected the Complaint by filing a Notice of Errata and First Amended Complaint, changing the incorrectly entered date of breach of April 24, 2018.  (Landsman Decl. ¶ 10; Oppos. pp. 2-3.) 

            In its Reply, Defendant reiterates that Plaintiff has already responded to the Requests for Admission and admitted that the alleged debts were incurred on or about April 24, 2018.  (Reply p. 2.)  Plaintiff is attempting to improperly amend these dates in the Complaint through a Notice of Errata.  (Ibid. at pp. 2-3.)  Defendant argues that “Plaintiff gave unqualified admission to each and every Request for Admission in the discovery” and “[n]ow, someone other than the person who made the unqualified admission is trying to undue [sic] those admissions.”  (Ibid. at pp. 3-4.)  Furthermore, Defendant argues that “[a]ny matter admitted in response to a request for admission is conclusively established against the party making the admission in the pending action, unless the court has permitted withdrawal or amendment of that admission under Section 2033.300.”  (Ibid.)  Defendant cites to Code of Civil Procedure § 2033.300, which sets forth the proper procedure for withdrawing any admissions with leave of court.  (Ibid.)

            The Court notes that a Notice of Errata may not be filed to amend a Complaint.  Filing an amended complaint, after seeking leave of Court, is the proper mechanism for amending a complaint.  Here, on May 8, 2023, the Court denied Plaintiff’s Motion for Leave to File First Amended Complaint.  (5-8-23 Minute Order.)  Moreover, Plaintiff has not sought leave of Court to withdraw its admissions to the Requests for Admission; thus, the dates presented in the original Complaint filed on April 18, 2022, and Plaintiff’s responses to the Requests for Admission, govern in the instant action.

            The Court also finds that the statute of limitations for an action arising out an oral contract is two years, as set forth in Code of Civil Procedure § 339.  Defendant produced sufficient evidence to demonstrate that the date of breach is April 24, 2018, and the Complaint was filed on April 18, 2022. Plaintiff has not shown that a triable issue of material fact exists as to the date of breach, and thus, the Court finds that the statute of limitations for the instant action has lapsed.

            Defendant’s Motion for Summary Adjudication as to the first cause of action for breach of contract is GRANTED.

b.     Second and Third Causes of Action - Common Counts

Plaintiff alleges two causes of action for common counts.

To establish the first cause of action for common counts, Plaintiff alleges that Defendant became indebted to Plaintiff “within the last four years (1) on an open book account for money due (2) because an account was stated in writing by and between plaintiff and defendant in which it was agreed that defendant was indebted to plaintiff.”  (Compl. p. 4.)  Moreover, Defendant became indebted to Plaintiff “within the last four years (2) for work, labor, services and materials rendered at the special instance and request of defendant and for which defendant promised to pay plaintiff the sum of $13,455.25.”  Plaintiff also seeks prejudgment interest “at the rate of 10.0 percent per year from 4/24/2018.”  (Ibid.)

To establish the second cause of action for common counts, Plaintiff alleges that Defendant became indebted to Plaintiff “within the last four years (1) on an open book account for money due (2) because an account was stated in writing by and between plaintiff and defendant in which it was agreed that defendant was indebted to plaintiff.”  (Compl. p. 5.)  Moreover, Defendant became indebted to Plaintiff “within the last four years (5) for money paid, laid out, and expended to or for defendant at defendant's special instance and request,” specifically $3,282.15 paid to “Epiq Court Reporting” on behalf of Defendant.  (Ibid.)  Plaintiff also seeks prejudgment interest “at the rate of 10.0 percent per year from 4/24/2018.”  (Ibid.)

Defendant moves for summary judgment as to the second and third causes of action for common counts.  (Mot. p. 2.)  As discussed above, Plaintiff admits that 1) it filed the complaint on April 18, 2022, 2) the debt involves an oral, not written contract, and 3) the alleged debt was incurred on or about April 24, 2018.  (Fletcher Decl., Ex. D – RFA Nos. 1-4.)  Furthermore, Defendant points to Plaintiff’s Complaint, which states that the debt for $13,455.25 was incurred on April 24, 2018.  (Sep. St. p. 5; Compl. p. 4 - CC-2.)  Defendant argues that these admissions “must be deemed ‘evidentiary facts’ and cannot be controverted by Defendants’ counter affidavit in determining if a triable issue of fact exists” and cites to case law to demonstrate the high evidentiary value of admissions.  (Mot. pp. 8-11.)

Furthermore, Defendant states that “[a]n ‘open book account’ and ‘money lent’ are common counts.”  (Ibid.  at p. 12.)  Defendant argues that “[i]n order to state a plausible claim for [open book account], the Complaint must allege that, despite the existence of an express agreement…the parties agreed that the money advanced to Epiq Court Reporting for its out of state court reporting services would be the subject of a book account.”  (Ibid. at p. 15.)  Such agreement need not be in writing.  (Ibid. at p. 13.)  Given that Plaintiff has clearly alleged the existence of an express agreement between Plaintiff and Defendant but has not alleged the existence of a book account, “no plausible claim [for open book account] is alleged.”  (Ibid.)  Therefore, Plaintiff’s cause of action for common counts is “sufficient to state a plausible common count for money lent” and the applicable statute of limitations for an oral agreement for money lent is two years, pursuant to Code of Civil Procedure § 339.  (Ibid.)  Given that Plaintiff has admitted that the debts were incurred on April 24, 2018, and the Complaint was filed on April 18, 2022, the Complaint was filed after the statute of limitations had lapsed.  (Ibid.)  For this reason, there is no triable issue of material fact and Defendant is entitled to judgment as a matter of law.  (Ibid.)

            As discussed above, Plaintiff generally opposes the Motion.  Plaintiff states that the Complaint “incorrectly stated that the debt was incurred on April 24, 2018 and that the Defendant's date of breach was April 24, 2018.”  (Oppos. pp. 1-2.)  Plaintiff has corrected the Complaint by filing a Notice of Errata and First Amended Complaint.  (Ibid. at pp. 2-3.)  Plaintiff states that the instant action is based on a continuing agreement and the facts alleged are sufficient for the application of the four-year statute of limitations set forth by Code of Civil Procedure § 337(2).  (Ibid.)  Defendant last received services from Plaintiff on June 8, 2021, and made the last payment on October 9, 2019; both dates are within two years of the date the Complaint was filed.  (Ibid. at p. 3.)  Therefore, “Defendant has failed to refute, much less disprove, any element of any of Plaintiffs' claims.”  (Ibid.)

            Furthermore, in Opposition to the Motion, Plaintiff has attached the declaration of Laura Medina, account representative and custodian of records for Plaintiff.  (Medina Decl. ¶¶ 1-3.)  According to Medina, Plaintiff provided account statements to Defendant on January 22, 2020.  (Ibid. at ¶¶ 14, Exs. 1-2.)  Between April 24, 2018, and August 31, 2021, Plaintiff sent invoices to Defendant.  (Ibid. at ¶ 15, Exs. 3-14.)  Subsequently, between July 24, 2018 and January 29, 2020, Plaintiff made demands for payment via email and phone calls.  (Ibid. at ¶¶ 30-33.)  Defendant made payments between November 28, 2017, and October 9, 2019, and did not dispute the account statements or invoices.  (Ibid. at ¶¶ 20-23, 26.)

            In its Reply, Defendant argues that Plaintiff has not produced any evidence that the debt is an “open book account” as “[t]here are insufficient allegations for the Court to infer that the account was kept in a reasonably permanent form.”  (Reply p. 5.)  Defendant also reiterates that “a debt associated with an express contract will not be the subject of a book account” unless the parties agree that the debt is subject to a book account.  (Ibid.)  Here, the allegations in the Complaint show that there was an express agreement between the parties and no separate agreement for open book account.  (Ibid.)  Accordingly, the statute of limitations for an oral agreement is two years.  (Ibid. at p. 6.)

            As stated above, a Notice of Errata may not be filed to amend a Complaint and Plaintiff’s Motion for Leave to File First Amended Complaint was denied on May 8, 2023.  (5-8-23 Minute Order.)  Thus, the dates of breach presented in the Complaint govern the instant action.

The Court finds that the statute of limitations on the common counts action depends on whether Code of Civil Procedure § 337 or § 339 apply.  According to § 337, the statute of limitations for an action for an open book account is four years and “begins to run from the date of the last item.”  Alternatively, according to § 339, in the absence of an open book account, the statute of limitation is two years for an oral agreement.

To establish a cause of action for open book account, the following elements must be satisfied: (1) plaintiff and defendant had financial transactions, (2) plaintiff kept an account of the debits and credits involved in the transactions, (3) defendant owes plaintiff money on the account, and (4) the amount of money that the defendant owes the plaintiff.  (State Comp. Ins. Fund v. ReadyLink Healthcare, Inc. (2020) 50 Cal. App. 5th 422, 449; CACI 372.)  A book account is “open” if a balance remains due on this account.  (Interstate Group Administrators, Inc. v. Cravens, Dargan & Co. (1985) 174 Cal.App.3d 700, 708.)  “The law does not prescribe any standard of bookkeeping practice which all must follow, regardless of the nature of the business of which the record is kept. We think it makes no difference whether the account is kept in one book or several so long as they are permanent records, and constitute a system of bookkeeping as distinguished from mere private memoranda.”  (Egan v. Bishop (1935) 8 Cal.App.2d 119, 122.)

Here, in Opposition, Plaintiff has produced a history of financial transactions between the parties with specific sums owed and services that were provided as late as June 8, 2021, which give rise to a triable issue of material fact regarding the existence of an open book account, whether the parties agreed that the monies advanced would be the subject of an open book account, and whether anything is owed for those services.

For this reason, Defendant’s Motion for Summary Adjudication of the second and third causes of action for common counts is DENIED.  Furthermore, Defendant’s Motion for Summary Judgment is also DENIED.

IV.           Conclusion & Order

For the foregoing reasons,

Defendant Loyst P. Fletcher’s Motion for Summary Judgment is DENIED.

Defendant Fletcher’s Motion for Summary Adjudication of the first cause of action for breach of contract is GRANTED.

Defendant Fletcher’s Motion for Summary Adjudication of the second and third causes of action for common counts is DENIED.

Moving party is ordered to give notice.