Judge Kerry Bensinger, Case Number: 20STCV27855, Date: 2024-11-08 Tentative Ruling

Counsel may submit on the tentative ruling by emailing Dept. 31 before 8:30 the morning of the hearing. The email address is smcdept31@lacourt.org. Please do not call the court to submit on the tentative. Please do not submit to the tentative ruling on behalf of the opposing party. Please do not e-mail the Court if you plan to appear and argue.

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The tentative rulings authored by this court reflect that the court has read and considered all pleadings and evidence timely submitted to the court in connection with the motion, opposition, and reply (if any). Because the pleadings were filed, they are part of the public record.

Oral argument is not an opportunity to simply regurgitate that which a party set forth in its pleadings. Nor, is oral argument an opportunity to "make a record" when there is no court reporter present and the statements and arguments of counsel are already part of the record because they were set forth in the pleadings. Finally, simply because a party or attorney disagrees with the court's analysis and ruling or is not satisfied with it does not necessarily warrant oral argument when no new arguments will be articulated.

If you submit on the tentative, you must immediately notify all other parties email that you will not appear at the hearing. If you submit on the tentative and elect not to appear at the hearing, the opposing party may nevertheless appear at the hearing and argue the motions. If all parties to the motion submit, this tentative ruling will become the final ruling after the hearing date and it will be memorialized in a minute order. This tentative ruling is not an invitation, nor an opportunity, to file further documents relative to the hearing in question. No such document will be considered by the Court.

**Tentative rulings on Motions for Summary Judgment will only be available for review in the courtroom on the day of the hearing.

MOVING PARTY: Defendants El Segundo Plaza Associates, L.P. and El Segundo Plaza I, Inc.

In 1998, El Segundo Plaza Associates, L.P (ESPA)[1] leased the property located at 5107 W. El Segundo Blvd., Hawthorne, California 90266 (the “Premises”) to Ping D. Foo (“Foo”). In 2010, Foo assigned his interest in the lease to JCS El Segundo, Inc. (JSC), Jay Shin, and Clara Shin (collectively “Plaintiffs”), with ESPA’s written consent. Thereafter, Plaintiffs operated a Burger King franchise on the Premises.

On July 23, 2020, Plaintiffs filed this action against Defendants ESPA and El Segundo Plaza I, Inc.[2] (collectively, “Defendants”). Plaintiffs allege causes of action for (1) Breach of Contract; (2) Accounting; (3) Breach of the Implied Covenant of Good Faith and Fair Dealing; (4) Misrepresentation; (5) Damages under Penal Code Section 496(c); and (6) Declaratory Relief. Plaintiffs allege that Defendants breached the lease agreement by collecting property tax and common area expense payments in excess of what Plaintiffs actually owed under the lease.

On February 13, 2024, Defendants filed this Motion for Summary Judgment, or in the Alternative, Summary Adjudication.

The motion was heard on September 6, 2024. In advance of the hearing, the court issued a tentative ruling finding the arguments inadequately developed as to the following issues: (1) whether the terms of the QD are ambiguous; (2) whether the court can consider parol evidence to interpret the QD; and (3) whether Plaintiffs purported mistake (of fact or law) presents a sufficient defense to raise triable issues of material fact. After oral argument, the court ordered additional briefing.

When reviewing a motion for summary judgment or summary adjudication, courts must apply a three-step analysis: “(1) identify the issues framed by the pleadings; (2) determine whether the moving party has negated the opponent’s claims; and (3) determine whether the opposition has demonstrated the existence of a triable, material factual issue.”¿ (Hinesley v. Oakshade Town Center (2005) 135 Cal.App.4th 289, 294.)¿ A motion for summary judgment must be granted “if all the papers submitted show that there is no triable issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” (Code Civ. Proc., § 437c, subd. (c).)

“[T]he initial burden is always on the moving party to make a prima facia showing that there are no triable issues of material fact.”¿ (Scalf v. D. B. Log Homes, Inc. (2005) 128 Cal.App.4th 1510, 1519.)¿ A defendant seeking summary judgment “bears the burden of persuasion that there is no triable issue of material fact and that he is entitled to judgment as a matter of law.” (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 850 (Aguilar).) A defendant moving for summary judgment or summary adjudication “has met his or her burden of showing that a cause of action has no merit if the party has shown that one or more elements of the cause of action . . . cannot be established, or that there is a complete defense to the cause of action.”¿ (Code Civ. Proc., § 437c, subd. (p)(2).)¿ A moving defendant need not conclusively negate an element of plaintiff’s cause of action.¿ (Aguilar, supra, 25 Cal.4th at p. 854.)¿

To meet this burden of showing a cause of action cannot be established, a defendant must show not only “that the plaintiff does not possess needed evidence” but also that “the plaintiff cannot reasonably obtain needed evidence.”¿ (Aguilar, supra, 25 Cal.4th at p. 854.)¿ It is insufficient for the defendant to merely point out the absence of evidence.¿ (Gaggero v. Yura (2003) 108 Cal.App.4th 884, 891.)¿ The defendant “must also produce evidence that the plaintiff cannot reasonably obtain evidence to support his or her claim.”¿ (Ibid.)¿ The supporting evidence can be in the form of affidavits, declarations, admissions, depositions, answers to interrogatories, and matters of which judicial notice may be taken.¿ (Aguilar, supra, 25 Cal.4th at p. 855.)¿

“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 the cause of action or a defense thereto.” (Code Civ. Proc., § 437c, subd. (p)(2).)¿The plaintiff may not merely rely on allegations or denials of its pleadings to show that a triable issue of material fact exists, but instead, “shall set forth the specific facts showing that a triable issue of material fact exists as to the cause of action.”¿(Ibid.)¿ A plaintiff opposing summary judgment defeats the motion by showing one or more triable issues of material fact exist as to the challenged element. (Aguilar, supra, 25 Cal.4th at p. 849.) “If the plaintiff cannot do so, summary judgment should be granted.” (Avivi v. Centro Medico Urgente Medical Center (2008) 159 Cal.App.4th 463, 467.)¿

The court must “liberally construe the evidence in support of the party opposing summary judgment and resolve all doubts concerning the evidence in favor of that party,” including “all inferences reasonably drawn therefrom.”¿ (Yanowitz v. L’Oreal USA, Inc. (2005) 36 Cal.4th 1028, 1037; Aguilar, supra, 25 Cal.4th at pp. 844-45.)¿ “On a summary judgment motion, the court must therefore consider what inferences favoring the opposing party a factfinder could reasonably draw from the evidence.¿ While viewing the evidence in this manner, the court must bear in mind that its primary function is to identify issues rather than to determine issues.¿ [Citation.]¿ Only when the inferences are indisputable may the court decide the issues as a matter of law.¿ If the evidence is in conflict, the factual issues must be resolved by trial.” (Binder v. Aetna Life Ins. Co. (1999) 75 Cal.App.4th 832, 839.)¿ “Put another way, have defendants conclusively negated a necessary element of the [plaintiff’s] case or demonstrated that under no hypothesis is there a material issue of fact that requires the process of trial?” (Jeld-Wen, Inc. v. Superior Court (2005) 131 Cal.App.4th 853, 860, internal citation omitted.) Further, “the trial court may not weigh the evidence in the manner of a factfinder to determine whose version is more likely true.¿ [Citation.]¿ Nor may the trial court grant summary judgment based on the court’s evaluation of credibility.¿ [Citation.]” ¿(Id. at p. 840; see also Weiss v. People ex rel.¿Department of Transportation (2020) 9 Cal.5th 840, 864 [“Courts deciding motions for summary judgment or summary adjudication may not weigh the evidence but must instead view it in the light most favorable to the opposing party and draw all reasonable inferences in favor of that party”].)¿¿

Defendants assert twenty objections to the declarations of Plaintiffs Jay Shin and Clara Shin in their response to Plaintiffs’ separate statement. Defendants’ objections are not in the proper format. “[California Rules of Court,] [r]ule 3.1354(b) dictates the format in which evidentiary objections must be submitted: ‘All written objections to evidence must be served and filed separately from the other papers in support of or in opposition to the motion. Objections on specific evidence may be referenced by the objection number in the right column of a separate statement in opposition or reply to a motion, but the objections must not be restated or reargued in the separate statement.’” (Hodjat v. State Farm Mut. Auto. Ins. Co. (2012) 211 Cal.App.4th 1, 8.) It is not an abuse of discretion for the trial court to decline to rule on improperly formatted objections or to deny an opportunity to reformat the objections. (Id.)

The issue to be decided is whether Plaintiffs assigned their right to recover the alleged overpayment of taxes and common area expenses in this action to Defendants when they executed a quitclaim deed.

In 1998, ESPA leased the property located at 5107 W. El Segundo Blvd., Hawthorne, California 90266 (the “Premises”) to Ping D. Foo (“Foo”). (Defendants’ Undisputed Material Facts (UMF) 1.) In 2010, Foo assigned his interest in the lease to Plaintiffs, with ESPA’s written consent. (UMF 2.) Plaintiffs operated a Burger King franchise on the Premises.

On October 19, 2017, JSC and ESPA entered into a written First Lease Extension Agreement, modifying the 1998 Lease (the “Lease”). (UMF 3.) Paragraph 16.02 of the Lease provides that “Upon expiration of the Lease term [], Tenant agrees to execute, acknowledge and deliver to Landlord a proper instrument in recordable form, releasing and quitclaiming to Landlord all right, title, and interest of Tenant in and to the Premises and all improvements constructed thereon”. (Plaintiffs’ Additional Material Facts (PAMF) 38.)

On December 3, 2023, Defendants’ principal Jerry Jamgotchian requested that Plaintiffs execute a Quitclaim and Lease Termination Agreement (the “Termination Agreement”). (PAMF 39.) Plaintiffs refused, as the Termination Agreement exceeded the scope called for under Paragraph 16.02 and contained mutual releases that would terminate the claims alleged in the instant action. (PAMF 40-41.)

Thereafter, Defendants prepared a Quitclaim Deed (“QD”). Defendants delivered the QD to Plaintiffs. Defendants left the QD at the Premises with one of Plaintiffs’ employees. Defendants did not discuss the QD with Plaintiffs. (PAMF 42-43.) On December 26, 2023, Plaintiffs executed the QD with the intention of complying with Paragraph 16.02. (UMF 35, PAMF 45.)

for all consideration of: One Dollar ($1.00) and/or other good and valuable consideration conveys, releases and quitclaims to the GRANTEE(S):

EL SEGUNDO PLAZA ASSOCIATES L.P., for the property located at: 5107 W. El Segundo Blvd., Hawthorne, Los Angeles County, California lease.

the following described real estate, situated in Hawthorne, in the county of Los Angeles, State of California

More commonly described as 5107 W. El Segundo Blvd., Hawthorne, California 90250.

Grantor does hereby convey, release and quitclaim all of the Grantor’s rights, claims, title and interest in and to the above described property and premises to the Grantee(s), and to the Grantee(s) heirs and assigns forever, so that neither Grantor(s) nor Grantor’s heirs, legal representatives or assigns shall have, claim or demand any right or title to the property, premises, improvements, rights, claims or appurtenances, if any part thereof.

Grantor herein confirms that existing Burger King lease dated July 31, 1998 will end on December 31, 2023 and Grantor agrees to vacate the premises and assign all rights, claims, and interests under the lease to Grantee.

(Jamgotchian Decl., Exh. D.) Plaintiffs executed the QD as the “Grantors”, and ESPA executed the QD as the “Grantee”. (Id.; UMF 26-30.)

Plaintiffs maintain that at the time they executed and delivered the QD to Defendants, Plaintiffs intended to surrender the premises at the expiration of the lease term and any future rights they had to rent or occupy the premises. (PAMF 46.) They did not intend to assign to Defendants (and thereby relinquish) their right to pursue their legal claims in the instant action. Plaintiffs did not they believe the QD assigned such claims to ESPA. (PAMF 47.)

The Lease terminated on December 31, 2023, and Plaintiffs timely vacated the Premises. (UMF 36.)

Defendants argue the language of the QD unambiguously expresses Plaintiffs’ intent to assign the claims asserted in this action to Defendants. Plaintiffs argue they executed the QD to assign Plaintiffs’ interest in the title to the Premises only, not their rights and interests in this lawsuit. For the reasons discussed herein, the court concludes there is a triable issue regarding the scope and meaning of the QD.

“The rules governing the role of the court in interpreting a written instrument are well established. The interpretation of a contract is a judicial function. [Citation.] In engaging in this function, the trial court ‘give[s] effect to the mutual intention of the parties as it existed’ at the time the contract was executed. [Citation.] Ordinarily, the objective intent of the contracting parties is a legal question determined solely by reference to the contract's terms. [Citation.]” (Wolf v. Walt Disney Pictures & Television (2008) 162 Cal.App.4th 1107, 1125-1126 (Wolf).)

“The court generally may not consider extrinsic evidence of any prior agreement or contemporaneous oral agreement to vary or contradict the clear and unambiguous terms of a written, integrated contract. [Citations.] Extrinsic evidence is admissible, however, to interpret an agreement when a material term is ambiguous. [Citations.]” (Wolf, supra, 162 Cal.App.4th at p. 1126; see also Pacific Gas & Electric Co. v. G.W. Thomas Drayage & Rigging (1968) 69 Cal.2d 33, 39-40 [if extrinsic evidence reveals that apparently clear language in the contract is, in fact, “susceptible to more than one reasonable interpretation,” then extrinsic evidence may be used to determine the contracting parties’ objective intent].)

“The interpretation of a contract involves ‘a two-step process: First the court provisionally receives (without actually admitting) all credible evidence concerning the parties’ intentions to determine “ambiguity,” i.e., whether the language is “reasonably susceptible” to the interpretation urged by a party. If in light of the extrinsic evidence the court decides the language is “reasonably susceptible” to the interpretation urged, the extrinsic evidence is then admitted to aid in the second step – interpreting the contract. [Citation.]’ [Citation.]” (Wolf v. Superior Court (2004) 114 Cal.App.4th 1343, 1351 (Wolf II) [citing and quoting Winet v. Price (1992) 4 Cal.App.4th 1159, 1165]; see also Wolf, supra,162 Cal.App.4th at p. 1126.)

“When there is no material conflict in the extrinsic evidence, the trial court interprets the contract as a matter of law. [Citations.] This is true even when conflicting inferences may be drawn from the undisputed extrinsic evidence [citations] or that extrinsic evidence renders the contract terms susceptible to more than one reasonable interpretation. [Citations.] If, however, there is a conflict in the extrinsic evidence, the factual conflict is to be resolved by the jury. [Citations.]” (Wolf, supra, 162 Cal.App.4th at pp. 1126-1127; see id. at p. 1134 [“that extrinsic evidence may reveal an ambiguity subjecting a contract to more than one reasonable interpretation does not mean resolution of that ambiguity is necessarily a jury question. Absent a conflict in the evidence, the interpretation of the contract remains a matter of law”].)

“A quitclaim deed transfers whatever present right or interest the grantor has in the property. [Citation.]” (City of Manhattan Beach v. Superior Ct. (1996) 13 Cal.4th 232, 239, citing Westlake v. Silva (1942) 49 Cal.App.2d 476, 478; see also Black's Law Dict. (4th ed. 1968) p. 1417, col. 1 [quitclaim “intended to pass any title, interest, or claim which the grantor may have in the premises”].) “[I]t has been often decided by this court that a quitclaim deed conveys the absolute fee-simple title if the party executing it had such title [citations]; and therefore such deed does not imply any precedent interest or easement in the releasee, or any admission of the releasor to that effect.” (Spaulding v. Bradley (1889) 79 Cal. 449, 456.) “In this State, from the earliest times, quitclaim deeds have been in every-day use for the purpose of transferring title to land, and have been considered as effectual for that purpose as deeds of bargain and sale.” (Graff v. Middleton (1872) 43 Cal. 341, 344.)

As the foregoing authority indicates, a quitclaim deed typically transfers the grantor’s title, interest, or claim in the property itself. Yet, the QD in this matter, as Defendants argue, purports to achieve more than that. The relevant language in the QD provides:

Defendants’ decision to place the “all claims” language at the tail end of a QUITCLAIM DEED strengthens Plaintiffs’ argument the language is ambiguous. The assignment of a lawsuit involving tax issues is generally not part of a QUITCLAIM DEED. QUITCLAIM DEEDS generally involve property rights, not assignments of lawsuits. True, the “all claims” language included in the QUITCLAIM DEED is susceptible to Defendants’ interpretation. But the placement of the language in a QD provides ballast to Plaintiffs’ interpretation.

The two-step interpretation process described above similarly supports Plaintiffs’ argument. Defendants point to the purported lack of ambiguity by raising the undisputed point that Plaintiffs had around four days to review and sign the two-page QD. (See Further Reply, p. 12:7-8.) This advances Defendants contention Plaintiffs did not make a mistake. But neither point resolves the ambiguity of the language placed in a QUITCLAIM DEED.

Assuming, arguendo, Defendants meet their initial burden, Plaintiffs submit evidence to show there is a triable issue of fact. The lease between the parties required Plaintiffs as tenants “to execute, acknowledge and deliver to Landlord a proper instrument in recordable form, releasing and quitclaiming to Landlord all right, title, and interest of Tenant in and to the Premises and all improvements constructed thereon” at the expiration of the lease term. (Jamgotchian Decl., ¶ 3, Ex. A, ¶ 16.02.) On December 3, 2023, Defendants’ principal, Jerry Jamgotchian requested that Plaintiffs execute a Quitclaim and Lease Termination Agreement. (PAMF 39.) Plaintiffs refused to execute the Termination Agreement because it exceeded the scope of paragraph 16.02 of the Lease. (PAMF 40.) The Termination Agreement contained mutual releases, which would have released in the lawsuit at issue here. (PAMF 41; see Shin Decls., Exs. A.) Having rejected the release in the Termination Agreement, why would Plaintiffs effectively agree to release the very same lawsuit by assigning claims in the QD? Defendants do not point to any incentives given to Plaintiffs that would have motivated Plaintiffs to reconsider and surrender the lawsuit by assigning away its claims. A reasonable juror could find the lack of explanation and lack of definition of the terms in the QD along with Plaintiffs prior rejection of the Termination Agreement indicative of Plaintiffs’ belief the QD related solely to the release of the property, not the lawsuit.

“[I]n late December, 2023, Defendants delivered a Quitclaim Deed (the “QD") to [us] by giving it to one of JCS El Segundo Inc.’s employees at the Property. At no time, before or after its delivery, did anyone affiliated with Defendants discuss it or its terms with [us]. .... The QD was prepared by Defendants. [We] had no part in its creation. [We] signed the QD so as to comply with section 16.02 of our Lease.”

“At the time [upon expiration of the Lease on December 31, 2023, to surrender the building I occupied on the Property, and all rights I may have had to rent r occupy the Property in the future, to Defendants. We were moving out and the QD was issued to acknowledge that, after vacating the unit, I would have not rights to the Property or the structure built thereon. The QD was a deed, and my understanding of deeds was that they are used to convey interests in real property.”

“At no time did [we] intend to assign the claims [we] have made in the instant lawsuit to Defendants, and at no time believe the QD would operate to assign such claims. [We] have never discussed or agreed with Defendants to assign the claims made in this action to them or anyone else.”

Taken together, Plaintiffs’ evidence tends to show the QD was meant to effectuate the release of their “right, title, and interest … in and to the Premises and all improvements constructed thereon” as provided under paragraph 16.02 of the Lease. Nothing more.

Defendants take issue with Plaintiffs’ reliance on parol evidence. They argue extrinsic evidence may not be considered because there is no ambiguity on the face of the QD. The court disagrees. First, as discussed above, there is an ambiguity on the face of the QD. Second, extrinsic evidence is not barred in this matter. “The court generally may not consider extrinsic evidence of any prior agreement or contemporaneous oral agreement to vary or contradict the clear and unambiguous terms of a written, integrated contract. [Citations.] Extrinsic evidence is admissible, however, to interpret an agreement when a material term is ambiguous. [Citations.]” (Wolf, supra, 162 Cal.App.4th at p. 1126.) Here, there is no integration clause and the extrinsic evidence is admissible to interpret the QD because the use of the terms “all claims” and “under the lease” in the context of a quitclaim deed are ambiguous. There is a triable issue. Summary judgment cannot be granted as a matter of law.

The Motion for Summary Judgment, or in the alternative, Summary Adjudication, is DENIED.

Kerry Bensinger

Judge of the Superior Court

[1] Erroneously sued as El Segundo Plaza Associate, L.P. aka El Segundo Plaza, L.P.

[2] Erroneously sued as El Segundo Plaza, Inc.