Judge Kerry Bensinger, Case Number: 21STCV27870, Date: 2024-11-15 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.

In deciding whether to submit on the tentative ruling or attend the hearing and present oral argument, please keep the following in mind:

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.

MOTION FOR SUMMARY JUDGMENT OR IN THE ALTERNATIVE FOR A MOTION FOR SUMMARY ADJUDICATION

This is a collections case. As alleged in the Complaint, Plaintiff Comerica Bank (Comerica or Plaintiff) is a banking institution. Defendant Video Tech Services, Inc. (VTS) provides audio and visual services for large events. In 2018, VTS sought financing from Comerica. On November 29, 2018, VTS executed and delivered to Comerica a Master Revolving Note (the Note) in the principal amount of $250,000. The Note was secured by a Security Agreement granting Comerica a security interest in VTS’s collateral. The Note was further personally guaranteed by John Manzano (Manzano). According to the terms of the Note, VTS agreed to pay Comerica accrued and unpaid interest on the unpaid principal balance of each outstanding Advance on the first business day of each month. The maturity date was “on demand” at the discretion of Comerica. On June 30, 2021, Comerica declared the entire balance due and owing under the Note; payable immediately. VTS and Manzano failed to pay any of the sums due.

On July 29, 2021, Comerica filed a Complaint against VTS and Manzano (hereafter, Defendants) for (1) Breach of Promissory Note, (2) Foreclosure of Security Agreement and Possession of Collateral, (3) Breach of Personal Guaranty, (4) Money Lent, and (5) Account Stated.[1]

On June 28, 2023, Comerica filed a Motion for Summary Adjudication for the first and third causes of action.

On September 18, 2023, the court denied the motion because the court found “there are triable issues of material fact with respect to modification of the note. In turn, there are triable issues of material fact as to whether there was a breach of contract, and which version

On July 10, 2024, Comerica filed this Motion for Summary Judgment or in the Alternative Summary Adjudication.

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”].)¿¿

Comerica requests judicial notice of its Complaint and Defendants’ Answer to the Complaint. The court must consider all of the evidence set forth in the papers, except the evidence to which objections have been made and sustained by the court. (Code Civ. Proc., § 437c(c).) Therefore, Comerica’s request is unnecessary. The court declines to rule on the request.

Defendants object to Paragraphs 1-5 of the declaration of Barry J. Cohen. The objection, which is not in the proper format, is OVERRULED.

Plaintiff submits twenty-three (23) objections to portions of the declaration of John Manzano. The objections are OVERRULED.

Plaintiff seeks summary judgment, or summary adjudication of the first, second, third, and fifth causes of action. As a threshold issue, Judge Murillo denied Plaintiff’s previous motion for summary adjudication of the first cause of action for breach of promissory note and third cause of action for breach of personal guaranty because there were “triable issues of material fact with respect to modification of the note. In turn, there are triable issues of material fact as to whether there was a breach of contract, and which version of the contract controls.” (Minute Order, 9/18/23.) Plaintiff did not file a motion for reconsideration. The time to do so has long passed. Instead, Plaintiff filed a nearly identical motion with respect to the first and third causes of action. This is expressly prohibited by the summary judgment statute.

CCP section 473c(f)(2) states, in relevant part, “A party shall not move for summary judgment based on issues asserted in a prior motion for summary adjudication and denied by the court unless that party establishes, to the satisfaction of the court, newly discovered facts or circumstances or a change of law supporting the issues reasserted in the summary judgment motion.”

In reply, Plaintiff argues the California Supreme Court in Le Francois v. Goel (2005) 35 Cal.4th 1049 held that a trial court has authority to consider a new motion for summary judgment

regardless of whether it was based on new facts or new law. Not so. This view is based on a selective reading of Le Francois. The Supreme Court held “that [CCP] sections 473c and 1008 limit the parties’ ability to file repetitive motions but do not limit the court’s ability, on its own motion, to reconsider its prior interim orders so it may correct its own errors.” (Le Francois, 35 Cal.4th at p. 1107.) “Unless the requirements of section 437c, subdivision (f)(2), or 1008 are satisfied, any action to reconsider a prior interim order must formally begin with the court on its own motion. To be fair to the parties, if the court is seriously concerned that one of its prior interim rulings might have been erroneous, and thus that it might want to reconsider that ruling on its own motion—something we think will happen rather rarely—it should inform the parties of this concern, solicit briefing, and hold a hearing.” (Id. at p. 1108, italics in original.)

Here, it is undisputed Plaintiff has not presented any new facts, circumstances, or changes in law that warrant a different ruling on Plaintiff’s first and third causes of action. Accordingly, the motion is denied as to those claims.[2] The court proceeds to analyze the second and fifth causes of action.

1. Foreclosure of Security Agreement and Possession of Collateral (2^nd Cause of Action)

The second cause of action is a breach of contract claim. The elements of breach of contract are: “(1) the contract, (2) plaintiff's performance or excuse for nonperformance, (3) defendant's breach, and (4) the resulting damages to plaintiff.” (Kumaraperu v. Feldsted (2015) 237 Cal.App.4th 60, 70.). It is based on the following allegations:

To secure payment of the obligation set forth in said Note, Defendant executed and delivered to Plaintiff a Security Agreement, granting to Plaintiff a security interest in all accounts (including health care insurance receivables), chattel paper, deposit accounts, documents, equipment, general intangibles, goods, instruments, inventory, investment property, equipment and fixtures described therein (hereinafter the “Collateral”). (Complaint, ¶ 15.)

Plaintiff duly performed or was excused from performing all of its obligations to be performed under said Security Agreement. (Complaint, ¶ 16.)

By virtue of Defendant’s default in payment on the Note, Plaintiff is entitled to

Plaintiff argues each element of the breach of contract claim is pleaded. In support, Plaintiff points to the undisputed fact that Plaintiff and VTS executed a Commercial Security Agreement (Security Agreement) which granted Plaintiff a security interest in the collateral. (Plaintiffs’ Undisputed Material Facts (UMF) 27, 32.) Plaintiff perfected its ownership interest in the collateral by filing a UCC Financing Statement with the Secretary of State. (UMF 28.) VTS defaulted on the payment. (Cohen Decl., ¶¶ 9, 18.) Pursuant the terms of the Security Agreement, Plaintiff accelerated all sums due. (Cohen Decl., ¶¶ 12, 18, Ex. 1.) Due to VTS’s default, Plaintiff is also entitled to immediate possession of the collateral. (Cohen Decl., ¶ 23, Ex. 3.) Plaintiff performed or was excused from performing all terms and conditions of the Note. (Cohen Decl., ¶ 8.) Plaintiff meets its initial burden to show there are no triable issues of material fact.

The burden shifts. Defendants argue VTS is not in default because the parties orally modified the Note.[3] “[N]otwithstanding a provision in a written contract that expressly precludes oral modification, the parties may, by their words or conduct, waive the enforcement of a contract provision if the evidence shows that was their intent.” (Wind Dancer Production Group v. Walt Disney Pictures (2017) 10 Cal.App.5th 56, 80.). In support, Plaintiff offers the declaration of John Manzano to establish that the parties entered into an oral modification of the Note whereby Plaintiff agreed to defer principal payments of the Note and not call the loan so long as VTS made interest payments. (Manzano Decl., ¶¶ 11, 13.) VTS made timely, monthly, interest-only payments pursuant to the oral agreement. (Manzano Decl., ¶¶ 12, 14, Exs. 5 and 6.) However, despite making timely payments, Plaintiff issued a notice of default and closed the account. (Manzano Decl., ¶ 15.)

Plaintiff argues, as it did before in connection with their prior Motion for Summary Adjudication, that an oral agreement cannot modify the Note because it is expressly prohibited by the Note. “The undersigned acknowledge(s) and agree(s) that there are no contrary agreements, oral or written, establishing a term of this Note and agree(s) that the terms and conditions of this Note may not be amended, waived or modified except in a writing signed by an officer of the Bank expressly stating that the writing constitutes an amendment, waiver or modification of the terms of this Note.” (Motion, Ex. 1.) In response, Defendants offer evidence that the Note was modified and, pursuant to that modification, Defendants made interest-only payments which Plaintiff accepted. Stated another way, Defendants evidence shows Plaintiff waived enforcement of the contract provision prohibiting oral modifications to the Note by accepting the interest-only payments. The court finds, as it did before in the September 18, 2023, order denying Plaintiff’s Motion for Summary Adjudication, that “Defendants have presented evidence sufficient to show that Plaintiff, by its conduct of accepting interest only payments, showed an intent to waive the enforcement of the contract provision requiring amendment or modification to be in writing.” (Minute Order 9/18/23.) There are triable issues of material fact with respect to modification of the Note, whether there was a breach of contract, and which version of the contract controls.

“The essential elements of an account stated are: (1) previous transactions between the

parties establishing the relationship of debtor and creditor; (2) an agreement between the parties,

express or implied, on the amount due from the debtor to the creditor; (3) a promise by the debtor, express or implied, to pay the amount due.” (Zinn v. Fred R. Bright Co. (1969) 271 Cal.App.2d 597, 600.)

Plaintiff’s fifth cause of action fails as a matter of law. “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. [Citation.]”¿ (FPI Dev., Inc. v. Nakashima (1991) 231 Cal.App.3d 367, 380.)¿ Evidence offered on an¿unpleaded¿claim, theory, or defense is irrelevant because it is outside the scope of the pleadings.”¿¿(California Bank & Trust v. Lawlor¿(2013) 222 Cal.App.4th 625, 637, fn. 3 (California Bank).)¿

Here, Plaintiff did not plead a cause of action for account stated. Although Plaintiff refers to a fifth cause of action for account stated in the caption of the Complaint, the claim itself is not alleged anywhere in the body of the Complaint. Plaintiff does not address this argument. Having not pleaded the claim, Plaintiff’s evidence offered in support of the fifth cause of action is irrelevant.

Plaintiff Comerica Banks’s Motion for Summary Judgment or in the Alternative Summary adjudication is DENIED.

Kerry Bensinger

Judge of the Superior Court

[1] On November 8, 2024, Comerica dismissed its fourth cause of action for money lent.

[2] Further, the court does not find any grounds to reconsider this court’s September 18, 2023, order denying Plaintiff’s previous motion for summary adjudication.

[3] This is the same argument that Defendants raised in opposition to Plaintiff’s Motion for Summary Adjudication.