Judge: Kevin C. Brazile, Case: 21STCV24343, Date: 2022-09-15 Tentative Ruling

Hearing Date: September 15, 2022

Case Name: Yu v. An, et al.

Case No.: 21STCV00001

Matter: Motion for Summary Judgment/Adjudication

Moving Party: Defendant Gae Sung An 

Responding Party: Plaintiff Paul Yu

Notice: OK

Ruling: The Motion for Summary Adjudication is granted as to the second 

and third causes of action, but is denied as to the first cause of action.

Moving party to give notice.

If counsel do not submit on the tentative, they are strongly 

encouraged to appear by LACourtConnect rather than in person due to the COVID-19 pandemic. 

On January 4, 2021, Plaintiff Paul Yu filed the operative Complaint against Defendants Gae Sung An and Steve Han for (1) fraud, (2) breach of contract, and (3) breach of the implied covenant of good faith and fair dealing.  Plaintiff alleges that it paid $14,000 to Defendants to collect on the debt of a third-party, but Defendants took no action.

Defendant Gae Sung An seeks summary judgment or, alternatively, summary adjudication of all causes of action.  Defendant argues that Plaintiff’s discovery responses indicate that Plaintiff has no evidence to support any of his claims.  Defendant further argues that Plaintiff’s contract claims are barred by the statute of frauds.

The law of summary judgment provides courts “a mechanism to cut through the parties’ pleadings in order to determine whether, despite their allegations, trial is in fact necessary to resolve their dispute.”  (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 843.)  In reviewing a motion for summary judgment or adjudication, courts employ 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.)  The moving party bears the initial burden of production to make a prima facie showing of the nonexistence of any triable issue, in which case the burden shifts to the opposing party to make a prima facie showing of the existence of a triable issue.  (Code Civ. Proc. § 437c(p)(2).)  To show a triable issue of material fact exists, the opposing party may not rely on the mere allegations or denials of the pleadings, but instead must set forth the specific facts showing that a triable issue exists as to that cause of action or a defense thereto.  (Aguilar, at p. 849.)  Courts “liberally construe the evidence in support of the party opposing summary judgment and resolve doubts concerning the evidence in favor of that party.”  (Dore v. Arnold Worldwide, Inc. (2006) 39 Cal.4th 384, 389.)

Defendant argues that the statute of frauds bars Plaintiff’s contract claims because the Complaint alleges an oral guaranty agreement.  

Plaintiff argues that “The complaint by itself specifically alleged that Defendant promised that they will be fully responsible for collecting all payments to Plaintiff, and they guaranteed for their own performance, not for guaranty of debts of another.”

Civ. Code 1624(a) states, “The following contracts are invalid, unless they, or some note or memorandum thereof, are in writing and subscribed by the party to be charged or by the party's agent: . . . (2) A special promise to answer for the debt, default, or miscarriage of another, except in the cases provided for in Section 2794.”

The Complaint alleges the following agreement:  “On September 29, 2020, Plaintiff and Defendants entered into a debt collection service agreement that Defendants will be fully responsible for collecting all payments from HG International, INC and get 30% commissions from collection with $10,000 non-refundable service fee. . . . In front of all Plaintiff's employees, both Defendants expressly guaranteed and promised that they will be fully responsible for collecting all payments to Plaintiff, and they even promise that they will be fully responsible for all remaining payments from HG International, INC, if they fail to collect any single payments from HG International, INC.”

The Complaint seems to describe a guaranty of collectibility.  “A guaranty of collectibility imports that the principal obligor is solvent and that the obligation is collectible by usual legal proceedings, with reasonable diligence.”  (3 Cal. Transactions Forms--Bus. Transactions § 19:35.)  “Guaranties of collection and continuing guaranties are forms of suretyship obligations, and except in so far as necessary in order to give effect to provisions specially relating thereto, shall be subject to all provisions of law relating to suretyships in general.”  (Civ. Code § 2787.)  As a guaranty of collectibility is subject to the laws applicable to sureties, the statute of frauds applies.  (See Witkin, Summary 11th Contracts § 373 [“The statute applies to a promise by the surety made to the creditor, to pay the debt, or perform any obligation of the principal debtor.”].)  The Motion is, therefore, granted as to the second and third causes of action. 

Defendant further argues that Plaintiff has no evidence to support his fraud claim because his discovery responses are a copy-paste of the allegations of the Complaint.

Where a litigant has had adequate opportunity for discovery, his or her factually devoid discovery responses to comprehensive discovery requests may show that one or more elements of a claim cannot be established.  (Union Bank v. Superior Court (1995) 31 Cal.App.4th 573, 590; Weber v. John Crane, Inc. (2006) 143 Cal.App.4th 1433, 1439-1442.) 

Defendant has failed to carry his burden.  The facts that Plaintiff’s responses are identical to the Complaint and lack further detail go to the weight of the evidence.  However, Plaintiff’s verified responses do constitute basic evidence.  Therefore, the Motion is denied as to the first cause of action.

In sum, the Motion is granted as to the second and third causes of action, but is denied as to the first cause of action.  The objections are overruled.  

Moving party to give notice.

If counsel do not submit on the tentative, they are strongly encouraged to appear by LACourtConnect rather than in person due to the COVID-19 pandemic.