Judge Latrice A. G. Byrdsong, Case Number: 23STLC03823, Date: 2024-03-21 Tentative Ruling

Judge: Latrice A. G. Byrdsong, Case: 23STLC03823, Date: 2024-03-21 Tentative Ruling

Case Number: 23STLC03823 Hearing Date: March 21, 2024 Dept: 25

Hearing Date: Thursday, March 21, 2024

Case Name: DIVERSITAS HOLDINGS LLC v. AYYUB PATEL DBA JEWELRY DESIGNS BY AP; AYYUB PATEL; and DOES 1-20

Case No.: 23STLC03823

Motion: Motion for Summary Judgment or in the Alternative Summary Adjudication Against Defendants

Moving Party: Plaintiff Diversitas Holdings, LLC

Responding Party: None

Notice: OK

Tentative Ruling: Plaintiff Diversitas Holdings, LLC’s Motions for Summary Judgment In Favor of Plaintiff and Against the Defendants is GRANTED.

Counsel for Plaintiff is ordered to serve and electronically submit a proposed form of Judgment within 10-days.

SERVICE:

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

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

[X] 16/21 Court Days Lapsed (CCP §§ 12c, 1005(b)) OK

OPPOSITION: None filed as of March 08, 2023 [ ] Late [X] None

REPLY: None filed as of March 14, 2023 [ ] Late [X] None

BACKGROUND

On June 14, 2023, Plaintiff Diversitas Holdings LLC (“Plaintiff”) filed an action for breach of contract, breach of guaranty, money lent, and recovery of personal property against Defendants Ayyub Patel dba Jewelry Designs by AP (“Jewelry Designs”) and Ayyub Patel (“Patel”) (collectively “Defendants”).

Defendant Patel, in propria persona, filed his Answer to the Complaint on July 14, 2023.

On December 12, 2023, Plaintiff filed the instant Motion for Summary Judgment, or in the Alternative for Summary Adjudication (“Motion”) against the Defendants.

No opposition has been filed.

MOVING PARTY POSITION

Plaintiff prays for the Court to enter summary judgment pursuant to CCP § 437(c) or in the alternative summary adjudication as to each of Plaintiff’s causes of action. Plaintiff asserts that there is no material issue of fact with respect to Defendants’ liability on each of Plaintiff’s causes of action and that neither Defendant has established any defense to Plaintiff’s actions for breach of contract, breach of guaranty, money lent, and recovery of personal property. Thus, Plaintiff asserts that it is entitled to judgment as a matter of law.

OPPOSITION

No opposition has been filed.

REPLY

No reply has been filed.

ANALYSIS

I. 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 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 plaintiff seeks summary judgment, he/she must produce admissible evidence on each element of each cause of action on which judgment is sought. (Code Civ. Proc., § 437c(p)(1).) 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.” (Id.)

II. Discussion

Plaintiff moves for summary judgment against Defendants as to all four of its causes of action. In the alternative, Plaintiff moves for summary adjudication, as to each of its causes of action.

Plaintiff seeks a court order granting summary judgment in its favor and against Defendants on the ground that there is no triable issue of material fact and that Plaintiff is therefore entitled to judgment as a matter of law.

As the moving party, Plaintiff has the burden to show, through admissible evidence, that there is no genuine dispute of material fact as to each element of its causes of action for breach of contract, breach of guaranty, money lent, and recovery of personal property.

The Court notes that Plaintiff combines its presented evidence in its Separate Statement for its first and second causes of action for breach of contract and breach of guaranty. Noting that the elements for a breach of guaranty claim are similar to a breach of contract claim, insofar as both require an agreement, and breach, the Court will review the first and second causes of action together in Part A of the opinion.

A. First and Second Cause of Action – Breach of Contract and Breach of Guaranty

“The standard elements of a claim for breach of contract are: ‘(1) the contract, (2) plaintiff’s performance or excuse for nonperformance, (3) defendant’s breach, and (4) damage to plaintiff therefrom.’” (Wall Street Network, Ltd. v. New York Times Co. (2008) 164 Cal.App.4th 1171, 1178.)

“A lender is entitled to judgment on a breach of guaranty claim based upon undisputed evidence that (1) there is a valid guaranty, (2) the borrower has defaulted, and (3) the guarantor failed to perform under the guaranty.” (Gray1 CPB, LLC v. Kolokotronis (2011) 202 Cal.App.4th 480, 486.)

Plaintiff provides the declaration of its counsel who provides evidence that on or about June 12, 2019, Defendant Jewelry Designs entered into a written Equipment Finance Agreement with Plaintiff’s predecessor-in-interest Financial Pacific Leasing, Inc. (“Plaintiff’s predecessor”) to obtain financing for certain business equipment (the “Equipment”). (Jennifer Pealor Decl. ¶ 3; Exh. A.) Pursuant to the Agreement, Plaintiff’s predecessor financed Jewelry Designs’ acquisition of the Equipment from a third-party vendor in exchange for Jewelry Designs’ agreement to make monthly payments for the Equipment. (Id. ¶ 4; Exh, A.) Plaintiff’s predecessor paid the vendor for the Equipment on behalf of Jewelry Designs. (Id.) Plaintiff perfected its security interest in the Equipment by filing a UCC-1 financing statement with the Secretary of State on June 18, 2019. (Id. ¶ 5; Exh. B.) Counsel avers that Plaintiff’s predecessor performed everything it was required to perform under the Agreement by paying the vendor for the Equipment on Jeweler Design’s behalf. (Id. ¶ 6.) Both the Agreement and Guaranty were assigned to Plaintiff who remains the holder. (Id. ¶ 7; Exh. C.) Jewelry Designs defaulted on the Agreement by failing to make its payment due after February 11, 2021. (Id. ¶ 8.) Plaintiff’s counsel additionally states that Defendant Patel breached the Guaranty by failing to make the payments on the Agreement after Jewelry Designs failed to make its payment. (Id.) As a result of Jewelry Designs’ default, and Patel’s failure to make payments after Jewelry Designs defaulted, Plaintiff accelerated the remaining balance due under the Agreement and made a demand on Defendants for the immediate payment of the accelerated balance. (Id. ¶ 9.) The balance due under the Agreement is $19,770.86, plus interest at the contracted rate of 18% per annum from and after the date of default on February 11, 2021. (Id. ¶ 9; Exh. D.) As a result of Jewelry Designs’ breach of the Agreement, it was necessary for Plaintiff to retain the Wright Law Group, PLLC to enforce its rights under the agreement. (Id. ¶ 15.)

Here, the Court finds that Plaintiff has provided evidence that there was an agreement between Plaintiff’s predecessor and the Defendants to secure an interest in Equipment in exchange for monthly payments. Plaintiff’s predecessor performed under the Agreement by paying for the Equipment from a third-party on behalf of Jewelry Designs. Jewelry Designs breached the agreement by failing to make its payments after February 11, 2021. Patel breached his duty under the Guaranty by failing to pay when Jewelry Designs failed to make its payments. Thus, the Court finds that Plaintiff has met its burden under CCP § 437c(b)(1) as to both its first and second causes of action based on the evidence provided in Plaintiff’s separate statement and accompanying declaration and exhibits.

The Court notes that Defendants do not provide any opposition indicating that there are any triable issues of fact.

Accordingly, because Plaintiff has met its burden in showing that there is no triable issue as to any material fact in its first and second causes of action, the Court finds that Plaintiff is entitled to judgment as a matter of law, and that Defendants have not met their burden under CCP § 437c(b)(1).

B. Third Cause of Action – Common Count (Money Lent)

The required elements of a common count claim are “(1) the statement of indebtedness in a certain sum, (2) the consideration, i.e., goods sold, work done, etc., and (3) nonpayment. A cause of action for money had and received is stated if it is alleged the defendant is indebted to the plaintiff in a certain sum for money had and received by the defendant for the use of the plaintiff.” (Farmers Insurance Exchange v. Zerin (1997) 53 Cal.App.4th 445, 460, citation and quotation marks omitted.)

Plaintiff provides evidence that Defendants became indebted after Plaintiff’s predecessor paid the vendor for the Equipment the defendants purchased. (Pealor Decl. ¶ 4.) The debt amount was subsequently reduced to $19,770.86 on account of payments made by Plaintiff. (Id. ¶ 9; Exh. D.) Defendants failed to pay Plaintiff for all amounts due as agreed for purchasing the Equipment. (Id. ¶¶ 9,10; Exh. D.) Plaintiff demanded payment from Defendants, however, Defendants have paid no part resulting in damages of $19,770.86. (Id. ¶¶ 9-10; Exh. D.) Interest on the balance of $19,770.86 from and after February 11, 2021, through February 15, 2024, pursuant to the legal rate of 10% totals $5,945.59. (Id. ¶ 12.)

Here, the Court finds that Plaintiff has provided evidence of a statement of indebtedness. Per the parties’ Agreement, Defendants agreed to pay back the money owed for the Equipment and Defendants failed to make their payments after February 11, 2021. The Court notes that Defendants do not provide any opposition indicating that there are any triable issues of fact as to this cause of action.

Accordingly, because Plaintiff has met its burden in showing that there is no triable issue as to any material fact Plaintiff’s third cause of action, the Court finds that Plaintiff is entitled to judgment as a matter of law, and that Defendants have not met their burden under CCP § 437c(b)(1).

C. Fourth Cause of Action – Possession of Personal Property

“Conversion is the wrongful exercise of dominion over the property of another. The elements of a conversion claim are: (1) the plaintiff’s ownership or right to possession of the property; (2) the defendant’s conversion by a wrongful act or disposition of property rights; and (3) damages.” (Lee v. Hanley (2015) 61 Cal.4th 1225, 1240.)

Plaintiff provides evidence that the Agreement provides that upon default, Plaintiff may take possession of the Equipment as collateral. (Pealor Decl. ¶ 14.) Despite Plaintiff’s demand for surrender of the Equipment, Defendants wrongfully remained in possession of the equipment. (Id.) As such Plaintiff requests a judgment for possession of the Equipment. (Id.) Counsel states that, “If Plaintiff recovers the Equipment, Plaintiff will sell the Equipment in a commercially reasonable manner and apply the proceeds, less expenses, to the judgment balance.” (Id.)

Here, the Court finds that Plaintiff has provided evidence proving that Plaintiff had a right to possession based on the Agreement which provided Plaintiff the right to take possession of the Equipment as collateral in the event of default. Defendant converted ownership by wrongfully retaining possession of the equipment despite Plaintiff's demand for the Defendants to surrender the Equipment. As a result, Plaintiff has suffered damages due to the Defendants refusal to surrender the Equipment. The Court again notes that Defendants do not provide any opposition indicating that there are any triable issues of fact as to this cause of action.

Accordingly, Plaintiff has met its burden in showing that there is no triable issue as to any material fact as to Plaintiff’s fourth cause of action.

Thus, since Plaintiff has carried its burden in showing that there are no triable issues of fact as to each of its causes of action, Plaintiff is entitled to judgment as a matter of law.

III. Conclusion

Plaintiff Diversitas Holdings, LLC’s Motion for Summary Judgment against Defendants is GRANTED.

Counsel for Plaintiff is ordered to serve and electronically submit a proposed form of Judgment within 10-days.

Moving party is ordered to give notice.