Judge Lee W. Tsao, Case Number: 22NWCV00271, Date: 2023-08-30 Tentative Ruling

Judge: Lee W. Tsao, Case: 22NWCV00271, Date: 2023-08-30 Tentative Ruling

Case Number: 22NWCV00271 Hearing Date: March 5, 2024 Dept: C

Senior Operations LLC vs Certified Records Management, LLC

Case No.: 22NWCV00271

Hearing Date: March 5, 2024 @ 10:30 AM

Tentative Ruling

Plaintiff/Cross-Defendant Senior Operations LLC’s Motion for Summary Judgment is DENIED.

Defendant/Cross-Complainant to give notice.

Background

This action for breach of contract was filed by Plaintiff/Cross-Defendant Senior Operations LLC dba Senior Aerospace SSP (“Senior Aerospace”) on April 8, 2022. The operative Complaint alleges that: “Senior Operations contracted with King Data Services… in 2003 to provide document storage services…. The Contract required that King Data provide 30 days written notice before implementing a change in rates. The Contract had no set term for the length of the Contract or any penalty or break-up fee when the Contract or business relationship ended.” (Complaint ¶7.) Defendant/Cross-Complainant Certified Records Management, LLC (“Certified”) acquired King Data Services and assumed its obligations under the Contract with Senior Operations in 2012. (Complaint ¶9.)

Senior Aerospace alleges Certified imposed unilateral rate increases without notice. Due to the rate increases, Senior Aerospace decided to move its documents to another document storage provider. (Complaint ¶¶11-12.)

The Complaint asserts the following causes of action: (1) Breach of Contract; (2) Violations of California’s Consumer Legal Remedies Act (CLRA); and (3) Violations of the California Unfair Competition Law (UCL).

On June 3, 2022, Certified filed a Cross-Complaint seeking, in part, a judicial determination with respect to its “ability to destroy [Plaintiff’s] belongings that are stored in [Defendant’s] custody.” (XC ¶27.) The XC asserts causes of action for: (1) Breach of Contract; and (2) Declaratory Relief.

Objections

Certified’s Objection to the Amended Declaration of Emi Donis.

The objection is OVERRULED.

Certified’s Objections to the Declaration of Christopher Hickey.

Objection Nos. 1, 2, 3, 4, 5 are OVERRULED.

Certified’s Objections to the Declaration of Emi Donis.

Objection Nos. 7, 8, 9, 10, and 13 are OVERULLED.

Objection Nos. 6, 11, and 12 are SUSTAINED.

Legal Standard

The purpose of a motion for summary judgment “is to provide courts with 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. Atl. Richfield Co. (2001) 25 Cal.4th 826, 843.) “Code of Civil Procedure section 437c, subdivision (c), requires the trial judge to grant summary judgment 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.)

“On a motion for summary judgment, 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.) A defendant moving for summary judgment “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.” (Code Civ. Proc., § 437c(p)(2).) “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.” (Id.) “If the plaintiff cannot do so, summary judgment should be granted.” (Avivi v. Centro Medico Urgente Med. Ctr. (2008) 159 Cal.App.4th 463, 467.)

“When deciding whether to grant summary judgment, the court must consider all of the evidence set forth in the papers (except evidence to which the court has sustained an objection), as well as all reasonable inferences that may be drawn from that evidence, in the light most favorable to the party opposing summary judgment.” (Avivi, supra, 159 Cal.App.4th at p. 467; see also Code Civ. Proc., § 437c, subd. (c).

Discussion

Senior Aerospace moves for summary judgment on the grounds that Certified has not and cannot identify any evidence that supports its claim that Senior Aerospace breached the parties’ document storage agreement. Senior Aerospace submits the following evidence in support of its Motion for Summary Judgment:

Senior Aerospace entered into a contract with King Data Services in 2003 for the long-term storage of certain records related to its business operations and the manufacture of various aircraft parts. (Declaration of Emi Donis ISO Motion for Summary Judgment, ¶3; see also, storage agreement between Senor Operations LLC and King Data Services dated April 16, 2003, attached as Exhibit A to Donis Amended Decl.). Since then, Senior Aerospace has placed approximately 5,000 boxes (7,917 cubic feet) of its business records in King Data Services’ or Certified Record’s custody (Id., ¶4).

Senior Aerospace alleges that Certified unilaterally imposed rate increases and changed the terms of the contract without notice. Senior Aerospace refused to pay the increased invoices and ultimately terminated the contract and demanded the return of their documents. (Donis Decl., ¶¶7-9.) In response, Certified demanded that Senior Aerospace pay $139,384.33 for the return of records. (Donis Decl., ¶8; see also, Certified Record’s March 30, 2021, fee quote, attached to Donis Amended Decl. as Exhibit B.) Senior Aerospace contends the 2003 Agreement contains no such terms or fees (Donis Decl., ¶3.)

In an effort to resolve the dispute, Senior Aerospace paid all claimed outstanding storage fees through February 2022 and informed Certified that it would pay an additional $25,000 for the return of its records. (Donis Decl., ¶9; see also, Senior Aerospace’s February 22, 2022, letter to Certified Records attached to Donis Amended Decl. as Exhibit C.) Certified will not release the records without payment of the $139,384.33 fees. (Donis Decl., ¶10.)

Based thereon, the Court determines that Senior Aerospace has made a prima facie showing that no triable issues of material fact exist. The burden now shifts to Certified to raise a triable issue of material fact.

In opposition, Certified argues triable issues of material fact exist with respect to its breach of contract claim because Certified is owed monthly storage fees dating back to April 2022, plus late fees and/or interest for late payment of invoices going back to November 2020, along with the fees to permanently retrieve and remove Senior’s documents from storage and return them to Senior.

The original contract stated that “Rates are subject to change on thirty (30) days written notice.” (Sobwick Decl., ¶3, Ex. A.) Certified has presented evidence that on or about September 1, 2020, Certified sent Senior Aerospace Notice of its Pricing Schedule for Records Management storage and services, effective October 1, 2020. (Pricing Schedule, Sobwick Decl., ¶5, Ex. B.) The Pricing Schedule stated that it supersedes and terminates any prior pricing schedule established. (Ibid.) The Pricing Schedule also gave Certified the option, after 90 days of non-payment by Senior, and after giving notice, to either destroy Senior’s deposits, or return them to Senior contingent upon payment of all outstanding charges including removal. (Sobwick Decl., ¶6, Ex. B, Master Agreement, ¶6.) Senior did not object to the 2020 Pricing Schedule within 30 days of receiving it. (Sobwick Decl., ¶7.) Senior tendered additional deposits for storage and requested additional services from Certified after Senior received the 2020 Pricing Schedule. (Ibid.) Certified sent Senior at least six other rate increase notices from 2016 to 2020. Each time Certified sent Senior a rate increase notice, the following month’s invoice to Senior reflected Certified’s increased pricing. Senior paid the increased rates in each of the following months without objection. (Sobwick Decl., ¶7, Ex. C-H.)

It is undisputed that Senior Aerospace has paid all claimed outstanding storage fees through March 2022. (SSUMF No. 10.) It has not paid the disputed late fees and fees for permanent removal. (SSUMF No. 11.) Senior Aerospace argues it cannot be liable for a permanent removal fee because it was not part of the original 2003 contract. However, Certified has submitted evidence of a permanent removal fee in the 2003 contract. (Sobwick Decl., Ex. A, p. 3.) Although the cost of “permanent removal” in the 2003 contract was the same as the cost for “retrieval” (i.e., $2.25 per file or carton) the cost of permanent removal increased until it reached $7.50 per cubic foot as of May 1, 2017. (Sobwick Decl., ¶8, Ex. C, pp. 5-6.) Senior Aerospace paid the increase fee without objection. (Sobwick Decl. ¶10, Ex. E, p.18.) The Court determines that Certified has raised a trial issue of material fact regarding whether Senior Aerospace received notice of 2016-2020 rate increases.

In Reply, Senior Aerospace argues that payment of the monthly invoices cannot operate to change the 2003 Agreement. The Court determines that there is also a triable issue of material fact regarding whether payment of the 2016-2020 invoices created an implied contract. An implied contract is one, the existence and terms of which are manifested by conduct. (Cal. Civil Code § 1621; Youngman v. Nevada Irrigation Dist. (1969) 70 Cal.2d 240, 247.)

Accordingly, Senior Aerospace’s Motion for Summary Judgment is DENIED.