Judge Lynette Gridiron Winston, Case Number: 23PSCV03776, Date: 2024-06-04 Tentative Ruling

Judge: Lynette Gridiron Winston, Case: 23PSCV03776, Date: 2024-06-04 Tentative Ruling

Case Number: 23PSCV03776 Hearing Date: June 4, 2024 Dept: 6

CASE NAME: Crossroads Equipment Lease and Finance, LLC v. DDL Trucking Inc., et al.

Crossroads Equipment Lease and Finance, LLC’s Motion for Summary Adjudication

TENTATIVE RULING

The Court DENIES Plaintiff Crossroads Equipment Lease and Finance, LLC’s motion for summary adjudication as to the First Cause of Action. The Court GRANTS the motion as to the Second Cause of Action.

Plaintiff shall prepare for the Court's signature an order pursuant to Code of Civil Procedure section 437c(g) and Cal Rule of Court rule 3.1312.

Plaintiff is ordered to give notice of the Court’s ruling within five calendar days of this order.

BACKGROUND

This is a breach of contract case. On December 6, 2023, plaintiff Crossroads Equipment Lease and Finance, LLC (Plaintiff) filed this action against defendant DDL Trucking Inc. (DDL), Dengdi Lan aka Deng Di Lan (Lan), and Does 1 through 100, alleging causes of action for breach of written agreement, breach of guaranty, account stated, unjust enrichment, and open book account.

On March 7, 2024, Plaintiff moved for summary adjudication as to the First and Second Causes of Action for breach of written agreement and breach of guaranty. The motion is unopposed.

LEGAL STANDARD

The purpose of a motion for summary judgment or summary adjudication “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. Atlantic 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, italics in original and quoting Code Civ. Proc., § 437c, subd. (c).) “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.” (Juge v. County of Sacramento (1993) 12 Cal.App.4th 59, 67, citing FPI Development, Inc. v. Nakashima (1991) 231 Cal.App.3d 367, 381-382.)

“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 plaintiff moving for summary judgment or summary adjudication “has met his or her burden of showing that there is no defense to a cause of action if that party has proved each element of the cause of action entitling the party to judgment on the cause of action. Once the plaintiff ... has met that burden, the burden shifts to the defendant ... to show that a triable issue of one or more material facts exists as to the cause of action or a defense thereto. The defendant … shall not rely upon the 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 or a defense thereto.” (Code Civ. Proc., § 437c, subd. (p)(1).) “[A] plaintiff bears the burden of persuasion that ‘each element of’ the ‘cause of action’ in question has been ‘proved,’ and hence that ‘there is no defense’ thereto.” (Aguilar, supra, 25 Cal.4th at p. 850, citing Code Civ. Proc., § 437c, subd. (o)(1).)”

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.)

PRELIMINARY ISSUES

Code of Civil Procedure section 437c, subdivision (a)(1), provides that motions for summary adjudication may not be made until after 60 days have elapsed since the opposing party first generally appeared in the action. (Code Civ. Proc., § 437c, subd. (a)(1).) On February 1, 2024, default was entered against DDL. (Request for Entry of Default (2/1/24).) On January 8, 2024, Lan answered the complaint. (Answer (1/8/24).) Plaintiff filed this motion on March 7, 2024, less than 60 days after Lan generally appeared in this action. (See Code Civ. Proc., § 1014; Sadlier v. Superior Court (1986) 184 Cal.App.3d 1050, 1052 (Sadlier).) DDL has not generally appeared in this action yet. Accordingly, Plaintiff’s motion is premature.

However, the Court of Appeal in Sadlier also found that even though the moving party’s motion was prematurely filed, it was deemed made orally at the hearing, which came after the expiration of the 60-day hold. (See Sadlier, supra, 184 Cal.App.3d at p. 1052.) Therefore, the Court exercises its discretion to deem this motion as having been made orally at the hearing on this motion. To be clear, the Court will only consider this motion as to Lan who has generally appeared, and not as to DDL who has not generally appeared and is currently in default. The Court nevertheless admonishes Plaintiff to comply with the requirement of the Code of Civil Procedure going forward and otherwise avoid timing issues like this.

DISCUSSION

Summary of Relevant Material Facts

On or about June 17, 2021, Plaintiff and DDL entered into a Master Equipment Finance Agreement (the Agreement) to finance the purchase of two tractor trucks. (SSF 1.) Plaintiff perfected its interest in the two tractor trucks by obtaining Certificates of Title from the Department of Motor Vehicles. (SSF 2.) Plaintiff and Lan also entered into a personal guaranty (the Guaranty), wherein Lan agreed to personally guaranty DDL’s performance under the Agreement. (SSF 7.) Plaintiff performed as required under the Agreement. (SSF 3.) On or about August 7, 2022, DDL breached the Agreement by failing to make monthly payments owing then and thereafter. (SSF 4.) Plaintiff elected to accelerate the remaining balance due and sold the trucks, leaving a remaining balance of $68,990.01. (SSF 5.) The Agreement provides for the recovery of attorney’s fees. (SSF 6.) Lan is liable for the outstanding $68,990.01 balance. (SSF 8.) The Guaranty also provides for recovery of attorney’s fees. (SSF 9.)

First Cause of Action – Breach of Written Agreement

“To prevail on a cause of action for breach of contract, the plaintiff must prove (1) the contract, (2) the plaintiff's performance of the contract or excuse for nonperformance, (3) the defendant's breach, and (4) the resulting damage to the plaintiff.” (Richman v. Hartley (2014) 224 Cal.App.4th 1182, 1186.)

Plaintiff contends it has met each of the elements required for its prima facie case for breach of written agreement against DDL. Plaintiff contends it financed DDL’s purchase of the trucks and that DDL breached by failing to make the required monthly payments.

The Court finds that Plaintiff has failed to meet its moving burden on this cause of action, but not necessarily for lack of admissible evidence. (See Code Civ. Proc., § 437c, subd. (p)(1).) The complaint only names DDL to the First Cause of Action, and DDL is the only other party to the Agreement. (Compl., ¶¶ 6-13, Ex. A.) The problem here is that, as noted above, DDL has not yet appeared in this action, which is necessary before one can move for summary adjudication. (See Compl., ¶¶ Id., § 437c, subd. (a)(1).) Moreover, DDL is currently in default, so the motion is procedurally defective. “The entry of a default terminates a defendant's rights to take any further affirmative steps in the litigation until either its default is set aside or a default judgment is entered.” (Devlin v. Kearny Mesa AMC/Jeep/Renault, Inc. (1984) 155 Cal.App.3d 381, 385.) Thus, as DDL is "out of court" and cannot respond to a summary adjudication motion, it is improper for Plaintiff to seek relief against DDL through such a motion. Instead, Plaintiff must proceed against DDL by way of an application for entry of default judgment, not a motion for summary adjudication. (See Devlin, supra, 155 Cal.App.3d at pp. 385-386; see also Code Civ. Proc., § 585, subd. (a).)

Based on the foregoing, the Court DENIES the motion for summary adjudication as to the First Cause of Action.

Second Cause of Action – Breach of Guaranty

Plaintiff contends it has met each of the elements for its prima facie case for breach of guaranty against Lan because Lan signed the Guaranty to induce Plaintiff to enter into the Agreement.

The Court finds Plaintiff has met its moving burden as to the Second Cause of Action. The undisputed material facts show that Plaintiff entered into the Agreement with DDL, that DDL breached the Agreement, and that DDL thereby owes Plaintiff $68,990.01, plus interest thereon at the rate of 18%. (SSF 1-5.) The undisputed material facts further show that Lan agreed to personally guarantee DDL’s performance under the Agreement, and that Lan is liable to Plaintiff for that outstanding balance. (See SSF 7-8.) The burden now shifts to Lan to establish the existence of a triable issue of material fact or some defense to this cause of action.

Lan did not oppose this motion, and therefore has failed to establish the existence of a triable issue of material fact or a defense to this cause of action.

The Court finds there are no triable issues of material fact as to the Second Cause of Action for breach of guaranty, and that Plaintiff is entitled to judgment as a matter of law. Based on the foregoing, the Court GRANTS Plaintiff’s motion for summary adjudication as to the Second Cause of Action for breach of guaranty.

CONCLUSION

Plaintiff shall prepare for the Court's signature an order pursuant to Code of Civil Procedure section 437c(g) and Cal Rule of Court rule 3.1312.

Plaintiff is ordered to give notice of the Court’s ruling within five calendar days of this order.