Judge: Lynne M. Hobbs, Case: 22STCV34129, Date: 2025-04-15 Tentative Ruling
Case Number: 22STCV34129 Hearing Date: April 15, 2025 Dept: 61
YOSEF DANGOR, et al. vs PREFERRED BANK, et al.
Tentative
Defendants Preferred Bank and John Stipanov’s Motion for Summary Judgment or Adjudication is GRATNED as to the first through eighth causes of action alleged by Plaintiffs Yosef Dangor and Jefferson Enterprises.
Moving party to provide notice.
Analysis
I. OBJECTIONS
Defendants Preferred Bank and John Stipanov (Defendants) object to many portions of the declaration of Plaintiff Yosef Dangor, largely on the grounds of the “sham declaration” doctrine. The sham declaration doctrine comes into play when a plaintiff makes a clear and unequivocal admission in a deposition but, in a later declaration, contradicts that admission. When this happens, the declaration's previously contradicted assertion alone cannot establish a triable issue of fact. This conclusion, however, follows only if there is no credible explanation for the supposed inconsistency. The doctrine does not apply when a reasonable explanation resolves the supposed discrepancy. (Tiffany Builders, LLC v. Delrahim (2023) 97 Cal.App.5th 536, 547, internal citations and quotation marks omitted.)
Defendants’ objections based on the sham-declaration theory are well-taken. Dangor’s declaration in support of the opposition to the present motion largely consists of repeated attempts to contradict matters specifically admitted during his prior deposition testimony. In the declaration submitted with his opposition, Dangor states that he contacted Defendant Stipanov in September 2020 to ask him whether he should enter into a lease with a cannabis business tenant, and states that Stipanov agreed that Defendant Preferred Bank would give him a loan, that the loan would be a refinance loan, that Dangor shared the details of an earlier existing loan on the property that Defendants’ loan would refinance, and that Stipanov provided a detailed estimate of the loan amount based on an estimated $70,000 monthly lease and a $13 million overall property valuation. (Dangor Decl. ¶¶ 24, 27–31.) Plaintiffs rely on this declaration testimony to show that it was Stipanov’s misrepresentations concerning the value of the property and estimated loan value that led to Plaintiffs execution of a lease with a cannabis tenant, which would later prove unprofitable, given the low appraisal amount ultimately obtained on the property.
These recent averments in Dangor’s declaration are an express contradiction of his earlier deposition testimony, in which he stated that he recalled calling Stipanov one month before entering the cannabis lease, and discussed only Plaintiffs’ entering into a lease with a cannabis tenant, to which Defendants responded that this would not be a problem, because they are one of three banks in California that deal with cannabis. (Motion Exh. 3 at p. 111.) Asked for the details of the conversation, and asked specifically whether Plaintiffs discussed “applying for a refinance loan,” Dangor answered, “No,” and repeatedly confirmed that they did not discuss the refinance loan until after Plaintiffs had executed the lease. (Motion Exh. 3 at pp. 111–112.) Plaintiff specifically testified that the first time he contacted Defendants regarding the obtaining of a refinance loan on the subject property was in January 2021, months after the lease had been signed. (Motion Exh. 3 at pp. 73–76.)
For the same reason, Dangor’s belated claims that he believed Stipanov was the bank’s appraiser, and that he discussed the absolute value of the loan based on Stipanov’s estimated value of the property, are inadmissible as being directly contradicted by Dangor’s testimony that no such matters were discussed at the meeting in question, and Plaintiff’s acknowledgement that Stipanov was not only not the bank’s appraiser, but repeatedly emphasized the need to obtain an appraisal from a third party on the property before any loan could be made. (Motion Exh. 2 at p. 54; Exh. 3 at pp. 76–77, 80–81.)
Plaintiff now attempts to testify concerning assurances made regarding the length of the loan, and the basis upon which any future appraisal would be made, after expressly testifying that no such assurances were made. (Motion Exh. 3 at pp. 80–81.) Dangor Decl. ¶¶ 40, 43.) Dangor directly admitted during deposition that he did not discuss the loan between January and May 2021 except to discuss the progress of the appraisal. (Motion Exh. 3 at pp. 83–84.) Plaintiff’s attempt to contradict this testimony as the result of a “vague” question is unpersuasive, as no vagueness objection was made, and no vagueness appears in the question. (Dangor Decl. ¶ 44.)
Dangor testifies in his declaration that at a May 2021 meeting, Stipanov “gave . . . assurances” that the appraisal on the property would come out to $13 million, and the loan would have an ultimate appraisal-based value of $9 million. (Dangor Decl. ¶ 45.) But Dangor stated at his deposition that Stipanov’s “assurances” at this meeting were expressly couched as to his “guess,” his “hope,” or what he “believe[d]” the appraisal value would turn out to be. (Motion Exh. 2 at p. 54.) Plaintiff’s new attempt to aver that he and Stipanov discussed the detailed terms of the loan at this meeting — monthly payments, guarantors, maturity date — is again expressly contradicted by his own deposition testimony denying such things were discussed. (Dangor Decl. ¶ 46; Motion Exh. 2 at pp. 53–54.) Plaintiffs provide no explanation for these flagrant inconsistencies.
Objections No. 1–6 and 8–19, 23–29, 32–37, 39–47, and 52 are therefore SUSTAINED.
Objections No. 20–22, 26, 30, 31, 38, and 53 are SUSTAINED, as Dangor lacks foundation for his testimony concerning Stipanov’s authority to decide whether Preferred Bank can issue a loan. Plaintiff testified at length during deposition that he had no knowledge concerning Stipanov’s authority to approve the loan, only stating that Stipanov was his contact at Preferred Bank. (Motion Exh. 2 at pp. 49–51.) Objection No. 49 as to Defendants’ purported knowledge of the true appraisal value is also SUSTAINED for lack of foundation.
Objection Nos. 55–57, 59, and 61 to Dangor’s characterization of Defendants’ conduct as fraud and misrepresentation are SUSTAINED as improper legal conclusions.
The remaining objections are OVERRULED.
II. MOTION FOR SUMMARY JUDGMENT
A party may move for summary judgment “if it is contended that the action has no merit or that there is no defense to the action or proceeding.” (Code Civ. Proc. § 437c, subd. (a).) “[I]f 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,” the moving party will be entitled to summary judgment. (Adler v. Manor Healthcare Corp. (1992) 7 Cal.App.4th 1110, 1119.) A motion for summary adjudication may be made by itself or as an alternative to a motion for summary judgment and shall proceed in all procedural respects as a motion for summary judgment. (Code Civ. Proc. § 437c, subd. (f)(2).)
The moving party bears an initial burden of production to make a prima facie showing of the nonexistence of any triable issue of material fact, and if he does so, the burden shifts to the opposing party to make a prima facie showing of the existence of a triable issue of material fact. (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 850; accord Code Civ. Proc. § 437c, subd. (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 that cause of action or a defense thereto. (Aguilar, supra, 25 Cal.4th at 850.) The plaintiff may not rely upon the mere 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 that cause of action or a defense thereto. (Ibid.) To establish a triable issue of material fact, the party opposing the motion must produce substantial responsive evidence. (Sangster v. Paetkau (1998) 68 Cal.App.4th 151, 166.)
Defendants Preferred Bank and John Stipanov (Defendants) move for summary judgment or adjudication as to the first through eighth causes of action pleaded against them by Plaintiffs Yosef Dangor and Jefferson Enterprises, LLC, leaving for a later motion the claims alleged by Plaintiff Oak Pass Road Enterprises, LLC. Defendants argue that the first through third causes of action for intentional and negligent misrepresentation and fraudulent concealment fail because Defendants made no misrepresentations concerning the basis for their valuation of the loan that they were to give Plaintiff, and did not conceal from Plaintiff the basis for that loan, i.e. the ultimate appraisal to be determined by a third party, which was lower than both Plaintiffs and Defendants expected. (Motion at pp. 21–25.) Defendants argue that the breach of contract claim is one for an oral contract for a commercial loan secured by an interest in real property, which is barred by the statute of frauds, and is based not an enforceable contract, but preliminary negotiations that were superseded by a later loan entered into by the parties. (Motion at pp. 25–27.) Defendants argue that Plaintiff’s claim for negligence fails because there is no duty of care owed by a lender to its borrower. (Motion at p. 27.) Defendants argue that Plaintiff Dangor cannot pursue a claim for intentional or negligent infliction of emotional distress based on the negotiation of a loan contract to which he was not a party. (Motion at pp. 29–30.)
1. Fraud — First through Third Causes of Action
Defendants have established the absence of triable issues as to the existence of actionable misrepresentations or concealments for the purposes of the first three causes of action for fraud and concealment. These claims require an actionable misrepresentation or concealment of “past or existing material fact.” (West v. JPMorgan Chase Bank, N.A. (2013) 214 Cal.App.4th 780, 792; seeThomas v. Regents of University of California (2023) 97 Cal.App.5th 587, 638 [concealment].) Although Plaintiffs’ claims are based on alleged misrepresentations as to the amount of a proposed loan based on false representations concerning the present value of the property belonging to Plaintiffs that the loan would secure (Complaint ¶¶ 21–23), Plaintiff’s own deposition testimony establishes that Defendants made no firm assurances regarding the value of the property or the amount of the loan, which was to be determined after a third-party appraisal was performed. (Motion Exh. 3 at pp. 80–81.) Moreover, even if Defendants had misrepresented their estimated value of the property, “[s]tatements regarding the appraised value of the property are not actionable fraudulent misrepresentations.” (Graham v. Bank of America, N.A. (2014) 226 Cal.App.4th 594, 606.)
Defendants also note the absence of any detrimental reliance upon Defendants’ representations, which is an independent basis to grant the motion as to these claims.(See Lazar v. Superior Court (1996) 12 Cal.4th 631, 642 [discussing detrimental reliance as element of fraud].) Although Plaintiffs allege they were induced to enter a less-favorable lease with a cannabis client by Defendants’ representations as to the amount of the refinance loan, Dangor’s testimony establishes that he entered into the lease before any discussion of the refinance loan took place. (Motion Exh. 3 at pp. 111–112.) Defendants also note that no representation by Defendants following entry of the lease could have prevented Plaintiff from seeking other lenders, because Plaintiff once more acknowledged that no other banks would have financed a cannabis business. (Motion Exh. 3 at pp. 106–107.) There are no triable issues as to whether Plaintiff took any action in reliance upon Defendants’ representations concerning the terms of the lease.
Accordingly, the motion is GRANTED as to the first through third causes of action.
2. Breach of Contract — Fourth and Fifth Causes of Action
The statute of frauds enacted in Civil Code § 1624 requires a written memorandum subscribed by the party to be bound for certain oral contracts to be enforceable. (Civ. Code § 1624, subd. 9a).) Among the contracts to which this statute applies is a contract “promise, undertaking, or commitment to loan money or to grant or extend credit, in an amount greater than one hundred thousand dollars ($100,000), not primarily for personal, family, or household purposes, made by a person engaged in the business of lending or arranging for the lending of money or extending credit.” (Civ. Code § 1624, subd. (a)(7).) The contracts at issue here are allegedly for commercial loans of $9 million and $2.3 million. (Complaint ¶¶ 18, 126.) It is alleged that these contracts were oral in nature. (Ibid.) No supporting memorandum of their terms is alleged or in evidence here.
Defendant also notes that Plaintiff testified in deposition that he only applied for the $2.3 million loan to see if Defendants would give it to him, out of frustration with his prior loan transactions, and confirmed at deposition that he had no intention of moving forward with the loan if they offered it to him. (Motion Exh. 3 at pp. 131–133.) Defendants have thus established that there was no intention of the parties to make a contract, and further that Plaintiff suffered no damages by any breach, both of which are elements of any contract claim. (See CSAA Ins. Exchange v. Hodroj (2021) 72 Cal.App.5th 272, 276 [elements of contract claim].)
The motion is therefore GRANTED as to the fourth and fifth causes of action.
3. Negligence — Eighth Cause of Action
A negligence claim requires as an element that the defendant owe the plaintiff a duty of care. (Nymark v. Heart Fed. Savings & Loan Assn. (1991) 231 Cal.App.3d 1089, 1095.) Defendants argue that Plaintiff’s negligence claim against them for the cannabis loan fails because, “as a general rule, a financial institution owes no duty of care to a borrower when the institution's involvement in the loan transaction does not exceed the scope of its conventional role as a mere lender of money.” (Id. at p. 1096.)
Defendants have shown the absence of triable issues as to the existence of a duty. Plaintiff’s deposition testimony establishes that Defendants’ involvement in the transaction consisted of telling Plaintiffs that they financed cannabis businesses and took cannabis-business deposits, and that after Plaintiff executed the lease, they informed Plaintiffs that they could issue a refinance loan with the amount depending on the appraised value of the property. (Motion Exh. 3 at pp. 110–112.) Plaintiff does not dispute that these statements were in fact true. And although Plaintiff states in declaration that he had been a depositor at Preferred bank for 15 years and had three prior loan transactions with Defendants (Dangor Decl. ¶¶ 4–6.) Plaintiff does not present any evidence to the effect that Defendants involvement in these or other transactions extended beyond that of lender, save for inadmissible statements that directly contradict Plaintiff’s detailed deposition testimony.
The motion is GRANTED as to the eighth cause of action.
4. Infliction of Emotional Distress — Sixth and Seventh Causes of Action
Defendants argue that Plaintiff Dangor’s claims for intentional and negligent infliction of emotional distress fail, because the evidence establishes no outrageous conduct, and because there is no claim for negligent infliction of emotional distress that is separate from the ordinary tort of negligence itself. (Motion at pp. 29–30.)
The elements of an IIED claim are: (1) extreme and outrageous conduct by defendant; (2) made with intent to cause, or with reckless disregard of the probability of causing, emotional distress; (3) severe emotional suffering; and (4) actual and proximate causation. (Huntingdon Life Sciences, Inc. v. Stop Huntingdon Animal Cruelty USA, Inc. (2005) 129 Cal.App.4th 1228, 1259; Bogard v. Employers Casualty Company (1985) 164 Cal.App.3d 602, 616.) “Whether a defendant’s conduct can reasonably be found to be outrageous is a question of law that must initially be determined by the court; if reasonable persons may differ, it is for the jury to determine whether the conduct was, in fact, outrageous.” (Berkley v. Dowds (2007) 152 Cal.App.4th 518, 534.)
There are no triable issues as to whether Defendants engaged in outrageous conduct. Plaintiff’s testimony at depositi on established that Defendants did not induce Plaintiff to enter the cannabis lease save by truthful representations that they handled cannabis business. Plaintiff thereafter testified that Defendants made no definitive representations concerning the value of the loan or property, save that the amount of the loan was contingent upon the outcome of a third-party appraisal. That the third-party appraisal was below both parties’ prior estimates does not constitute outrageous conduct. Nor does Defendants’ failure to provide a loan that Plaintiffs had no intention of accepting.
Defendants are also correct that negligent infliction of emotional distress is not an independent tort. “As we have noted . . . there is no independent tort of negligent infliction of emotional distress.” (Delfino v. Agilent Technologies, Inc. (2006) 145 Cal.App.4th 790, 818.) Such a claim is merely the tort of negligence. (Ibid.) Plaintiffs’ own negligence claim fails as noted above.
The motion is therefore GRANTED in its entirety.