Judge: Malcolm Mackey, Case: 22STCV00239, Date: 2022-07-28 Tentative Ruling
Case Number: 22STCV00239 Hearing Date: July 28, 2022 Dept: 55
ON
DECK CAPITAL, INC. v. JUTANHAK COSMETICS USA, INC. 22STCV00239
Hearing Date: 7/28/22, Dept. 55
#4: DEMURRER
TO COMPLAINT.
Notice: Okay
Opposition
MP:
Defendants YOUNG HAN KIM and JUTANHAK COSMETICS,
USA, INC.
RP:
Plaintiff
Summary
On 1/4/22, Plaintiff ON
DECK CAPITAL, INC. filed a Complaint for BREACH OF WRITTEN CONTRACT, alleging that,
on or about 2/25/20, Plaintiff's assignor CELTIC BANK, and defendants JUTANHAK
COSMETICS USA, INC. and YOUNG HAN KIM, entered into a written contract for a
business loan, but defendants subsequently breached by failure to make
payments, causing damages in the sum of $133,150.89.
MP
Positions
Moving parties request an
order sustaining the demurrer to the Complaint, on grounds including the
following:
·
The alleged assignment is uncertain as to
details.
·
Exhibit A to the Complaint is not an
executed contract.
·
Facts regarding breach are not alleged.
Capital has no idea what term of the Contract
was allegedly breached, when payments were due, what monies were actually paid
and received by Capital's assignor, or the date of breach, if any, because none
of the facts necessary to plead the element of breach have been alleged.
·
The interest rate exceeds the 10% maximum
interest rate permitted under Article XV, section 1 of the California
Constitution, and is usurious and unconscionable.
RP
Positions
Opposing party advocates overruling,
for reasons including the following:
·
The agreement to the terms of the Business
Loan and Security Agreement and Business Loan and Security Agreement Supplement
is evidenced by the signature of all parties on the Signature Page.
·
The Complaint adequately alleges that
about February 25, 2020, a written agreement was made between assignor Celtic
Bank and Jutanhak Cosmetics USA, Inc. and Young Han Kim, guarantor.
·
The terms of the written loan agreement
attached to the Complaint, are clear.
·
The pleading sufficiently alleges that
defendants breached the agreement by failing to make payment as agreed.
·
Interest in excess of the maximum rate is
legal and enforceable where, as here, the contract is with a bank.
Tentative
Ruling
The demurrer is overruled. Twenty days to answer.
Assignment
Contract Signatures
Generally, contract
signatures are not necessarily required, unless “‘the signatures of all parties
were contemplated as being a condition precedent to the validity of the
contract….’” Rael v. Davis (2008) 166 Cal.App.4th 1608, 1618 n.15
(citing, e.g., CC §3388). “[I]t is not the presence or absence of a
signature which is dispositive; it is the presence or absence of evidence of an
agreement ….” Banner Entertainment,
Inc. v. Sup. Ct. (1998) 62 Cal.App.4th
348, 361 (finding a complete absence of proof of circumstances showing
assent).
“Civil Code section
1633.9 addresses how a proponent of an electronic signature may authenticate
the signature.” Ruiz v. Moss Bros.
Auto Grp. (2014) 232 Cal. App. 4th 836, 843 (unsupported assertion the
person electronically signed insufficient authentication). Accord Espejo v. S. California Permanente Med.
Grp. (2016) 246 Cal. App. 4th 1047, 1062
(factual details to properly authenticated electronic signature, such as
using security, passwords, time and IP address); J.B.B. Investment Partners, Ltd. v. Fair
(2014) 232 Cal.App.4th 974, 989
(insufficient proof to show party printed name at the end of e-mail with
any intent to formalize electronic transaction).
“Mutual assent usually is
manifested by an offer communicated to the offeree and an acceptance communicated
to the offeror.” Donovan v. Rrl Corp.
(2001) 26 Cal. 4th 261, 270-71. “The
requirements are only that there be a writing containing all terms and that
there be acceptance by the party to be charged. How that acceptance is
manifested is a matter of proof. It may be proved by evidence of words spoken,
if believed by the trier of fact. It may be proved by evidence of a particular
act other than signing. It may be proved by evidence that the party to be
charged prepared the written document and offered to perform its terms.” E.O.C. Ord v. Kovakovich (1988) 200
Cal. App. 3d 1194, 1201.
Breach
The Complaint
sufficiently alleges defendants’ loan nonpayment and breach of an individual
guaranty of such payment.
Pleaders are to state
facts showing a breach. Levy v. State
Farm Mutual Automobile Ins. Co. (2007) 150 Cal. App. 4th 1, 5-6.
Usury and Unconscionability
A usurious loan is not
revealed by the Complaint. Exhibit A to
the Complaint, at page 1, states that “Celtic Bank” was the lender. Banks are exempt from usury law. Jones v. Wells Fargo Bank (2003) 112 Cal.
App. 4th 1527, 1535 n.3. See also Jones v. Wells Fargo Bank (2003) 112
Cal. App. 4th 1527, 1535 (“‘[T]he usury law … is riddled with so many
exceptions that the law’s application itself seems to be the exception rather
than the rule.’”).
Uncertainty