Judge: Mark A. Young, Case: 20SMCV01720, Date: 2023-04-04 Tentative Ruling

Case Number: 20SMCV01720    Hearing Date: April 4, 2023    Dept: M

CASE NAME:           Trinity Media Financing Intl Ltd., et al., v. Every Breath LLC, et al.

CASE NO.:                20SMCV01720

MOTION:                  Motion for Summary Judgment/Summary Adjudication

HEARING DATE:   4/4/2023

Legal Standard

            A party may move for summary judgment in any action or proceeding if it is contended the action has no merit or that there is no defense to the action or proceeding. (CCP, § 437c(a).) “The purpose of the law of 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. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 843.)

“A party may move for summary adjudication as to one or more causes of action within an action, one or more affirmative defenses, one or more claims for damages, or one or more issues of duty, if the party contends that the cause of action has no merit, that there is no affirmative defense to the cause of action, that there is no merit to an affirmative defense as to any cause of action, that there is no merit to a claim for damages, as specified in Section 3294 of the Civil Code, or that one or more defendants either owed or did not owe a duty to the plaintiff or plaintiffs.” (CCP, § 437c(f)(1).) If a party seeks summary adjudication as an alternative to a request for summary judgment, the request must be clearly made in the notice of the motion. (Gonzales v. Superior Court (1987) 189 Cal.App.3d 1542, 1544.)  “[A] party may move for summary adjudication of a legal issue or a claim for damages other than punitive damages that does not completely dispose of a cause of action, affirmative defense, or issue of duty pursuant to” subdivision (t). (CCP, § 437c(t).) 

            To prevail, the evidence submitted must show there is no triable issue as to any material fact and that the moving party is entitled to judgment as a matter of law. (CCP, § 437c(c).) The motion cannot succeed unless the evidence leaves no room for conflicting inferences as to material facts; the court has no power to weigh one inference against another or against other evidence. (Murillo v. Rite Stuff Food Inc. (1998) 65 Cal.App.4th 833, 841.) In determining whether the facts give rise to a triable issue of material fact, “[a]ll doubts as to whether any material, triable, issues of fact exist are to be resolved in favor of the party opposing summary judgment…” (Gold v. Weissman (2004) 114 Cal.App.4th 1195, 1198-99.) “In other words, the facts alleged in the evidence of the party opposing summary judgment and the reasonable inferences there from must be accepted as true.” (Jackson v. County of Los Angeles (1997) 60 Cal.App.4th 171, 179.) However, if adjudication is otherwise proper the motion “may not be denied on grounds of credibility,” except when a material fact is the witness’s state of mind and “that fact is sought to be established solely by the [witness’s] affirmation thereof.” (CCP, § 437c(e).) 

            Once the moving party has met their burden, the burden shifts to the opposing party “to show that a triable issue of one or more material facts exists as to that cause of action or a defense thereto.” (CCP § 437c(p)(1).) “[T]here is no obligation on the opposing party... to establish anything by affidavit unless and until the moving party has by affidavit stated facts establishing every element... necessary to sustain a judgment in his favor.” (Consumer Cause, Inc. v. SmileCare (2001) 91 Cal.App.4th 454, 468.) 

“The pleadings play a key role in a summary judgment motion. The function of the pleadings in a motion for summary judgment is to delimit the scope of the issues and to frame the outer measure of materiality in a summary judgment proceeding.” (Hutton v. Fidelity National Title Co. (2013) 213 Cal.App.4th 486, 493, quotations and citations omitted.) “Accordingly, the burden of a defendant moving for summary judgment only requires that he or she negate plaintiff's theories of liability as alleged in the complaint; that is, a moving party need not refute liability on some theoretical possibility not included in the pleadings.” (Ibid.) 

Analysis

The notice and presentation of issues renders Plaintiff/Cross-Defendant’s motion for summary judgment or adjudication procedural flawed and, at the same time, remarkably difficult to analyze.  For instance, the Notice does not reflect the issues stated in the Separate Statement. The Notice provides notice as to the motion for summary judgment as to each complaint, and states issues as to each cause of action for the respective complaint. (Though, the issues include extraneous information and do not assert why any cause of action succeeds or fails.) The separate statement reproduces these issues verbatim but does not actually rely on the issues presented in the Notice. The separate statement generally must tie each “undisputed material fact” to a particular claim (defense or issue of duty). (CRC 3.1350(b).) Each cause of action, issue of duty or defense must have a separate section heading indicating the issue number and specifying the issue (Id., 3.1350(d).) The separate statement does not go through the case regarding each claim. Instead, the separate statement defines the issues by mixing the various causes of action together and setting out three general, factual issues regarding the case.

For example, Trinity’s separate statement seeks adjudication of an ambiguous factual issue related to certain “Holdbacks and Holdback Letters” in the following subparts:

The following are the causes of action relevant to the Holdbacks and the Holdback Letters:

(a) Plaintiff Trinity’s First Cause of Action for Declaratory Relief in the Complaint as set forth in ¶40 thereof i.e. Trinity has no obligation to pay EB LLC the Holdbacks under the Holdback Letters or pay it from the proceeds of its loan collateral or to directly pay the payees under the Holdback Letters either and no alleged Affirmative Defense set forth by Defendants in their Answer factually and legally defeats such claim.

(b) Trinity’s Cause of Action for Fraud in the Complaint.

(c) The FAC's [meaning First Amended Cross-Complaint] First Cause of Action for Breach of Contract against Trinity with respect to the alleged Trinity obligation to pay the amounts set forth in the Lewis Negotiated Holdback Letters (as hereinafter defined) to EB LLC and/or to the payees thereunder upon the conclusion of $2.5mm in sales either directly or out of the proceeds of Trinity’s Picture collateral as set forth in the FAC [¶¶ 33-35]. The FAC’s First Cause of Action specifies that an Agreement was orally concluded with Trinity on 11/27/19 to pay the Lewis Negotiated Holdbacks under certain conditions (i.e., when $2.5 mm in presales were secured). The allegations state that this oral holdback agreement was confirmed in writing by email from Morgan to Lorri Charnetski ("Lorri") on 11/27/19, [FAC ¶¶18, 39-42] [See discussion hereinafter and in fn #1 differentiating the Lewis Negotiated Holdbacks from the Construction Holdback, which Construction Holdback is not in issue in this Action

(d) Cross-Complainants’ Second Cause of Action in the FAC against Trinity for Breach of the Covenant of Good Faith and Fair Dealing with respect to the alleged Trinity obligation to pay the amounts set forth in the Lewis Negotiated Holdback Letters to EB LLC and/or to the payees directly thereunder upon the conclusion of $2.5mm in sales directly or from Trinity's collateral, and, thus, caused Southpaw to breach the terms of a certain letter agreement to pay the original writer named Murray (the “Letter Agreement”) and the Holdback Letter payees and, thus, Cross-Complainants were damaged thereby as set forth in the FAC. [¶¶28, 36, 44-50].

(e) Cross-Complainants’ Third Cause of Action in the FAC for Intentional Interference with Contract against Trinity, Morgan, and JC with respect to the alleged Trinity obligation to pay the amounts set forth in the Lewis Negotiated Holdback Letters to EB LLC and/or to the payees thereunder upon the conclusion of $2.5mm in sales directly or from Trinity's collateral as set forth in the FAC. [¶¶52-58] No mention of the Letter Agreement is made in this cause of action.

(f) Cross-Complainants’ Fourth Cause of Action for Fraud in the FAC against Trinity, Morgan, and JC whereunder the Cross-Defendants allegedly induced Lewis (only Lewis is alleged to be the party complainant…See [FAC ¶39]...to enter into the Lewis Negotiated Holdback Agreements wherein Trinity would have to pay the amounts set forth therein to EB LLC and/or to the payees thereunder upon the conclusion of $2.5mm in sales directly or from Trinity's collateral. [FAC ¶¶61-67].

(g) Cross-Complainants Fifth Cause of action for Declaratory Relief in the FAC with respect the alleged Holdback Agreement [FAC ¶¶68-70].

The separate statement’s second issue is related to an “Equity Raise,” which is stated as follows:

The following are the causes of action relevant to the Equity Raise issue:

(a) Plaintiff Trinity’s First Cause of Action for Declaratory Relief in the Complaint as set forth in ¶39 and ¶52(a) thereof i.e. Trinity is not obligated to bear the recoupment positions accorded to Defendants’ and Cross-Complainants’ equity investors wherein Trinity was not party to the agreements, the Equity Raise agreements were not approved by Construction and/or Delphi prior to the Phase 1 Closing, and Trinity knew nothing about the Equity Raise agreements until after the Phase 1 Closing as well.

(b) Cross-Complainants’ confusing and poorly drafted FAC appears to ask the Court for a declaration that it had the right to raise equity and Trinity has to bear the recoupment of the Equity Raise in its Net Profit definition.

The Separate statement’s third issue relates to a “Net Profit Claim” and is stated as follows:

The following are the causes of action relevant to Cross-Complainants’ claims with respect to New Profits and Trinity’s obligation to contribute some of its share to cover the over-grants thereof:

(a) Trinity’s First Cause of Action for Declaratory Relief of the Complaint asks the Court for a Declaration that Trinity is not obligated to contribute any of its Net Profits (as defined) to cover any of the 115% over grant of Net Profits (the “Over-Grants”) accorded by EB LLC directly or through BC Service Co. (such BC Service Co. grants approved by EB LLC);

(b) As set forth on FAC, ¶32 and ¶35 (c) and the First Cause of Action thereunder, Cross-Complainants allege that Trinity (and/or Construction) were responsible for according all profits in the Picture, inclusive of the Over-Grants. Further, Cross-Defendants EB LLC, Lewis, and Southpaw had no “knowledge, involvement and/or consent in the grant of net profit participations” which were negotiated by Trinity and/or Construction and Trinity has refused to reduce its Net Profit participation to ameliorate its own improper actions.

As a result, the Court cannot determine which UMF applies to which claim. For example, not all the UMFs under the first issue would apply to the fraud cause of action, despite adjudication being sought under that issue. If Trinity contends that all of them apply to each cause of action, then it would be impossible to meaningfully distinguish the request for summary judgment from adjudication. Moreover, resolving a single issue presented would not completely dispose of any cause of action independently. The Court must necessarily examine each issue presented together to adjudicate any particular cause of action.

Another fatal defect is that the separate statement does not plainly and concisely set forth the 107 material facts across these issues. Moreover, some of the material facts are stated in subparts. (See e.g., UMF 88, 88A.) This violates the rule that the UMFs be in a numerical sequence. (CRC Rule 3.1350(d)(3).)         “[T]echnical compliance with the procedures of CCP § 437c is required to ensure that there is no infringement of a litigant’s hallowed right to have a dispute settled by a jury of his or her peers.” (Bahl v. Bank of America (2001) 89 Cal.App.4th 389, 395.) 

Given the nature of the above defects, the Court cannot meaningfully parse the issues presented by the motion. As such, the Court will exercise its discretion to disregard the Separate Statement and deny the entire motion on procedural grounds.

Even if the Court was to substantively consider the motion, given the presentation of issues, Trinity fails to meet its initial burden to show entitlement to judgment as a matter of law as to any particular cause of action of either its complaint or the cross-complaint. The Court concludes that there are disputes of material facts regarding the distribution of revenues and the holdback terms, and as such, there are disputes of material fact preventing summary adjudication of any cause of action in either complaint or cross-complaint.  (See, e.g., UMF 7, 11, 38, 42-46, 49, 58.)

Accordingly, the motion is DENIED.