Judge: Mark E. Windham, Case: 22STLC06773, Date: 2023-10-04 Tentative Ruling
Case Number: 22STLC06773 Hearing Date: October 4, 2023 Dept: 26
The Cannery Villas, LLC v. Chu, et al.
MOTION
FOR SUMMARY JUDGMENT
TENTATIVE RULING:
Plaintiff The Cannery Villas, LLC’s Motion for Summary
Judgment is GRANTED. PLAINTIFF IS TO FILE A PROPOSED JUDGMENT WITHIN 20 DAYS OF
THIS ORDER.
ANALYSIS:
Plaintiff The
Cannery Villas, LLC (“Plaintiff”) brought
this action for breach of contract against Defendant Michael Chu (“Defendant”) on October 12, 2022. Defendant filed an answer on December
7, 2022. On July 10, 2023, Plaintiff filed the instant Motion for
Summary Judgment. No opposition has been filed to date.
Discussion
The Complaint alleges a
single cause of action for breach of contract. (Compl., p. 3.) Plaintiff
alleges that the parties entered into a note (“the Note”) secured by a deed of
trust (“the Deed of Trust”) that required Plaintiff to pay Defendant
$400,000.00 on or before January 1, 2023, together with interest from July 1,
2021 at four percent per annum, payable beginning August 1, 2021. (Compl.,
¶BC-1 and Exh. A.) The Note provided a specific payment schedule, including a
principal reduction amount of $200,000.00 due on January 1, 2022. (Ibid.)
It also states that “[s]hould default be made in payment when due, the
whole sum of principal and interest shall become immediately due at the option
of the holder of this Note.” (Ibid.)
Plaintiff moves for summary
judgment on the grounds that (1) its $200,000.00 principal reduction
payment on the Note made to Defendant on January 11, 2022, was timely; (2) Defendant
improperly rejected Plaintiff’s January 31, 2022, tender of full payment on the
Note, and refused to reconvey the Deed of Trust, instead demanding an
additional $10,000.00 “late charge” with respect to the January 11, 2022
payment; and (3) Plaintiff incurred damages from the $10,000.00 late charge and
$3,079.45 in interest it paid after Defendant rejected the tender of full
payment.
Plaintiff moves for summary judgment on the Complaint
pursuant to Code of Civil Procedure section 437c. On a motion for summary judgment
or adjudication of a particular cause of action, a moving plaintiff must show that
there is no defense by proving each element of the cause of action entitling
the party to judgment on that cause of action. (Code Civ. Proc., § 437c, subd.
(p)(1).) Then the burden shifts to the defendant to show that a triable issue
of one or more material facts exists as to that cause of action or a defense. (Code
Civ. Proc., § 437c, subd. (p)(1).) Additionally, in ruling on the Motion, the
Court must view the “evidence [citations] and such inferences [citations], in
the light most favorable to the opposing party.” (Intrieri v. Superior Court
(2004) 117 Cal.App.4th 72, 81 [citing Aguilar v. Atlantic Richfield Co.
(2001) 25 Cal.4th 826, 843].)
Plaintiff’s Initial Burden of Proof
The elements of a cause of action for breach of contract are
(1) the existence of the contract; (2) plaintiff’s performance or excuse for
nonperformance; (3) defendant’s breach (or anticipatory breach); and (4)
resulting damage. (Wall Street Network, Ltd. v. N. Y. Times Co. (2008)
164 Cal.App.4th 1171, 1178.)
In support of its Motion for Summary Judgment for breach of
the Note, Plaintiff presents the following undisputed facts. The parties
entered into the Note Secured by the Deed of Trust in the principal amount of
$400,000.00, at four percent annual interest, on January 24, 2021. (Motion,
Separate Statement, Fact No. 1; Pelletier Decl., Exh. 1; King Decl., Exhs. 9-10
at RFA No. 1.) The Note obligated Plaintiff to pay Defendant (1) monthly
interest payments, (2) a principal reduction amount of $200,000.00 by January
1, 2022, and (3) the remaining principal balance by January 1, 2023. (Motion,
Separate Statement, Fact No. 2; Pelletier Decl., Exh. 1; King Decl., Exhs. 9-10
at RFA No. 1.) Plaintiff would be subject to late charges if payments were not
made within ten days of the due date. (Motion, Separate Statement, Fact No. 3;
Pelletier Decl., Exh. 1; King Decl., Exhs. 9-10 at RFA No. 1.) The Note was
secured by the Deed of Trust on vacant land in San Bernardino County,
Assessor’s Parcel No. 1050-601-25-0-000 (“the San Bernardino Property”).
(Motion, Separate Statement, Fact No. 4; Pelletier Decl., Exh. 1; King Decl.,
Exhs. 9-10 at RFA No. 1.)
Plaintiff timely made the interest payments. (Motion,
Separate Statement, Fact No. 5; Pelletier Decl., ¶3.) On January 11, 2022,
Plaintiff deposited the $200,000.00 check into Defendant’s bank account for the
principal reduction payment. (Motion, Separate Statement, Fact No. 7; Pelletier
Decl., ¶3; King Decl., Exhs. 11-12 at RFP Nos. 1-3; King Decl., Exh. 13.) On
January 31, 2022, Plaintiff sent Defendant a check for $187,600.55, reflecting
the full remaining payoff amount of principal and interest on the Note.
(Motion, Separate Statement, Fact No. 8; Pelletier Decl., Exh. 3; King Decl.,
Exhs. 9-10 at RFA No. 4.) Also on January 31, 2022, Plaintiff sent Defendant a
Substitution of Trustee and Full Reconveyance form to execute so that the Deed
of Trust would no longer affect title to the San Bernardino Property. (Motion,
Separate Statement, Fact No. 8; Pelletier Decl., Exh. 3; King Decl., Exhs. 9-10
at RFA No. 4.) Defendant sent a letter on February 1, 2022 refusing to reconvey
the Deed of Trust unless Plaintiff paid an additional $10,000.00, on the
grounds that the January 11, 2022 payment was untimely and that he was entitled
to a late charge. (Motion, Separate Statement, Fact No. 9; Pelletier Decl.,
Exh. 4; King Decl., Exhs. 9-10 at RFA No. 5.) In a response dated February 7,
2022, Plaintiff disputed that its principal reduction payment was late and
again asked Defendant to execute the reconveyance. (Motion, Separate Statement,
Fact No. 10; Pelletier Decl., Exh. 5; King Decl., Exhs. 9-10 at RFA No. 6.)
On July 8, 2022, Plaintiff’s counsel again reiterated its
position in writing that no late charge was due and Defendant was required to
execute the reconveyance form. (Motion, Separate Statement, Fact No. 11;
Pelletier Decl., Exh. 14; King Decl., Exhs. 9-10 at RFA No. 7.) Defendant did
not respond to that letter. (Motion, Separate Statement, Fact No. 11; Pelletier
Decl., Exh. 14; King Decl., Exhs. 9-10 at RFA No. 7.) By another letter dated
July 14, 2022, Plaintiff’s counsel explained to Defendant that the recorded Deed
of Trust threatened the pending sale of the San Bernardino property and that
upon closing the sale, Plaintiff would reserve its rights for reimbursement
against Defendant. (Motion, Separate Statement, Fact No. 12; Pelletier Decl.,
Exh. 15; King Decl., Exhs. 9-10 at RFA No. 8.) From the escrow proceeds,
Plaintiff debited $10,000.00 for the late charge and $4,000.00 in interest, of
which it paid Defendant $13,079.45. (Motion, Separate Statement, Fact No. 13;
Pelletier Decl., Exhs. 6-8; King Decl., Exhs. 9-10 at RFA No. 8.)
This evidence carries
Plaintiff’s initial burden of proof as to its claim for breach of contract against
Defendant. First, Plaintiff has demonstrated the existence of the Note between
itself and Defendant, and Plaintiff’s performance of all its obligations under
the Note. This performance included timely payments under the schedule set
forth in the Note. A payment is untimely under the Note “in the event any
payment is not paid within 10 days of the due date . . . .” (Motion, Pelletier
Decl., Exh. 1.) The payment made on January 11, 2022 was within ten days of the
January 1, 2022 due date for the principal reduction payment. (See Civ. Code,
§10 [“The time in which any act provided by law is to be done is computed by
excluding the first day and including the last, unless the last day is a
holiday, and then it is also excluded.”]; Johnson v. Kaeser (1925) 196
Cal. 686, 700.) Following Plaintiff’s performance of its obligations, Defendant
was to reconvey the Deed of Trust on the San Bernardino property within 30
calendar days. Civil Code section 2941 specifically provides: “[w]ithin 30
calendar days after the obligation secured by any deed of trust has been
satisfied, the beneficiary or the assignee of the beneficiary shall execute and
deliver to the trustee the original note, deed of trust, request for a full
reconveyance, and other documents as may be necessary to reconvey, or cause to
be reconveyed, the deed of trust.” (Civ. Code, § 2941, subd. (b)(1).) As the
obligation secured by the Deed of Trust on the San Bernardino property was
satisfied on January 31, 2022, Defendant was required to execute the
reconveyance form with 30 days thereafter. Defendant did not execute the
reconveyance form, in breach of the terms of the Note, thereby causing
Plaintiff to incur damages of $13,079.45.
The burden now shifts to
Defendant to demonstrate that a triable issue of material fact exists as to
Plaintiff’s claims. As no opposition has been filed, however, Defendant has
failed to demonstrate the existence of any triable issue of material fact.
Conclusion
Therefore, Plaintiff The Cannery
Villas, LLC’s Motion for Summary Judgment is GRANTED. PLAINTIFF IS TO FILE A
PROPOSED JUDGMENT WITHIN 20 DAYS OF THIS ORDER.
Moving party to give notice.