Judge Michael P. Linfield, Case 20STCV09590 2022-07-28 Tentative Ruling

Judge: Michael P. Linfield, Case: 20STCV09590, Date: 2022-07-28 Tentative Ruling

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SUBJECT: Motion for Summary Judgment or, in the Alternative, Summary Adjudication of Defendants EJT Holdings Inc. and Sean Thomas

Moving Party: Defendants EJT Holdings, Inc. dba MHC Properties (erroneously named and sued as “MHC Mortgage, Inc.”) and Sean Thomas (collectively, “Defendants”)

Defendants EJT Holdings, Inc. and Sean Thomas’ Motion for Summary Judgment is DENIED.

Defendants EJT Holdings, Inc. and Sean Thomas’ Motion for Summary Adjudication of Plaintiff Good Tidings Baptist Church’s Third, Fourth, Sixth, Seventh and Eighth Causes of Action is DENIED.

Defendants EJT Holdings, Inc. and Sean Thomas’ Motion for Summary Adjudication of Plaintiff Good Tidings Baptist Church’s Fifth Cause of Action for Accounting is DENIED as MOOT.

On March 6, 2020, Plaintiff Good Tidings Baptist Church filed a complaint against Defendant Robert E. Grier, MHC Properties, Shawn Thomas, and Pentecostal Church of God aka Iglesia De Dios Pentecostal to allege the following causes of action:

On July 31, 2020, Defendant and Cross-Complainant Robert E. Grier filed a cross-complaint against Cross-Defendants Brion Wells, Robert Hinton, Elsie Perkins Johnson, and Roes 1 through 10, inclusive, for declaratory relief on the grounds that Defendant is the pastor of the Church and that the Board has the right to control the Church and to sell the Church’s property. (Cross-Complaint, ¶ 16.)

On June 14, 2021, Plaintiff filed a First Amended Complaint against Defendant Robert E. Grier, EJT Holdings Inc., Sean Thomas, Pentecostal Church of God, I.M., 85RPCA, aka Iglesia De Dios Pentecostal, M.I., MHC Mortgage, Inc. (Doe 1) and Orange Coast Title Company of Southern California (Doe 34) to allege the same causes of action.

On July 12, 2021, Defendant and Cross-Complainant Robert E. Grier filed a Notice of Settlement and an Application for Good Faith Determination under Cal. Code of Civ. Proc. § 877.6(a)(2) with Plaintiff and Cross-Defendants Brion Wells, Robert Hinton, Elsie Perkins Johnson, and Roes 1 through 10, inclusive.

On April 28, 2022, Defendants EJT Holdings, Inc. dba MHC Properties (erroneously named and sued as “MHC Mortgage, Inc.”) and Sean Thomas (collectively, “Defendants”) moved for summary adjudication on the Third, Fourth, Fifth, Sixth, Seventh, and Eighth causes of action pursuant to California Code of Civil Procedure § 437c on the grounds that no triable issue as to any material fact exists. (Motion for Summary Judgment, ¶¶ 1-6.)

On June 8, 2022, Defendant and Cross-Complainant Robert E. Grier (“Pastor Grier”) applied to the Court in accordance with California Code of Civil Procedure § 877.6(a)(2) for a determination that the Settlement Agreement between the parties was made in good faith.

On June 27, 2022, Plaintiff filed a Request for Dismissal of Defendant Pentecostal Church of God, I.M, 85RPCA, aka Iglesia De Dios Pentecostal, M.I., a nonprofit religious corporation.

On July 14, 2022, Plaintiff Good Tidings Baptist Church opposed Defendants EJT Holdings, Inc. dba MHC Properties (erroneously named and sued as “MHC Mortgage, Inc.”) and Sean Thomas motion for summary judgment/ summary adjudication.

Plaintiff Good Tidings Baptist Church submits the following objections to the evidence submitted by Defendants EJT Holdings, Inc., and Sean Thomas’ Separate Statement of Undisputed Material Facts in support of their Motion for Summary Judgment, or in the Alternative, Summary Adjudication. Rulings of the Court on these objections are listed below.

Objection
1	SUSTAINED
2		OVERRULED
3	SUSTAINED

Objection
4		OVERRULED
5	SUSTAINED
6		OVERRULED

Defendants EJT Holdings, Inc., and Sean Thomas submit the following objections to evidence cited by Plaintiff Good Tidings Baptist Church in opposition to Defendants’ Motion for Summary Judgment or, in the Alternative, Summary Adjudication. Rulings of the Court on these objections are listed below.

Objection
1	SUSTAINED
2	SUSTAINED
3	SUSTAINED
4	SUSTAINED
5	SUSTAINED
6	SUSTAINED
7		OVERRULED
8		OVERRULED
9		OVERRULED
10	SUSTAINED
11	SUSTAINED
12	SUSTAINED
13	SUSTAINED
14	SUSTAINED
15	SUSTAINED

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.)

“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.) When a plaintiff seeks summary judgment or adjudication, the plaintiff must produce admissible evidence on each element of each cause of action on which judgment is sought. (CCP § 437c(p)(1).) The opposing party on a motion for summary judgment is under no evidentiary burden to produce rebuttal evidence until the moving party meets his or her initial movant’s burden. (Binder v. Aetna Life Insurance Company (1999) 75 Cal.App.4th 832.) Once the initial movant’s burden is met, then the burden shifts to the opposing party to show, with admissible evidence, that there is a triable issue requiring the weighing procedures of trial. (CCP § 437c(p).)

"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. A motion for summary adjudication shall be granted only if it completely disposes of a cause of action, an affirmative defense, a claim for damages, or an issue of duty." (CCP § 437c(f)(1).)

“When deciding whether to grant summary judgment, the court must consider all of the evidence set forth in the papers (except evidence to which the court has sustained an objection), as well as all reasonable inferences that may be drawn from that evidence, in the light most favorable to the party opposing summary judgment.” (Avivi v. Centro Medico Urgente Medical Center (2008) 159 Cal.App.4th 463, 467; CCP § 437c(c).)

“Declarations must show the declarant's personal knowledge and competency to testify, state facts and not just conclusions, and not include inadmissible hearsay or opinion. The declarations in support of a motion for summary judgment should be strictly construed, while the opposing declarations should be liberally construed.” (Fernandez v. Alexander (2019) 31 Cal.App.5th 770, 779, quoting Bozzi v. Nordstrom, Inc. (2010) 186 Cal.App.4th 755, 761; see also CCP § 437c(d).)

In analyzing motions for summary judgment, courts must apply a three-step analysis: "(1) identify the issues framed by the pleadings; (2) determine whether the moving party has negated the opponent's claims; and (3) determine whether the opposition has demonstrated the existence of a triable, material factual issue." (Hinesley v. Oakshade Town Ctr. (2005) 135 Cal.App.4th 289, 294.)

“A motion for summary adjudication shall be granted only if it completely disposes of a cause of action, an affirmative defense, a claim for damages, or an issue of duty.” (CCP § 437c(f)(1).) “If a cause of action is not shown to be barred in its entirety, no order for summary judgment — or adjudication — can be entered.” (McCaskey v. California State Automobile Assn. (2010) 189 Cal.App.4th 947, 975; Snatchko v. Westfield LLC (2010) 187 Cal.App.4th 469, 476; Dunn v. County of Santa Barbara (2006) 135 Cal.App.4th 1281, 1290.) “The purpose of the enactment of¿Code of Civil Procedure section 437c, subdivision (f)¿was to stop the practice of piecemeal adjudication of facts that did not completely dispose of a substantive area.” (Catalano v. Superior Court (2000) 82 Cal.App.4th 91, 97.)

“The elements for a claim of unjust enrichment are receipt of a benefit and unjust retention of the benefit at the expense of another. The theory of unjust enrichment requires one who acquires a benefit which may not justly be retained, to return either the thing or its equivalent to the aggrieved party so as not to be unjustly enriched. (Lyles v. Sangadeo-Patel (2014) 225 Cal.App.4th 759, 769 (cleaned up).)

The Court finds triable issues of material fact as to whether an enforceable, binding agreement exists between the parties based in part on Pastor Grier’s agent authority to enter contracts for Good Tidings. (Plaintiff’s Opposition to Defendants’ Separate Statement of Undisputed Material Facts (“POSS”), Nos. 23-28, 49, 51.) This central question must be determined by the the trier of fact.

The “essential elements” of the cause of action for breach of fiduciary duty “have been distilled as follows: 1) The vulnerability of one party to the other which 2) results in the empowerment of the stronger party by the weaker which 3) empowerment has been solicited or accepted by the stronger party and 4) prevents the weaker party from effectively protecting itself. In short, vulnerability is the necessary predicate of a confidential relation, and the law treats it as absolutely essential. . . .” (Persson v. Smart Inventions, Inc. (2005) 125 Cal.App.4th 1141, 1161 (cleaned up).)

Defendants cite Padgett v. Phariss (1997) 54 Cal.App.4th 1270, 1283 for the position that a real estate agent’s fiduciary duty does not require the agent “to go beyond the statutory standard of care, since the fiduciary duty should be interpreted as the duty to carry out the responsibilities required under the particular circumstances.” (Motion, MPA, p. 15:13-20.) Good Tidings argues that Padgett addressed the fiduciary duty a seller’s real estate broker owed to purchasers under Civil Code § 2079 and not the broader fiduciary duty real estate brokers owe their own clients. (Opposition, p. 12:17-19.) Under Field v. Century 21 Klowden-Forness Realty (1998) 63 Cal.App.4th 18, 25, “the fiduciary duty owed by brokers to their own clients is substantially more extensive than the nonfiduciary duty codified in section 2079.”

“Under the common law, unchanged by Easton and section 2079, a broker's fiduciary duty to his client requires the highest good faith and undivided service and loyalty. The broker as a fiduciary has a duty to learn the material facts that may affect the principal's decision. He is hired for his professional knowledge and skill; he is expected to perform the necessary research and investigation in order to know those important matters that will affect the principal's decision, and he has a duty to counsel and advise the principal regarding the propriety and ramifications of the decision. The agent's duty to disclose material information to the principal includes the duty to disclose reasonably obtainable material information. The facts that a broker must learn, and the advice and counsel required of the broker, depend on the facts of each transaction, the knowledge and the experience of the principal, the questions asked by the principal, and the nature of the property and the terms of sale. The broker must place himself in the position of the principal and ask himself the type of information required for the principal to make a well-informed decision. This obligation requires investigation of facts not known to the agent and disclosure of all material facts that might reasonably be discovered.” (Field, 63 Cal.App.4th at 25–26 (cleaned up); see also 2 Miller & Starr, Cal. Real Estate 2d (1989) Agency, § 3.17, pp. 94, 96-97, 99, fn. omitted.)

The Court finds that under Field, triable issues of material fact exist as to the scope of Defendants’ fiduciary duty to Good Tidings. Even if Defendants lacked any ability stop the sale of the Church Building, once Defendants had reason to believe that Pastor Grier’s agent authority was questioned by others involved with Good Tidings, Defendants’ fiduciary duty to its client Good Tidings may have required Defendants to determine whether Pastor Grier actually represented Good Tidings with the authority to enter contracts. Given the nature of the property, the terms of sale, and the knowledge and experience of the principal’s apparent agent, a triable issue of material fact exists as to whether Defendants, as Good Tidings’ real estate agent, knew or had reason to know that the August 31, 2018 Cease-and-Desist Letter affected the very nature of Defendants’ fiduciary duty to Good Tidings. (POSS Nos. 2, 23-28.)

A cause of action for an accounting requires a showing that a relationship exists between the plaintiff and defendant that requires an accounting, and that some balance is due the plaintiff that can only be ascertained by an accounting. An action for accounting is not available where the plaintiff alleges the right to recover a sum certain or a sum that can be made certain by calculation. A plaintiff need not state facts that are peculiarly within the knowledge of the opposing party. (Teselle v. McLoughlin (2009) 173 Cal.App.4th 156, 179 (cleaned up).)

On July 14, 2022, the Court granted Defendant and Cross-Complainant Pastor Robert E. Grier’s Application for Good Faith Settlement Determination Under CCP § 877.6(a)(2). In the event of Court approval of this settlement, Good Tidings agreed to dismiss their accounting claim against all defendants. (Opposition, p. 19:1-2.)

The Motion for Summary Adjudication as to this cause of action is DENIED as MOOT.

Conversion is the wrongful exercise of dominion over the property of another. The elements of a conversion claim are: (1) the plaintiff's ownership or right to possession of the property; (2) the defendant's conversion by a wrongful act or disposition of property rights; and (3) damages. (Hodges v. County of Placer (2019) 41 Cal.App.5th 537, 551.) Aiding and abetting liability takes two forms. First, an aider and abettor with the necessary mental state is guilty of the intended crime. Second, under the natural and probable consequences doctrine, an aider and abettor is guilty not only of the intended crime, but also for any other offense that was a natural and probable consequence of the crime aided and abetted. (People v. White (2014) 230 Cal.App.4th 305, 317 (cleaned up).)

Good Tidings disputes that Sean Thomas was properly hired as the listing agent for sale of the Church Building and asserts that Thomas failed to perform due diligence to determine Pastor Grier’s authority to enter contracts on behalf of Good Tidings. (POSS No. 47.) Further, Good Tidings disputes Defendants’ claim that it lacks evidence as to Thomas’ alleged “conscious decision” to participate in Pastor Grier’s alleged wrongful activity “with knowledge of the object to be attained” because Thomas regarded Good Tidings as his client but did not act to determine whether Pastor Grier actually carried agent authority to enter contracts on behalf of Good Tidings. (POSS No. 48.)

Plaintiff’s aiding and abetting claim requires determination of Pastor Grier’s actual authority by a trier of fact.

5. Seventh Cause of Action for Violation of Business and Professions Code § 17200 et seq.

By proscribing any unlawful business practice, section 17200 borrows violations of other laws and treats them as unlawful practices that the unfair competition law makes independently actionable. ... The statutory language referring to any unlawful, unfair, or fraudulent practice makes clear that a practice may be deemed unfair even if not specifically proscribed by some other law. Because Business and Professions Code section 17200 is written in the disjunctive, it establishes three varieties of unfair competition—acts or practices which are unlawful, or unfair, or fraudulent. In other words, a practice is prohibited as “unfair” or “deceptive” even if not “unlawful” and vice versa. (Cel-Tech Communications, Inc. v. Los Angeles Cellular Telephone Co. (1999) 20 Cal.4th 163, 180 (cleaned up).)

The Court finds triable issues of material fact as to the Seventh Cause of Action because triable issues of material fact have been found under the Third, Fourth, and Sixth Causes of Action of Good Tidings’ First Amended Complaint.

The elements of a claim for professional negligence are: (1) the duty of the professional to use such skill, prudence, and diligence as other members of his profession commonly possess and exercise; (2) a breach of that duty; (3) a proximate causal connection between the negligent conduct and the resulting injury; and (4) actual loss or damage resulting from the professional's negligence. While negligence is ordinarily a question of fact, the existence of a duty is generally a question of law that may be addressed by demurrer. (Paul v. Patton (2015) 235 Cal.App.4th 1088, 1095 (cleaned up).)

· whether Defendants’ duties to Good Tidings were properly encapsulated by the Commercial and Residential Income Listing Agreement (“Listing Agreement”) Defendants entered with Robert E. Grier Sr. on July 7, 2018 and the Commercial Property Purchase Agreement (“Purchase Agreement”) Robert E. Grier, Sr. entered with Pentecostal Church of God for the sale of the Church Building on August 16, 2018;

· whether Pastor Grier enjoyed the authority to enter such an agreement with Defendants on behalf of Good Tidings; and

· whether the August 31, 2018 Cease and Desist Letter to Defendants from Thris Van Taylor, an attorney purporting to represent Good Tidings, imposed a duty on Defendants to discern whether Pastor Grier had the legal authority to enter into a binding sales contract on behalf of Good Tidings. (POSS, Nos. 5-10, 23-28, 30-34.)

Defendants argue that the internal Good Tidings dispute about who served as pastor of the church with legal authority to enter contracts “is not material to the central argument animating the MSJ: that Thomas, the listing agent for the sale of the Church Building, had no duty to (i) adjudicate the alleged dispute between the pastors; or (ii) take affirmative action upon the receipt of a cease-and-desist letter (the “Cease-and-Desist Letter”) from an attorney purporting to represent the Church.” (Reply, p. 2:8-12.) A more accurate restatement of this question for the Eighth Cause of Action asks whether Defendants enjoyed any professional duty imposed by statute or contract to investigate whether Pastor Grier had legal authority to sell the Church Building once they received the Cease-and-Desist Letter on August 31, 2018. Once Defendants received the Cease-and-Desist Letter, it was clear that others purporting to control Good Tidings opposed the Church Buildings’ sale.

The central question in this case is whether Pastor Grier possessed agent authority to enter contracts for Good Tidings. Defendants may not reduce the scope of their professional duties to those imposed by contracts Pastor Grier entered while ignoring whether or not he had the authority to enter into those contracts on behalf of Good Tidings. While the Listing Agreement states that a real estate broker is qualified to advise on real estate issues, but not qualified to provide legal or tax advice, the issue posed by Pastor Grier’s questionable authority is not legal advice to Good Tidings but rather the certainty that any real estate contracts with which Defendants assist Good Tidings are contracts Good Tidings wishes to enter. (Defendants’ Separate Statement (“SS”), No. 10.) The Court finds triable issues of material fact as to whether Defendants had a professional duty to discern whether Pastor Grier had the authority to represent Good Tidings because the scope of Defendants’ professional duties were influenced by the question of Pastor Grier’s agent authority.

Defendants EJT Holdings, Inc. and Sean Thomas’ Motion for Summary Adjudication of Plaintiff Good Tidings Baptist Church’s Third Cause of Action for Unjust Enrichment is DENIED.

Defendants EJT Holdings, Inc. and Sean Thomas’ Motion for Summary Adjudication of Plaintiff Good Tidings Baptist Church’s Fourth Cause of Action for Breach of Fiduciary Duty is DENIED.

Defendants EJT Holdings, Inc. and Sean Thomas’ Motion for Summary Adjudication of Plaintiff Good Tidings Baptist Church’s Fifth Cause of Action for Accounting is MOOT.

Defendants EJT Holdings, Inc. and Sean Thomas’ Motion for Summary Adjudication of Plaintiff Good Tidings Baptist Church’s Sixth Cause of Action for Aiding and Abetting Conversion is DENIED.

Defendants EJT Holdings, Inc. and Sean Thomas’ Motion for Summary Adjudication of Plaintiff Good Tidings Baptist Church’s Seventh Cause of Action for Violation of Business and Professions Code § 17200 et seq. is DENIED.

Defendants EJT Holdings, Inc. and Sean Thomas’ Motion for Summary Adjudication of Plaintiff Good Tidings Baptist Church’s Eighth Cause of Action for Professional Negligence is DENIED.