Judge Michael P. Linfield, Case Number: 22STCV11579, Date: 2023-10-16 Tentative Ruling

Judge: Michael P. Linfield, Case: 22STCV11579, Date: 2023-10-16 Tentative Ruling

Resp. Party: Defendants Restaurant Design Studio Corp. and Heriberto Camacho

SUBJECT: Motion to Compel Further Responses to Special Interrogatory Nos. 2, 7, 12, 16, and 19 and Request for Monetary Sanctions

Resp. Party: Defendants Restaurant Design Studio Corp. and Heriberto Camacho

Moving Party: Defendants Restaurant Design Studio Corp. and Heriberto Camacho

Resp. Party: Plaintiffs Joe Maez, Hunter Maez, and Maez Restaurant Group LLC

The Motion to Quash is GRANTED. The subpoena issued to Non-Party Bank of America is QUASHED.

The Parties are ORDERED to meet and confer regarding production of sufficient documents to show the required information and/or a stipulation as to the required information.

The Further SROGs Motion is GRANTED. Defendants shall provide further responses to the SROGs at issue within seven (7) days of the issuance of this Order.

Attorney’s fees and costs are AWARDED in favor of Plaintiff Maez Restaurant Group LLC and against Defendant Restaurant Design Studio Corp. in the amount of $3,835.00. Defendants’ Request for Sanctions is DENIED.

The Motion for Summary Adjudication is GRANTED in part. Summary adjudication is GRANTED to the fifth cause of action in the First Amended Verified Complaint, and to the second and third affirmative defenses in the Verified Answer, in favor of Plaintiff Maez Restaurant Group LLC and against Defendant Restaurant Design Studio Corp. Summary adjudication is DENIED to the first cause of action in the First Amended Verified Complaint.

On April 5, 2022, Plaintiffs Joe Maez, Hunter Maez, and Maez Restaurant Group LLC filed their Verified Complaint against Defendants Heriberto Camacho, Jr. and Restaurant Design Studio Corp. on causes of action arising from Defendants’ renovation of Plaintiffs’ property.

On November 7, 2023, Plaintiffs filed their First Amended Verified Complaint (“FAC”).

On August 7, 2023, Plaintiff Maez Restaurant Group LLC filed its Motion for Summary Adjudication (“MSA”). In support of its MSA, Plaintiff Maez Restaurant Group LLC concurrently filed: (1) Declaration of Jason Riddick; (2) Declaration of Hunter Maez; (3) Declaration of Joe Maez; (4) Separate Volume of Evidence; (5) Separate Statement; (6) Request for Judicial Notice; and (7) Proof of Service.

On August 23, 2023, for each Defendant, Defense Counsel (Mark J. Skapik and Skapik Law Group) filed: (1) MC-051, Motion to be Relieved as Counsel; (2) MC-052, Declaration; and (3) MC-053, Proposed Order.

On October 13, 2023, Plaintiff Maez Restaurant Group LLC filed Motion to Compel Further Responses to Special Interrogatories Nos. 2, 7, 12, 16, and 19 and Request for Monetary Sanctions (“Further SROGs Motion”). In support of its Further SROGs Motion, Plaintiff Maez Restaurant Group LLC concurrently filed: (1) Declaration of Jason Riddick; (2) Index of Exhibits; (3) Separate Statement; and (4) Proposed Order.

On October 17, 2023, Defendants filed their Motion to Quash Subpoena for Production of Records (“Motion to Quash”). In support of their Motion to Quash, Defendants concurrently filed their Separate Statement.

On October 26, 2023, Defendants filed their Opposition to the Further SROGs Motion. In support of their Opposition to the Further SROGs Motion, Defendants concurrently filed Declaration of Mark J. Skapik. Defendants’ Opposition to the Further SROGs Motion includes a Request for Sanctions.

On October 27, 2023, Defendants filed their Opposition to the MSA. In support of their Opposition to the MSA, Defendants concurrently filed: (1) Declaration of Tito Camacho; and (2) Opposition to Separate Statement.

On October 27, 2023, Plaintiffs filed their Opposition to the Motion to Quash. In support of their Opposition to the Motion to Quash, Plaintiffs concurrently filed: (1) Declaration of Jason Riddick; and (2) Response to Separate Statement.

On November 2, 2023, Defendants filed their Reply regarding the Motion to Quash.

On November 2, 2023, Plaintiff Maez Restaurant Group LLC filed its Reply regarding the Further SROGs Motion.

On November 3, 2023, Plaintiff Maez Restaurant Group LLC filed its Reply regarding the MSA. In support of its Reply regarding the MSA, Plaintiff Maez Restaurant Group LLC concurrently filed: (1) Supplemental Declaration of Jason Riddick; and (2) Evidentiary Objections to Declaration of Tito Camacho.

The Court first concurrently considers the Motions to be Relieved as Counsel. The Court then consecutively considers the Motion to Quash, the Further SROGs Motion, and the MSA.

An attorney moving to be relieved as counsel under California Code of Civil Procedure section 284(2) must meet the requirements set out in California Rules of Court, rule 3.1362.

To comply with rule 3.1362, the moving party must submit the following forms: (1) Notice of Motion and Motion to be Relieved as Counsel; (2) Declaration in Support of Attorney's Motion to be Relieved as Counsel; and (3) Order Granting Attorney's Motion to be Relieved as Counsel. (Cal. Rules of Court, rule 3.1362(a), (c), (e).)

The moving party must serve the aforementioned forms on the client and all other parties who have appeared in the case. (Cal. Rules of Court, rule 3.1362(d).) Further, when the client is served by mail, the attorney's declaration must show that the client's address was confirmed within the last 30 days and how it was confirmed. (Id.)

Absent a showing of resulting prejudice, an attorney’s request for withdrawal should be granted. (People v. Prince (1968) 268 Cal.App.2d 398, 406.)

Counsel’s Motion to be Relieved as Counsel complies with all of the requirements of California Rules of Court, rule 3.1362, in that Counsel provided notice of motion and motion to be relieved as counsel, a proposed order granting attorney’s motions to be relieved as counsel, and a declaration in support of the motion to be relieved as counsel.

Defense Counsel’s declarations state that there are “[i]rreconcilable differences between the Defendants and Defendants’ current counsel of record.” (MC-052.) There is no further clarity from Defense Counsel on what these differences are or whether they require a mandatory withdrawal.

Trial is scheduled for December 18, 2023 — approximately one month from the hearing on these motions. A withdrawal at this point would pose a high risk of prejudice to Defendants, who would be unlikely to find new counsel in time to adequately represent them. Further, Defendant Restaurant Design Studio Corp. faces an even greater risk of prejudice because, aside from narrow exceptions such as in small claims court, the California Supreme Court has long held that corporations cannot represent themselves in propria persona. (Merco Constr. Eng’rs, Inc. v. Mun. Ct. (1978) 21 Cal.3d.724, 730.)

“If a subpoena requires the attendance of a witness or the production of books, documents, or other things before a court, or at the trial of an issue therein, or at the taking of a deposition, the court, upon motion reasonably made by any person described in subdivision (b), or upon the court's own motion after giving counsel notice and an opportunity to be heard, may make an order quashing the subpoena entirely, modifying it, or directing compliance with it upon those terms or conditions as the court shall declare, including protective orders. In addition, the court may make any other order as may be appropriate to protect the person from unreasonable or oppressive demands, including unreasonable violations of the right of privacy of the person.”

Courts have considerable discretion in granting and crafting protective orders. (Raymond Handling Concepts Corp. v. Super. Ct. (1995) 39 Cal.App.4th 584, 588.)

Defendants move the Court to quash the Plaintiffs’ amended subpoena for production of documents, which was issued to Non-Party Bank of America on October 11, 2023. (Motion to Quash, p. 10:18–26 and Exh. A.1.

(1) For account number 325119828230, all account opening/origination documents, including but not limited to agreements and financial statements.

(2) For account number 325119828230, all signature cards identifying all persons authorized to sign for account number 325119828230.

(3) For account number 325119828230, all bank statements (in unredacted form and reflecting all account activity), cancelled checks, all check images (front and back), deposit slips, and wire confirmations, all for the time period September 1, 2019 to the present.

(4) For account number 325119828230, all documents pertaining to wire transfers sent or received between September 1, 2019 to the present, by any person authorized to sign for the account, including but not limited to Fed Wire, CHIPS, SWIFT, or other money transfer documents (such as ACH transactions); documents (checks, debit memos, cash in tickers, wires in, etc.) reflecting the source of the funds wired out; documents (checks, credit memos, cash out tickets, wires out, etc.) reflecting the ultimate disposition within the bank of the funds wired in; and notes, memoranda, or other writings pertaining to the sending or receipt of wire transfers.

The Court already twice denied Plaintiffs’ requests for overly-broad, privacy-invasive requests for financial records. (See Minute Orders dated February 24, 2023, pp. 23–26 and June 27, 2023, pp. 9–11.)

The Court first wrote: “The Court finds that it would not be appropriate to issue an order permitting discovery into the financial condition of the Defendants. Defendants’ arguments about privacy outweigh Plaintiffs’ need to obtain the discovery requested.” (Minute Order dated February 24, 2023, p. 25.)

In its second order, the Court then wrote: “. . . the Court already denied these exact same RPDs. (Minute Order dated February 24, 2023, pp. 24–26.) . . . The new Motion to Compel does not present any argument for Plaintiff’s need to obtain the discovery outweighs Defendant’s privacy.” (Minute Order dated June 27, 2023, pp. 9–10.)

Plaintiffs argue that the discovery requested here is much more narrowly tailored than the prior requests, as the subpoena is limited to corporate bank records from a single account. (Opposition to Motion to Quash, p. 1:12–16.) Plaintiffs further argue that there is “no less intrusive means of obtaining records of how much of Plaintiffs [sic] money Camacho caused RDSC to transfer or pay out to himself or subcontractors personally, because Camacho refuses to answer any deposition questions or interrogatories concerning these topic [sic] (other than to admit that he received some of the funds and vaguely stating he paid money to subs.)” (Id. at p. 1:16–20.)

The Court disagrees with Plaintiffs’ arguments. While Plaintiffs are entitled to documents sufficient to prove punitive damages and other penalties, the subpoena requests – for the third time – are clearly overbroad and violative of Defendants’ right to privacy.

The Court notes that Defendants have not sought a protective order pursuant to Civil Code section 3295(a), nor have Defendants sought an order bifurcating trial as to the issue of punitive damages pursuant to Civil Code section 3295 (d). Plaintiffs are entitled to certain information, documents, and witnesses under Civil Code section 3295(c), prior to any court order. Defendants should understand that the Court’s privacy concerns do not diminish Plaintiffs’ rights to discover evidence necessary to present their case.

The Court GRANTS the Motion to Quash. The Court QUASHES the subpoena issued to Non-Party Bank of America.

The Court ORDERS the Parties to meet and confer regarding production of sufficient documents to show the required information and/or a stipulation as to the required information.

The Motion to Quash is GRANTED. The subpoena issued to Non-Party Bank of America is QUASHED.

The Parties are ORDERED to meet and confer regarding production of sufficient documents to show the required information and/or a stipulation as to the required information.

On receipt of a response to form interrogatories, special interrogatories, and/or demand requests, the propounding and/or demanding party “may move for an order compelling further response” if: (1) the response is evasive or incomplete; (2) the representation of inability to comply is inadequate, incomplete, or evasive; or (3) the objection is without merit or too general. (Code Civ. Proc., §§ 2030.300, subd. (a), 2031.310, subd. (a).)

The court shall impose monetary sanctions against any party, person, or attorney who unsuccessfully makes or opposes a motion to compel further interrogatories and/or a motion to compel further production of documents, unless the Court finds that the one subject to sanction acted with substantial justification or that other circumstances make the imposition of the sanction unjust. (Code Civ. Proc., §§ 2030.300, subd. (d), 2031.310, subd. (h).)

Plaintiff Maez Restaurant Group LLC moves the Court to: (1) order Defendant Restaurant Design Studio Corp. to provide further verified responses to special interrogatories (“SROGs”) 2, 7, 12, 16, and 19; and (2) award monetary sanctions in favor of Plaintiff Maez Restaurant Group LLC and against Defendant Restaurant Design Studio Corp. and Defense Counsel, jointly and severally, in the amount of $4,681.00. (Further SROGs Motion, p. 8:14–20.)

Defendants oppose the Further SROGs Motion, arguing: (1) that the motion should be denied because Plaintiffs have not satisfied the requirements of Civil Code section 3295(c); (2) that Plaintiffs have not proven a substantial likelihood of prevailing on their claim pursuant to Penal Code section 496(a); and (3) that Plaintiffs cannot establish that the requested financial documents are fundamental to their case. (Opposition to Further SROGs Motion, pp. 7:3–4, 7:13–14, 10:24–25.)

In its Reply, Plaintiff Maez Restaurant Group LLC argues: (1) that the information requested in the SROGs must be provided; (2) that Civil Code section 3295, subdivision (c) does not apply because the interrogatories do not seek to ascertain the financial condition of either Defendant nor probe the “profits gained by any Defendant on account of the Wrongful Course of Conduct”; and (3) that Defendant Restaurant Design Studio Corp. has waived its privacy objections. (Reply regarding Further SROGs Motion, pp. 1:12–20, 4:7–9, 6:8.)

In YOUR verified response to Requests For Admission No. 17, YOU admitted “that RESTAURANT DESIGN STUDIO CORP. paid Tito Camacho some of the money provided to RESTAURANT DESIGN STUDIO CORP by MAEZ RESTAURANT GROUP LLC.” As to the monies that plaintiff MAEZ RESTAURANT GROUP LLC paid to defendant RESTAURANT DESIGN STUDIO CORP. and that defendant RESTAURANT DESIGN STUDIO CORP. in turn paid to defendant TITO CAMACHO, describe each transfer of such monies through indicating the last four digits of the account number of the transferor account, and the date, FORM and amount of the transfer.

As to each bank account of defendant RESTAURANT DESIGN STUDIO CORP. to which it deposited the monies that plaintiff MAEZ RESTAURANT GROUP LLC tendered to defendant RESTAURANT DESIGN STUDIO CORP. RELATED TO 217 W. Bonita Avenue, San Dimas, California 91773, describe each withdrawal or other subtraction of such monies (that plaintiff MAEZ RESTAURANT GROUP LLC tendered to defendant RESTAURANT DESIGN STUDIO CORP.) from such accounts during the RELEVANT PERIOD [May 9, 2019 to the present] that constituted a shareholder distribution through indicating the date, the FORM, and the amount of each withdrawal or other subtraction of monies.

As to each bank account of defendant RESTAURANT DESIGN STUDIO CORP. to which it deposited the monies that plaintiff MAEZ RESTAURANT GROUP LLC tendered to defendant RESTAURANT DESIGN STUDIO CORP. RELATED TO 217 W. Bonita Avenue, San Dimas, California 91773, describe each withdrawal or other subtraction of monies from such accounts during the RELEVANT PERIOD [May 9, 2019 to the present] for purposes of tendering same to Joseph Zang in connection with materials, equipment or services RELATED TO 217 W. Bonita Avenue, San Dimas, California 91773, through indicating the date, the FORM, and the amount of each withdrawal or other subtraction of monies.

As to each bank account of defendant RESTAURANT DESIGN STUDIO CORP. to which it deposited the monies that plaintiff MAEZ RESTAURANT GROUP LLC tendered to defendant RESTAURANT DESIGN STUDIO CORP. RELATED TO 217 W. Bonita Avenue, San Dimas, California 91773, describe each withdrawal or other subtraction of monies from such accounts during the RELEVANT PERIOD [May 9, 2019 to the present] for purposes of tendering same to Fred Tagudar in connection with materials, equipment or services RELATED TO 217 W. Bonita Avenue, San Dimas, California 91773, through indicating the date, the FORM, and the amount of each withdrawal or other subtraction of monies.

As to each bank account of defendant RESTAURANT DESIGN STUDIO CORP. to which it deposited the monies that plaintiff MAEZ RESTAURANT GROUP LLC tendered to defendant RESTAURANT DESIGN STUDIO CORP. RELATED TO 217 W. Bonita Avenue, San Dimas, California 91773, describe each withdrawal or other subtraction of such monies (that plaintiff MAEZ RESTAURANT GROUP LLC tendered to defendant RESTAURANT DESIGN STUDIO CORP.) from such accounts during the RELEVANT PERIOD [May 9, 2019 to the present] for purposes of tendering same to Ricardo Naves in connection with materials, equipment or services RELATED TO 217 W. Bonita Avenue, San Dimas, California 91773, through indicating the date, the FORM, and the amount of each withdrawal or other subtraction of monies.

These SROGs only request specific information about money that went from Defendant Restaurant Design Studio Corp. to (a) Defendant Camacho, (b) shareholders, (c) Joseph Zang, (d) Fred Tagudar, and/or (e) Ricardo Naves. The information requested – the amount of the transfer, the date of the transfer, the form of the transfer, the last four digits of account number from which the transfer is made, and the person to which the transfer is made – is germane to the issues in this matter. The disclosure of this information to Plaintiffs does not unnecessarily invade Defendants’ privacy.

Unlike other discovery requests denied earlier this year and the subpoena considered previously in this Order, these five SROGs are narrowly tailored.

Further, Plaintiff Maez Restaurant Group LLC correctly notes that this information is not prohibited by Civil Code section 3295(c). This is not information about Defendants’ financial condition; this is information narrowly focused on financial transfers between Defendants, and between Defendant Restaurant Design Studio Corp. and a limited, specified group of non-parties.

Even if this information were covered by Civil Code section 3295(c), the court finds that Plaintiff Maez Restaurant Group LLC has established that there is a substantial probability that Plaintiffs will prevail on their claims pursuant to Civil Code section 3294. (Civ. Code, § 3295, subd. (c).) This finding shall not be considered to be a determination on the merits of the claim or any defense thereto and shall not be given in evidence or referred to at the trial. (Ibid.)

The Court GRANTS the Further SROGs Motion. Defendants shall provide further responses to the SROGs at issue within seven (7) days of the issuance of this Order.

Plaintiff Maez Restaurant Group LLC requests monetary sanctions against Defendant Restaurant Design Studio Corp. and Defense Counsel, jointly and severally. (Further SROGs Motion, p. 8:14–20.)

Defendants request monetary sanctions against Plaintiffs. (Opposition to Further SROGs Motion, p. 11:22–27.)

The Court does not have sufficient evidence before it that would indicate Defendant Restaurant Design Studio Corp. or Defense Counsel acted with substantial justification or that other circumstances make the imposition of a monetary sanction unjust. (Code Civ. Proc., §§ 2030.300, subd. (d), 2031.310, subd. (h).) Thus, the Court must impose a monetary sanction on them. (Ibid.)

It is not uncommon for courts to compare opposing counsel’s fees to help determine whether the moving party’s fees are reasonable. That is because a “comparative analysis of each side’s respective litigation costs may be a useful check on the reasonableness of any fee request.”¿¿(Mountjoy v. Bank of Am., N.A.¿(2016) 245 Cal.App.4th 266, 273, 281, quoting Donahue v. Donahue¿(2010) 182 Cal.App.4th 259, 272.)¿

“[T]here is one particularly good indicator of how much time is necessary [for the purpose of determining reasonableness of attorneys’ fees] . . . and that is how much time the other side’s lawyers spent. . . . [S]uch a comparison is a useful guide in evaluating the appropriateness of time claimed. If the time claimed by the prevailing party is of a substantially greater magnitude than what the other side spent, that often indicates that too much time is claimed. Litigation has something of the tennis game, something of war, to it; if one side hits the ball, or shoots heavy artillery, the other side necessarily spends time hitting the ball or shooting heavy artillery back.” (Democratic Party of Washington State v. Reed (9th¿Cir. 2004) 388 F.3d 1281, 1287.)

Here, Plaintiffs’ Counsel requested $4,681.00 in attorney’s fees and costs, based on twelve hours of work at $385.00 per hour, plus $61.00 in costs. (Decl. Riddick re: Further SROGs Motion, ¶ 13.)

In contrast, Defense Counsel requested $6,195.00 in attorney’s fees and costs, based on twenty-one hours of work at $295.00 per hour. (Decl. Skapik re: Opposition to Further SROGs Motion, ¶ 15.) Subtracting the eight hours listed for the Motion to Quash, defense counsel is requesting attorney's fees of $3,835.00 for this motion.

While the Court might normally think that $3,835.00 is excessive, the Parties’ Counsel appear to believe that this is an appropriate amount.

The Court AWARDS attorney’s fees and costs in favor of Plaintiff Maez Restaurant Group LLC and against Defendant Restaurant Design Studio Corp. and Defense Counsel, jointly and severally, in the amount of $3,835.00.

The Further SROGs Motion is GRANTED. Defendants shall provide further responses to the SROGs at issue within seven (7) days of the issuance of this Order.

Attorney’s fees and costs are AWARDED in favor of Plaintiff Maez Restaurant Group LLC and against Defendant Restaurant Design Studio Corp. in the amount of $3,835.00.

Plaintiff Maez Restaurant Group LLC filed objections to Defendants’ evidence. The following are the Court’s rulings on these objections.

Objection
1	SUSTAINED
2	SUSTAINED

Plaintiff Maez Restaurant Group LLC requests that the Court take judicial notice of Permit Number BD2228892, issued by the City of San Dimas Department of Building and Safety on May 9, 2022.

The Court GRANTS judicial notice of this item. However, “[w]hile courts take judicial notice of public records, they do not take notice of matters stated therein.” (Herrera v. Deutsche Bank Nat’l Trust Co. (2011) 196 Cal.App.4th 1366, 1375, citing Love v. Wolf (1964) 226 Cal.App.2d 378, 403.) “When judicial notice is taken of a document, however, the truthfulness and proper interpretations of the document are disputable.” (StorMedia Inc. v. Super. Ct. (1999) 20 Cal.4th 449, fn. 9, citing Joslin v. H.A.S. Ins. Brokerage (1986) 184 Cal.App.3d 369, 374.)

“A party may move for summary judgment in an action or proceeding if it is contended that the action has no merit or that there is no defense to the action or proceeding. The motion may be made at any time after 60 days have elapsed since the general appearance in the action or proceeding of each party against whom the motion is directed or at any earlier time after the general appearance that the court, with or without notice and upon good cause shown, may direct.” (Code Civ. Proc., § 437c, subd. (1)(a).)

“[T]he party moving for summary judgment bears the burden of persuasion that there is no triable issue of fact and that he is entitled to judgment as a matter of law. That is because of the general principle that a party who seeks a court’s action in his favor bears the burden of persuasion thereon. There is a triable issue of material fact if, and only if, the evidence would allow a reasonable trier of fact to find the underlying fact in favor of the party opposing the motion in accordance with the applicable standard of proof.” (Aguilar v. Atl. Richfield Co. (2001) 25 Cal.4th 826, 850, citation omitted.)

“[T]he party moving for summary judgment bears an initial burden of production to make a prima facie showing of the nonexistence of any triable issue of material fact; if he carries his burden of production, he causes a shift, and the opposing party is then subjected to a burden of production of his own to make a prima facie showing of the existence of a triable issue of material fact.” (Aguilar, supra, at p. 850; Smith v. Wells Fargo Bank, N.A. (2005) 135 Cal.App.4th 1463, 1474, [applying the summary judgment standards in Aguilar to motions for summary adjudication].)

“On a summary judgment motion, the court must therefore consider what inferences favoring the opposing party a factfinder could reasonably draw from the evidence. While viewing the evidence in this manner, the court must bear in mind that its primary function is to identify issues rather than to determine issues. Only when the inferences are indisputable may the court decide the issues as a matter of law. If the evidence is in conflict, the factual issues must be resolved by trial.” (Binder v. Aetna Life Ins. Co. (1999) 75 Cal.App.4th 832, 839, citation omitted.)

“The trial court may not weigh the evidence in the manner of a fact finder to determine whose version is more likely true. Nor may the trial court grant summary judgment based on the court's evaluation of credibility.” (Binder, supra, at p. 840, citations omitted; see also Weiss v. People ex rel. Dep’t of Transp. (2020) 9 Cal.5th 840, 864 [“Courts deciding motions for summary judgment or summary adjudication may not weigh the evidence but must instead view it in the light most favorable to the opposing party and draw all reasonable inferences in favor of that party”].)

“On a motion for summary adjudication, the trial court has no discretion to exercise. If a triable issue of material fact exists as to the challenged causes of action, the motion must be denied. If there is no triable issue of fact, the motion must be granted.” (Fisherman's Wharf Bay Cruise Corp. v. Super. Ct. (2003) 114 Cal.App.4th 309, 320, citation omitted.)

Plaintiff Maez Restaurant Group LLC moves for summary adjudication in favor of Plaintiff Maez Restaurant Group LLC and against Defendant Restaurant Design Studio Corp. on the following five issues:

(1) the first cause of action for breach of contract, regarding the construction contract;

(2) the first cause of action for breach of contract, regarding the restaurant equipment contract;

(3) the fifth cause of action for violation of Business and Professions Code section 7031;

To state a cause of action for breach of contract, a plaintiff must be able to establish “(1) the existence of the contract, (2) plaintiff’s performance or excuse for nonperformance, (3) defendant’s breach, and (4) the resulting damages to the plaintiff.” (Oasis W. Realty, LLC v. Goldman (2011) 51 Cal.4th 811, 821.)

If a breach of contract claim “is based on alleged breach of a written contract, the terms must be set out verbatim in the body of the complaint or a copy of the written agreement must be attached and incorporated by reference.” (Harris v. Rudin, Richman & Appel (1999) 74 Cal.App.4th 299, 307.)

“In an action based on a written contract, a plaintiff may plead the legal effect of the contract rather than its precise language.” (Constr. Protection Servs., Inc. v. TIG Specialty Ins. Co. (2002) 29 Cal.4th 189, 198–199.)

Plaintiff Maez Restaurant Group LLC claims that it is entitled to summary adjudication of its first cause of action for breach of contract, on both the construction contract and the restaurant equipment contract. (MSA, p. 13:1–19.)

Plaintiff Maez Restaurant Group LLC has: (1) submitted a copy of the alleged construction contract (Separate Volume of Evidence, Exh. 6); (2) submitted a copy of the alleged restaurant equipment contract; (3) provided declaratory evidence that these are valid contracts (Decl. Joe Maez, ¶¶ 3–4); (4) provided declaratory and documentary evidence that Plaintiffs performed under the contracts (Decl. Joe Maez, ¶¶ 5–10; Separate Volume of Evidence, Exhs. 8–10); (5) provided declaratory evidence that Defendants did not perform under the contracts (Decl. Joe Maez, ¶¶ 13–14; Decl. Hunter Maez, ¶ 4); and (6) provided documentary evidence of Plaintiffs’ damages (Separate Volume of Evidence, Exhs. 9–10).

Defendants argue: (1) that Plaintiffs did not prove with sufficient evidence that the Parties entered into a contract, and thus the burden has not shifted to Defendants; (2) that Plaintiffs did not prove with sufficient evidence that they performed their duties pursuant to the contract, and thus the burden has not shifted to Defendants; (3) that there is evidence Plaintiffs are actually the ones who breached the contracts because they need to have a building plan and a building permit, neither of which they had when they fired Defendants; (4) that there is a triable issue of material fact as to whether Defendants’ breach was a substantial factor in causing damages to Plaintiffs; and (5) that Plaintiffs entirely caused their own harms. (Opposition to MSA, pp. 7:4–28, 8:1–27.)

Plaintiffs have met their initial burden of proof regarding the first cause of action for breach of contract, including that there were contracts and that Plaintiffs performed under the contracts. Further, Defendants submit evidence that there were in fact contracts between the Parties and that Plaintiffs had paid Defendants. (Decl. Camacho, ¶¶ 2, 5–6, 8, 11.)

However, Defendant Heriberto Camacho declares that he could not perform under the construction contract or the equipment purchasing contract because the permits had not yet been issued and “[i]n order to conduct construction work on Joe and Hunter Maez’s restaurant, permits had to be issued by the City of San Dimas.” (Decl. Camacho, ¶¶ 9, 11.) Defendant Heriberto Camacho further declares that “it was understood by all parties to the restaurant equipment proposal that there was no need to order the equipment under this proposal until the plans were approved”. (Id. at ¶ 6.)

According to Defendant Heriberto Camacho, there were multiple contracts and/or proposals: (1) a “contract” for designing and planning the construction and remodel of the interior of a restaurant which was paid in full by Joe Maez and Hunter Maez (Decl. Camacho, ¶ 2); (2) a “proposal” for the actual construction of the interior of that restaurant which apparently became a “contract” that Defendant Heriberto Camacho was later “fired” from around late April or early May of 2021 (Decl. Camacho, ¶¶ 3, 5, 7); (3) a “proposal” for the purchase of restaurant equipment for that restaurant (Decl. Camacho, ¶¶ 4, 6, 8); and (4) a “contract” for the design of the exterior of the restaurant, under an “oral promise that [Defendant Heriberto Camacho] would be given the construction job for the exterior of the restaurant as well” — from which Defendant Heriberto Camacho would be “fired” and “re-hired by Joe and Hunter Maez to finish the work pursuant to our oral agreement, which expanded the scope of work under the original proposal to also include exterior construction and design.” (Decl. Camacho, ¶¶ 5, 8).

While this declaratory evidence would normally be too lacking in foundation to be admissible, the issues here involve allegations of multiple oral contracts and parole evidence of such contracts. Even Plaintiff has only submitted unsigned contracts, which affirm the need for declaratory (as opposed to solely documentary) evidence.

According to the evidence submitted by Defendants, there were three contracts: (1) the contract for designing the interior of the restaurant; (2) the contract for construction of the interior of the restaurant; and (3) the contract for the design and construction of the exterior of the restaurant. According to the evidence submitted by Defendants, the restaurant equipment contract was actually just a proposal. Further, it is notable that none of the written contracts submitted include language that explicitly required Plaintiffs to obtain permits prior to any construction work was done or any restaurant equipment was purchased.

Upon considering the evidence submitted, Defendants have met their subsequent burden in demonstrating that there are triable issues of material fact regarding both the “construction contract” and the “restaurant equipment contract.”

As to the “construction contract,” triable issues of material fact include, but are not limited to: (1) what exactly the construction contract(s) was/were; (2) whether permits were required prior to any construction, or whether some construction could have begun prior to obtaining permits; (3) what exactly Plaintiffs’ damages were on these contracts; and (4) whether Plaintiffs breached these contracts first by firing Defendants before they could perform on these contracts.

As to the “restaurant equipment contract,” triable issues of material fact include, but are not limited to: (1) whether there was actually a contract for the purchase of restaurant equipment; and (2) whether Plaintiffs suffered any damages under this contract.

The Court DENIES the Motion for Summary Adjudication as to the first cause of action for breach of contract.

“Except as provided in subdivision (e), no person engaged in the business or acting in the capacity of a contractor, may bring or maintain any action, or recover in law or equity in any action, in any court of this state for the collection of compensation for the performance of any act or contract where a license is required by this chapter without alleging that they were a duly licensed contractor at all times during the performance of that act or contract regardless of the merits of the cause of action brought by the person, except that this prohibition shall not apply to contractors who are each individually licensed under this chapter but who fail to comply with Section 7029.” (Bus. & Prof. Code, § 7031, subd. (a).)

“Except as provided in subdivision (e), a person who utilizes the services of an unlicensed contractor may bring an action in any court of competent jurisdiction in this state to recover all compensation paid to the unlicensed contractor for performance of any act or contract.” (Bus. & Prof. Code, § 7031, subd. (b).)

“If licensure or proper licensure is controverted, then proof of licensure pursuant to this section shall be made by production of a verified certificate of licensure from the Contractors State License Board which establishes that the individual or entity bringing the action was duly licensed in the proper classification of contractors at all times during the performance of any act or contract covered by the action. Nothing in this subdivision shall require any person or entity controverting licensure or proper licensure to produce a verified certificate. When licensure or proper licensure is controverted, the burden of proof to establish licensure or proper licensure shall be on the licensee.” (Bus. & Prof. Code, § 7031, subd. (d).)

“The judicial doctrine of substantial compliance shall not apply under this section where the person who engaged in the business or acted in the capacity of a contractor has never been a duly licensed contractor in this state. However, notwithstanding subdivision (b) of Section 143, the court may determine that there has been substantial compliance with licensure requirements under this section if it is shown at an evidentiary hearing that the person who engaged in the business or acted in the capacity of a contractor (1) had been duly licensed as a contractor in this state prior to the performance of the act or contract, (2) acted reasonably and in good faith to maintain proper licensure, and (3) acted promptly and in good faith to remedy the failure to comply with the licensure requirements upon learning of the failure.” (Bus. & Prof. Code, § 7031, subd. (e).)

Plaintiff Maez Restaurant Group LLC argues: (1) that Defendants were never licensed contractors; (2) that Defendants took Plaintiff Maez Restaurant Group LLC’s $125,000.00 deposit; (3) never performed construction work; and (4) did not refund the money. (MSA, p. 12:14–23.)

Plaintiff Maez Restaurant Group LLC provides declaratory and documentary that: (1) there was a construction contract; (2) that Plaintiff Maez Restaurant Group LLC paid Defendants $125,000.00; (3) that Defendants did not perform construction work; and (4) that Defendants did not return the money. In addition, Plaintiff Maez Restaurant Group LLC submits to the Court Defendants’ requests for admissions, which among other things include admissions that Defendant Restaurant Design Studio Corp. deposited hundreds of thousands of dollars in checks from Plaintiff Maez Restaurant Group LLC. (Supplemental Decl. Riddick, Exh. A.)

Further, “[w]hen licensure or proper licensure is controverted, the burden of proof to establish licensure or proper licensure shall be on the licensee.” (Bus. & Prof. Code, § 7031, subd. (d).)

Plaintiff Maez Restaurant Group LLC meets its initial burden as to the fifth cause of action for violation of Business and Professions Code section 7031.

Defendants argue in response: (1) that there can be no violation of Business and Professions Code section 7031 because Defendants were fired before any construction work could take place; and (2) that summary adjudication is not appropriate here because adjudication on this claim of damages would wholly dispose of the cause of action. (Opposition to MSA, p. 9:5–13.) Notably, Defendants do not: (1) provide any proof of having ever been licensed; (2) dispute that they received $125,000.00 from Plaintiff Maez Restaurant Group LLC; or (3) dispute that they have not returned the $125,000.00.

First, the statute does not require that any work actually take place before an action can be brought in court. Rather, the text of the statute clearly allows “a person who utilizes the services of an unlicensed contractor . . . to recover all compensation paid to the unlicensed contractor for performance of any act or contract.” (Bus. & Prof. Code, § 7031, subd. (b).) In this situation, where Plaintiff Maez Restaurant Group LLC paid Defendants $125,000.00 for the performance construction work that they were not licensed to do, Plaintiff Maez Restaurant Group LLC is entitled to recover all of that compensation paid.

Second, Defense Counsel misrepresents to the Court what is allowed by the Code of Civil Procedure section 437c. (Opposition to MSA, p. 9:9–13 [mistakenly referred to by defense counsel also mistakenly as the Civil Code rather than the Code of Civil Procedure.]) The statute clearly allows a party to “move for summary adjudication as to one or more causes of action within an action . . . . 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.” (Code Civ. Proc., § 437c, subd. (f)(1), emphasis added.) Contrary to Defense Counsel’s argument, subdivision (t) – which requires, among other things, a joint stipulation from the Parties stating the issue or issues to be adjudicated – is not at issue here. Even if it were, the text of that subdivision explicitly notes that “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”. (Code Civ. Proc., § 437c, subd. (t), emphasis added.) Every definition of “may” means that the act is allowed, not that it is prohibited.

Defendants have not met their subsequent burden as to the fifth cause of action.

The Court GRANTS summary adjudication on the fifth cause of action for violation of Business and Professions Code section 7031 in favor of Plaintiff Maez Restaurant Group LLC and against Defendant Restaurant Design Studio Corp.

Plaintiff Maez Restaurant Group LLC moves for summary adjudication on Defendants’ affirmative defenses for statute of frauds and statute of limitations. (MSA, pp. 13:21–22, 14:8–9.)

Defendants do not oppose summary adjudication on these two affirmative defenses. (Opposition to MSA, p. 9:2–4.)

The Court GRANTS summary adjudication on the second and third affirmative defenses, for statute of frauds and statute of limitations, respectively, in favor of Plaintiff Maez Restaurant Group LLC and against Defendant Restaurant Design Studio Corp.

Summary adjudication is GRANTED to the fifth cause of action in the First Amended Verified Complaint, and to the second and third affirmative defenses in the Verified Answer, in favor of Plaintiff Maez Restaurant Group LLC and against Defendant Restaurant Design Studio Corp.

Summary adjudication is DENIED to the first cause of action in the First Amended Verified Complaint.