Judge: Olivia Rosales, Case: 21NWCV00587, Date: 2022-10-04 Tentative Ruling

Case Number: 21NWCV00587    Hearing Date: October 4, 2022    Dept: SEC

NORTH MILL EQUIPMENT FINANCE LLC v. JEYLIM INVESTMENTS, LLC, et al.

CASE NO.:  21NWCV00587

HEARING:  10/4/22 @ 1:30 PM

 

#6

TENTATIVE RULING

 

Plaintiff North Mill Equipment Finance LLC’s motion for summary judgment or in the alternative summary adjudication of issues is DENIED. 

 

Opposing Party to give NOTICE.

 

 

Plaintiff North Mill Equipment Finance LLC (“North Mill”) moves for summary judgment, or in the alternative for summary adjudication pursuant to CCP § 437c.


Plaintiff North Mill’s Complaint alleges that it entered into an equipment lease agreement with Defendant Jeylim Investments, LLC dba Godtti nightclub Sports Grill on August 15, 2019.  (Complaint, ¶ 5.)  On November 20, 2020, Defendant failed to make the payments due and owing.  (Id., ¶ 7.)  Plaintiff was injuried in the sum of $97,168.24.  (Id., ¶ 8.)  Based thereon, the Complaint asserts contractual damagers  the following causes of action:

 

1.    Breach of Contract

2.    Open Book Account

3.    Account Stated

4.    Unjust Enrichment

5.    Breach of Personal Guaranty

 

A Plaintiff has met his or her burden of showing that there is no defense to a cause of action if that party has proved each element of the cause of action entitling the party to judgment on the cause of action. Once met, the burden then 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 thereto.  (CCP § 437c(p)(1).)

 

Plaintiff North Mill contends that it is entitled to summary judgment and/or adjudication of the causes of action based on the following submitted evidence:

 

·        On or about August 15, 2019, Defendants Jeylim Investments, LLC, dba Godtti Nightclub Sports Grill entered into a written Equipment Lease Agreement with Partners Capital Group, Inc.  (Plaintiff’s Separate Statement (PSS) 1.)

·        The Agreement was subsequently assigned to Plaintiff. (PSS 2)

·        Plaintiff performed all of the terms and conditions of the Agreement required to be performed by it.  (PSS 3.)

·        On or about November 20, 2020, Defendants failed to make the payment then due and owing (PSS 4) and failed to become current in the payments under the Agreement. (PSS 5)

·        Pursuant to the terms of the Agreement, Plaintiff has elected to accelerate the balance due under the Agreement, and the unpaid amount now due, owing and unpaid from Defendants to Plaintiff is the principal sum of $89,070.51, plus interest at the rate of eighteen percent per annum from November 20, 2020 (PSS 6-7), late charges in the sum of $2,522.61 (PSS 8), NSF fees in the amount of $1,040.00 (PSS 9), and attorney’s fees (PSS 18).

·        Plaintiff maintained a continuing security interest in the Collateral and related property.  (PSS 10)  Plaintiff perfected its security interest in the collateral by filing a UCC-1 Financing Statement with the California Secretary of State.  (PSS 10, Ex. 11).  By virtue of Defendant's default, Plaintiff is entitled to immediate possession of the Collateral. (PSS 11).

·        Within four years last past, Plaintiff furnished to Defendants, and each of them, at their special insistence and request, on an open book account, financing for equipment for the agreed upon value of $89,070.51, and no part of said sum has been paid. (PSS 12-13).

·        Within four years last past, an account was stated by and between Plaintiff and Defendants, wherein it was agreed that said Defendants, and each of them, were indebted to Plaintiff in the sum of $89,070.51. (PSS 14)

·        To induce Plaintiff to furnish the above-described Collateral to Defendants, on or about October 4, 2019, Defendant Jeylim Esperanza Rios executed a Guarantee in favor of Plaintiff. (PSS 15; Ex. 1.)

·        Defendant Guarantor is indebted to Plaintiff in the sum of $89,070.51, plus interest thereon at the rate of eighteen percent (18.00%) per annum from November 20, 2020, along with fees and costs (PSS 16, 17), and attorney’s fees (PSS 18).

 

In opposition, Defendant contends that the doctrine of Impossibility, or Force Majeure, forced Defendant to cease business to protect the public from Covid-19.  The State of California and the Los Angeles County Department of Public Health issued emergency orders that temporarily prohibited indoor and outdoor restaurant dining.  Further, Defendant contends that interest is not recoverable because CC § 3287(a) provides that interest is recoverable “except when the debtor is prevented by law.”

 

“[I]mpossibility means not only strict impossibility but also impracticability because of extreme and unreasonable difficulty, expense, injury, or loss involved.”  (Board of Supervisors v. McMahon (1990) 219 Cal.App.3d 286, 300.)  A defendant claiming impracticability must demonstrate that he or she made reasonable efforts to perform under the contract.  (See, e.g., Butler v. Nepple (1960) 54 Cal.2d 589, 599.)

 

Eric Herrera, Chief Executive Officer of Jeylim Investments LLC, declares that the State and County Orders prevented it from conducting business.  “Payments were made to Partners Capitol Group until the Covid 19 pandemic took absolute control of the business… in the County and State of California.  During this 2 year time of the ongoing pandemic from March of 2020 to January 2022 business stopped and the premises were closed to the public.  There was no business or business income… Defendant has timely paid all amounts due until closed as a result of the Covid 19 County orders to cease public associations for the preservation of life and the well being of the public at large.”  (Herrera Decl., ¶¶ 3-5.)

 

In reply, Plaintiff argues that Impossibility or Force Majeure was not pled in Defendant’s Answer.  However, Defendant’s 42nd Affirmative Defense pleads that Defendant’s acts and/or omissions alleged in the complaint were justified and/or excused.  If a pleading is deficient, an MSJ/MSA may be treated as a motion for judgment on the pleadings because it necessarily includes a test of the sufficiency of the pleading.  (American Airlines, Inc. v. County of San Mateo (1996) 12 Cal.4th 1110, 1118.)  This court would liberally construe that the 42nd Affirmative Defense as incorporating such defenses as Impossibility or Force Majeure. 

 

Accordingly, the court finds that triable issues exist regarding the 42nd affirmative defense; triable issues exist regarding whether interest is recoverable because Defendant was “prevented by law”; and triable issues exist regarding whether Defendant made reasonable efforts to perform under the contract (Defendant presents evidence that it paid all amounts due prior to the Order prohibiting it from operating the business).  The motion is DENIED.