TENTATIVE RULING

Calendar: 2

Date: 8/26/22

Case No: 21 GDCV00845 Trial Date:    None Set 

Case Name: CAC Motors dba ZR Investment v. X3 AST Consulting, Inc., et al. 

JUDGMENT ON THE PLEADINGS

Moving Party: Defendants X3 AST Consulting, Inc., Marques Johnson, and 

Sleiman A. Timani  

Responding Party: Plaintiff CAC Motors dba ZR Investment 

Relief Requested:

Order granting Judgment on the Pleadings as to the first cause of action of the complaint for negligence per se  

CAUSES OF ACTION FROM THE Complaint  

1) Negligence Per Se (Vehicle Code section 5753)

2) Conversion 

3) Breach of Contract 

4) Fraud 

5) False Promise

6) Restitution, Unjust Enrichment 

7) Breach of Implied Warranty of Fitness for a Particular Purpose 

8) Negligent Hiring, Retention and Supervision

9) Negligence—Vicarious Liability 

 

SUMMARY OF FACTS:

Plaintiff CAC Motors dba ZR Investment brings this action against defendants X3 AST Consulting, Inc. (“X3 AST Consulting”), Sleiman A. Timani, and Marques Johnson, alleging that plaintiff is engaged in the automobile export business, and entered into a business relationship with defendant X3 AST Consulting pursuant to which plaintiff would request specific vehicles and X3 AST Consulting would locate, purchase and deliver those vehicles to plaintiff. Plaintiff alleges that defendant Timani, who is associated with X3 AST Consulting, contacted plaintiff and induced it to transfer money to defendants to secure a 2020 Mercedes Benz GL450, which was not in defendants’ possession.  The complaint alleges that after plaintiff transferred the funds for the vehicle, defendants failed to satisfy the security interest associated with the vehicle in order to authorize the release of the lienholder, so that the vehicle was repossessed by Mercedes Benz Financial Services.

ANALYSIS:

CCP § 438 establishes the procedures for moving for judgment on the pleadings, and provides, in pertinent part:

“(c)(1) The motion provided for in this section may only be made on one of the following 

grounds:...

(B) If the moving party is a defendant, that either of the following conditions exist:

(i) The court has no jurisdiction of the subject of the cause of action alleged in the complaint.

(ii) The complaint does not state facts sufficient to constitute a cause of action against that defendant.”

Subdivision (d) provides that “The grounds for the motion provided for in this section shall appear on the face of the challenged pleading or from any matter of which the court is required to take judicial notice.”  

The motion may be granted with leave to file an amended complaint, or without leave to amend, in which case, judgment may be entered in favor of the moving defendant.   CCP § 438 (h).

First Cause of Action—Negligence Per Se  

Defendants X3 AST Consulting, Sleiman A. Timani, and Marques Johnson argue that plaintiff’s cause of action for negligence per se is insufficient because the claim and remedies sought can only be brought against the “legal owner” or “lessor” of the subject vehicle.   Defendants argue that the complaint fails to allege that moving defendants were ever legal owners or lessors of the subject vehicle.  Defendants also argue that by way of plaintiff’s response to request for admissions in this matter, plaintiff has admitted that none of the moving defendants were legal owners or lessors of the subject vehicle. 

The cause of action is based on alleged violation of the statute Vehicle Code section 5753, which provides, in pertinent part:

“(a) It is unlawful for any person to fail or neglect properly to endorse, date, and deliver the certificate of ownership and, when having possession, to deliver the registration card to a transferee who is lawfully entitled to a transfer of registration….

(c)(1) Within 15 business days after receiving payment in full for the satisfaction of a security interest and a written instrument signed by the grantor of the security interest designating the transferee and authorizing release of the legal owner's interest, the legal owner shall release its security interest and mail, transmit, or deliver the vehicle's certificate of ownership to the transferee who, due to satisfaction of the security interest, is lawfully entitled to the transfer of legal ownership.

(2) If a lease provides a lessee with the option to purchase the leased vehicle, within 15 business days after receiving payment in full for the purchase, and all documents necessary to effect the transfer, the lessor shall mail, transmit, or deliver the vehicle's certificate of ownership to the transferee, who, due to purchase of the vehicle, is lawfully entitled to the transfer of legal ownership.”

[Emphasis added]. 

Defendants argue that the statutory duties relied upon are expressly applicable only to a legal owner or lessor, when there are no allegations that defendants are either of those parties with respect to the transaction. 

As pointed out by plaintiff in the opposition, the statute expressly applies to “any person” who engages in the failure to “deliver” the subject documents within the statutory periods.   The complaint, tracking subdivision (a) of the statute, specifically alleges:

“Plaintiff alleges that Defendants breached their statutory duty by failing or neglecting to properly endorse, date, and deliver the certificate of ownership to the Plaintiff.” 

[Complaint, para. 74]. 

This appears sufficient to allege a violation of the statute for purposes of a negligence per se claim.  Moreover, on its face the cause of action does not allege facts which would foreclose the possibility that defendants could be found to be owners or lessors. 

Defendant in reply argues that it would have been legally impossible for defendants to have endorsed, dated and delivered the certificate of ownership to plaintiff, because only Mercedes Benz could have done so here, and it is clear from the pleading that this party remained the lessor at all times.  This assertion is not clearly admitted in the pleading or based on matter which would directly contradict this allegation that defendants failed to properly deliver the certificate, which must be taken as true for purposes of a motion for judgment on the pleadings.      

Plaintiff in opposition cites Brasher’s Cascade Auto Auction v. Valley Auto Sales and Leasing (2004) 119 Cal.App.4th 1038, 1061, in which the court of appeal observed that Vehicle Code section 5753 made it “unlawful for ‘any person’ to fail to deliver a certificate of title to a transferee entitled to it.”  Brasher’s, at 1061.  In that case, the court of appeal noted under the language a violation of the section is a factual matter and could have in that case have applied to an auction party which impliedly authorized the sale of vehicles.  [Id.].  The reply does not address this case law.  To the extent defendants appear to argue that some measure of the statutory penalties would not be available against the moving defendants, this would not dispose of the entire cause of action, as required on a motion for judgment on the pleadings, as the cause of action for negligence per se requests not only statutory penalties but compensation for damages.  [Complaint, paras. 75, 76].  No timely motion to strike has been made.   

The statutory violation is sufficiently stated for purposes of judgment on the pleadings and the motion is denied on this ground. 

Plaintiffs also argue that plaintiff’s verified responses to Requests for Admissions confirm that defendants cannot establish that defendants violated the Vehicle Code section. 

Plaintiff argues that this is argument is essentially an improper motion for summary judgment, not brought on the full 75-day notice required for such a motion. The motion is a bit curious, as defendants refer repeatedly to the motion as a non-statutory motion for judgment on the pleadings, evidently in order to avoid the statutory requirement of meeting and conferring prior to bringing this motion.  See CCP § 439 (a) (“Before filing a motion for judgment on the pleadings pursuant to this chapter, the moving party shall meet and confer in person or by telephone with the party who filed the pleading that is subject to the motion for judgment on the pleadings for the purpose of determining if an agreement can be reached that resolves the claims to be raised in the motion for judgment on the pleadings.”) The court is does not appreciate the practice of attempting to avoid the statutory requirements applicable to a statutory motion for 

judgment on the pleadings, which has now been codified for many years, particularly a meet and confer obligation, which is designed to avoid the need for court intervention where possible.  

The motion requests that the court take judicial notice of responses to Requests for Admissions. There is authority under which on a motion for judgment on the pleadings, the court may consider admissions made by a party in discovery.  In Pang v. Beverly Hospital, Inc. (2000) 79 Cal.App.4th 986, the Second District affirmed the trial court’s treatment of a motion for summary adjudication as a motion for judgment on the pleadings, and the granting of that motion based on the sworn evidence presented by plaintiff in connection with the motion, noting that on a motion for judgment on the pleadings:

“In addition to the facts pleaded, we may consider matters that may be judicially noticed, including a party's admissions or concessions which cannot reasonably be controverted. (Evans v. California Trailer Court, Inc. (1994) 28 Cal. App. 4th 540, 548-549 [33 Cal. Rptr. 2d 646].)”

Pang, at 989-990.   

In any case, plaintiff has made no objection to the court considering the responses to requests for admissions in connection with this motion.

The requests for admissions at issue request that plaintiff “Admit that YOU have no evidence that” each defendant “ever became the registered owner of the VEHICLE,” “Admit that YOU have no evidence that” each defendant “was ever the legal owner of the VEHICLE,” and “Admit that YOU have no evidence,” that each defendant “was the lessor of the VEHICLE.”    [Boniadi Decl., Ex. A, See RFAs, Nos. 4-6, 9-11, 14-16].   Plaintiff’s response to all but one of these requests was “Admit.”   [Boniadi Decl., Ex. B, See Responses to RFAs, Nos. 4-6, 9-11, 15-16].   However, in response to RFA No. 14, “Admit that YOU have no evidence that JOHNSON ever became the registered owner of the VEHICLE,” the Response is “Deny.”  [RFA No. 14, Response to RFA No. 14].    

As discussed above, these admissions are irrelevant to the sufficiency of the pleading of the first cause of action, given that the statute applies broadly to a “any person” who fails to deliver a certificate, and these allegations are appropriately asserted.  [Complaint, para. 74].  In addition, as argued in the opposition, the admissions do not admit that defendants were not in fact at some point in time the legal owner or lessor of the subject vehicle, but essentially admit that plaintiff at the time of responding, had “no evidence” that defendant was the legal owner or lessor.  Admitting to having no evidence is not an admission that something did not in fact occur.  There is also a denial that plaintiff does not have evidence that defendant Johnson became a registered owner.  In any case, the admissions do not establish that plaintiff will be unable to prove a statutory violation, and the motion for judgment on the pleadings is denied.  

Plaintiff in opposition makes arguments that defendants were acting as a dealer without a license but does not indicate how such an argument pertains to the viability of the first cause of action for purposes of judgment on the pleadings, when the first cause of action is not based on such an alleged statutory violation, and only identifies Vehicle Code section 5753 as the basis for the alleged statutory violation.  [Complaint, paras.  72, 73, 77].    

Plaintiff in opposition also requests an award of costs against defendants, without citing to any statutory authority under which this court may award costs in connection with opposition to a motion for judgment on the pleadings.  No costs are awarded.  

RULING:

Defendants’ Motion for Judgment on the Pleadings on the Complaint is DENIED. 

UNOPPOSED Request for Judicial Notice in Support of Defendants’ Motion for Judgment on the Pleadings is GRANTED.

  

GIVEN THE CORONAVIRUS CRISIS, AND TO ADHERE TO HEALTH GUIDANCE THAT DICTATES SAFETY MEASURES, DEPARTMENT D IS ENCOURAGING AUDIO OR VIDEO APPEARANCES

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