Judge Randolph M. Hammock, Case 20STCV30279 2022-09-01 Tentative Ruling

Judge: Randolph M. Hammock, Case: 20STCV30279, Date: 2022-09-01 Tentative Ruling

Plaintiff DC Partners, Inc. dba Soligen 2006 (“Soligen”) alleges that Defendant Eaton Aerospace, LLC (“Eaton”) is indebted to Soligen in the amount of $183,481.06 plus interest based on component parts Soligen supplied Eaton. The operative First Amended Complaint contains causes of action for (1) Goods Sold and Delivered, (2) Account Stated, and (3) Open Book Account.

The function of a motion for summary judgment or adjudication is to allow a determination as to whether an opposing party cannot show evidentiary support for a pleading or claim and to enable an order of summary dismissal without the need for trial. Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 843. 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 Center (2005) 135 Cal.App.4th 289, 294. Thus, summary judgment is granted when, after the Court’s consideration of the evidence set forth in the papers and all reasonable inferences accordingly, no triable issues of fact exist and the moving party is entitled to judgment as a matter of law. Code Civ. Proc. § 437c(c); Villa v. McFarren (1995) 35 Cal.App.4th 733, 741.

As to each claim as framed by the Complaint, the defendant moving for summary judgment must satisfy the initial burden of proof by presenting facts to negate an essential element, or to establish a defense. Scalf v. D. B. Log Homes, Inc. (2005) 128 Cal.App.4th 1510, 1520. Courts “liberally construe the evidence in support of the party opposing summary judgment and resolve doubts concerning the evidence in favor of that party.” Dore v. Arnold Worldwide, Inc.¿(2006) 39 Cal.4th 384, 389. A motion for summary judgment must be denied where the moving party's evidence does not prove all material facts, even in the absence of any opposition Leyva v. Sup. Ct. (1985) 164 Cal.App.3d 462, 475) or where the opposition is weak. Salesguevara v. Wyeth Labs., Inc. (1990) 222 Cal.App.3d 379, 384, 387.

A defendant has met its burden of showing that a cause of action has no merit if it demonstrates the absence of any single essential element of plaintiff’s case or a complete defense to plaintiff’s action. Code Civ. Proc. § 437c(o)(2); Bacon v. Southern Cal. Edison Co. (1997) 53 Cal.App.4th 854, 858. Once the defendant moving party has met the burden, the burden shifts to the plaintiff to show via specific facts that a triable issue of material facts exists as to a cause of action or a defense thereto. § 437c(o)(2).

Where a plaintiff cannot establish an essential element of a cause of action, or where a complete defense is shown, a court must grant a motion for summary adjudication. Code Civ. Proc. § 437c(o)(1)-(2). A defendant meets its burden by showing that “one or more elements of a cause of action . . . cannot be established.” Id.; Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 853. When a defendant moves for summary judgment or adjudication on the basis of an affirmative defense, the defendant has the burden of establishing the undisputed facts support each element of the affirmative defense. Consumer Cause, Inc. v. SmileCare (2001) 91 Cal.App.4th 454, 467-68.

Plaintiff Soligen supplied Eaton with component parts for Eaton’s product called “Tiller Housing” for use in Gulstream Aerospace Corporation’s aerospace program. (UMF ¶ 1.) Eaton would send Soligen a Purchase Order; Soligen would respond with an invoice. Plaintiff alleges in the First Amended Complaint that Defendant owes $183,481.06 for unpaid goods. (FAC ¶¶ 6, 9, 12.)

At issue in this case are the following Eaton purchase orders: N757256 rev 2, N739547 rev 1, N781029, and N823163. These purchase orders correspond to the following nine (9) Soligen invoices at issue: Numbers 12348, 12365, 12366, 12367, 12368, 12384, 12385, 12386, and 12387. (UMF ¶ 6.)

Defendant has provided the Declaration of Paul Tinniste. Tinniste is a senior buyer for Eaton who was personally involved in Eaton’s dealings with Soligen. (Tinniste Decl. ¶ 2.) Defendant contends that four of these invoices—12348, 12365, 12366, and 12367—have been paid in full. (UMF 7; Tinniste Decl. ¶ 11.)

Defendant further contends that Plaintiff is not entitled to any payment on two invoices—12384 and 12387. (Id.) For invoice number 12384, this is because Plaintiff continued work after Defendant issued a stop work order. Eaton says it issued Soligen a stop work order on February 13, 2019, instructing Soligen to cease production on the component parts at issue. (UMF ¶ 5.) Soligen received the stop work order but continued working. (UMF ¶ 18.) For invoice number 12387, Defendant contends it never issued a purchase order for the parts listed in this invoice.

Finally, Defendant also says it has made partial payments on three invoices—12368, 12385, 12386—and that Plaintiff is entitled to no further payment on them. (Id.) As to number 12368, Defendant contends it never received all of the order. As to numbers 12386 and 12385, Defendant contends the amount remaining was based on work done after the February 13, 2019, stop work order.

It does not appear that Defendant has provided any direct evidence—i.e. bank statements, payment ledgers, etc.—of transactional payment history demonstrating which payments were purportedly made. The main evidence is Tinniste’s Declaration, which summarizes each transaction. Defendant also provides “exemplars” of its purchase orders, but it is not clear that they are specific to the transactions at issue. (Id., Exh. 1.)

In addition to the evidence submitted with Paul Tinniste’s Declaration, Defendant argues that Plaintiff’s factually devoid discovery responses demonstrate that Plaintiff has no evidence that it is entitled to payment. (UMF ¶¶ 10, 11.) Eaton contends it propounded discovery that “specifically requested that Plaintiff identify all facts, witnesses, and documents that support its causes of action…” (Mtn. 7: 22-23.) Soligen’s responses merely “identified the process by which invoices were submitted” but lacked “any detailed accounting, documentation, or facts to show that Plaintiff is entitled to any further payment.” (UMF ¶¶ 7, 11; Mtn. 8: 2-4.)

Based on this, it is Defendant’s position that “each Soligen invoice at issue in this case has either been paid in full, partially paid (with specific reasons for the limitation) or was issued improperly.” (Mtn. 11:3-4.) Since a right to payment or indebtedness is an essential element of each cause of action in the First Amended Complaint, Defendant argues each cause of action fails. Accordingly, based on the above evidence, Defendant has met its initial burden to establish a prima face case that Plaintiff has no right to payment. This shifts the burden to Plaintiff to establish the dispute of a material triable issue of fact.

First, Plaintiff appears to argue there are more purchase orders at issue than the four that Defendant has presented. Plaintiff says Defendant “cherry picked” these four “to mislead the Court.” (Uziel Decl. ¶ 12.) Most important, Yehoram Uziel—Plaintiff’s CEO—states that none of the 9 invoices at issue have been paid in full. (Uziel Decl. ¶ 16.) He further states that Eaton knew this fact because Uziel met with Tinniste, Benjamin Stoney, and a few others at Eaton in late 2019 “to reconcile the outstanding invoices and balance owed to Soligen.”(Id.)

Specifically, contrary to what Eaton says, Soligen disputes that invoice numbers 12348, 12365, 12366, and 12367, have been paid in full. (Compare Tinniste Decl. ¶ 11, with Uziel Decl. ¶ 22.) Rather, Soligen says there is an unpaid balance of $13,021.07 on invoice number 12348; an unpaid balance of $9,863.58 on invoice number 12365; an unpaid balance of $8,881.06 on invoice number 12366; and an unpaid balance of $3,200.00 on invoice number 12367. (DMF 7; Uziel Decl. ¶ 21; Exh. B3.)

Regarding the invoices addressing parts purportedly manufactured after the stop work order—12384, 12386, 12385—Plaintiff disagrees that it is not entitled to full payment on those invoices. Uziel acknowledges receipt of the stop work email but argues he “did not consent to comply” with the email. (DMF 5; Uziel Decl. ¶ 21.) He also states he never “indicate[d] that [he] would not charge Eaton for the parts that Eaton had ordered, or to discount any ‘remaining components.’” (Id.) Thus, Plaintiff contends invoice number 12384 has an unpaid balance of $447.30; invoice number 12386 has an unpaid balance of $9,354.10; and invoice number 12385 has an unpaid balance of $66,219.34. (DMF 7; Uziel Decl. ¶ 22.)

As to invoice 12387—while Defendant contends it never issued a purchase order for the tools listed in this invoice—Plaintiff counters that Eaton made “requests…that Soligen quote and procure such tooling.” (DMF 7; Uziel Decl. ¶ 22, ix.) Thus, Plaintiff argues there is an unpaid balance of $47,500.00 on that invoice. (Id.)

Finally, as to invoice number 12368—Defendant contends a piece was missing from the order—Plaintiff does not address the missing piece but contends there remains an unpaid balance of $5,393.93. (DMF 7; Uziel Decl. ¶ 22, v.)

Based on the above, Plaintiff has demonstrated a litany of disputes of material fact as to what has been paid, what (if anything) has been excused, and what is still owing on one or more invoices. Substantially all of the discernible evidence before this court is in the form of competing Declarations by Paul Tinniste for Defendant, and Yehoram Uziel for Plaintiff. In most ways, each party’s declaration directly contradicts the other. Courts do not weigh evidence and must “liberally construe the evidence in support of the party opposing summary judgment and resolve doubts concerning the evidence in favor of that party.” (Dore v. Arnold Worldwide, Inc.¿(2006) 39 Cal.4th 384, 389.) Accordingly, the dispute here is an issue to be resolved by a trier of fact, not this court on a motion for summary judgment.

Plaintiff’s First Amended Complaint seeks attorney’s fees incurred in bringing this action. (See Complaint, Prayer.) Parties to litigation are generally required to cover their own attorney’s fees. But where the parties have a contract that expressly permits a prevailing party to recover attorney’s fees in an action to enforce the contract, such fees are recoverable. (Civ. Code § 1717.) In support of its request for attorney’s fees, Plaintiff relies on a January 20, 2017, price quote it provided Defendant. (Golodnitska Decl. 7, Exh. F.) The quote provides pricing “[f]or 100 pcs of 563003-1 in four deliveries and 130 of Housing 56421-1 in 5 deliveries[,]” and concludes with a “Terms and Conditions” section. The T&O section includes the following provision: “Failure to Pay: In case that Soligen 2006 will be forced to collect unpaid invoices customer will be liable to collection including (but not limited to) litigation costs and attorneys fees.” (Id., Exh. F. [underlining in original].)

Code of Civil Procedure Section 437c, subdivision (f)(1) provides that “[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.” (Emphasis added.)

Civil Code section 3294 governs only claims for punitive damages—but says nothing in the way of attorney’s fees as damages. Thus, as this court and others have read section 437c, subdivision (f)(1), a “claim for damages” may be the subject of summary adjudication only when it is a claim for punitive damages under section 3294. (See DeCastro West Chodorow & Burns, Inc. v. Superior Court (1996) 47 Cal.App.4th 410, 418-42 [holding only “claim for damages” that may be summarily adjudicated without completely disposing of a cause of action is a claim for punitive damages under Civil Code section 3294].)

In short, there is no statutory authority permitting summary adjudication of a prayer for attorney’s fees, which is being requested per statute or by contract, as is in this case. Defendant has not cited any case authority purporting to show otherwise. [FN1]

Judge of the Superior Court

FN1 - This is not a situation in which the attorney’s fees are actually an item of economic damages, such as a situation in which there is a lawsuit for malicious prosecution, and the plaintiff in that case is claiming he incurred attorney’s fees in defending the underlying case in which he prevailed as a defendant. Those attorney’s fees are certainly potential economic “damages” in the malicious prosecution case. Be that as it may, it appears one could only summarily adjudicate that particular item of damages under subsection (t) of CCP §437c.

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