GF Distribution, LLC v. Collective Pharm, Inc.

DEFENDANT ELEVATE CAPITAL INVESTMENTS, LLC’S MOTION FOR SUMMARY JUDGMENT, OR IN THE ALTERNATIVE, SUMMARY ADJUDICATION

 

MOVING PARTY(S): Defendant Elevate Capital Investments, LLC 

RESPONDING PARTY(S): None

STATEMENT OF MATERIAL FACTS AND/OR PROCEEDINGS:

This action arises from an alleged breach of a Settlement Agreement.  Plaintiff GF Distribution (“GF”) alleges it entered into the Agreement with Defendant Collective Pharm, Inc. (“Collective”) whereby Collective settled to pay $184,921.00.  Plaintiff further alleges that Defendant has failed to make required payments under the Agreement. Plaintiff brings claims against Collective for (1) breach of contract, (2) open book account, (3) account stated, and (4) unjust enrichment. 

On April 19, 2022, Plaintiff filed a First Amended Complaint. Plaintiff alleges that after Plaintiff obtained an Order for Right to Attach against Collective, Collective transferred its assets to Defendant Elevate Capital Investments, LLC. Plaintiff asserts claims against Collective and Elevate for (5) fraudulent transfer, (6) set aside fraudulent transfer, (7) conspiracy to defraud, and (8) injunctive relief.

Defendant Elevate now moves for summary judgment, or in the alternative, summary adjudication. Plaintiff did not file an opposition to the motion.

TENTATIVE RULING:

Defendant’s Motion for Summary Judgment is GRANTED in its entirety.

Defendant is to file a [Proposed] Judgment consistent with this Ruling.

Defendant is ordered to give notice.

DISCUSSION:

Motion for Summary Judgment

I. Legal Standard

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 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).)

II. Analysis

Defendant Elevate Capital Investments, LLC, moves for summary judgment or adjudication of the Fifth, Sixth, Seventh, and Eighth Causes of Action.

A. Fifth Cause of Action for Fraudulent Transfer; Sixth Cause of Action to Set Aside Fraudulent Transfer; and Seventh Cause of Action for Conspiracy to Defraud

First, the court must “identify the issues framed by the pleadings.” (Hinesley v. Oakshade Town Center (2005) 135 Cal.App.4th 289, 294.) Plaintiff alleges it entered into a settlement agreement with Defendant Collective Pharm whereby Collective agreed to pay $184,921.00 to Plaintiff in accordance with a payment schedule outlined in the agreement. (FAC ¶ 8.) Plaintiff alleges that Defendant failed to make all payments under the settlement agreement. (Id. ¶ 12.) Plaintiff filed the instant action against Defendant Collective on May 06, 2021, for claims arising from the alleged breach.

“Under the UFTA, ‘a transfer of assets made by a debtor is fraudulent as to a creditor, whether the creditor’s claim arose before or after the transfer, if the debtor made the transfer (1) with an actual intent to hinder, delay or defraud any creditor, or (2) without receiving reasonably equivalent value in return, and either (a) was engaged in or about to engage in a business or transaction for which the debtor’s assets were unreasonably small, or (b) intended to, or reasonably believed, or reasonably should have believed, that he or she would incur debts beyond his or her ability to pay as they became due.’ ” (Hasso v. Hapke (2014) 227 Cal.App.4th 107, 121–122, internal citations omitted.) “A transfer is not voidable against a person ‘who took in good faith and for a reasonably equivalent value or against any subsequent transferee.’ ” (Filip, supra, 129 Cal.App.4th at p. 830, internal citations omitted.)

Even where, as here, “no opposition is presented, the moving party still has the burden of eliminating all triable issues of fact.” (Wright v. Stang Mfg. Co. (1997) 54 Cal. App. 4th 1218, 1228.) Thus, the burden begins with Defendant to show that “one or more elements of a cause of action . . . cannot be established.” (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 853. 

Defendant presents evidence that it loaned Collective Pharm $245,000 on July 1, 2020, memorialized in a Secured Promissory Note. (SSUMF 1, 2.) Notably, this was the month before Plaintiff entered into the August 2020 settlement agreement with Defendant Collective Pharm. (SSUMF 8.)

Defendant presents further evidence that the First Promissory Note matured on November 15, 2021, at which point Defendant had the right to take possession of Collective Pharm’s assets. (SSUMF 7.) On January 19, 2022, Elevate initiated the foreclosure of all of Collective Pharm’s assets. (SSUMF 14.) 

A prima facie showing is one that is sufficient to support the position of the party in question. [Citation.] No more is called for.” (Aguilar v. Atl. Richfield Co. (2001) 25 Cal. 4th 826, 851 [emphasis added].) “The prima facie showing by the moving party must be such that it would, if uncontradicted, entitle the moving party to judgment as a matter of law.” (Id. at 851.)

Considering this evidence, Defendant has demonstrated that it had the right to foreclose on Collective Pharm’s assets pursuant to an antecedent secured loan.  In other words, pursuant to Defendant Collective Pharm’s breach of the loan agreement, Defendant Elevate foreclosed on Collective’s assets “in good faith and for a reasonably equivalent value.’ ” (Filip, supra, 129 Cal.App.4th at p. 830, internal citations omitted.) 

This shifts the burden to Plaintiff to establish the existence of a triable issue of material fact. By failing to oppose, Plaintiff has not met that burden. Based on the lack of a triable issue as to a fraudulent transfer, Plaintiff’s Fifth, Sixth, and Seventh causes of action fail. 

Accordingly, Defendant’s Motion for Summary Adjudication of the Fifth, Sixth, and Seventh Causes of Action is GRANTED.

B. Eighth Cause of Action for Injunctive Relief

Defendant also moves to summarily adjudicate Plaintiff’s Eighth Cause of Action for injunctive relief. “Injunctive relief is a remedy, not a cause of action.” (City of South Pasadena v. Department of Transportation (1994) 29 Cal.App.4th 1280, 1293.)  Because all claims against the moving Defendant fail, so too does the request for injunctive relief.

Accordingly, Defendant’s Motion for Summary Adjudication of the Eighth Cause of Action is GRANTED.

Defendant’s Motion for Summary Judgment is GRANTED in its entirety.

Defendant is ordered to give notice.

IT IS SO ORDERED.

Dated:   April 05, 2024 ___________________________________