Judge: Randy Rhodes, Case: 21CHCV00160, Date: 2023-03-23 Tentative Ruling
Case Number: 21CHCV00160 Hearing Date: March 23, 2023 Dept: F51
Dept. F-51¿
Date: 3/23/23
Case #21CHCV00160
¿
MOTION FOR SUMMARY
JUDGMENT
Motion Filed: 1/14/22
MOVING PARTY: Defendant Rocoso 26, LLC (“Defendant”)
RESPONDING PARTY: Plaintiff Mark Todd Hong (“Plaintiff”)
NOTICE: OK
RELIEF REQUESTED: Defendant moves for summary
judgment, or, in the alternative, summary adjudication as to all of the causes
of action in the Complaint.
TENTATIVE RULING: The motion is granted.
REQUESTS FOR JUDICIAL NOTICE: Defendant’s requests
for judicial notice (RJN) are granted.
BACKGROUND
On 3/7/19, Plaintiff purchased a
townhouse located at 18505 Mayall Street #D, Northridge, California 91324 from
Defendant for investment purposes. (Compl., ¶ 2). However, defendants allegedly
failed to disclose that renting the property was prohibited for the first two
years of ownership and restricted thereafter. (Compl., ¶¶ 1, 26.)
On 3/4/21, Plaintiff filed his
complaint against defendants Rocoso 26, LLC; Northridge Park Townhome Owners
Association, Inc., and LB Property Management, Inc., asserting causes of action
for (1) Violation of Civil Code § 4525 et seq., (2) Negligent Misrepresentation,
(3) Negligent Misrepresentation, (4) Intentional Misrepresentation, and (5) Intentional
Misrepresentation.
On 1/14/22, Defendant filed the
instant Motion for Summary Judgment, or in the Alternative, Summary
Adjudication. On 3/30/22, the Court granted Defendant’s unopposed motion. On
5/26/22, the Court entered judgment against Plaintiff. On 1/17/23, the Court
granted Plaintiff’s motion to set aside the order granting Defendant’s motion
for summary judgment. On 1/27/23, Plaintiff filed his opposition to Defendant’s
motion for summary judgment. On 3/17/23, Defendant filed its reply.
ANALYSIS
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.) Code of Civil Procedure section 437c, subdivision (c)
“requires the trial judge to grant summary judgment if all the evidence
submitted, and ‘all inferences reasonably deducible from the evidence’ and
uncontradicted by other inferences or evidence, show that there is no triable
issue as to any material fact and that the moving party is entitled to judgment
as a matter of law.” (Adler v. Manor
Healthcare Corp. (1992) 7 Cal.App.4th 1110, 1119.) “The function of the
pleadings in a motion for summary judgment is to delimit the scope of the
issues; the function of the affidavits or declarations is to disclose whether
there is any triable issue of fact within the issues delimited by the
pleadings.” (Juge v. County of Sacramento
(1993) 12 Cal.App.4th 59, 65, citing FPI
Development, Inc. v. Nakashima (1991) 231 Cal.App.3d 367, 381–382.)
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. (Code Civ. Proc., § 437c, subd. (p)(2); Scalf v. D. B. Log Homes, Inc. (2005)
128 Cal.App.4th 1510, 1519–1520.)
Once the defendant has met that
burden, the burden shifts to the plaintiff to show that a triable issue of one
or more material facts exists as to that cause of action or a defense
thereto.
To establish a triable issue of material fact, the party
opposing the motion must produce substantial responsive evidence. (Sangster v. Paetkau (1998) 68
Cal.App.4th 151, 163.) 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.)
1.
Procedural Deficiencies
As a preliminary matter,
Plaintiff’s opposition does not contain a separate statement in opposition to
Defendant’s motion, nor any evidentiary objections, nor does Plaintiff proffer
any additional evidence.
“The opposition papers shall
include a separate statement that responds to each of the material facts
contended by the moving party to be undisputed, indicating if the opposing
party agrees or disagrees that those facts are undisputed. The statement also
shall set forth plainly and concisely any other material facts the opposing
party contends are disputed. Each material fact contended by the opposing party
to be disputed shall be followed by a reference to the supporting evidence.
Failure to comply with this requirement of a separate statement may constitute
a sufficient ground, in the court’s discretion, for granting the motion.” (Code
Civ. Proc. § 437c,
suubd. (b)(3).) The California Rules of Court also require a separate statement
to be included in an opposition to a motion for summary judgment/adjudication.
(Cal. Rules. Ct., rule 3.1350(e).)
As Plaintiff has failed to include
a separate statement with his opposition papers, the Court accepts all of
Defendant’s UMFs as undisputed. Moreover, as the factual assertions made by
Plaintiff in his opposition are unsubstantiated by any additional evidence,
they lack proper foundation.
Notwithstanding the foregoing, “the
law respects form less than substance.” (Civ. Code § 3528.) Additionally, the
public policy of California favors adjudicating cases on the merits. (Elston
v. City of Turlock¿(1985) 38 Cal.3d 227, 235; Hernandez v. Superior
Court¿(2004) 115 Cal.App.4th 1242, 1246.) Accordingly, the Court exercises
its discretion against granting Defendant’s motion on this ground alone.
2.
Violation of Civil Code Section 4525
Plaintiff’s first cause of action
alleges against all defendants a violation of Civil Code section 4525. Civil
Code section 4525, subdivision (a), requires the owner of a separate interest
to provide the prospective purchaser of that interest with a copy of all
governing documents and a statement describing any rental or leasing
prohibitions of the separate interest in a common interest development, as soon
as practicable before the transfer of title or the execution of a real property
sales contract. (Civ. Code § 4525, subds. (a)(1), (9).)
“Any person who willfully
violates this article is liable to the purchaser of a separate interest that is
subject to this section for actual damages occasioned thereby and, in addition,
shall pay a civil penalty in an amount not to exceed five hundred dollars
($500). In an action to enforce this liability, the prevailing party shall be
awarded reasonable attorney’s fees.”
(Civ. Code § 4540 [emphasis added].)
Here, Defendant contends that it
did not willfully refrain from disclosing the rental restriction that the
Property was subject to under the covenants, conditions, and restrictions
(“CC&Rs”), as part of being in the Northridge Park Townhome Owners
Association, Inc. (the “Association”). (UMF No. 1.) Defendant points the Court
to evidence that it requested the documents listed in section 4525 from the
Association’s Property Management. (UMF No. 6.)
The Association’s Property Management then delivered the disclosure
package, which included the rental restrictions relating to the Property. (UMF
Nos. 8-9.) Defendant also provides evidence that it was not aware of the rental
restrictions on the Property prior to selling the same to Plaintiff, and had
multiple tenants openly rent the Subject Property during its ownership. (UMF
Nos. 13-14.) Furthermore, Defendant was not aware that the Association, through
their property manager, provided Plaintiff with an outdated copy of the CC&Rs,
but that document contained similar rent restrictions. (UMF Nos. 11, 15.)
Accordingly, Defendant has
presented sufficient evidence to establish that it did not willfully violate
section 4525. The burden is then shifted to Plaintiff to offer facts and/or
evidence to establish a triable issue of fact that Defendant willfully violated
section 4525.
Here, Plaintiff’s opposition papers
merely reiterate his allegations that Defendant provided him an outdated copy
of the CC&Rs. (Pl.’s Opp., 5:1–2.) This contention alone is insufficient to
meet Plaintiff’s responsive burden to establish a triable issue of material
fact, particularly in light of the procedural deficiencies discussed above.
Accordingly, as Defendant has
offered evidence that it did not willfully violate section 4525, and Plaintiff
has failed to meet his responsive burden to show a triable issue of material
fact, Defendant’s motion for summary adjudication as to Plaintiff’s first cause
of action is granted.
3.
Negligent Misrepresentation
Plaintiff’s second cause of action
alleges against all defendants Negligent Misrepresentation. Plaintiff’s third
cause of action alleges Negligent Misrepresentation against Defendant.
Negligent misrepresentation
requires the defendant to make false statements believing them to be true, but
without reasonable ground for such belief. (Bily v. Arthur Young & Co.
(1992) 3 Cal.4th 370, 407.) “[T]here are two causation elements in a
[misrepresentation] cause of action. First, the plaintiff’s actual and
justifiable reliance on the defendant’s misrepresentation must have caused him
to take a detrimental course of action. Second, the detrimental action taken by
the plaintiff must have caused his alleged damage.” (Beckwith v. Dahl
(2012) 205 Cal.App.4th 1039, 1062.) Here, Defendant contends that Plaintiff
cannot establish that he justifiably relied on Defendant’s misrepresentation to
his detriment.
“To establish this element of
fraud, plaintiffs must show (1) that they actually relied on the defendant's
misrepresentations, and (2) that they were reasonable in doing so.” (OCM
Principal Opportunities Fund, L.P. v. CIBC World Markets Corp. (2007) 157
Cal.App.4th 835, 863.) The element of justifiable reliance “may be decided as a
matter of law if reasonable minds can come to only one conclusion based on the
facts.” (Guido v. Koopman (1991) 1 Cal.App.4th 837, 842.) A plaintiff may be precluded from relying on
representations made by a defendant where the plaintiff “has the means at hand
for determining its truth or falsehood and resorts to such means, without
interference by the other party, and after investigation learns that the
statement was false…” (Mercer v. Elliot (1962) 208 Cal.App.2d 275, 279.)
Additionally, in determining the element of justifiable reliance, “the
knowledge, education and experience of the person claiming reliance must be
considered. (Guido, 1 Cal.App.4th at 843–844.)
Defendant contends that the
undisputed evidence shows that Plaintiff received multiple documents that put
him on notice that the rental restrictions were applicable to the
Property. (UMF Nos. 23-29.) In support,
Defendant points the Court to evidence that the rental restrictions were
included in the disclosure package that Plaintiff received before escrow closed
for the purchase of the Property. (UMF Nos. 22-26.) Plaintiff also admitted in
discovery that he received the rental restrictions before escrow closed. (UMF
No. 26.) Furthermore, Plaintiff admits that he received a document called
“Statement of Fees” which stated “See RENTAL RESTRICTIONS.” (UMF No. 27.) Moreover, Plaintiff signed a
form approving of the package of documents from the Association. (UMF No. 28.)
Defendant also relies on Guido to argue that Plaintiff’s experience in
renting homes and as a licensed attorney must be considered. (UMF Nos. 30-32.)
In Guido, a plaintiff went
to a horse-riding academy to inquire about riding lessons. There, she signed a
document entitled “Release” which purported to release the academy from
liability connected to potential injuries sustained while riding. The Plaintiff
claims that she was told by a representative at the time of signing that the
release was “meaningless.” The plaintiff took several months of riding lessons
but was later injured when thrown from a horse. The plaintiff admitted during a
deposition that she was a practicing attorney and used releases in her
practice. Given this, the court concluded “as a matter of law that any such
reliance [on the representative’s assertion that the waiver was ‘meaningless]
was not reasonable.”
Accordingly, Defendant has
presented sufficient facts to show that Plaintiff cannot establish that he
justifiably relied on Defendant’s misrepresentation to his detriment because he
was put on notice of the rent restrictions on the Property. This shifts the
burden to Plaintiff to establish a triable issue of fact that he justifiably
relied on Defendant’s misrepresentation to his detriment.
Here, like in Guido,
Plaintiff was put on notice of the existence of the rental restrictions, as he
admitted that the rental restrictions were included in the disclosure package,
which he received and approved. In approving, Plaintiff acknowledged that he
approved of the documents contained therein, including the rental restrictions.
Furthermore, Plaintiff has experience in renting homes, and is a licensed
attorney and worked as an attorney from 2009 to 2019. (UMF Nos. 30-32.) Here,
Plaintiff approved of the documents included in the package with his signature,
and as an experienced attorney, it can be presumed that Plaintiff understands
the importance of reviewing documents before signing and approving them. It was
not justifiable for Plaintiff to rely on any representations made by Defendant,
based on his approval of the documents in the package (which included the rental
restrictions), and his experience in renting homes and as an attorney.
Plaintiff argues in opposition that his
mistaken belief that there was no rental restriction was based on the following
three documents: (1) outdated CC&Rs, (2) Seller Property Questionnaire, and
(3) Transfer Disclosure Statement. (Pl.’s Opp. 5:11–12.) However, Plaintiff’s
opposition does not address Defendant’s argument that Plaintiff received and
approved of documents containing the rental restriction prior to the closing of
escrow. Therefore, Plaintiff has failed to offer facts or evidence to establish
a triable issue of fact that he justifiably relied on Defendant’s
misrepresentation to his detriment.
Based on the foregoing, Defendant’s
motion for summary adjudication as to Plaintiff’s second and third causes of
action is granted.
4.
Intentional Misrepresentation
Plaintiff’s fourth and fifth causes
of action allege against Defendant Intentional Misrepresentation with regard to
the Seller Property Questionnaire and the Transfer Disclosure Statement,
respectively. To establish a cause of action for intentional misrepresentation,
Plaintiff must establish (1) misrepresentation, (2) knowledge of falsity, (3)
intent to defraud or to induce reliance, (4) justifiable reliance, and (5)
resulting damage. (Engalla v. Permanente Medical Group, Inc. (1997) 15
Cal.4th 951, 974; Manderville v. PCG & S Group, Inc. (2007) 146
Cal.App.4th 1486, 1498.)
Here, Defendant contends that
Plaintiff cannot establish that Defendant intended to defraud or induce
reliance based on the misrepresentations regarding the rent
restrictions. As discussed above in detail relating to Plaintiff’s first
cause of action, Defendant has presented evidence that it did not intend that
its misrepresentations would induce Plaintiff’s reliance to purchase the
Property, as it was not aware that the Property was subject to the rental
restrictions.
Accordingly, Defendant has
presented sufficient evidence to establish that it did not intend to induce
Plaintiff’s reliance based on the misrepresentations. This shifts the
burden to Plaintiff to offer facts and/or evidence to establish a triable issue
of fact that Defendant intended to induce Plaintiff’s reliance based on the
misrepresentations.
In opposition, Plaintiff fails to
offer facts or evidence to meet his responsive burden to establish a triable
issue of fact that Defendant intended to induce Plaintiff’s reliance based on
the misrepresentations. Accordingly, Defendant’s motion for summary adjudication
as to Plaintiff’s fourth and fifth causes of action is granted.
CONCLUSION
The motion is granted.