Judge: Richard S. Whitney, Case: 37-2019-00029739-CU-OR-CTL, Date: 2024-06-28 Tentative Ruling

SUPERIOR COURT OF CALIFORNIA,

DEPT.:

EVENT DATE:

EVENT TIME:

HALL OF JUSTICE

TENTATIVE RULINGS - June 27, 2024

06/28/2024  10:30:00 AM  C-68 COUNTY OF SAN DIEGO

JUDICIAL OFFICER:Richard S. Whitney

CASE NO.:

CASE CATEGORY:

EVENT TYPE:

CASE TITLE: CASE TYPE:

Civil - Unlimited  Other Real Property Summary Judgment / Summary Adjudication (Civil) 37-2019-00029739-CU-OR-CTL HS INDEPENDENCE LLC VS WAFA KATTO [IMAGED] CAUSAL DOCUMENT/DATE FILED:

TENTATIVE RULING: CROSS-DEFENDANT FOUNDATION ESCROW NORTH COUNTY, INC.'S MOTION FOR SUMMARY JUDGMENT, OR IN THE ALTERNATIVE, SUMMARY ADJUDICATION AS TO WAFA KATTO'S AMENDED CROSS-COMPLAINT is GRANTED.

Cross-Defendant FOUNDATION ESCROW NORTH COUNTY, INC. ('Cross-Defendant') challenges Cross-Complainant Wafa Katto's ('Cross-Complainant') entire cross-complaint. In ruling on a summary judgment motion, the trial court must first identify the issues framed by the pleadings, since the pleadings set the boundaries of the issues to be resolved, and the materiality of disputed facts. (Conroy v. Regents of University of Cal. (2009) 45 Cal.4th 1244, 1250; Nativi v. Deutsche Bank National Trust Company (2014) 223 Cal.App.4th 261, 289-90; Serri v. Santa Clara University (2014) 226 Cal.App.4th 830, 858.) The Court then determines whether the moving party has established facts justifying judgment in its favor, and if the moving party has carried its initial burden, decide whether the opposing party has demonstrated the existence of a triable issue of material fact. (Serri, supra, at p. 858.) The Court 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.) Cross-Defendant provides evidence that it never had an interest in the subject property, it never (and does not now) claimed any interest in the subject property, it never received rents from the subject property, that it never transferred the subject property, and that it merely acted as the escrow officer for the sale of the subject property which occurred on June 16, 2017. (See Cross-Defendant's Separate Statement of Undisputed Material Facts.) Cross-Defendant has shifted the burden to Cross-Complainant.

Cross-Complainant does not address Cross-Defendant's arguments nor discuss the causes of action at issue. Rather, Cross-Complainant asserts there are triable issues of material fact based on deposition testimony wherein Cross-Defendant's escrow officer, Andrea Schmitt, testified that she signed a Preliminary Change of Ownership Report ('PCOR') for Cross-Complainant without her express authorization. (Decl. Zryd, Exhibit 1.) Andrea Schmitt testified that she signed the PCOR in her own name. (Decl. Zryd, Exhibit 1.) Explaining why she signed the PCOR, Andrea Schmitt testified that '[a]ny representative of Ms. Katto, which I was as her escrow officer, can sign the paperwork.' (Decl. Zryd, Exhibit 1.) Cross-Complainant takes issue with the fact Cross-Complainant did not specifically instruct Andrea Schmitt to sign the PCOR, asserting this indicates Andrea Schmitt conspired with Defendant/Cross-complainant Ninus Malan ('Malan'). (Decl. Zryd, Exhibit 1; Decl. Katto, ¶ 7.) Cross-Complainant purports to dispute the facts in Cross-Defendant's separate statement based on two Calendar No.: Event ID:  TENTATIVE RULINGS

3076975  50 CASE NUMBER: CASE TITLE:  HS INDEPENDENCE LLC VS WAFA KATTO [IMAGED]  37-2019-00029739-CU-OR-CTL assertions: (1) Cross-Defendant owed a fiduciary duty to Cross-Complainant and (2) Cross-Defendant participated in a conspiracy with Malan. Cross-Complainant does not cite any legal authority to support that if a fiduciary duty is owed the fiduciary has an 'interest' in the property and/or transaction in which the fiduciary is involved. Rather, Cross-Complainant cites case law that supports an escrow owes a duty to strictly follow escrow instructions, nothing more. Cross-Complainant fails to explain how Andrea Schmitt's signing of the PCOR was a violation of the escrow instructions. Andrea Schmitt testified that Cross-Complainant instructed Andrea Schmitt to prepare the accommodation grant deed and that the PCOR is something the County requires to be attached to the grant deed to tell them what type of transfer tax to assess. (Decl. Zryd, Exhibit 1.) Andrea Schmitt testified the PCOR is not needed to file a grant deed. (Decl. Zryd, Exhibit 1.) Andrea Schmitt testified 'I could have not even had one submitted in with the grant deed, and she would have just been charged an extra $20. The County would have charged her $20 to slap that form on themselves. That's how irrelevant that form is.' (Decl. Zryd, Exhibit 1.) Cross-Complainant does not contradict this testimony. Further, Cross-Complainant does not provide any argument or evidence that Andrea Schmitt could not sign the PCOR as a representative or Cross-Complainant.

Cross-Complainant also declares that she did not sign the grant deed and that it is a forgery. (Decl.

Katto, ¶ 3.) However, this declaration does not aid Cross-Complainant, unless Cross-Defendant can be liable for conspiracy with Malan for forging the grant deed. Indeed, Cross-Complainant relies on its conspiracy argument to purportedly raise issues of fact. '[A] conspiracy does no harm and engenders no tort liability. It must be activated by the commission of an actual tort.' (Applied Equipment Corp. v. Litton Saudi Arabia Ltd. (1994) 7 Cal.4th 503, 511.) 'To prove a claim for civil conspiracy, [Cross-Complainant] was required to provide substantial evidence of three elements: (1) the formation and operation of the conspiracy, (2) wrongful conduct in furtherance of the conspiracy, and (3) damages arising from the wrongful conduct. (3) As is well established, civil conspiracy is not an independent tort.' (Kidron v. Movie Acquisition Corp. (1995) 40 Cal.App.4th 1571, 1581.) 'The conspiring defendants must also have actual knowledge that a tort is planned and concur in the tortious scheme with knowledge of its unlawful purpose.' (Id. at 1582.) 'However, actual knowledge of the planned tort, without more, is insufficient to serve as the basis for a conspiracy claim. Knowledge of the planned tort must be combined with intent to aid in its commission.' (Id.) 'It is well settled that a conspirator is liable for all the acts done in furtherance of a common scheme or plan even though he is not a direct actor. [Citation] It is equally well settled that a party may be liable even if the intentional tort is commenced before he participates, if he, knowing the facts, then participates therein.' (Peterson v. Cruickshank (1956) 144 Cal.App.2d 148, 168 [Citation omitted].) As a threshold matter, the Court must address the fact Cross-Complainant's motion for leave to amend to add allegations of conspiracy was denied. A motion for summary judgment is constrained by the scope of the allegations. The operative cross-complaint does not include allegations of conspiracy.

Therefore, Cross-Complainant's arguments fail. Even if the Court were to consider Cross-Complainant's arguments as being properly within the scope of the operative cross-complaint, the Court would still reject the arguments.

Cross-Complainant fails to raise an issue of fact that Cross-Defendant had any knowledge of a conspiracy or plan by Malan to commit forgery. At best, Cross-Complainant points to the fact the requests for admission to Malan were deemed admitted such that the Court can conclude the deed was forged by Malan. Cross-Complainant also points to Andrea Schmitt's signing of the PCOR. However, Cross-Complainant makes no attempt to explain or provide evidence of how the signing of the PCOR was part of the conspiracy or aided Malan in any way. Cross-Complainant does not contradict Andrea Schmitt's testimony that she had authority to sign the PCOR, even without Cross-Complainant's explicit instruction.

Cross-Complainant declares '[a]s a fiduciary in performing its duties, Foundation Escrow was supposed to at all times exercise reasonable care, loyalty, and good faith towards myself. Foundation Escrow did not uphold it's duties when it conspired and aided and abetted Malan in preparing and recording the Forged Deed. Foundation Escrow was paid to perform escrow services.' (Decl. Katto, ¶ 11.) As Calendar No.: Event ID:  TENTATIVE RULINGS

3076975  50 CASE NUMBER: CASE TITLE:  HS INDEPENDENCE LLC VS WAFA KATTO [IMAGED]  37-2019-00029739-CU-OR-CTL Cross-Complainant acknowledges, Cross-Defendant is responsible to follow escrow instructions, not to discover fraudulent plans. While Cross-Complainant includes conclusory statements that Cross-Defendant 'conspired and aided and abetted Malan in preparing and recording the Forged Deed,' Cross-Complainant does not cite any evidence that supports this legal conclusion. Cross-Defendant does not have a duty to discover fraud. (Decl. Katto, ¶ 11.) Thus, for Cross-Defendant to have any liability Cross-Defendant must have had knowledge of a conspiracy to aid in such plan. However, Cross-Complainant does not provide evidence to indicate that Andrea Schmitt knew of Cross-Complainant's true relationship with Malan, other than what was told her by Cross-Complainant and/or Malan. Cross-Complainant does not provide evidence to indicate that Andrea Schmitt had any knowledge of Malan's plan. As explained above, the only evidence Cross-Complainant provides is testimony from Andrea Schmitt taken out of context. Andrea Schmitt's full testimony easily dispels Cross-Complainant's argument and Cross-Complainant does not provide any argument or evidence to raise an issue of fact that the PCOR furthered any purported conspiracy.

The motion is granted. The Court notes it did not need to consider Cross-Defendant's evidence in reply to grant the motion.

Cross-Complainant Objections to Evidence: Objection 1-5: Overruled.

Calendar No.: Event ID:  TENTATIVE RULINGS

3076975  50