Judge: Richard Y. Lee, Case: 30-2021-01211072, Date: 2022-12-15 Tentative Ruling

Plaintiff Balboa Capital Corporation’s (“Plaintiff”) unopposed Motion for Summary Judgment, or Alternatively, Summary Adjudication is GRANTED against Defendant Green Sip Construction, Inc. on the first cause of action for Breach of Business Loan Agreement, against Defendant Marlene Eaton on the second cause of action for Breach of Guaranty and against both Defendants on the third cause of action for Indebtedness.

Plaintiff’s undisputed material facts establish the following events. On 2/26/21, Plaintiff executed written Business Loan Agreement No. F345561-001 (“BLA”) to Defendant Green Sip Construction, Inc. for a loan in the amount of $74,000.00. (UMF 1). The BLA required Green Sip Construction to make 53 weekly payments of $1,843.02 (UMF 2). Defendant Marlene Eaton personally guaranteed payment under the BLA. (UMFs 11 and 12).

Green Sip Construction’s last payment was credited to the payment due on 5/25/21. (UMF 4). Under the terms of the BLA, Plaintiff declared the entire balance due and payable and was owed $73,720.80 in unpaid obligations, along with $175 in returned payment fees, for a total of $73,895.80 plus 10% interest per annum from 6/1/21 until entry of judgment. (UMFs 5-7 and 9).

On 10/28/21, Plaintiff served Requests for Admission on Defendants. (UMF 18). On 8/11/22, the court granted Plaintiff’s unopposed Motions Establishing Admissions Propounded on Defendants, deeming Plaintiff’s Requests for Admission, Set One served on Defendants Green Sip Construction and on Marlene Eaton admitted. (UMF 22). Defendant Green Sip Construction admitted entering into the Business Loan Agreement and failing to comply with its terms. (UMF 23, Exhibit 1 to Agbayani Decl.). Defendant Eaton admitted guaranteeing payment. (UMF 24, Exhibit 2 to Agbayani Decl.). Defendants also admitted they have no defense. (UMFs 23 and 24, Exhibits 1 and 2 to Agbayani Decl.).

As of 9/29/22, when the motion was filed, Defendant owed $73,895.80 plus interest. (UMFs 27, 54 and 81.)

First Cause of Action for Breach of Business Loan Agreement (against Green Sip Construction). 

“To prevail on a cause of action for breach of contract, the plaintiff must prove (1) the contract, (2) the plaintiff's performance of the contract or excuse for nonperformance, (3) the defendant's breach, and (4) the resulting damage to the plaintiff.” (Richman v. Hartley (2014) 224 Cal.App.4th 1182, 1186). “It is essential to the existence of a contract that there should be: 1. Parties capable of contracting; 2. Their consent; 3. A lawful object; and, 4. A sufficient cause or consideration.” (CC §1550).

Plaintiff provided evidence that there was a written Business Loan Agreement (“BLA”) between Plaintiff and Defendant Green Sip Construction for a loan in the amount of $74,000.00. (UMF 1). The BLA required Defendant Green Sip Construction to make 53 weekly payments of $1,843.02 (UMF 2). Plaintiff performed under the contract. (UMF 8).

Defendant Green Sip Construction stopped making the required payments after 5/25/21. (UMF 4). The contract, therefore, was breached.

Plaintiff alleges that it was harmed in the amount of $73,895.80 (representing $73,720.80 in unpaid obligations and $175 in returned payment fees) plus 10% interest per annum from 6/1/21 until entry of judgment, as well as reasonable attorney fees. (UMFs No. 5-7 and 9-10.)

Second Cause of Action for Breach of Guaranty (against Marlene Eaton). 

"A contract of guaranty gives rise to a separate and independent obligation from that which binds the principal debtor." (Security First National Bank v. Chapman (1940) 41 Cal.App.2d 219, 221.) "A surety or guarantor is one who promises to answer for the debt, default, or miscarriage of another, or hypothecates property as security therefor." (CC § 2787.)

“[G]uaranty contracts are construed according to the same rules as those used for other contracts, with a view to ascertaining the intent of the parties.” (River Bank America v. Diller (1995) 38 Cal.App.4th 1400, 1415.)

The Personal Guaranty that Defendant Eaton signed in connection with the BLA states:

"The undersigned (each a ‘Guarantor’), jointly and severally (if more than one) absolutely and unconditionally guarantee the prompt payment to Lender, including its successors and assignees, of any and all Obligations incurred by the Borrower pursuant to this Agreement. Each Guarantor further agrees to repay the Obligations on demand, without requiring Lender to first enforce payment against Borrower.”

(UMFs 38 and 39, Exhibit 1 at ¶27).

Plaintiff provided evidence that Eaton personally guaranteed the BLA. (UMFs 38, 39 and 51). Eaton admitted that she personally guaranteed the BLA but failed to make the required payments. (UMF 51). Plaintiff alleges that it was harmed in the amount of $73,895.80 (representing $73,720.80 in unpaid obligations and $175 in returned payment fees) plus 10% interest per annum from 6/1/21 until entry of judgment. (UMFs No. 32-24 and 36.)

Third Cause of Action for Indebtedness (against Green Sip Construction and Marlene Eaton). 

The elements of a common count for indebtedness are: (1) a statement of indebtedness in a certain sum, (2) the consideration, and (3) nonpayment. (Farmers Ins. Exchange v. Zerin (1997) 53 Cal.App.4th 445, 460).

As discussed above regarding the Breach of Business Loan Agreement and Breach of Guaranty causes of action, Plaintiff has shown that has lent money under the BLA to Green Sip Construction and that Green Sip Construction and guarantor Marlene Eaton are obligated to pay Plaintiff the principal, interest and other fees pursuant to the BLA. Green Sip Construction has failed to pay $73,895.80 (representing $73,720.80 in unpaid obligations and $175 in returned payment fees) plus interest and attorney fees. Pursuant to the BLA, Plaintiff declared the entire balance of the payments under the BLA to be immediately due and payable. (UMF 60).

In light of the foregoing, Plaintiff’s Motion for Summary Judgment is GRANTED.

Pursuant to Evid. Code §452(d), the court takes judicial notice of its 8/11/22 Minute Order (ROA 36) deeming Plaintiff’s Requests for Admissions, Set No. One served on Defendants Green Sip Construction Inc. and Marlene Eaton on 10/28/21 admitted.

Plaintiff to give notice.