Judge Ronald F. Frank, Case Number: 23TRCV02840, Date: 2024-07-25 Tentative Ruling

Judge: Ronald F. Frank, Case: 23TRCV02840, Date: 2024-07-25 Tentative Ruling

Case Number: 23TRCV02840 Hearing Date: July 25, 2024 Dept: 8

Tentative Ruling¿

HEARING DATE: July 25, 2024

CASE NUMBER: 23TRCV02840

CASE NAME: First Utah Bank vs. Chicken Bone Effects, Inc., et al.

MOVING PARTY: Plaintiff, First Utah Bank

RESPONDING PARTY: Defendants, Chicken Bone Effects, Inc. and John Renzulli III

TRIAL DATE: Not Set.

MOTION: (1) Motion for Summary Judgment, or in the alternative, Summary Adjudication

Tentative Rulings: (1) GRANTED.

I. BACKGROUND

A. Factual

On August 29, 2024, Plaintiff, First Utah Bank (“Plaintiff”) filed a complaint against Defendant, Chicken Bone Effects, Inc. (“CBE”) and John Renzulli III (“Renzulli”), and DOES 1 through 20. The complaint alleges causes of action for: (1) Breach of Contract; (2) Breach of Guaranty; (3) Common Count (Money Lent); and (4) Recovery of Personal Property. The complaint alleges that prior to the filing of this current action, SLIM Capital, LLC entered into written Equipment Finance Agreement (the “Agreement”) with CBE whereby SLIM Capital, LLC agreed to finance CBE’s purchase of certain equipment from a vendor selected by CBE. (Complaint, ¶ 8.) In consideration therefore, Plaintiff contends that CBE obligated itself to make certain specified monthly payments to SLIM Capital, LLC, which obligation was absolute and unconditional. (Complaint, ¶ 8.) Plaintiff asserts that SLIM Capital, LLC subsequently assigned the Agreement to Plaintiff. (Complaint, ¶ 8.)

Plaintiff notes that it remains the holder of the agreement and has performed all of the obligations which it was required to perform under the Agreement. (Complaint, ¶ 9.) Plaintiff alleges that CBE defaulted on the agreement when it failed to make the payments pursuant to the Agreement. (Complaint, ¶ 10.) As a result of CBE’s default, Plaintiff alleges it accelerated the balance due under the Agreement and made demand on CBE for immediate payment of the accelerated balance. (Complaint, ¶ 11.) Plaintiff contends the accelerated balance due under the agreement at the time it filed its complaint was $73,972.77, plus interest thereon at the contract rate of 10% per annum from May 2, 2023. (Complaint, ¶ 12.) Plaintiff further asserts that the

accelerated balance has not been paid. (Complaint, ¶ 12.) Plaintiff alleges that the agreement provides that CBE shall pay the attorneys’ fees and costs incurred by Plaintiff in enforcing its rights thereunder. (Complaint, ¶ 13.)

Plaintiff now files a Motion for Summary Judgment or in the alternative, Motion for Summary Adjudication.

B. Procedural

On April 18, 2024, Plaintiff filed a Motion for Summary Judgment, or in the alternative, Summary Adjudication. To date, no opposition has been filed.

II. REQUEST FOR JUDICIAL NOTICE

With Plaintiff’s moving papers, Plaintiff also requested this Court take judicial notice of the following documents:

1. Complaint filed in this action by Plaintiff FIRST UTAH BANK on August 29, 2023. (Exhibit F to the Table of Exhibits.)

2. Answers to the Complaint filed in this action on January 10, 2024 by Defendants CHICKEN BONE EFFECTS, INC. and JOHN RENZULLI III. (Exhibit G to the Table of Exhibits.)

This Court GRANTS this request and takes judicial notice of the above documents.

III. ANALYSIS

A. 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.) CCP Section 437(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, 67, 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. (CCP § 437c(p)(2); 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.)

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, 166.)

B. Discussion

Plaintiff moves for summary judgment on the grounds that it argues the first and second causes of action: (1) have been established by undisputed facts; (2) that there are no material issues of fact with respect to Defendants’ liability on Plaintiff’s first and second causes of action tat remain to be determined; (3) that Defendants have not established any defense to Plaintiff’s first and second causes of action; and (4) that Plaintiff is entitled to judgment against Defendants on the first and second causes of action in the principal amount of $52,240.41, pre-judgment interest in the amount of $6,544.56, attorneys’ fees to be determined by noticed motion, and court costs.

Further, Plaintiff moves for summary judgment as to the third cause of action on the grounds that: (1) Plaintiff’s third cause of action for common count of money lent against Defendants have been established by undisputed facts; (2) that no material issue of fact with respect to Defendants liability on Plaintiff’s third cause of action remains to be determined; (3) that Defendants have not established any defense to Plaintiff’s third cause of action; and (4) that Plaintiff is entitled to judgment against Defendants on the third cause of action in the principal amount of $52,240.41, pre-judgment interest in the amount of $6,544.56, attorneys’ fees to be determined by noticed motion, and court costs.

First and Second Causes of Action for Breach of Contract and Breach of Guaranty

Plaintiff first argues that undisputed facts establish Plaintiff’s first and second causes of action. To state a cause of action for breach of contract, Plaintiff must be able to establish “(1) the existence of the contract, (2) plaintiff’s performance or excuse for nonperformance, (3) defendant’s breach, and (4) the resulting damages to the plaintiff.” (Oasis West Realty, LLC v. Goldman (2011) 51 Cal.4th 811, 821.) If a breach of contract claim “is based on alleged breach of a written contract, the terms must be set out verbatim in the body of the complaint or a copy of the written agreement must be attached and incorporated by reference.” (Harris v. Rudin, Richman & Appel (1999) 74 Cal.App.4th 299, 307.) In some circumstances, a plaintiff may also “plead the legal effect of the contract rather than its precise language.” (Construction Protective Services, Inc. v. TIG Specialty Ins. Co. (2002) 29 Cal.4th 189, 198-199.)

Here, Plaintiff argues that each element of its first and second cause of action against Defendants CBE and Renzulli for breach of the Agreement and Guaranty are established by undisputed facts. First, Plaintiff argues that the Agreement and Guaranty were executed by

Plaintiff’s assignor and Defendants, which were later assigned to Plaintiff. (Plaintiff’s SSUMF 1, 3.) In support of this, Plaintiff refers to the declaration of Don Rudy (“Rudy Decl.”), who is the VP, Asset Management Group and custodian of records for the finance agreement for First Utah Bank. (Rudy Decl., ¶¶ 1-2.) Rudy notes that on August 1, 2019, SLIM Capital, LLC entered into a written Equipment Finance Agreement No. 2586 (the “Agreement”) with Defendant, CBE whereby SLIM Capital, LLC agreed to finance CBE’s purchase of certain equipment from a vendor selected by CBE. (Rudy Decl., ¶ 3.) Rudy contends Plaintiff subsequently changed the account number to 8313011606. (Rudy Decl., ¶ 3.) As consideration therefore, Rudy contends that CBE obligated itself to make certain specified monthly payments to SLIM Capital, LLC, which obligation was absolute and unconditional. (Rudy Decl., ¶ 3.) Rudy asserts that Plaintiff entered into an agreement to purchase the Agreement from SLIM Capital, LLC and the account number for that transaction is 8313011606. Rudy attached the copy of the Agreement as Exhibit A, and attached the assignment as Exhibit B. (Rudy Decl., ¶ 3, Exhibits A, B.) Based on the evidence presented by Plaintiff, the Court finds that Plaintiff has carried its initial burden in showing that a contract and assignment between the parties existed.

Next, Plaintiff argues that it remains the holder of the Agreement and Guaranty and has performed all other obligations required of it. (Plaintiff’s SSUMF 4, 5.) Rudy’s declaration asserts that Plaintiff has performed all things it was required to perform under the Agreement and Guaranty, and still remains the holder of the Agreement and Guaranty. (Rudy Decl., ¶¶ 6-7.) Plaintiff’s Exhibit D contains the Continuing Guaranty of Indebtedness that appears to have the signature of Renzulli. The Court notes that the continuing guaranty of indebtedness appears to have been sent from Renzulli to SLIM Capital, LLC, not directly to Plaintiff.

Third, Plaintiff contends that Defendants breached the Agreement and Guaranty by failing to make the payments that were required thereunder. (Plaintiff’s SSUMF 6.) Rudy’s declaration states that CBE and Renzulli defaulted on the Agreement and Guaranty by failing to make the payment that was due on June 1, 2023, and all subsequent payments thereafter. (Rudy Decl., ¶ 8.) Plaintiff has included, in its Table of Exhibits, Exhibit E – Statement of Account, which evidences the past due amounts in the account linked to Defendants. As such, this Court finds that Plaintiff has carried its initial burden that Defendants have breached the contract and guaranty.

Lastly, this Court finds that Plaintiff has also carried its initial burden in showing that it has suffered damages as a result of the alleged breach.

Based on the above, this Court tentatively holds that Plaintiff has carried its initial burden in showing that undisputed facts establish Plaintiff’s first and second causes of action. This Court notes that after a moving party has carried its initial burden, the burden then shifts to the opposing party to show that disputed issues of material fact exist. However, Defendants here have failed to file an opposition brief. Thus, they have failed to carry their shifted burden. On these grounds, the Court tentatively GRANTS Plaintiff’s motion for summary judgment.

Defendants may present oral argument as to why they have failed to respond to the motion.

Third Cause of Action for Money Lent

Plaintiff also argues that the undisputed facts establish Plaintiff’s Third Cause of Action for Money Lent. The required elements of a claim for money lent are “(1) the statement of indebtedness in a certain sum, (2) the consideration, i.e., goods sold, work done, etc., and (3) nonpayment. A cause of action for money had and received is stated if it is alleged the defendant is indebted to the plaintiff in a certain sum for money had and received by the defendant for the use of the plaintiff.” (Farmers Insurance Exchange v. Zerin (1997) 53 Cal.App.4th 445, 460, citation and quotation marks omitted.)

Here, Plaintiff argues that each element of Plaintiff’s third cause of action against Defendant, for money lent, is established by the undisputed facts. First, Plaintiff argues that Defendants became indebted after Plaintiff paid the vendor for the equipment that Defendants purchased. (Plaintiff’s SSUMF 13.) Rudy contends that CBE and Renzulli became indebted to Plaintiff after Plaintiff paid the vendor for the equipment that CBE leased. (Rudy Decl., ¶¶ 3-4.) Plaintiff also attached the UCC-1 filing with the California Secretary of State, showing that Plaintiff perfected its security interest in the Equipment. (Exhibit C.)

Next, Plaintiff argues that Defendants failed to pay Plaintiff for all amounts due as agreed for leasing the Equipment. (Plaintiff’s SSUMF 14-16.) Rudy notes that as a result of Defendants’ default under the Agreement and Guaranty, the outstanding balance due is $52,240.41. (Rudy Decl., ¶ 9, Exhibit E.) Rudy further asserts that despite demand, no part of the outstanding balance has been paid and Defendants have failed to deliver the Equipment to Plaintiff. (Rudy Decl., ¶ 10.) Further, Rudy notes that interest on the balance from and after May 1, 2023, the date of the last payment, through July 25, 2024, the hearing date for the current motion, pursuant to the statutory rate of 10% totals $6,544.56. (Rudy Decl., ¶ 11, Exhibit E.) As such, Plaintiff contends that as of the motion hearing date, the total amount due, including interest, is $58,784.97. (Rudy Decl., ¶ 12, Exhibit E.)

Based on the above, this Court tentatively holds that Plaintiff has carried its initial burden in showing that undisputed facts establish Plaintiff’s third cause of action. Again, because this Court found that Plaintiff carried its burden, the burden would then shift to Defendants. However, because Defendants here have failed to file an opposition brief, they have failed to carry their shifted burden. On these grounds, the Court tentatively GRANTS Plaintiff’s motion for summary judgment, subject to any oral argument by Defendants at the hearing as to why they have failed to respond to the motion.

IV. CONCLUSION

For the foregoing reasons, this Court’s tentative ruling is to GRANT Plaintiff’s Motion for Summary Judgment.

Plaintiff is ordered to give notice.