Judge: Teresa A. Beaudet, Case: 21STCV40234, Date: 2023-01-20 Tentative Ruling

Case Number: 21STCV40234    Hearing Date: January 20, 2023    Dept: 50

Superior Court of California

County of Los Angeles

Department 50

Background

On November 2, 2021, Plaintiff NJR Three Properties, LLC (“NJR”) filed this action against Defendants Stellas Inc. (“Stellas”) and Mihee Kim (jointly, “Defendants”). The Complaint asserts one cause of action for declaratory relief.

On December 14, 2021, Defendants filed a Cross-Complaint against NJR and Discovery Estates, LLC, asserting causes of action for (1) breach of contract, (2) judicial foreclosure, and (3) equitable lien.

NJR now moves for an order granting summary judgment on its Complaint. In the alternative, NJR moves for an order adjudicating a number of issues. Defendants oppose.[1]

Requests for Judicial Notice

The Court grants NJR’s request for judicial notice. The Court also grants Defendants’ request for judicial notice.  

Legal Standard

“[A] motion for summary judgment shall be granted if all the papers submitted show that there is no triable issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” (Code Civ. Proc., § 437c, subd. (c).) “A party may move for summary adjudication as to one or more causes of action within an action, one or more affirmative defenses, one or more claims for damages, or one or more issues of duty, if the party contends that the cause of action has no merit, that there is no affirmative defense to the cause of action, that there is no merit to an affirmative defense as to any cause of action, that there is no merit to a claim for damages, as specified in¿Civil Code section 3294, or that one or more defendants either owed or did not owe a duty to the plaintiff or plaintiffs.” (Code Civ. Proc., § 437c(f)(1).)¿“A motion for summary adjudication shall be granted only if it completely disposes of a cause of action, an affirmative defense, a claim for damages, or an issue of duty.” (Ibid.)¿

The moving party bears the initial burden of production to make a prima facie showing that there are no triable issues of material fact. (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 850.) If the moving party carries this burden, the burden shifts to the opposing party to make a prima facie showing that a triable issue of material fact exists. (Ibid.) 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.)

For purposes of motions for summary judgment and summary adjudication, a plaintiff “has met his or her burden of showing that there is no defense to a cause of action if that party has proved each element of the cause of action entitling the party to judgment on the cause of action.” (Code Civ. Proc., § 437c, subd. (p)(1).)

Discussion

Allegations of the Complaint

NJR alleges that on or about December 21, 2018, it made a loan to Discovery Estates, LLC (“Discovery”) to acquire residential real property located at 1468 12th Ave., Los Angeles, California 90019 (the “Property”). (Compl., ¶ 7.) On December 27, 2018, a grant deed dated December 3, 2018 was recorded transferring all right and interest in the Property to Discovery. (Compl., ¶ 7.)

To finance the acquisition of the Property, NJR made a purchase money loan to Discovery in the original principal amount of $695,000.00. (Compl., ¶ 8.) Discovery executed a written Note in favor of NJR to evidence this obligation. (Compl., ¶ 8.) To secure repayment of the debt, on December 21, 2018, Discovery executed a Deed of Trust in favor of NJR granting NJR a first priority security interest in the Property. (Compl., ¶ 8.) Due to a default on the Note and Deed of Trust, on September 6, 2019, NJR recorded a Notice of Default against the Property. (Compl., ¶ 9.)

When the default was not cured, on December 30, 2019, NJR recorded a Notice of Trustee’s Sale against the Property. (Compl., ¶ 10.) On August 4, 2020, NJR conducted a non-judicial foreclosure sale of the Property, and as the successful bidder at the sale, ownership of the Property reverted to NJR. (Compl., ¶ 11.) A Trustee’s Deed Upon Sale vesting ownership in the Property with NJR was recorded on August 6, 2020. (Compl., ¶ 11.)

On or about December 4, 2018, Defendants entered into a Joint Venture Agreement with Discovery wherein Defendants would invest $100,000.00 in a joint venture with Discovery for the renovation of the Property and to share in the profits of the future sale of the Property. (Compl., ¶ 13.)

Defendants claim that on or about December 4, 2018, prior to the recording of the Grant Deed transferring ownership of the Property to Discovery, Discovery executed a Deed of Trust (“JV Deed of Trust”) in favor of Defendants granting them a security interest in the Property. (Compl., ¶ 14.) The JV Deed of Trust was recorded on December 12, 2018. (Compl., ¶ 14.) NJR contends that because Discovery was not the record owner of the Property on December 12, 2018, the JV Deed of Trust did not attach to the Property. (Compl., ¶ 15.) Defendants claim that on or about December 24, 2018, they deposited a check for $50,000.00 with Central Escrow, Inc. (“Central”). (Compl., ¶ 16.) NJR alleges that Defendants did not provide instructions to Central that the $50,000.00 was intended to be a loan to Discovery or was intended to be secured by a deed of trust against the Property. (Compl., ¶ 17.)

Following NJR’s nonjudicial foreclosure of the Property, on or about September 22, 2022, Defendants made a written demand upon NJR for payment of $121,610.96, claiming a senior interest in the Property. (Compl., ¶ 19.) On October 21, 2020, Defendants made a second written demand upon NJR for payment of $122,531.51. (Compl., ¶ 20.) On January 8, 2021, Defendants made a third written demand upon NJR for payment of $125,161.64. (Compl., ¶ 21.) NJR has made no payments to Defendants at any time. (Compl., ¶ 22.)

In the Complaint, NJR requests a judicial determination that: (1) NJR had no knowledge that the $50,000 deposit with Central pursuant to the Joint Venture Agreement was either intended to be a loan or intended to be secured by a deed of trust; (2) NJR had no knowledge that the JV Deed of Trust had been recorded at the time that the NJR Deed of Trust was recorded; (3) if the JV Deed of Trust did attach to the Property, it was junior to NJR’s Deed of Trust and was wiped out by NJR’s nonjudicial foreclosure sale; (4) neither Discovery nor Defendants informed Central that the $50,000.00 provided by Defendants was purchase money funds to be secured by the JV Deed of Trust; (5) Central had no knowledge of the Defendants’ loan or that it was to be secured by the JV Deed of Trust; (6) neither Discovery nor Defendants provided any instructions to Central regarding the $50,000.00 nor disclosed that the JV Deed of Trust had been previously recorded nor provided a copy of the recorded JV Deed of Trust; and (7) the JV Deed of Trust is a wild deed of trust imparting no constructive or actual notice to NJR and/or its agents, under the recording statutes, and no other notice or knowledge of the JV Deed of Trust was imparted nor attributable to NJR and/or its agents, and as a result, NJR’s Deed of Trust is not subject to the JV Deed of Trust, and the Trustee’s Deed Upon Sale vests ownership of the Property in NJR free and clear of the JV Deed of Trust. (Compl., ¶ 25.)

Issue No. 2[2]

            As set forth above, NJR asserts one cause of action for declaratory relief. “Declaratory relief is appropriate to obtain judicial clarification of the parties’ rights and obligations under applicable law.” (Californians for Native Salmon Etc. Ass’n v. Dep’t of Forestry (1990) 221 Cal.App.3d 1419, 1427.)

            The second issue on which NJR seeks summary adjudication is that “NJR is Entitled to a Declaration that it had No Knowledge that the JV Deed of Trust Had Been Recorded at the Time that the NJR Deed of Trust was Recorded.” (Notice of Motion at p. 1:17-18.)

NJR provides evidence that to finance the acquisition of residential real property located at 1468 12th Ave., Los Angeles, California 90019 (the “Property”), NJR made a purchase money loan to Discovery in the original principal amount of $695,000.00. (Walters Decl., ¶¶ 6, 8.)  

On December 27, 2018, a Grant Deed dated December 3, 2018 was recorded transferring all right and interest in the Property to Discovery. (Walters Decl., ¶ 7.) To secure repayment of the loan, on December 21, 2018, Discovery executed a Deed of Trust in favor of NJR granting to NJR a security interest in the Property. (Walters Decl., ¶ 9.) The Deed of Trust was recorded in on December 27, 2018. (Walters Decl., ¶ 9.)

In addition, on or about December 4, 2018, Discovery executed a Deed of Trust (“JV Deed of Trust”) in favor of Defendants granting Defendants a security interest in the Property. (Walters Decl., ¶ 24.) The JV Deed of Trust was recorded on December 12, 2018. (Walters Decl., ¶ 24.) Thus, the JV Deed of Trust was recorded before December 27, 2018, the date on which the Grant Deed transferring ownership of the Property to Discovery was recorded. (Walters Decl., ¶ 7.) The JV Deed of Trust was also recorded before NJR’s Deed of Trust was recorded on December 27, 2018.  

NJR’s managing agent indicates that NJR had no knowledge, notice or information of the recording of any liens or encumbrances against the Property prior to the close of NJR’s escrow on December 27, 2018. (Walters Decl., ¶¶ 1, 18.) NJR indicates that the ALTA loan policy for the transaction dated December 27, 2018 only reflects the NJR Deed of Trust which is in first lien position on the Property; no other liens or encumbrances are reported on the title policy for the transaction. (Walters Decl., ¶ 21.) On or about August 17, 2020, after the closing of the NJR loan, NJR first learned of a purported transaction between Discovery and Defendants by which Defendants claim a superior interest in the Property over NJR’s interest in the Property. (Walters Decl., ¶ 22.)

Defendants counter that triable issues of material fact exist on the issue of whether NJR had constructive notice of the JV Deed of Trust imputed from the knowledge of others, including Tae Kim, who handled escrow. (Kim Decl., ¶ 3, Ex. 2 (Tae Kim Depo.) at p. 20:6.)[3] On December 3, 2018, Christopher Lim (“Lim”) of Discovery[4] sent Tae Kim an email indicating that Harry Kim[5] “and one other investor will be joining me 50,000 each on this project. Harry will be writing me a check directly and the other investor can give the check to you or wire you the funds after the close of escrow.” (Kim Decl., ¶ 2, Ex. 1 (Christopher Lim Depo.) at p. 65:3-13, Ex. 3.) In his deposition, Lim was asked whether he recalls “specifically telling Tae that Harry would be an investor and that he was going to have a deed of trust on the property.” (Id. at p. 70:16-18.) Lim responded, “Yes,” and testified that “I knew there was going to be Stellas and Mihee Kim. So I…mentioned to Tae there was going to – you know, we’re going to have investors on 1468; it’s going to be Stellas and Mihee Kim. Which is why I wrote that email…” (Id. at p. 70:21; 70:24-71:3.)

Lim also testified that “I did tell Tae that, you know, Stellas and Mihee Kim are going to need – are going to need a deed of trust, and we’re going to have to put it against the property.” (Id. at p. 71:10-13.) In addition, after the December 3, 2018 email was referenced, Lim was asked in his deposition, “[a]t that point, had you told Tae Kim that your investor was going to be a secure creditor on the deal?” (Id. at p. 113:14-15.) Lim responded, “I think what I told him was that there was going to be a lien on the property and a deed of trust, which is why I asked him to help me draft the documents for it.” (Id. at p. 113:16-19.) Lim asked Tae Kim to assist him in doing the first draft of a deed of trust, and Lim believes that Tae Kim actually prepared that first draft of the deed of trust. (Id. at p. 113:23-114:3.)

            Lim was also asked in his deposition, “[s]o you told Tae Kim that the $50,000 was coming in from Mihee Kim, and you told him that it was going to be secured?” to which Lim responded, “Yes, sir.” (Id. at p. 196:11-14.) Lim was also asked, “[a]nd you told Tae Kim, relative to the Mihee Kim $50,000, that it was going to be secured by a deed of trust?” to which Lim responded, “Yes, sir.” (Id. at p. 196:15-18.) Lim indicated that this occurred prior to the close of escrow. (Id. at p. 196:21.)

Defendants assert that as the sole escrow officer on the transaction, Tae Kim was an agent to all parties to the escrow, such that Tae Kim was an agent of NJR and NJR was his principal. Indeed, NJR does not dispute that it is Central’s principal. (See Notice of Motion at    p. 2:6,“NJR is Entitled to a Declaration that as CENTRAL’s principal…) Defendants note that “[i]t is well-settled law in California that the holder of an escrow is agent for all parties up to the time that the escrow is closed.” (In re Marriage of Cloney (2001) 91 Cal.App.4th 429, 440.) “As a general rule, an agent has a duty to disclose material matters to his or her principal, and the actual knowledge of the agent is imputed to the principal. It is . . . well-settled law in this state that notice given to or possessed by an agent within the scope of his employment and in connection with and during his agency, is notice to the principal. . . .The general rule is well settled that the knowledge of the agent in the course of his [or her] agency is the knowledge of the principal. It rests on the assumption that the agent will communicate to his [or her] principal all information acquired in the course of his [or her] agency, and when the knowledge of the agent is ascertained the constructive notice to the principal is conclusive.” (Id. at p. 439 [internal quotations and citations omitted].) Defendants assert that there are thus triable issues of material fact as to whether NJR had constructive notice of the JV Deed of Trust imputed from the knowledge of Tae Kim.

Defendants also contend that Tae Kim was on inquiry notice regarding the exact date of the recording of the JV Deed of Trust, given that he had been informed by Lim that Defendants would be providing $100,000 to Discovery secured by a deed of trust. Defendants note that “[a] person generally has notice of a particular fact if that person has knowledge of circumstances which, upon reasonable inquiry, would lead to that particular fact.” (In re Marriage of Cloney, supra, 91 Cal.App.4th 429, 436-437 [internal quotations omitted].)[6] In the reply, NJR does not appear to directly address Defendants’ assertion that Tae Kim was on inquiry notice regarding the date of the recording of the JV Deed of Trust.

In the motion, NJR relies on Far W. Sav. & Loan Ass'n v. McLaughlin (1988) 201 Cal.App.3d 67 (“Far West”) in support of its assertion that NJR cannot be deemed to have constructive knowledge of the JV Deed of Trust. In Far West, “[o]n June 1, 1982, Frederick Geiger (Geiger) acquired record title to real property,” and “[a] purchase money deed of trust from Geiger to Hancock Savings and Loan Association for $92,000 was also recorded that same day.” (Far W. Sav. & Loan Ass'n v. McLaughlin, supra, 201 Cal.App.3d at p. 70.) “On July 8, 1982, Geiger executed a grant deed transferring the property to GTB Properties (GTB). However, that document was not recorded until July 1, 1983, almost a year later. Meanwhile, on August 3, 1982, GTB executed a deed of trust for $51,888.49 in favor of McLaughlin (‘GTB deed of trust’) and on August 10, 1982, this document was recorded.” (Id. at p. 70 [internal emphasis omitted].) “On July 1, 1983…at Burbank Escrow, the following three documents were recorded in the following sequential order: (1) a purported reconveyance of the GTB deed of trust executed by the Vice President of Burbank Escrow as trustee; (2) the Geiger grant deed to GTB (dated July 8, 1982); and (3) a grant deed conveying the property from GTB to Thomas and Jean Stapleton (Stapleton). On the same date…a purchase money deed of trust executed by Stapleton in favor of Far West for $ 105,300, was also recorded. From the $105,300 loan made by Far West, the outstanding first trust deed obligation to Hancock Savings and Loan Association was satisfied.” (Id. at p. 70 [internal quotations omitted].) “On February 3, 1984, after Stapleton had failed to make timely payments, Far West recorded a Notice of Default and Election to Sell under Deed of Trust in order to foreclose Stapleton’s interest in the…property…Subsequently, McLaughlin informed Far West of their intention to foreclose under the GTB deed of trust and denied that Far West (1) was a bona fide encumbrancer for value or (2) had subsequently taken title as a bona fide purchaser for value.” (Id. at pp. 70-71.)

The Court of Appeal found that “[t]he GTB deed of trust was recorded before GTB obtained record title. Therefore, it must be termed a ‘wild’ document, i.e., one recorded outside the chain of title. As such, a search of the grantor/grantee indices could not have disclosed its existence.” (Far W. Sav. & Loan Ass'n v. McLaughlin, supra, 201 Cal.App.3d at p. 73 [internal emphasis omitted].) The Court of Appeal noted that “[p]roper recordation of a real property instrument is necessary to impart constructive notice of its contents. If an instrument cannot be located by searching the ‘grantor’ and ‘grantee’ indices of the public records, the instrument does not constitute constructive notice and later bona fide purchasers or encumbrances are not charged with knowledge of its existence.” (Id. at p. 73, internal citation omitted, emphasis added.) “The second grantee who purchases for value and records first will prevail by virtue of the terms of the recording statute…He has no constructive notice of the deed to the first grantee, for the record of such deed, made before the grantor had title, is not in the chain of title. For the first grantee to prevail he would have to have recorded his deed again (1) after record title had come to his grantor and (2) before the second grantee had given value.” (Id. at pp. 73-74 [internal emphasis omitted].)

NJR assert that here too, Defendants recorded the JV Deed of Trust on December 12, 2018, outside the chain of title before the Grant Deed was recorded on December 27, 2018 conveying ownership of the Property to Discovery.

Defendants assert that the facts of Far West are distinguishable from this case. As Defendants note, the Far West Court found that knowledge of the escrow was not imputable to Far West, noting that “we have no reason to assume Far West had any knowledge of such matters. Nothing in the record indicates that this in any way came to Far West’s attention.” (Far W. Sav. & Loan Ass'n v. McLaughlin, supra, 201 Cal.App.3d at pp. 74-75.) Defendants contend that in this case by contrast, the evidence raises triable issues of material fact as to whether NJR’s agents (i.e., Tae Kim) had knowledge of the JV Deed of Trust that would constitute constructive knowledge to NJR. The Far West Court noted that “McLaughlin argues that in recording the loan documents Burbank Escrow was an agent of Far West and that Far West was thus ‘chargeable with the knowledge of its agent.’ However, from the record it appears that Burbank Escrow was Far West’s agent only as to Escrow No. 2231 in which the deed of trust to Far West was deposited and through which it was recorded. The other documents, including the void reconveyance, were in Escrow No. 2134 and this involved only GTB, as the seller, and Stapleton as the buyer. Nothing indicates that Far West was a principal in this escrow and, under these circumstances, any knowledge Burbank Escrow might have had of McLaughlin’s purported interest is not imputable to Far West.” (Far W. Sav. & Loan Ass'n v. McLaughlin, supra, 201 Cal.App.3d at p. 74.) The Far West Court noted that “[w]hen there are two escrows, the doctrine of imputed knowledge has no application to documents deposited in the escrow to which the party sought to be charged with notice was not a participant.” (Id. at p. 75.) Here, NJR does not appear to argue that there were two escrows, rather, NJR alleges that Central was the escrow company handling the purchase transaction. (Compl., ¶ 16.)

Based on the foregoing, the Court finds that Defendants have raised a triable issue of material fact as to whether NJR had constructive notice that the JV Deed of Trust had been recorded at the time that the NJR Deed of Trust was recorded. Thus, the Court denies summary adjudication of NJR’s Issue No. 2.

Issue No. 1

The first issue on which NJR seeks summary adjudication is that “NJR is Entitled to a Declaration that it Had No Knowledge that the $50,000 Deposit by [Defendants] with CENTRAL pursuant to the Joint Venture Agreement was either intended to be a loan or intended to be secured by a deed of trust.” (Notice of Motion at p. 1:13-16.)

NJR indicates that on or about December 4, 2018, Defendants and Discovery entered into a Joint Venture Agreement wherein Defendants would invest $100,000.00 in a joint venture with Discovery for the renovation of the Property and to share in the profits of the future sale of the Property. (Walters Decl., ¶ 23.) NJR learned that on or about December 24, 2018, Mihee Kim wired funds of $50,000.00 to Central, the escrow company handling the purchase transaction. (Walters Decl., ¶ 26.) NJR asserts that Mihee Kim did not indicate or communicate to Central that the $50,000 deposit was intended to be a loan to Discovery, or that it was secured by a deed of trust. (Tae Kim Decl., ¶ 11.) NJR asserts that prior to the closing of the NJR loan, NJR had no knowledge, information or notice that (a) Mihee Kim deposited $50,000 into escrow; (B) Mihee Kim’s $50,000 was intended to be a loan pursuant to a Joint Venture Agreement, (C) Mihee Kim’s loan was to be secured by the JV Deed of Trust to be recorded against the Property, or that (D) Defendants provided any instructions or other information to Central or anyone else to that effect. (Walters Decl., ¶ 27.)  

As set forth above, Defendants provide evidence that Lim testified that “I did tell Tae that, you know, Stellas and Mihee Kim are going to need – are going to need a deed of trust, and we’re going to have to put it against the property.” (Kim Decl., ¶ 2, Ex. 1 (Christopher Lim Depo.) at p. 71:10-13.) In addition, after the subject December 3, 2018 email was referenced, Lim was asked in his deposition, “[a]t that point, had you told Tae Kim that your investor was going to be a secure creditor on the deal?” (Id. at p. 113:14-15.) Lim responded, “I think what I told him was that there was going to be a lien on the property and a deed of trust, which is why I asked him to help me draft the documents for it.” (Id. at p. 113:16-19.) Lim asked Tae Kim to assist him in doing the first draft of a deed of trust, and Lim believes that Tae Kim actually prepared that first draft of the deed of trust. (Id. at p. 113:23-114:3.) As discussed above in connection with Issue No. 2, the Court finds that a triable issue of material fact exists as to whether NJR had constructive notice of the JV Deed of Trust imputed from the knowledge of Tae Kim. Thus, the Court denies summary adjudication of NJR’s Issue No. 1.

Issue No. 3

The third issue on which NJR seeks summary adjudication is that “NJR is Entitled to a Declaration that if the JV Deed of Trust Did Attach to the Property, It Was Junior to NJR’s Deed of Trust.” (Notice of Motion at p. 1:19-20.)

NJR notes that “a bona fide purchaser for value who acquires his interest in real property without notice of another’s asserted rights in the property takes the property free of such unknown rights. The elements of bona fide purchase are payment of value, in good faith, and without actual or constructive notice of another’s rights.” (Melendrez v. D & I Investment, Inc. (2005) 127 Cal.App.4th 1238, 1251 [internal quotations, citations, and emphasis omitted].)

NJR asserts that “[i]n this case, NJR has met both elements for it to be declared a bona fide encumbrancers [sic]. NJR made a $695,000 loan to DISCOVERY which constituted value. Further, NJR had no actual or constructive notice of the deed of trust recorded by [Defendants] on December 12, 2018. As a result, as a bona fide encumbrancer, NJR’s deed of trust is superior to that of [Defendants], despite the [Defendants] deed of trust being recorded first in time.” (Mot. at p. 18:19-24.) As discussed above, the Court finds that a triable issue of material fact exists as to whether NJR had constructive notice of the JV Deed of Trust imputed from the knowledge of Tae Kim.

Thus, the Court denies summary adjudication of NJR’s Issue No. 3.

Issue No. 4

The fourth issue on which NJR seeks summary adjudication is that “NJR is Entitled to a Declaration that if the JV Deed of Trust Did Attach to the Property and Was Junior to NJR’s Deed of Trust, Then it Was Wiped Out by NJR’s NonJudicial Foreclosure Sale.” (Notice of Motion at p. 1:21-24.) As set forth above, the Court denies summary adjudication of NJR’s Issue No. 3, that “NJR is Entitled to a Declaration that if the JV Deed of Trust Did Attach to the Property, It Was Junior to NJR’s Deed of Trust.” Thus, the Court likewise denies summary adjudication of NJR’s Issue No. 4.

Issue Nos. 5 and 6

The fifth issue on which NJR seeks summary adjudication is that “NJR is Entitled to a Declaration that Neither DISCOVERY nor STELLAS or KIM informed CENTRAL that the $50,000.00 provided by STELLAS and KIM was intended to be purchase money funds secured by the JV Deed of Trust.” (Notice of Motion at p. 1:25-27.) The sixth issue on which NJR seeks summary adjudication is that “NJR is Entitled to a Declaration that CENTRAL had no knowledge of the [Defendants] loan secured by the JV Deed of Trust.” (Notice of Motion at p. 2:1-2.)

NJR provides evidence that Mihee Kim deposited $50,000 into escrow via wire transfer. (Tae Kim Decl., ¶ 11.) In his declaration, Tae Kim states that Mihee Kim did not indicate or communicate to Central that the $50,000 deposit was intended to be a loan to Discovery or that it was secured by a deed of trust. (Tae Kim Decl., ¶ 11.) Tae Kim states that Mihee Kim ever indicated to Central that she was a lender in the transaction. (Tae Kim Decl., ¶ 11.)   

As set forth above, Defendants indicate, inter alia, that Lim was asked in his deposition, “[s]o you told Tae Kim that the $50,000 was coming in from Mihee Kim, and you told him that it was going to be secured?” to which Lim responded, “Yes, sir.” (Kim Decl., ¶ 2, Ex. 1 (Christopher Lim Depo.) at p. 196:11-14.) Lim was also asked, “[a]nd you told Tae Kim, relative to the Mihee Kim $50,000, that it was going to be secured by a deed of trust?” to which Lim responded, “Yes, sir.” (Id. at p. 196:15-18.)

The Court finds that Defendants have raised a triable issue of material fact as to whether Discovery informed Central that the $50,000.00 provided by Defendants was intended to be purchase money funds secured by the JV Deed of Trust. As set forth above, Issue No. 5 asserts that “NJR is Entitled to a Declaration that Neither DISCOVERY nor STELLAS or KIM informed CENTRAL that the $50,000.00 provided by STELLAS and KIM was intended to be purchase money funds secured by the JV Deed of Trust.” (Notice of Motion at p. 1:25-27, emphasis added.) However, as set forth above, “[a] motion for summary adjudication shall be granted only if it completely disposes of a cause of action, an affirmative defense, a claim for damages, or an issue of duty.” (Code Civ. Proc., § 437c(f)(1), emphasis added.)¿

Based on the foregoing, the Court also finds that Defendants have raised a triable issue of material fact as to whether Central had knowledge of Defendants’ loan secured by the JV Deed of Trust. Thus, the Court denies summary adjudication of Issues Nos. 5 and 6.

Issue No. 7

The seventh issue on which NJR seeks summary adjudication is that “NJR is Entitled to a Declaration that Neither DISCOVERY nor [Defendants] Provided any Instructions to CENTRAL Regarding the $50,000.00 nor Disclosed that the JV Deed of Trust had been Recorded nor Provided a Copy of the Recorded JV Deed of Trust.” (Notice of Motion at p. 2:3-5.) As discussed, the Court finds that Defendants have raised a triable issue of material fact as to whether Discovery informed Central that the $50,000.00 provided by Defendants was intended to be purchase money funds secured by the JV Deed of Trust. As also discussed, “[a] motion for summary adjudication shall be granted only if it completely disposes of a cause of action, an affirmative defense, a claim for damages, or an issue of duty.” (Code Civ. Proc., § 437c(f)(1).)

Thus, the Court denies summary adjudication of Issue No. 7.

Issue No. 8

The eighth issue on which NJR seeks summary adjudication is that “NJR is Entitled to a Declaration that as CENTRAL’s principal, NJR had No Imputed Knowledge that the $50,000.00 Provided by [Defendants] was Purchase Money Funds to be Secured by the JV Deed of Trust.” (Notice of Motion at p. 2:6-9.) As discussed, the Court finds that a triable issue of material fact exists as to whether NJR had constructive notice of the JV Deed of Trust imputed from the knowledge of Tae Kim. In addition, as discussed, Defendants provide evidence that Lim told Tae Kim that Mihee Kim’s $50,000 loan was going to be secured by a deed of trust. (Kim Decl., ¶ 2, Ex. 1 (Christopher Lim Depo.) at p. 196:15-18.)

Thus, the Court denies summary adjudication of Issue No. 8.

Issue No. 9

The ninth issue on which NJR seeks summary adjudication is that “NJR is Entitled to a Declaration that the JV Deed of Trust is a Wild Deed of Trust Imparting No Constructive or Actual Notice to NJR and/or its agents, under the Recording Statutes, and no other Notice or Knowledge of the JV Deed of Trust was imparted nor attributable to NJR and/or its agents, NJR’s Deed of Trust is not Subject to the JV Deed of Trust, and the Trustee’s Deed Upon Sale Vests Ownership of the Property in NJR Free and Clear of the JV Deed of Trust.” (Notice of Motion at p. 2:10-16.) As discussed, Court finds that a triable issue of material fact exists as to whether NJR had constructive notice of the JV Deed of Trust imputed from the knowledge of Tae Kim. Thus, the Court denies summary adjudication of Issue No. 9.

Conclusion

Based on the foregoing, the Court denies NJR’s motion in its entirety.

Defendants are ordered to give notice of this Order.

DATED:  January 20, 2023                            ________________________________

Hon. Teresa A. Beaudet

Judge, Los Angeles Superior Court