Judge Theresa M. Traber, Case Number: 19STCV12435, Date: 2023-09-07 Tentative Ruling

Judge: Theresa M. Traber, Case: 19STCV12435, Date: 2023-09-07 Tentative Ruling

Case Number: 19STCV12435 Hearing Date: November 2, 2023 Dept: 47

Tentative Ruling

Judge Theresa M. Traber, Department 47

HEARING DATE: November 2, 2023 TRIAL DATE: December 12, 2023

CASE: AMG & Associates, LLC, et al. v. Housing Preservation, Inc., et al.

CASE NO.: 19STCV12435

MOTION FOR SUMMARY JUDGMENT, OR, IN THE ALTERNATIVE, SUMMARY ADJUDICATION

MOVING PARTY: Defendants Housing Preservation Inc., Silver Tree Residential LLC, Casa La Merced, L.P., SPE Merced, LLC, and Doug Gilland

RESPONDING PARTY(S): Plaintiffs AMG & Associates, LLC and Affordable Housing Acquisition Partnership.

STATEMENT OF MATERIAL FACTS AND/OR PROCEEDINGS:

This is an action for conversion and breach of contract filed on April 10, 2019. Plaintiffs allege that, after contracting with Defendants Gilland and Silver Tree to purchase a parcel of low-income elderly housing, Defendants conspired to sabotage Plaintiffs’ efforts so that Defendants Housing Preservation, SPE Merced, and Casa La Merced could instead take ownership of the subject property.

Defendants move for summary judgment, or, in the alternative, summary adjudication of each cause of action asserted against them.

TENTATIVE RULING:

Defendants’ Motion for Summary Judgment is DENIED.

Defendants’ Motion in the Alternative for Summary Adjudication is GRANTED as to the third cause of action for conversion and fifth cause of action for breach of the implied covenant of good faith and fair dealing and otherwise DENIED.

DISCUSSION:

Motion for Summary Judgment

Defendants move for summary judgment. As, for the reasons stated below, the Court has found that Defendants are entitled to summary adjudication of each cause of action asserted against them, Defendants’ Motion for Summary Judgment is GRANTED.

Motion for Summary Adjudication

Defendants move, in the alternative, for summary adjudication of each cause of action asserted against them.

Legal Standard

The purpose of a motion for summary judgment “is to provide courts with a mechanism to cut through the parties’ pleadings in order to determine whether, despite their allegations, trial is in fact necessary to resolve their dispute.” (Aguilar v. Atl. 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.)

“On a motion for summary judgment, the initial burden is always on the moving party to make a prima facie showing that there are no triable issues of material fact.” (Scalf v. D. B. Log Homes, Inc. (2005) 128 Cal.App.4th 1510, 1519.) Once the moving party has met that burden, section 437c shifts the burden to the opposing party to show that a triable issue of one or more material facts exists as to the cause of action or a defense thereto. If the opposing party cannot do so, summary judgment should be granted. (Avivi v. Centro Medico Urgente Med. Ctr. (2008) 159 Cal.App.4th 463, 467.)

When deciding whether to grant summary judgment, the Court must consider all the evidence set forth in the papers, except evidence to which the Court has sustained an objection, as well as all reasonable inferences that may be drawn from that evidence, in the light most favorable to the party opposing summary judgment. (Ibid.)

Defendants’ Request for Judicial Notice

Defendants request that the Court take judicial notice of (1) the Complaint in this action; (2) a printout that purports to be the docket in the matter of AMG & Associates, LLC et al. v. Casa La Merced, et al., LASC Case No. BC622973 (“Prior Action”); (3) the Complaint in the Prior Action; and (4) the Declaration by Alexis Gevorgian in support of an opposition to a motion to expunge lis pendens in the Prior Action.

With respect to request No. 2, the Court does not take judicial notice of the document provided as it is not the actual docket itself, such that it is subject to Evidence Code section 452(d). However, the Court will instead, on its own motion, take judicial notice of the docket in the Prior Action pursuant to that section.

With respect to the remaining requests, Defendants’ requests are GRANTED pursuant to Evidence Code section 452(d) (court records). In so doing, the Court takes judicial notice only of the existence of these documents, not the truth of their contents.

Plaintiffs’ Request for Judicial Notice

Plaintiffs request that the Court take judicial notice of additional documents. However, as none of the documents offered are relevant to the Court’s ruling, the Court declines to do so. Accordingly, Plaintiffs’ requests for judicial notice are DENIED. (Gbur v. Cohen (1979) 93 Cal.App.3d 296, 301 (“[J]udicial notice . . . is always confined to those matters which are relevant to the issue at hand.”].)

Effect of Prior Ruling

In their opposition, Plaintiffs claim Defendants’ motion should be denied in its entirety because Defendants rely, as they did in their previous motion for judgment on the pleadings, on a declaration submitted by Plaintiffs in a previous action against the prior owner of the subject property. In ruling on that motion, the Court rejected the contents of that declaration as a basis for Defendants’ claim of judicial estoppel. (July 5, 2023 Minute Order.) Although Plaintiffs claim that the declaration is being offered to relitigate an argument which the Court previously rejected, a cursory review of the moving papers demonstrates that Defendants do not advance such an argument, but rather offer the declaration as evidence tending to support their factual contentions. Notwithstanding the sufficiency or persuasiveness of that declaration, it does not, by itself, constitute a basis to deny the motion outright.

First Cause of Action: Intentional Interference with Prospective Economic Advantage

Defendants move for summary adjudication of the first cause of action for intentional interference with prospective economic advantage. Defendants’ primary argument with respect to this cause of action is that Plaintiffs cannot establish an economic relationship with any third party that had the probability of future economic benefit to Plaintiffs. Defendants also contend that this cause of action is barred by the statute of limitations.

1. Existence of Economic Relationship with Prospective Benefit

To prevail on a claim for intentional interference with prospective economic advantage, a plaintiff must establish (1) an economic relationship between the plaintiff and some third party with the probability of future economic benefit to the plaintiff; (2) defendant’s knowledge of the relationship; (3) intentional acts on the part of the defendant designed to disrupt the relationship; (4) actual disruption of the relationship; and (5) economic harm to the plaintiff caused by the acts of the defendant. (Youst v. Longo (1987) 43 Cal.3d 64, 71, fn. 6.)

A prospective economic relationship need not take the form of a legally enforceable agreement to establish a probability of future economic benefit to the plaintiff. (See Buckaloo v. Johnson (1975) 14 Cal.3d 815, 827 [disapproved on other grounds in Della Penna v. Toyota Motor Sales, U.S.A., Inc. (1995) 11 Cal.4th 376, 393, fn.5].) However, the tort of intentional interference with prospective economic advantage “traditionally has not protected speculative expectancies, usually because there is no sufficient degree of certainty that the plaintiff ever would have received the anticipated benefits.” (Roy Allan Slurry Seal, Inc. v. American Asphalt South, Inc. (2017) 2 Cal.5th 505, 518 [internal citations and quotations omitted].)

The Complaint alleges that Plaintiffs entered into a written Purchase and Sale Agreement concerning parcel of real property from its then-owner, Casa La Merced (“Prior Owner”), not to be confused with the similarly-named Defendant in this action, Casa La Merced L.P. (“CLMLP”) on January 19, 2016. (Complaint ¶ 7.) An essential term of this agreement required approval of the transaction by the United States Department of Housing and Urban Development, which required the Prior Owner to file certain necessary paperwork. (Id.) Plaintiffs allege that while this agreement was outstanding, Defendant Gilland began communicating with the Prior Owner concerning a separate offer to purchase the property sometime in late May or early June 2016. (Complaint ¶ 9.) Defendant Gilland, on the advice of the Prior Owner, then contacted Plaintiffs on June 14, 2016 to discuss a joint agreement concerning the sale of the property and allegedly induced Plaintiffs, between June 21 and 23, 2016, to provide confidential information concerning the property, including tax credit structures, financing plans, bond information, and a rent comparability study, subject to an alleged confidentiality agreement. (Complaint ¶ 12.) According to Plaintiffs, Defendants then used that information to purchase the property for themselves. (Complaint ¶ 13.)

Defendants contend that, in reality, no prospective economic relationship existed by June 21, 2016 with a probability of future economic benefit because the Purchase and Sale Agreement had been terminated by the Prior Owner pursuant to the terms of the agreement on June 20, 2016. According to a declaration filed by Plaintiffs’ principal, Alexis Gevorgian, in a separate action against the Prior Owner, the Purchase and Sale Agreement entitled either party, if approval by HUD was not obtained within 150 days of the effective date, to terminate the Agreement after that deadline had passed. (Separate Statement of Undisputed Material Fact No. 7.) The effective date of the agreement was January 19, 2016. (SSUMF No. 3.) Defendants state that Plaintiffs were aware that the Prior Owner was seeking offers from other buyers as of June 3, 2016, and that the Prior Owner expressly informed Plaintiffs on June 20, 2016, three days after the 150-day deadline had passed, that it was exercising its right to terminate the agreement. (SSUMF No. 8.) Thus, Defendants contend, the probability of future economic benefit had ceased to exist because of the independent conduct of the Prior Owner a day before Plaintiffs claim that Defendants engaged in their alleged wrongful conduct. This evidence is sufficient to carry Defendants’ burden to show that, at the time of the alleged interference by Defendants, no prospective economic relationship existed at the time with the probability of future economic benefit to Plaintiffs. The burden now shifts to Plaintiffs to demonstrate a triable issue of fact in this respect.

In opposition, Plaintiffs argue that, whether or not the Purchase Agreement had expired, Plaintiffs retained a prospective economic relationship based on their contention that the Prior Owner breached the Purchase Agreement and the resulting lawsuit. Plaintiffs state that, although the Prior Owner tried to terminate the Agreement, it was not entitled to do so because it breached its obligation under the Purchase Agreement by “failing and refusing to submit the requisite application to HUD, including but not limited to, submitting Form 9808 to HUD in order to initiate the HUD Approval Process, and by “failing and refusing to contact HUD to obtain consent to the easement, and/or initiating contact with the neighbor in order to negotiate a release of the easement, and/or taking some other action to cure the Easement Default.” (Complaint for Specific Performance, Case No. BC622973, ¶ 13.) Plaintiffs also contend that the Prior Owner could not unilaterally cancel the escrow, which required the signature of both parties to cancel, remained open. (Separate Statement of Material Facts No. 8.) According to Plaintiffs, negotiations with the Prior owner continued throughout the course of the lawsuit, but their only evidence for this contention is a brief statement in the Declaration of Alexis Gevorgian in support of the Opposition which is not cited in Plaintiffs’ Separate Statement of Material Facts. (Declaration of Alexis Gevorgian ISO Opp. ¶ 7.) Plaintiffs contend that, because of the pending lawsuit challenging the Prior Owner’s right to terminate the Purchase Agreement and with escrow remaining open, they retained a prospective economic relationship with the Prior Owner that had a probability of future economic benefit, notwithstanding the enforceability of the Purchase Agreement, because Plaintiffs could have reached a settlement with the Prior Owner that would have resolved the issue of HUD approval. (See SAF No. 122.) In reply, Defendants argue that these prospective benefits are too speculative, as they hinge on settlement negotiations, obtaining financing from third parties, or finding other qualified buyers to create a joint venture.

Plaintiffs’ contention, though not supported by any authority provided in opposition, constitutes a colorable argument on its face. For this reason, at the previous hearing on this motion, the Court ordered supplemental briefing on the issue of whether a claim asserted in a pending lawsuit was sufficiently definite to constitute a prospective economic benefit and set a briefing schedule for the parties’ supplemental filings. (September 7, 2023 Minute Order.) The parties provided supplemental briefing pursuant to the Court’s order.

Disappointingly, neither party provided any authority directly speaking to the issue on which the Court requested briefing. Instead, Defendants’ supplemental brief endeavors to extend the principle that the prospective economic advantage be more than a mere hope or desire for a benefit (see, e.g., Blank v. Kirwan (1985) 39 Cal.App.3d 311, 330-31), to argue that, under the facts here, Plaintiffs’ prospective benefit was not sufficiently definite. Defendants cite the order in the previous action expunging the lis pendens recorded against the subject property as evidence that Plaintiffs’ claims did not have a viable prospective economic benefit. (SSUMF No. 13.) As Defendants state, the court in the prior action expunged the lis pendens finding Plaintiffs failed to establish, by a preponderance of the evidence, that they had a probability of establishing their claims in that action. (Id.). That said, however, an order expunging a lis pendens has no preclusive effect in this case, and the fact that Plaintiffs did not carry their burden on an interlocutory motion does not establish, construing all inferences in their favor, that their claims were too indefinite to constitute a prospective economic advantage. In addition, Defendants again argue that Plaintiffs’ proposed financing schemes rely on too many contingencies and are too speculative to constitute a prospective economic benefit. Leaving aside that these arguments ignore the issue of whether the claim in the prior action itself was a prospective economic benefit, Defendants’ contentions are of no benefit to them, as they show the existence of a dispute of fact as to whether Plaintiffs’ proposed agreements were viable.

The Court is not persuaded by Defendants’ arguments in reply and supplemental briefing. Construing all factual inferences in favor of the non-moving party, Plaintiffs have offered evidence which tends to show that there is a triable issue of fact as to the existence of a prospective economic advantage during the pendency of the prior action. Further, because Plaintiffs specifically contest the Prior Owner’s right to terminate the Purchase Agreement because of its own prior breach of the HUD approval clause, Defendants’ arguments about the lack of actual disruption and economic harm fall apart because they are predicated on a disputed issue – whether the Purchase Agreement was properly terminated by the Prior Owner as of June 20, 2016. The factual record before the Court thus reveals a triable issue of fact with respect to those contentions as well.

Accordingly, Defendants are not entitled to summary adjudication on this basis. In making this finding, the Court emphasizes that this ruling only goes so far as to establish a triable issue of fact as to this cause of action, and not that Defendant’s arguments are foreclosed as a matter of law.

2. Statute of Limitations

Defendants argue in the alternative that Plaintiff cannot prevail on this cause of action because the statute of limitations bars its claim.

Claims for intentional interference with prospective economic advantage have a two-year statute of limitations. (Code Civ. Proc. § 339(1); Tu-Vu Drive-In Corp. v. Davies (1967) 66 Cal.2d 435, 437.) In ordinary tort and contract actions, the statute of limitations . . . begins to run upon the occurrence of the last element essential to the cause of action. (Neel v. Magana, Olney, Levy, Cathcart & Gelfand (1971) 6 Cal.3d 176, 187.) In the context of a claim for interference with prospective economic advantage, the statute of limitations would therefore begin to run upon disruption of the economic relationship with potential benefit resulting in injury to the plaintiff. (See Youst v. Longo, supra, 43 Cal.3d at 71, fn. 6.)

Defendant argues that the statute of limitations began to run on June 20, 2016, when the original Purchase Agreement was cancelled by the prior owner of the subject property. As this action was filed on April 10, 2019, Defendant argues that the statute of limitations thus bars this cause of action. However, the Court has already found a triable issue of fact as to whether there was an economic relationship with a prospective benefit during the pending lawsuit for specific performance. Thus, construing all inferences in favor of the nonmoving party, the date of accrual is not, as Defendant argues, the date of cancellation of the Purchase Agreement, but rather when it was no longer possible for Plaintiff to achieve specific performance of the Agreement, i.e., the date escrow closed on the subject property. It is undisputed that escrow closed on June 19, 2017, which is less than two years before the Complaint was filed. (SSUMF No. 9). Thus, construing all factual inferences in favor of the non-moving party, the Court finds that Defendants have not demonstrated that Plaintiff cannot prevail because this claim is barred by the two-year statute of limitations. Defendants are therefore not entitled to summary adjudication on this basis.

Accordingly, Defendants’ Motion for Summary Adjudication of the first cause of action for intentional interference with prospective economic advantage is DENIED.

Second Cause of Action: Negligent Interference with Prospective Economic Advantage

Defendants move for summary adjudication of the second cause of action for negligent interference with prospective economic advantage. The parties agree that this cause of action survives or fails alongside the first cause of action. Accordingly, for the reasons stated above, Defendants’ Motion for Summary Adjudication of the second cause of action for negligent interference with prospective economic advantage is DENIED.

Third Cause of Action: Conversion

Defendants move for summary adjudication of the third cause of action for conversion. Defendants contend that Plaintiffs cannot prevail on this claim because their confidential information is not tangible personal property, because Defendants did not substantially interfere with property rights, and because this claim is also barred by the statute of limitations.

The tort of conversion is “an act of willful interference with personal property, done without lawful justification, by which any person entitled thereto is deprived of the use and possession of personal property.” (De Vries v. Brumback (1960) 53 Cal.2d 643, 647.) For the purpose of this tort, “personal property” must be tangible. (See, e.g., Minniear v. Tors (1968) 266 Cal.App.2d 495, 505.) The tort of conversion does not apply to ideas. (Melchior v. New Line Products (2003) 106 Cal.App.4th 779, 794.)

Plaintiffs allege that Defendant Gilland induced Plaintiffs to provide him with the Purchase and Sale Agreement, Plaintiffs’ tax credit underwriting model, financing plains, bond information, and a rent comparability study for the property. (Complaint ¶ 12.) According to Plaintiffs, Defendant Gilland shared this information with the other named Defendants, who used the information to acquire the subject property. (Complaint ¶ 13.) This claim, Defendants argue, is thus a claim for conversion of information, which is intangible personal property not subject to this tort as a matter of law. This contention is principally an attack on the sufficiency of the pleadings. As the Court of Appeal stated in FPI Development, Inc. v. Nakashima:

The procedure for resolving a summary judgment motion presupposes that the pleadings are adequate to put in issue a cause of action or defense thereto. [citation]. However a pleading may be defective in failing to allege an element of a cause of action or in failing to intelligibly identify a defense thereto. In such a case, the moving party need not address a missing element nor, obviously, respond to assertions which are unintelligible or make out no recognizable legal claim. The summary judgment proceeding is thereby necessarily transmuted into a test of the pleadings and the summary judgment motion into a motion for judgment on the pleadings. In these circumstances it has been said that a defendant's “motion for summary judgment necessarily includes a test of the sufficiency of the complaint and as such is in legal effect a motion for judgment on the pleadings.” [citation].

(FPI Development Inc. v. Nakashima (1991) 231 Cal.App.3d 367, 382.) In support of their position, Defendants principally rely on Olschewski v. Hudson, a 1927 appellate opinion holding that a list of laundry customers that had not been reduced to writing was more akin to business goodwill or a trade secret than tangible personal property that could be subject to a conversion action. (Olschewski v. Hudson (1927) 87 Cal.App. 282, 286.) According to Defendants, while the information alleged in the Complaint might constitute a form of property rights, it is not a tangible item which might be transferred like a physical good or a financial instrument.

In opposition, Plaintiffs claim that the information provided to Gilland is properly the subject of a conversion action because it was reduced to writing, citing Fremont Indemnity Co. v. Fremont General Corp. (2007) 148 Cal.App.4th 97, in support of this proposition. Plaintiffs’ reliance on this authority is misplaced, as the Fremont court did not hold that any information which was reduced to writing could support a claim for conversion. Rather, Fremont held that, for the purposes of a demurrer, certain financial assets could be the subject of a conversion claim, despite their intangibility, based on their character as sufficiently definite and certain, analogous to shares of stock. (Fremont, supra, 148 Cal.App.4th at 121.) Further, although Plaintiffs contend that the basis of this claim is Defendants’ misappropriation of the physical documents, that argument is undermined by the allegations in the Complaint itself, which turn on Defendants’ purported misuse of the contents of the documents, not the physical (or electronic) items. (See Complaint ¶ 13.) The Court is therefore persuaded by Defendants’ argument that this cause of action, as pled, does not support a claim for conversion, and Defendants are therefore entitled to summary adjudication of this claim.

As a separate basis exists for summary adjudication of this cause of action, the Court declines to address Defendants’ alternative arguments that Plaintiff has not shown interference with a property right and that this claim is barred by the statute of limitations.

Accordingly, Defendants’ Motion for Summary Adjudication of the third cause of action for conversion is GRANTED.

Fourth Cause of Action: Breach of Contract

Defendants move for summary adjudication on the fourth cause of action for breach of contract.

In order to prevail on a claim for breach of contract, a plaintiff must establish (1) the existence of a contract, (2) the plaintiff’s performance or excuse for nonperformance, (3) the defendant’s breach, and (4) resulting damage to the plaintiff. (Richman v. Hartley (2014) 224 Cal.App.4th 1182, 1186.) To constitute an enforceable contract, the terms of the agreement “must be sufficiently certain to provide a basis for determining what obligations the parties have agreed to.” (Estate of Thottam (2008) 165 Cal.App.4th 1331, 1340.) The issue of whether a contract is sufficiently definite is a question of law. (Ladas v. California State Auto Assn. (1993) 19 Cal.App.4th 761, 770 fn. 2, 23.)

As alleged in the Complaint, Plaintiffs contend that the agreement which gives rise to this cause of action consists of a text message exchange on June 21, 2016, and an email exchange on June 23, 2016, between Defendant Gilland and Alexis Gevorgian in which Defendant agreed to keep confidential the materials provided regarding the subject property. (Complaint ¶ 12.) The contents of these communications are undisputed: on June 21, 2016, Mr. Gevorgian and Defendant Gilland exchanged text messages concerning the subject property, during which Defendant Gilland requested a copy of the Purchase and Sale Agreement at 11:52 A.M. (See, e.g., Declaration of Doug Gilland ISO Mot. Exh. A. p. AMGAHAP000251.) At 1:24 P.M., Gevorgian texted “No amendments. Obviously what I sent to you is confidential, agreed?” (Id. p. AMGAHAP000258.) Defendant Gilland responded one minute later, saying “Agreed. Thank you.” (Id.) On June 23, 2016, Gevorgian and Gilland exchanged emails, wherein Defendant Gilland requested Plaintiffs’ tax credit underwriting model. (See, e.g., Gilland Decl. Exh. C. p. DEF001314.) After some discussion regarding the relevance and usefulness of sending that information, Gevorgian stated “of the 10 offers, all 10 of which are major players proposed a bond deal with 4 percent credits, this should tell you something. I'll send you a proforma if you agree to keep it confidential, maybe even on Sunday. Bottom line is that it generates about 6 million in free equity. Please let me know if it will remain confidential.” (Id. p. DEF001313.) In response, Defendant Gilland replied “Yes. It will remain confidential.” (Id.)

Defendants contend that these two exchanges cannot constitute a written confidentiality agreement because they are not sufficiently defined to determine the scope of any duty, the limits of performance, or a rational basis for the assessment of damages. Defendants argue that these exchanges do not, on their face, define “confidential information,” the parties to the agreement, the duration of the agreement, or what information would be provided by Plaintiffs. (Gilland Decl. Exhs. A, C.) As Defendants state, Gilland only requested the Purchase and Sale Agreement and Plaintiffs’ tax credit underwriting model. (SSUMF No. 70.) However, Alexis Gevorgian stated an intent to send a “proforma” (Gilland Decl. Exh. C. p. DEF001313), and Plaintiffs allege that they provided their tax credit structure, financing plans that “met HUD’s debt to dollar rule,” bond information, and a rent comparability study for the subject property. (Complaint ¶ 12.)

The Court is not persuaded that Defendants have met their burden of production with respect to this line of argument. Drawing all inferences in the light most favorable to Plaintiffs, the exchanges shown in Defendants’ body of evidence, in context, evidence an agreement between Gevorgian and Gilland, as agents for their respective businesses, to keep the tax credit underwriting model and the purchase and sale agreement from public disclosure, and to prevent their use for purposes other than the development of a joint agreement to purchase the subject property. The Court does not agree that the terms of these agreements are so vague as to render them unenforceable. Defendant is therefore not entitled to summary adjudication on this basis.

Defendants argue in the alternative that this cause of action fails because Defendant Gilland did not disseminate any confidential information. Defendants base this argument on the contention, unsupported by any citation to authority, that because Gilland stated in a June 23, 2016, email that he was working with an unspecified partner, and because he was purportedly acting as a representative of the other corporate Defendants besides Silver Tree, Plaintiffs knowingly agreed to provide information to the other corporate Defendants. (See SSUMF No. 76.) The Court is not persuaded.

Nothing in the evidence presented provides any basis to conclude that Plaintiffs had reason to know of Defendant Gilland’s involvement with the other corporate entities in this action. The Court certainly cannot conclude, especially drawing all inferences in Plaintiffs’ favor, that Plaintiffs should have deduced a connection with Defendant HPI by a nonspecific reference to “my partner.” Defendants have failed to carry their burden to demonstrate that Plaintiffs cannot prevail on this basis.

Accordingly, as they have failed to demonstrate that Plaintiffs cannot prevail on this cause of action, Defendants are not entitled to summary adjudication. Defendants’ Motion for Summary Adjudication of the fourth cause of action is therefore DENIED.

Fifth Cause of Action: Breach of Implied Covenant of Good Faith and Fair Dealing

Defendants move for summary adjudication of the fifth cause of action for breach of the implied covenant of good faith and fair dealing. A claim of this nature is premised on the existence of an enforceable contract. (See, e.g., Racine & Laramie, Ltd. v. Dep’t of Parks and Recreation (1992) 11 Cal.App.4th 1026, 1031-33.)

Defendants argue that this cause of action is duplicative of the fourth cause of action, as it is based on the same allegations and conduct. Where the allegations “do not go beyond the statement of a mere contract breach and, relying on the same alleged acts, simply seek the same damages or other relief already claimed in a companion contract cause of action, they may be disregarded as superfluous as no additional claim is actually stated.” (Careau & Co. v. Security Pacific Business Credit, Inc. (1990) 222 Cal.App.3d 1371, 1395.) The essential allegations of the fifth cause of action are identical to the allegations in the fourth cause of action for breach of contract. (Complaint ¶¶ 30, 34.) Defendants have therefore demonstrated that Plaintiffs cannot prevail on this claim because it is duplicative. The burden now shifts to Plaintiffs to demonstrate a triable issue of fact as to allegations going beyond the statement of a breach of contract.

Plaintiffs, in opposition, do not directly address Defendants’ argument beyond a rote recitation of the facts in support of their breach of contract claim. Plaintiffs have therefore effectively conceded that Defendants are correct and have failed to carry their burden to demonstrate a triable issue of fact in this respect. Defendants are therefore entitled to summary adjudication of this cause of action.

Accordingly, Defendants’ Motion for Summary Adjudication of the fifth cause of action for breach of the implied covenant of good faith and fair dealing is GRANTED.

Claim for Damages

Defendants also move separately for summary adjudication of the entire complaint for failure to establish damages. A party may only move for summary adjudication of a claim for damages, by itself, if that party contends that “there is no merit to a claim for damages, as specified in Section 3294 of the Civil Code [pertaining to punitive damages].” (Code Civ. Proc. § 437c subd. (f)(1) [emphasis added].) As Defendants are not specifically challenging a claim for punitive damages, a free-standing challenge to Plaintiffs’ damages claims is improper. Defendants are therefore not entitled to summary adjudication of these claims for damages.

CONCLUSION:

Accordingly, Defendants’ Motion for Summary Judgment is DENIED.

Moving parties to give notice.

IT IS SO ORDERED.

Dated: November 2, 2023 ___________________________________

Theresa M. Traber

Judge of the Superior Court

Any party may submit on the tentative ruling by contacting the courtroom via email at Smcdept47@lacourt.org by no later than 4:00 p.m. the day before the hearing. All interested parties must be copied on the email. It should be noted that if you submit on a tentative ruling the court will still conduct a hearing if any party appears. By submitting on the tentative you have, in essence, waived your right to be present at the hearing, and you should be aware that the court may not adopt the tentative, and may issue an order which modifies the tentative ruling in whole or in part.