Judge Theresa M. Traber, Case 19STCV41768 2022-07-28 Tentative Ruling

Judge: Theresa M. Traber, Case: 19STCV41768, Date: 2022-07-28 Tentative Ruling

Case Number: 19STCV41768 Hearing Date: July 28, 2022 Dept: 47

Tentative Ruling

Judge Theresa M. Traber, Department 47

HEARING DATE: July 28, 2022 TRIAL DATE: October 10, 2022

CASE: Talia del Carmen Rodriguez v. Jacqueline Stein, et al

CASE NO.: 19STCV41768

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

MOVING PARTY: Defendants Jacqueline Stein, Standard Home Lending, Inc., Matthew Roton.

RESPONDING PARTY(S): Plaintiff Talia del Carmen Rodriguez

STATEMENT OF MATERIAL FACTS AND/OR PROCEEDINGS:

This is an action for breach of contract filed on November 19, 2019. Plaintiff alleges that she contracted with Defendants to execute a lien loan agreement on her home, and that the Defendants falsely recorded a notice of default and are pursuing a foreclosure sale on the property.

Defendants Stein, Roton, and Standard Home Lending Inc. move for summary judgment on all six causes of action against them, or, in the alternative, summary adjudication.

TENTATIVE RULING:

Defendants’ motion for summary judgment is DENIED.

Defendants’ alternative motion for summary adjudication is DENIED as to the third and fourth causes of action and otherwise GRANTED.

DISCUSSION:

Requests for Judicial Notice

Defendants request that the Court take judicial notice of (1) a deed of trust recorded naming Chase Bank as the lender for a loan backed by Plaintiff’s property; (2) a deed of trust recorded naming Jacqueline Stein as the lender for a loan backed by Plaintiff’s property; (3) a notice of default on the Stein loan; (4) a notice of default on the Chase loan; (5) a notice of recission on the Chase loan; (6) a notice of sale on the Stein loan; (7) a petition for Bankruptcy; (8) a motion for relief from automatic stay; (9) a March 19, 2020 bankruptcy order; (10) an April 30, 2020 bankruptcy order; (11) a motion to dismiss bankruptcy case; (12) an order of dismissal from the bankruptcy court; (13) a grant deed on Plaintiff’s property; and (14) a notice of recission on the Stein loan.

Defendants’ requests Nos. 1-6 and 13-14 are GRANTED pursuant to Evidence Code section 452(c) and (h) (official acts and matters not reasonably subject to dispute and capable of verification.) Defendants’ requests Nos. 7 through 12 are GRANTED pursuant to Evidence Code section 452(d) (court records).

Motion for Summary Judgment

As discussed in connection with Defendants’ motion for summary adjudication below, Defendants have failed to demonstrate that they are entitled to prevail as to each cause of action asserted against them. Accordingly, the motion for summary judgment is DENIED.

Motion for Summary Adjudication

Defendants move for summary adjudication as to all causes of action against them.

Legal Standard

The function of a motion for summary judgment or adjudication is to allow a determination as to whether an opposing party can show evidentiary support for a pleading or claim and, if not, to enable an order of summary dismissal without the need for trial. (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 843.) Code of Civil Procedure Section 437c(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, 381-82.)

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. (Code Civ Proc. § 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.) The lack of opposition by a plaintiff is not grounds to grant a motion for summary judgment if a defendant cannot meet their initial burden of proof. (See Thatcher v. Lucy Stores, Inc. (2000) 79 Cal.App.4th 1081, 1087.)

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.)

Defendant’s Evidentiary Objections

Declaration of Talia Rodriguez:

Objections Nos. 2 – 38: OVERRULED. Hearsay may be cured at trial. (Sweetwater Union High School Dist. V. Gilbane Building Co. (2019) 6 Cal.5^th 931, 941-42.) Other objections go to weight, not admissibility.

As the Court does not rely on any of the remaining testimony in the declaration in reaching its decision, the Court declines to rule on the remainder of Defendants’ objections. (Code Civ. Proc. § 437c(q).)

Declaration of Patricia Rodriguez:

Objections Nos. 15-19: OVERRULED. Hearsay may be cured at trial. (Sweetwater Union High School Dist. V. Gilbane Building Co. (2019) 6 Cal.5^th 931, 941-42.) Other objections go to weight, not admissibility.

First Cause of Action: Breach of Contract

Defendants contend that Plaintiff cannot prevail on the first cause of action for breach of contract.

To state a cause of action for breach of contract, a Plaintiff must plead the contract, the Plaintiff’s performance of the contract or excuse for nonperformance, Defendant’s breach, and finally the resulting damage. (Otworth v. Southern Pac. Transportation Co. (1985) 166 Cal.App.3d 452, 458.) Further, the complaint must indicate whether the contract is written, oral, or implied by conduct. (Code Civ.Proc. § 430.10(g).) General allegations stating that defendants violated a contract are insufficient, and plaintiffs must state facts showing a breach. (Levy v. State Farm Mutual Automobile Ins. Co. (2007) 150 Cal.App.4th 1, 5-6.) For breach of a written contract, the terms must be set out verbatim in the body of the complaint or a copy of the written instrument must be attached and incorporated by reference. (Otworth v. Southern Pac. Transportation Co., supra, 166 Cal.App.3d at 459.)

Defendants contend that Plaintiff cannot prevail on this cause of action because Plaintiff cannot establish that a contract existed between Plaintiff and any other party. Defendants contend that neither Standard Home Lending nor Defendant Roton had a contract with either Stein or Plaintiff regarding servicing of the loan. (Defendant’s Separate Statement of Undisputed Material Fact (“SSUMF”) Issue 2 Nos. 15-16.) However, Defendants offer no evidence to show that Plaintiff cannot establish that a contract existed between Plaintiff and Defendant Stein. In fact, Defendants requested that the Court take judicial notice of a deed of trust between Plaintiff and Defendant Stein for the property (RJN Exh. B.) Accordingly, the burden shifts to Plaintiff to establish a triable issue of fact only as to Defendants Standard Home Lending and Roton.

Plaintiff states in opposition that Standard Home Lending and Roton had “contact” with Plaintiff regarding servicing of the loan. (Plaintiff’s Separate Statement of Material Fact (“SSMF”) Issue 2 Nos. 15-16.) However, the affidavits offered in support make no assertions and offer no evidence as to the existence of a contract between Standard Home Lending and Roton. The Court therefore finds that Plaintiff has failed to establish a triable issue of fact as to the existence of a contract involving Defendants Roton or Standard Home Lending.

Defendants also contend that even if Plaintiff can establish the existence of a contract, Plaintiff breached her obligations by defaulting on her loan payments. Specifically, Defendants allege that Plaintiff failed to make timely payment on June 1, 2019. (SSUMF Issue 2 Nos. 5-7.) Defendants also contend that Plaintiff was obligated, under the deed of trust, to fulfill any obligations under any mortgage, deed of trust, or other security agreement with a lien with priority over the deed of trust. (SSUMF Issue 2 No. 7; RJN Exh. B.) It is undisputed that Chase Bank held a lien senior to Defendant Stein’s lien and that Plaintiff stopped paying Chase Bank on May 1, 2019. (SSMF Issue 2 Nos. 3 and 4.) Defendants contend that Plaintiff was therefore in breach of her obligations under the Deed of Trust. Defendants have offered evidence that Plaintiff cannot prevail on this cause of action because Plaintiff had not performed all of her obligations under the alleged contract. The burden now shifts to Plaintiff.

In opposition, Plaintiff contends that the June 1, 2019 payment was issued on June 3, 2019, and was therefore not delinquent pursuant to the terms of the promissory note. (SSMF Issue 2 Nos. 5-6.) Plaintiff further contends that the failure of this payment to go through was due to no fault of Plaintiff’s. (See Declaration of Talia Rodriguez ISO Opp. ¶¶ 16-30.) However, Plaintiff does not address the issue of her obligations to Chase Bank and the corresponding effect on Stein’s lien in her opposition. In her separate statement, Plaintiff concedes that she had stopped paying Chase Bank, but contends that she did so due to a dispute with Chase arising out of a settlement agreement. (SSMF Issue 2 No. 3.) This admission is fatal to Plaintiff’s position. Plaintiff has conceded that she had not fulfilled her obligations under the senior deed of trust, as required under the Stein lien. Plaintiff has therefore failed to establish that there is a triable issue of fact as to whether she was in breach of her obligations under the Stein deed of trust.

The Court need not address Defendants’ contentions as to damages, as there is an independent basis to grant the motion for summary adjudication on this cause of action. Nevertheless, the Court will address the merits of this contention. Defendants contend that, even if there was a breach, Plaintiff cannot establish damages because, once Plaintiff paid off the loan, the outstanding notices of default were rescinded and all attempts at foreclosure ceased. (SSUMF Issue 2 Nos. 13-14.) Therefore, Defendants argue, Plaintiff can no longer show any damages resulting from the breach of contract. This evidence is not sufficient. A showing that Plaintiff has paid off the balance of the loan in spite of the alleged conduct by Defendants does not establish that Plaintiff cannot show any other monetary damages as a result of Defendants’ conduct. The burden is on Defendants to show that Plaintiff cannot produce any evidence establishing a triable issue of fact as to damages. Defendants have failed to do so. The burden of proof therefore does not shift to Plaintiff.

As Plaintiff has failed to establish the existence of a contract as to Standard Home Lending and Roton, and failed to show a triable issue of fact as to whether she was in compliance with her obligations under the agreement with Stein, summary adjudication is GRANTED as to the first cause of action.

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

Defendants contend that Plaintiff cannot prevail on the second cause of action for breach of the implied covenant of good faith and fair dealing.

“There is an implied covenant of good faith and fair dealing in every contract that neither party will do anything which will injure the right of the other to receive the benefits of the agreement.” (Comunale v. Traders & General Ins. Co. (1958) 50 Cal.2d 654, 658.) However, there must be an enforceable contract for the implied covenant to exist. (Peterson Development Co. v. Torrey Pines Bank (1991) 233 Cal.App.3d 103, 116 [“An underlying contract is required” to state a cause of action for breach of the covenant of good faith and fair dealing]; Jones v. Aetna Casualty & Surety Co. (1994) 26 Cal.App.4th 1717, 1722 [“While an action for breach of the covenant of good faith and fair dealing sounds in tort, the duty of good faith and fair dealing arises from and exists solely because of the contractual relationship between the parties”].)

Defendants contend that Plaintiff cannot prevail on this cause of action for the same reasons as the separate breach of contract action. Therefore, for the foregoing reasons, summary adjudication is GRANTED as to this cause of action.

Third Cause of Action: Negligence

Defendants contend that Plaintiff cannot prevail on the third cause of action for negligence.

To prevail on a cause of action for negligence, a plaintiff must establish a legal duty of care owed by the defendant to the plaintiff, an act or omission by the defendant breaching that duty, and damages or injury resulting from that breach. (See, e.g., Hoyem v. Manhattan Beach City Sch. Dist. (1978) 22 Cal.3d 508, 513-14.)

1. Duty

Defendants first contend that Plaintiff cannot prevail on this cause of action because none of the defendants owed Plaintiff any duty of care. Lenders do not generally have a duty of care to a borrower in ensuring that the borrower has the ability to repay the loan. (See, e.g., Wagner v. Benson (1980) 101 Cal.App.3d 27, 35.) These contentions are not relevant, however. The allegation in the Complaint is that Defendants failed to properly facilitate Plaintiff’s repayment of the loan by negligently failing to process payments that were timely made. (Complaint ¶¶ 13-26; 47-48.) Defendants’ authorities address only the absence of a duty of care in ensuring the financial ability of the borrower to repay the loan. To be sure, absent a special relationship, a lender has no obligation to ensure that a borrower has the financial means to repay a debt, but that has no bearing on whether there is a duty for the lender to make it physically possible to repay a loan when the borrower already possesses the financial means to do so. Defendants have not shown that Plaintiff cannot establish a legal duty. The burden therefore does not shift to Plaintiff to establish a triable issue of fact on this question.

2. Breach

Defendants next argue that, assuming there was a duty, Plaintiff cannot establish a breach of care. Defendants simultaneously contend that Plaintiff does not allege that there were payments made that were not accepted or processed, and therefore does not claim that Defendants did anything wrongful, while also asserting the evidence negates Plaintiff’s allegations that Defendants did not process Plaintiff’s payments cannot survive. With respect to their contention that Plaintiff alleged no failure to accept or process any payment, Defendants are incorrect. The Complaint plainly alleges that Plaintiff made payments on June 3, 2019 and July 1, 2019 that were not processed. (Complaint ¶¶ 13-14.)

Turning to Defendants’ effort to negate the allegations that they failed to process Plaintiff’s payments properly, Defendants produce three checks that purport to evidence when Plaintiff’s payments were made and processed. Defendant’s Exhibit C is described in the Declaration of Jacqueline Stein to have been dated April 20, 2019 for a payment due March 1, 2019. (Declaration of Jacqueline Stein ISO Mot. ¶ 7, Exh. C.) However, no date is evident on the scan of the check itself. Nor is there any ledger showing the date of the obligation that matches with this check. Exhibit D is alleged to be a check dated May 20, 2019 for payments due April 1 and May 1 of 2019. (Stein Decl. ¶ 8, Exh. D.) Again, however, the date on the scan of the check is illegible due to the low quality of the scan. Exhibit E is alleged to be a check dated August 2, 2019 for payment due on June 1, 2019. (Stein Decl. ¶ 9, Exh. E.) However, like Exhibit C, no date is evident on the scan of the check itself, and the only date shown is the post date on the transaction report accom-panying the check of August 7, 2019. (Exh. E.) Not only is it unclear whether these checks are what Defendants purport them to be, but even if they are, there is no evidence here that shows that either Plaintiff’s alleged June 3 and July 1 payments were processed, or that they were never made. The only evidence that approaches that question is a brief statement by Defendant Stein that “Every single payment Rodriguez made was late.” (Stein Decl. ¶ 10.) This evidence is not sufficient to establish that Plaintiff cannot prevail on this cause of action because she cannot establish a breach of care. The burden of proof therefore does not shift to Plaintiff to establish a triable issue of fact on the question of breach. Defendants are therefore not entitled to summary adjudication on the basis of the absence of breach of a duty of care.

3. Damages

Defendants next contend that Plaintiff cannot establish any damages, and therefore cannot prevail on this cause of action. For the reasons stated above in connection with the first cause of action, Defendants have not met their burden to show that Plaintiff cannot prevail on this cause of action on this basis.

Accordingly, summary adjudication is DENIED on the third cause of action.

Fourth Cause of Action for Unfair Business Practices

Defendants contend that Plaintiff cannot prevail on the fourth cause of action for unfair business practices.

The Business and Professions Code prohibits “unfair competition,” defined as any “unlawful, unfair, or fraudulent business act or practice.” (Bus. & Prof. Code § 17200.) To bring a claim under this law, a person must have “suffered injury in fact and [have] lost money or property as a result of unfair competition.” (Bus. & Prof. Code § 17204.)

Defendants contend that Plaintiff cannot prevail on this cause of action because Plaintiff cannot show a violation of Penal Code section 115.5. This contention is insufficient to entitle Defendants to summary adjudication. The Complaint alleges that all of Defendants’ conduct alleged in the Complaint was unfair and deceptive. (Complaint ¶¶ 53-58.) Plaintiff’s allegation that Defendants’ conduct violated Penal Code section 115.5 is only one component of the cause of action. (Complaint ¶ 59.) Where only part of a plaintiff’s claim is challenged under section 437c, summary adjudication is not available because the motion does not dispose of an entire cause of action as is required under subdivision (t) of the statute. (Nazir v. United Airlines, Inc. (2009) 178 Cal. App. 4th 243, 251 [“Summary adjudication must completely dispose of the cause of action to which it is directed.”].) Defendants have therefore failed to meet their burden to show that Plaintiff cannot prevail on this basis, so the burden does not shift to Plaintiff to establish a triable issue of material fact.

Defendants also contend, once again, that Plaintiff cannot prevail because there were no damages. For the reasons stated above, this argument once again must fail.

Accordingly, summary adjudication is DENIED as to the fourth cause of action.

Fifth Cause of Action: Conspiracy

Defendants contend that Plaintiff cannot prevail on the fifth cause of action for conspiracy.

To establish a conspiracy, a plaintiff must prove (1) formation and operation of a conspiracy; (2) a wrongful act in furtherance of the common design; and (3) damage resulting from that wrongful act. (See, e.g, Rusheen v. Cohen (2006) 37 Cal.4th 1048, 1062.)

Defendants contend that Plaintiff cannot prevail on this cause of action because the alleged purpose for the conspiracy was wrongful foreclosure on Plaintiff’s property. (Complaint ¶ 63.) Defendants contend that, for the reasons stated above in connection with the first cause of action, foreclosure was proper. For the reasons stated above in connection with the breach element of the first cause of action, the Court finds that Defendant has met its burden to establish that Plaintiff cannot prevail on this cause of action because the foreclosure was proper, and that Plaintiff cannot establish a triable issue of fact as to whether foreclosure was proper.

Accordingly, summary adjudication is GRANTED as to the fifth cause of action for conspiracy.

Sixth Cause of Action for an Accounting

Defendants contend that Plaintiff cannot prevail on the sixth cause of action requesting an accounting.

To establish a claim for an accounting, a plaintiff must show (1) a relationship between the parties or other circumstances requiring an accounting in equity; and (2) an unknown balance that is due that cannot be ascertained without an accounting, the means of which are within the knowledge of a defendant. (See Whann v. Doell (1923) 192 Cal. 680, 684.)

Defendants contest Plaintiff’s ability to prevail on this cause of action arguing that Plaintiff has not alleged the existence of a fiduciary relationship between the parties such that there is not an adequate remedy at law. “[A]bsent special circumstances … a loan

transaction is at arm’s length and there is no fiduciary relationship between the borrower and lender.” (Oaks Management Corporation v. Superior Court (2006) 145 Cal.App.4th

453, 466.) Defendants argue that Plaintiff cannot establish any special circumstances that may require an adequate remedy at law. However, Defendants cite no evidence in either their moving papers or their separate statement to establish that Plaintiff cannot prove a special relationship. Defendants must produce evidence, and not merely point out through argument, that a Plaintiff does not possess and cannot reasonably obtain needed evidence. (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 854.) Defendants have failed to meet their burden to establish that Plaintiff cannot prevail on this cause of action on this basis, and therefore the burden does not shift to Plaintiff.

Defendants also contend that this cause of action is moot because Defendants provided Plaintiff an accounting on the loan. (SSUMF Issue 7 No. 1.) Plaintiff concedes that Defendant Stein accounted to Plaintiff on the loan. (SSMF Issue 7 No. 1.) Based on this concession, Defendants have met their burden to establish that Plaintiff cannot prevail on this cause of action because it is moot, and Plaintiff, having conceded, cannot establish that a triable issue of material fact remains on this cause of action.

Accordingly, summary adjudication is GRANTED as to the sixth cause of action.

CONCLUSION:

Accordingly, Defendants’ motion for summary judgment is DENIED.

Defendants’ alternative motion for summary adjudication is DENIED as to the third and fourth causes of action and otherwise GRANTED.

Moving Parties to give notice.

IT IS SO ORDERED.

Dated: July 28, 2022 ___________________________________

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.