Judge: Thomas D. Long, Case: 22STCV13372, Date: 2023-02-09 Tentative Ruling

Case Number: 22STCV13372    Hearing Date: February 9, 2023    Dept: 48

SUPERIOR COURT OF THE STATE OF CALIFORNIA

FOR THE COUNTY OF LOS ANGELES - CENTRAL DISTRICT

On April 21, 2022, Plaintiff First American Title Insurance Company filed this action against Defendants Golden State Holdings LLC (“Golden State”) and Karen Baca (collectively, “Defendants”).

On August 1, 2022, Defendants filed an answer, and on August 31, 2022, they filed an amended answer.  On September 19, 2022, Plaintiff filed a demurrer to Defendants’ amended answer.  Defendants did not file an opposition.

On December 6, 2022, Plaintiff filed a motion to compel responses to Requests for Production of Documents, Set One, from Golden State.  Golden State did not file an opposition.

At the February 2, 2023 hearing on the demurrer, the Court continued the hearing due to the lack of opportunity for the parties to review the Court’s Tentative Ruling.

ORDER TO SHOW CAUSE

At the February 2, 2023 hearing, Plaintiffs represented that their counsel has ceased to represent them in this case.  The Court urged Defendants to secure new counsel to represent Golden State by the next hearing date.  No Notice of Withdrawal or Substitution of Attorney forms have been filed.

An Order to Show Cause Re: Withdrawal and Retaining New Counsel is scheduled for 03/10/2023 (March 10, 2023) at 8:30 AM in Department 28 at Stanley Mosk Courthouse.  If Defendants’ counsel no longer represents them, then counsel must file a completed Substitution of Attorney form or move to be relieved as counsel.

“[A] corporation cannot represent itself in a court of record either in propria persona or through an officer or agent who is not an attorney.”  (Caressa Camille, Inc. v. Alcoholic Beverage Control Appeals Bd. (2002) 99 Cal.App.4th 1094, 1101.)  If it has not already done so, Golden State must retain counsel before it can further participate in this action, including participation by amending its answer and producing documents pursuant to the Court’s orders below.  If Golden State does not retain counsel, the Court may strike its answer and place it in default.

DEMURRER

Plaintiff’s request for judicial notice is denied as irrelevant.

A general demurrer may be made on the ground that an answer does not state facts sufficient to constitute a defense.  (Timberidge Enterprises, Inc. v. City of Santa Rosa (1978) 86 Cal. App. 3d 873, 880.)  The answer to a complaint must contain the “general or specific denial of the material allegations of the complaint controverted by the defendant” and a “statement of any new matter constituting a defense.”  (Code Civ. Proc., § 431.30, subds. (b)(1)-(2).)  “The phrase ‘new matter’ refers to something relied on by a defendant which is not put in issue by the plaintiff.”  (Walsh v. West Valley Mission Community College District (1998) 66 Cal.App.4th 1532, 1546.)  Where the answer sets forth facts showing some essential allegation of the complaint is not true, such facts are not new matter but are denials.  (Ibid.)  The same pleading of “ultimate facts” rather than evidentiary matter or legal conclusions is required as in pleading a complaint.  The answer must aver facts as carefully and with as much detail as the facts which constitute the cause of action and which are alleged in the complaint.  (FPI Development, Inc. v. Nakashimi (1991) 231 Cal.App.3d 367, 384.)  Defenses must be pleaded in the nature of “yes, the allegations [of the complaint] are true, but . . .”  (Id. at p. 383.)

The amended answer contains eight affirmative defenses.  Plaintiff contends that the second through seventh affirmative defenses fail to state facts sufficient to constitute a defense and are unsupported and contradictory.

The second affirmative defense asserts misconduct of others, the third affirmative defense asserts apportionment of fault, and the sixth affirmative defense asserts a lack of causation.  The amended answer identifies Michelle Budd’s, Elizabeth Reyes’s, and Luis Leonardo Reyes’s knowledge of the encumbrance, as well as escrow’s awareness that the loan was not under Defendants’ names.  Plaintiff’s argument goes to the merit of the affirmative defenses, not the sufficiency of pleaded facts.  (See Demurrer at pp. 7-8.)

The fourth affirmative defense asserts non-recoverable damages, stating, “Plaintiff seeks damages not properly recoverable, nor constitutional, against these answering Defendants.”  Defendants do not state any additional facts.

The fifth affirmative defense asserts due diligence, stating, “Defendant exercised due diligence and relied in good faith on the representations of others, and was not aware of, and had no way of becoming aware of, any alleged wrongdoing or omissions.”  Defendants then repeat the facts asserted with the second and third affirmative defenses; however, these facts relate to others’ knowledge and do not relate to any due diligence exercised by Defendants.

The seventh affirmative defense asserts a good faith error of judgment.  The amended answer states that Defendants “were not responsible for any encumbrances placed upon the subject property and believed that any and all issues related to any such encumbrances would be resolved between the purchaser, LaShawti Janifer and the Reyeses who were the loan holders.”  Plaintiff’s argument again goes to the merit of the affirmative defense, not the sufficiency of pleaded facts.  (See Demurrer at p. 9.)

The demurrer is SUSTAINED IN PART as to the fourth (non-recoverable damages) and fifth (due diligence) affirmative defenses, with 21 days’ leave to amend these affirmative defenses.  The demurrer is otherwise overruled. 

MOTION TO COMPEL RESPONSES

When a party fails to serve timely responses to discovery requests, the court may make an order compelling responses.  (Code Civ. Proc., §§ 2030.290, 2031.300; Healthcare Consulting, Inc. v. Pacific Healthcare Consultants (2007) 148 Cal.App.4th 390, 403.)   A party that fails to serve timely responses waives any objections to the request, including ones based on privilege or the protection of attorney work product.  (Code Civ. Proc., §§ 2030.290, subd. (a), 2031.300, subd. (a).)  Sanctions shall be imposed against the party who unsuccessfully makes or opposes a motion to compel, unless the party acted with substantial justification or the sanction would otherwise be unjust.  (Code Civ. Proc., §§ 2030.290, subd. (c), 2031.300, subd. (c).)

Plaintiff served Request for Production of Documents, Set One on Golden State on July 29, 2022.  The parties’ counsel agreed to an extension, but Golden State did not provide responses by the agreed-upon date.  Golden State still has not provided responses to Plaintiff’s discovery and filed no opposition to this motion.

The motion is GRANTED.  Golden State is ordered to provide verified responses, without objection, within 21 days.

The request for sanctions is GRANTED.  Golden State did not file an opposition and therefore did not show that it acted with substantial justification.  Golden State is ordered to pay sanctions of $1,378,75 to Plaintiff within 21 days.

Moving party to give notice.

Parties who intend to submit on this tentative must send an email to the Court at SMCDEPT48@lacourt.org indicating intention to submit.  Parties intending to appear are encouraged to appear remotely and should be prepared to comply with Dept. 48’s new requirement that those attending court in person wear a surgical or N95 or KN95 mask.

       Dated this 9th day of February 2023