Judge: Timothy B. Taylor, Case: 37-2021-00045559-CU-BT-CTL, Date: 2023-09-08 Tentative Ruling

SUPERIOR COURT OF CALIFORNIA,

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HALL OF JUSTICE

TENTATIVE RULINGS - September 07, 2023

09/08/2023  01:30:00 PM  C-72 COUNTY OF SAN DIEGO

JUDICIAL OFFICER:Timothy Taylor

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Civil - Unlimited  Business Tort Summary Judgment / Summary Adjudication (Civil) 37-2021-00045559-CU-BT-CTL BATTLE VS MUNSON PROPERTY GROUP LLC [IMAGED] CAUSAL DOCUMENT/DATE FILED: Motion for Summary Judgment and/or Adjudication, 10/18/2022

Tentative Ruling on Defendants' Motion for Summary Judgment/Adjudication Battle v. Munson Property Group, Case No. 2021-45559 Sept. 8, 2023, 1:30 p.m., Dept. 72 1. Overview and Procedural Posture.

This is in interference action arising out of a 2012 oral agreement between plaintiffs and a man named Wheeler regarding real property in Chula Vista. According to plaintiffs, the parties agreed that Wheeler would 'obtain a loan in his name and purchase the Property for Plaintiffs' benefit. Plaintiffs would make all payments and be responsible for all expenses or any maintenance related to the property, including but not limited to utilities, property taxes, mortgage payments, and/or homeowner's insurance.' Wheeler, however, failed to transfer the property to plaintiffs as agreed. Instead, he allegedly engaged in a phony loan transaction with defendants as a way to transfer plaintiffs' equity in the property to himself and defendants.

In 2019, plaintiffs sued Wheeler for breach of contract. The case was assigned to Judge Sturgeon.

When Wheeler failed to file an answer, a default judgment was entered, and in 2021 Wheeler was ordered to 'obtain a full reconveyance for any loans he obtained using the property as collateral and to transfer the property to plaintiffs.' Wheeler has not complied with Judge Sturgeon's order.

Shortly thereafter, plaintiffs sued defendants. The complaint alleges claims for intentional and negligent interference with prospective economic relations, intentional interference with contract, and other related claims. Defendants initially were defaulted; the default was later set aside, and they answered. ROA 13, 15, 17, 19, 20.

At the due-course CMC, the case was set for trial in February of 2023. ROA 29-34. The parties agreed to mediation, but the mediation did not result in a resolution of the case. ROA 35.

Presently, defendants seek summary judgment/adjudication, alleging a time bar and an illegality defense. ROA 38-45. The motion was originally scheduled to be heard January 6, 2023, but was continued to today pursuant to the parties' stipulation. ROA 52. Trial was continued as well (to October 27, 2023). ROA 48-49. Plaintiffs filed a tardy opposition brief, as well as a 'supplemental' opposition.* Calendar No.: Event ID:  TENTATIVE RULINGS

2916633  38 CASE NUMBER: CASE TITLE:  BATTLE VS MUNSON PROPERTY GROUP LLC [IMAGED]  37-2021-00045559-CU-BT-CTL ROA 53-54, 59-64. Defendants filed reply. ROA 55-58. The court has reviewed the papers, and no further submissions are authorized in connection with this motion.

2. Applicable Standards.

A. A three-step analysis is employed in ruling on motions for summary judgment. Kline v. Turner (2001) 87 Cal.App.4th 1369, 1373. First, the court identifies the issues framed by the pleadings. Pierson v. Helmerich & Payne Internat. Drilling Co. (2016) 4 Cal.App.5th 608, 617. Second, the court determines whether the moving party has established facts justifying judgment in its favor. Id. Third, if the moving party has carried its initial burden, the court decides whether the opposing party has demonstrated the existence of a triable issue of material fact. Id. at 618. To satisfy this burden, the opposing party must present admissible evidence and may not rely upon the allegations or denials of its pleading. Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 849. Summary judgment may only be granted when a moving party establishes the right to the entry of judgment as a matter of law. Code Civ. Proc. § 437c(c).

B. 'The tort of intentional or negligent interference with prospective economic advantage imposes liability for improper methods of disrupting or diverting the business relationship of another which fall outside the boundaries of fair competition.' Settimo Associates v. Environ Systems, Inc. (1993) 14 Cal.App.4th 842, 845. The difference between the two torts relates to the defendant's intent. Crown Imports, LLC v. Superior Court (2014) 223 Cal.App.4th 1395, 1404, fn. 10. The elements are (1) the existence of an economic relationship between the plaintiff and a third party having a probability of future economic benefit to the plaintiff; (2) the defendant's knowledge of the relationship; (3) the defendant's intentional or negligent independently wrongful act designed to disrupt the relationship; (4) disruption of the relationship; and (5) damages. Id. at 1404-1405. '[A]n act is independently wrongful if it is unlawful, that is, if it is proscribed by some constitutional, statutory, regulatory, common law, or other determinable legal standard.' Korea Supply Co. v. Lockheed Martin Corp. (2003) 29 Cal.4th 1134, 1159.

C. 'To prevail on a cause of action for intentional interference with contractual relations, a plaintiff must plead and prove (1) the existence of a valid contract between the plaintiff and a third party; (2) the defendant's knowledge of that contract; (3) the defendant's intentional acts designed to induce a breach or disruption of the contractual relationship; (4) actual breach or disruption of the contractual relationship; and (5) resulting damage.' Reeves v. Hanlon (2004) 33 Cal.4th 1140, 1148.

D. Statutes of limitations begin to run when a claim accrues. Fox v. Ethicon Endo-Surgery, Inc. (2005) 35 Cal.4th 797, 806. This occurs at 'when the cause of action is complete with all of its elements.' Norgart v. Upjohn Co. (1999) 21 Cal.4th 383, 397. A defendant moving for summary judgment based on the affirmative defense of the statute of limitations carries its burden by presenting evidence establishing that the plaintiff's claim is time-barred. Genisman v. Carley (2018) 29 Cal.App.5th 45, 49. It then falls to plaintiff to counter with evidence creating a dispute about a fact relevant to that defense. Police Retirement System of St. Louis v. Page (2018) 22 Cal.App.5th 336, 340.

E. The tort of another doctrine, as set forth by our Supreme Court in Prentice v. North Amer. Title Guar.

Corp. (1963) 59 Cal.2d 618 (Prentice), holds that 'a person who through the tort of another has been required to act in the protection of his interests by bringing or defending an action against a third person is entitled to recover compensation for the reasonably necessary loss of time, attorney's fees, and other expenditures thereby suffered or incurred.' (Id. at p. 620.) The doctrine is an exception to the general rule, codified in section 1021, 'that each party is to bear his own attorney fees unless a statute or the agreement of the parties provides otherwise.' (Gray v. Don Miller & Associates, Inc. (1984) 35 Cal.3d 498, 504 (Gray).) The tort of another doctrine, which is also referred to as the ' 'third party tort' exception' is 'embodied in the Restatement of Torts and is generally followed in the United States.' (Gray, at p. 505, citing Rest.2d Torts, § 914, subd. (2), and appen.).

3. Discussion and Rulings.

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2916633  38 CASE NUMBER: CASE TITLE:  BATTLE VS MUNSON PROPERTY GROUP LLC [IMAGED]  37-2021-00045559-CU-BT-CTL The motion for summary judgment or, in the alternative, summary adjudication is denied.

A. The motions for summary adjudication of issues 1, 3, 5, and 7 are denied.

The statute of limitations for plaintiffs' interference-based claims is two years. Civ. Code § 339(1). 'A tolling provision suspends the running of a limitations period.' Shalabi v. City of Fontana (2021) 11 Cal.5th 842, 845. One such provision is Emergency Rule 9, which tolled 'the statutes of limitations and repose for civil causes of action' from April 6, 2020, until October 1, 2020.** 'Tolling may be analogized to a clock that is stopped and then restarted. Whatever period of time that remained when the clock is stopped is available when the clock is restarted, that is, when the tolling period has ended.' Woods v. Young (1991) 53 Cal.3d 315, 326 fn. 3.

In this case, it is undisputed that plaintiffs learned defendants had recorded a trust deed against the property on June 17, 2019. (UMF 21.) Thus, the two-year statute of limitations ordinarily would have run on June 17, 2021. However, the 178-day tolling period provided by Emergency rule 9 extended the deadline for plaintiffs to file their complaint until December 13, 2021. See Code Civ. Proc. § 12a(a).

Accordingly, defendants have failed to establish that the complaint filed on October 26, 2021 is time-barred. See Code Civ. Proc. § 437c(p)(2); see also Genisman, supra, 29 Cal.App.5th at 49.

B. The motions for summary adjudication of issues 2 and 4 are denied. 'Tortious interference with prospective economic advantage...does not depend on the existence of a legally binding contract.' Ixchel, LLC v. Biogen, Inc. (2020) 9 Cal.5th 1130, 1141. Moreover, while some courts have recognized an exception to this rule for fraudulently procured relationships (see Renaissance Realty, Inc. v. Soriano (1981) 120 Cal.App.3d Supp. 13), defendants have failed to establish the applicability of this exception here. There is no evidence, for example, showing that plaintiffs knew, or should have known, that Wheeler was going to make misrepresentations on the loan application. See Code Civ. Proc. § 437c(p)(2); see also Jackson v. Rogers & Wells (1989) 210 Cal.App.3d 336, 349-50 ('Whether a contract is illegal or contrary to public policy is a question of law to be determined from the circumstances of each particular case.').

C. The motion for summary adjudication of issue 6 is denied. '[A] cause of action for intentional interference with contractual relations requires an underlying enforceable contract[.]' Bed, Bath & Beyond of La Jolla, Inc. v. La Jolla Village Square Venture Partners (1997) 52 Cal.App.4th 867, 879. In this case, for the reasons discussed above, defendants have not shown as matter of law that the agreement between plaintiffs and Wheeler is illegal or against public policy. Nor have they argued that the oral agreement is unenforceable by virtue of the statute of frauds. See Civ. Code § 1624(3).

D. The motion for summary adjudication of issue 8 is denied. The 'tort of another' claim is derivative of plaintiffs' interference claims. Because the interference claims survive summary judgment/adjudication, so too does the' tort of another' claim.

E. The motions for summary adjudication of issues 9 and 11 are denied. 'California law prohibits one department of a superior court from invalidating a ruling made by another department of the same court.' Slone v. Inyo County Juvenile Court (1991) 230 Cal.App.3d 263, 268; see also In re Marriage of Oliverez, 238 Cal. App. 4th 1242, 1247 (2015); People v. Riva, 112 Cal. App. 4th 981, 991 (2003) (for 'one superior court judge, no matter how well intentioned, even if correct as a matter of law, to nullify a duly made, erroneous ruling of another superior court judge places the second judge in the role of a one-judge appellate court').*** Thus, absent evidence that the default judgment in Judge Sturgeon's case has been vacated or set aside due to a lack of personal jurisdiction, this court is unable to grant summary adjudication on grounds that the judgment is void ab initio.

F. The motions for summary adjudication of issues 10 and 12 are denied.

'Res judicata, or claim preclusion, prevents relitigation of the same cause of action in a second suit between the same parties or parties in privity with them.' Mycogen Corp. v. Monsanto Co. (2002) 28 Calendar No.: Event ID:  TENTATIVE RULINGS

2916633  38 CASE NUMBER: CASE TITLE:  BATTLE VS MUNSON PROPERTY GROUP LLC [IMAGED]  37-2021-00045559-CU-BT-CTL Cal.4th 888, 896. Under the doctrine, if a plaintiff prevails in an action, the cause is 'merged' into the judgment and may not be asserted in a subsequent lawsuit. Id. at 896-97. 'A party who asserts claim or issue preclusion as a bar to further litigation bears the burden of proving that the requirements of the doctrine are satisfied.' Hong Sang Market, Inc. v. Peng (2018) 20 Cal.App.5th 474, 489.

Here, the merger aspect of claim preclusion does not apply because the parties in the 2019 action are not the same as the parties in this action. See Grande v. Eisenhower Medical Center (2022) 13 Cal.5th 313, 324 ('[C]laim preclusion contains a 'between the same parties or their privies' inquiry, which restricts the set of litigants who can benefit from a prior judgment to those who could have had the judgment used against them.'). Thus, defendants have failed to establish that the declaratory relief and fraudulent conveyance claims may not be asserted against them in this lawsuit. Code Civ. Proc. § 437c(p)(2).

G. In issuing this ruling, the court has not considered the new evidence submitted in connection with defendants' reply brief. San Diego Watercrafts, Inc. v. Wells Fargo Bank, N.A. (2002) 102 Cal.App.4th 308, 316.

_______________________ *In addition to being filed three days late, the opposition papers do not include the date of the MSJ hearing. See CRC 3.1110(b)(1). This omission likely contributed to the delay in processing the opposition brief.

**On March 4, 2020, Governor Gavin Newsom declared a state of emergency as a result of the threat of COVID-19, and on March 19, 2020, issued an executive order directing all Californians not providing essential services to stay home. The order did not close the courts, as they were deemed an essential service. (E.P. v. Superior Court of Yolo County (2020) 59 Cal.App.5th 52, 54-55.) On March 27, 2020, the Governor issued an executive order (Governor's Exec. Ord. No. N-38-20 (Mar. 27, 2020)) suspending limitations on the 'Judicial Council's ability to issue emergency orders or rules, and suspend[ing] statutes that may be inconsistent with rules the Judicial Council may adopt.' (Stanley v. Superior Court of Contra Costa County (2020) 50 Cal.App.5th 164, 167-168). 'Acting on that authority, on April 6, 2020, the Judicial Council adopted 11 emergency rules.' (E.P. v. Superior Court of Yolo County, supra, 59 Cal.App.5th at p. 55.) ***The wisdom of this rule is patent. Among other things, this rule preserves the authority of the Court of Appeal and avoids unsettling problems among colleagues of equal constitutional authority.

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