Judge: Walter P. Schwarm, Case: 30-2021-01210090, Date: 2022-08-30 Tentative Ruling
Plaintiff’s (Providence Capital Funding, Inc.) Motion for Summary Judgment or, Alternatively, Summary Adjudication of Issues Against Defendants SC Service Inc. and Bryan A. Simpson (Motion), filed on 6-10-22 under ROA No. 40, is DENIED. The Notice for this Motion (Notice) was filed on 6-10-22 under ROA No. 42.
Code of Civil Procedure section 437c, subdivision (p)(1), provides, “A plaintiff or cross-complainant 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. Once the plaintiff or cross-complainant has met that burden, the burden shifts to the defendant or cross-defendant to show that a triable issue of one or more material facts exists as to the cause of action or a defense thereto. The defendant or cross-defendant shall not rely upon the allegations or denials of its pleadings to show that a triable issue of material fact exists but, instead, shall set forth the specific facts showing that a triable issue of material fact exists as to the cause of action or a defense thereto.”
Aguilar v. Atlantic Richfield Co. (Aguilar) (2001) 25 Cal.4th 826, 850-851 (Aguilar), states, “Second, and generally, the party moving for summary judgment bears an initial burden of production to make a prima facie showing of the nonexistence of any triable issue of material fact; if he carries his burden of production, he causes a shift, and the opposing party is then subjected to a burden of production of his own to make a prima facie showing of the existence of a triable issue of material fact. Although not expressly, the 1992 and 1993 amendments impliedly provide in this regard for a burden of production as opposed to a burden of persuasion. A burden of production entails only the presentation of ‘evidence.’ (Evid. Code, § 110.) A burden of persuasion, however, entails the ‘establish[ment]’ through such evidence of a ‘requisite degree of belief.’ (Id., § 115.) It would make little, if any, sense to allow for the shifting of a burden of persuasion. For if the moving party carries a burden of persuasion, the opposing party can do nothing other than concede. Further, although not expressly, the 1992 and 1993 amendments impliedly provide for a burden of production to make a prima facie showing. A prima facie showing is one that is sufficient to support the position of the party in question. [Citation.]” (Footnotes 13 and 14 omitted; Italics in Aguilar.)
Binder v. Aetna Life Ins. Co. (1999) 75 Cal.App.4th 832, 838 (Binder) states, “Although summary judgment might no longer be considered a ‘disfavored’ procedure, [citation], the rule continues that the moving party's evidence must be strictly construed, while the opposing party's evidence must be liberally construed.” “On a summary judgment motion, the court must therefore consider what inferences favoring the opposing party a factfinder could reasonably draw from the evidence. While viewing the evidence in this manner, the court must bear in mind that its primary function is to identify issues rather than to determine issues. [Citation.]” (Id., at p. 839.)
Consumer Cause, Inc. v. SmileCare (2001) 91 Cal.App.4th 454, 468 (Consumer Care), explains, “ ‘ “[T]here is no obligation on the opposing party (plaintiffs here) to establish anything by affidavit unless and until the moving party has by affidavit stated ‘ “facts establishing every element [of the affirmative defense] necessary to sustain a judgment in his favor. . . .” ’ ” ’ . . .” (Italics in Consumer Care.)
The Complaint, filed on 7-13-21 under ROA No. 2, alleges causes of action for Breach of Written Lease Agreement, Recovery of Personal Property, and Breach of Guaranty.
Nazir v. United Airlines, Inc. (2009) 178 Cal.App.4th 243, 252 (Nazir), states, “We offer two observations about this footnote. The first is that it ignores the advice from the leading practice treatise: ‘PRACTICE POINTER: [¶] ... [¶] Include only those facts which are truly material to the claims or defenses involved because the separate statement effectively concedes the materiality of whatever facts are included. Thus, if a triable issue is raised as to any of the facts in your separate statement, the motion must be denied!’ [Citation.]” (Id. at p. 252; Emphasis and italics in Nazir.)
The court OVERRULES Plaintiff’s Objections to the Declaration of Tammy Bettis filed on 8-24-22 under ROA No. 61.
The court OVERRULES Plaintiff’s Objections to the Declaration of Bryan Simpson filed on 8-24-22 under ROA No. 62.
The Notice seeks summary adjudication of 18 issues. Specifically, the Notice seeks summary adjudication of Defendants’ (SC Services Inc. and Bryan A. Simpson) 14 affirmative defenses contained in Defendants’ Answer filed on 9-18-21 under ROA No. 18. (Notice; 3:9-4:28.) Under Code of Civil Procedure section 437c, subdivision (p)(1), a plaintiff does not have a burden to negate affirmative defenses. A plaintiff meets his/her burden by proving each element of a plaintiff’s cause of action. If a plaintiff meets that burden, the burden shifts to the defendant to demonstrate a triable issue of material as to a cause of action or a defense to a cause of action. Since Plaintiff does not have a burden to negate the affirmative defenses contained in Defendants’ Answer, the court will only address the first four issue in the Notice.
Issue No. 1—“SC has no defense to Providence's First Cause of Action in the Complaint for Breach of Written Lease Agreement and Providence is entitled to judgment on that cause of action as a matter of law. See Separate Statement of Undisputed Facts (‘Undisputed Facts’), Nos. 1-19.”
The Complaint pleads in part, “SC and DOES 1 through 10 have defaulted under the Lease by, among other things, failing to make payments owed under the Lease for March 202L and thereafter. . . .” (Complaint, ¶ 12.)
Oasis West Realty, LLC v. Goldman (2011) 51 Cal.4th 811, 821 (Oasis), states, “And the elements of a cause of action for breach of contract are (1) the existence of the contract, (2) plaintiff's performance or excuse for nonperformance, (3) defendant's breach, and (4) the resulting damages to the plaintiff. [Citation.]”
Although Defendants dispute the date that SC Services Inc. executed the Lease Agreement, the parties do not dispute that Plaintiff and Defendants entered into the Lease Agreement. (Defendants’ Separate Statement (DSS) filed on 8-16-22 under ROA No. 57; DSS No. 4.) It appears that the parties do not dispute that the Lease Agreement became effective on 7-29-15 when Plaintiff executed the Lease Agreement. (DSS No. 4.)
Plaintiff provides the following evidence: (1) Plaintiff “. . . performed all covenants, conditions, and promises required on its part under the terms of the Lease and Guaranty . . .” by paying the vendor (Nixon-Egli Equipment) $151,092.00 for the equipment. (DSS No. 7); (2) “SC defaulted under the Lease by, among other things, failing to make payments owed under the Lease for January 15, 2021 and thereafter. The defaults include SC’s failure to pay two (2) remaining payments due under the initial Base Term of the Lease (January and February 2021) and fourteen (14) unpaid renewal monthly rental payments from March 15, 2021 through April 15, 2022. . . .” Despite the default, Defendant—SC Services Inc. “. . . continues to possess the Equipment.” (DSS No. 11.); (3) “As a result of the default by SC, there is due, owing and unpaid as of April 18, 2022 . . . the sum of $58,678.40.” (DSS No. 13.); (4) Plaintiff’s “. . . damages do not include [Plaintiff’s] residual interest in the Equipment. [Plaintiff] is also entitled to immediate possession of the Equipment. (DSS No. 14.); (5) “Under the Lease, title to the Equipment . . . remained with [Plaintiff]. . . .” (DSS No. 16.); (6) “The Lease transaction was structured and priced as true lease . . . . [Plaintiff] approved the transaction based on the structure, pricing, tax accounting and financing accounting which SC requested. SC had the option to structure the transaction as a conditional sale agreement . . . .” (DSS No. 17.); and (7) “. . . Addendum B was not made a part of the final transaction. . . . [Plaintiff] did not execute addendum B and the 1.5% purchase option was not factored into the financial economics of the transaction. (DSS No. 18.)
These facts are sufficient for Plaintiff to meet its initial burden on the first cause of action for Breach of Written Lease Agreement. The burden then shifts to the Defendants to show the existence of a triable issue of material fact.
Defendant has presented evidence sufficient to demonstrate a triable issue of material fact as to whether they breached the Lease Agreement. Defendants dispute DSS Nos. 7, 11, 13, 14, 17, and 18.
The declarations of Tammy Bettis and the exhibits submitted with that declaration and the declaration of Bryan Simpson show the existence of a triable issue of material fact with regard to the terms of the agreement. (Bettis Decl., ¶¶ 2 and 3, and Exhibit A; Simpson Decl., ¶¶ 6 and 8.) Specifically, there is a dispute as to whether Addendum B was a part of the Lease Agreement. (Bettis Decl., ¶¶ 2 and 3, and Exhibit A; Simpson Decl., ¶¶ 6 and 8.) Further, the Commencement Agreement (Bettis Decl., ¶ 3 and Exhibit A), which is dated July 16, 2015 and containing the same Agreement number as the Lease Agreement, states, Plaintiff and Defendant SC Services, Inc. “. . . entered into the above referenced equipment lease, equipment finance agreement, secured loan or similar agreement (which may be one or more schedules to a master agreement) (‘Agreement’) pursuant to which we will be financing the Equipment or Collateral as defined in and described in the Agreement (in either case ‘Equipment’) as set forth in this Commencement Agreement (‘CA’).” Addendum B creates a triable issue of material fact as to the terms of the agreement between the parties.
The declaration from Bryan Simpson states, “It was a shock to me when Providence demanded that I pay $68,000.00 to purchase the equipment at the conclusion of the lease because this is not how the lease was represented to me and the copies of the documents Providence had previously provided to me included a 1.5% buy out provision.” (Simpson Decl., ¶ 8.)
Construing Defendants evidence liberally, Defendants’ evidence creates a triable issue of fact as to the terms of the agreement between the parties and whether Defendants breached the Lease Agreement. Therefore, the court DENIES the Motion for Summary Adjudication as to Issue No. 1.
Issue No. 2—“SC has no defense to Providence's Second Cause of Action in the Complaint for Recovery of Personal Property and Providence is entitled to judgment on that cause of action as a matter of law. Undisputed Facts Nos. 1-19.”
Paragraph 15 of the Complaint pleads, “By virtue of the Lease and the default of SC thereunder, Providence has alf the rights and remedies of a lessor under the Lease, including, without limitation, the right to immediate possession of the Equipment and the right to request the assistance of the Court to enforce the terms of the Lease.” Since Issue No. 2 relies on the same facts as Issue No. 1, the court DENIES the Motion for Summary Adjudication as to Issue No. 2 for the same reasons as discussed for Issue No. 1.
Issue No. 3—“Simpson has no defense to Providence's Second Cause of Action in the Complaint for Recovery of Personal Property and Providence is entitled to judgment on that cause of action as a matter of law. Undisputed Facts Nos. 1-19.”
Since Issue No. 3 relies on the same facts as Issue No. 1, the court DENIES the Motion for Summary Adjudication as to Issue No. 3 for the same reasons as discussed for Issue No. 1.
Issue No. 4—“Simpson has no defense to Providence's Third Cause of Action in the Complaint for Breach of Guaranty and Providence is entitled to judgment on that cause of action as a matter of law. Undisputed Facts Nos. 1-19.”
Gray1 CPB, LLC v. Kolokotronis (2021) 202 Cal.App.4th 480, 486 (Gray1), states, “A lender is entitled to judgment on a breach of guaranty claim based upon undisputed evidence that (1) there is a valid guaranty, (2) the borrower has defaulted, and (3) the guarantor failed to perform under the guaranty. [Citation.]”
Since Issue No. 4 relies on the same facts as Issue No. 1, the court DENIES the Motion for Summary Adjudication as to Issue No. 4 for the same reasons as discussed for Issue No. 1.
Since the court has DENIED Plaintiff’s Motion for Summary Adjudication, the court DENIES Plaintiff’s Motion for Summary Judgment.
Based on the above, the court DENIES Plaintiff’s (Providence Capital Funding, Inc.) Motion for Summary Judgment or, Alternatively, Summary Adjudication of Issues Against Defendants SC Service Inc. and Bryan A. Simpson filed on 6-10-22 under ROA No. 40.
Defendants are to give notice.