Judge: Wesley L. Hsu, Case: KC070042, Date: 2023-04-19 Tentative Ruling

Case Number: KC070042    Hearing Date: April 19, 2023    Dept: L

Defendants Prakash Patel’s and Hardika Patel’s Motion for Summary Judgment is summarily DENIED for insufficient Code of Civil Procedure § 437c notice [see below].

 

Background   

 

Case No. KC070042

 

Plaintiffs Bharat Patel (“Bharat”) and Dinesh Patel (“Dinesh”) allege as follows: Bharat and Dinesh are brothers and are the uncles of Prakash Patel (“Prakash”). Beginning in April 2007, Bharat and Dinesh agreed to make a series of loans to Prakash. The total amount of these loans, which were secured by a deed of trust on Prakash’s personal residence, was $1,095,000.00, with an additional $983,978.25 in interest owed as of July 2016. On July 6, 2015, a “Judgment Based on Sister-State Judgment” and a “Corrected Judgment Based on Sister-State Judgment” were entered in favor of First National Bank (“FNB”) and against Prakash in case styled First National Bank v. Sachin, LLC, Case No. BS155273 (the “Sachin Matter”). FSB then filed case styled First National Bank v. Patel, Case No. BC616377 (the “Patel Matter”) against Prakash, Bharat and Dinesh because FNB was contesting the validity of Bharat’s and Dinesh’s deed of trust. In or around July 2016, the parties to the Sachin and Patel Matters entered into a settlement agreement. As part of that settlement agreement, Prakash acknowledged that he was indebted to Bharat and Dinesh in the amount of $2,078,978.23. Prakash was required, within 180 days of the execution of the settlement agreement, to reimburse Bharat and Dinesh $10,000.00 in attorneys’ fees incurred in connection with the Sachin and Patel Matters. Prakash was also obligated to enter into a written agreement with Bharat and Dinesh regarding a repayment plan; if he failed to do so, then Bharat and Dinesh would be entitled to have judgment entered against him in the amount of $2,078.978.23. Bharat and Dinesh have been unable to get Prakash to establish a repayment plan. Prakash has also failed to reimburse Bharat and Dinesh for the attorneys’ fees as per the settlement agreement.

On February 14, 2018, Bharat and Dinesh filed a complaint, asserting causes of action against Prakash and Does 1-10 for:

 

1.      Breach of Settlement Agreement

2.      Fraud

 

On May 2, 2019, Bharat and Dinesh filed a “Notice of Settlement.” On December 10, 2019, Bharat and Dinesh dismissed their lawsuit, with prejudice.

 

On June 19, 2020, a “Stipulation of Counsel to Vacate Dismissal and Reopen Case and to Consolidate Defendant’s Complaint; Order Thereon” was filed, wherein the dismissal in Case No. KC070042 was vacated, Case Nos. KC070042 and 20STCV10801 were consolidated and Case No. KC070042 was designated the lead case.

 

On April 1, 2021, an “Order on Motion to Enforce Settlement” was filed.

 

On April 14, 2022, an “Order Granting Defendants’ Motion for Summary Judgment” was filed (i.e., as to Prakash and Hardika’s complaint in Case No. 20STCV10801).

 

On October 10, 2022, Interlocutory Judgment was filed.

 

On March 13, 2023, Bharat and Dinesh filed a Second Amended Cross-Complaint (“SACC”) (i.e., as to Case No. 20STCV10801), asserting causes of action against Prakash, Hardika Patel (“Hardika”) and Roes 1-20 for:

 

1.      Breach of Settlement Agreement (Contract)

2.      Fraud (Misrepresentation)

3.      Fraud (Concealment)

4.      Conspiracy to Commit Fraud

5.      Declaratory Relief

 

The Final Status Conference is set for May 9, 2023. Trial is set for May 23, 2023.

 

Case No. 20STCV10801

 

Plaintiffs Prakash and Hardika allege as follows: On July 6, 2015, a “Judgment Based on Sister-State Judgment” and a “Corrected Judgment Based on Sister-State Judgment” were entered in favor of FNB and against Prakash and Hardika in the Sachin Matter. FNB pursued collection efforts to enforce the judgment by applying for an order for the sale of Prakash’s and Hardika’s personal residence located at 2838 Bentley Way, Diamond Bar, CA 91765 (the “Bentley Residence”) and their real property located at 1271 S. Lemon Ave., Walnut, CA 91789 (the “Lemon Property”). Parkash and Hardika challenged the validity of the judgment in the Sachin Matter. FNB then filed the Patel Matter. The Sachin and Patel Matters were settled on or about June 30, 2016 by and between FNB, on the one hand, and Prakash, Hardika, Bharat and Dinesh, on the other hand (“First Settlement Agreement”). The First Settlement Agreement stated that Prakash and Hardika received $1,095,000.00 in loans from Bharat and Dinesh and that the total interest owed was $983,970.25, for a total amount owed of $2,078,970.25. The First Settlement Agreement further stated that in the event the Bentley Residence was sold, $1,095,000.00 or more out of the proceeds would first be paid to Bharat and Dinesh. The amount was false and inflated to defraud FNB, which Prakash, Hardika, Bharat and Dinesh all knew; the true amount of principal and interest owed was approximately $1.3 million. Bharat and Dinesh agreed with Prakash and Hardika to put in the false amount so that with FNB paying Bharat and Dinesh first, FNB would receive less money in the event the Bentley Property was sold. They agreed that after the settlement with FNB was completed, Bharat and Dinesh would abide by the correct amount of $1.3 million to be paid to them by Prakash and Hardika. After FNB settled and was paid on its judgment, Bharat and Dinesh attempted to enforce the agreement for the false inflated amount. When Prakash and Hardika refused to pay, Bharat and Dinesh filed Case No. KC070042 but sued Prakash only, even though Hardika owns half of the Bentley Residence and the Lemon Property. Case No. KC070042 was thereafter allegedly settled per a “Stipulation for Settlement and Mutual Release of Claims” signed on or about November 9, 2018 (“Second Settlement Agreement”), which was not “binding and enforceable” but was to be thereafter memorialized in a “Settlement Agreement and Mutual Release” allegedly executed on or about November 26, 2018 (“Third Settlement Agreement”). In the Third Settlement Agreement, it was stated that Bharat and Dinesh would buy the Bentley Residence from Prakash for $1.9 million. An escrow was opened but Prakash and Hardika have refused to complete the transaction based on Bharat’s and Dinesh’s fraud. The First, Second, and Third Settlement Agreements are based on fraud and thus illegal and void.

 

On March 16, 2020, Prakash and Hardika filed a complaint, asserting causes of action against Bharat, Dinesh and Does 1-100 for:

 

1.      Voiding and Rescission of First Settlement Agreement

2.      Voiding and Recission of Second Settlement Agreement

3.      Voiding and Rescission of Third Settlement Agreement

4.      Fraud [Misrepresentation]

5.      Fraud [False Promise]

6.      Fraud [Concealment]

7.      Negligent Misrepresentation

8.      Voiding and Rescission of First Settlement Agreement [Fraud]

9.      Voiding and Rescission of Second Settlement Agreement [Fraud]

10.  Voiding and Rescission of Third Settlement Agreement [Fraud]

 

On June 23, 2020, Case Nos. KC070042 and 20STCV10801 were consolidated; Case No. KC070042 was designated the lead case.

 

Discussion

 

Prakash and Hardika seek (1) summary judgment in favor of Hardika and against Bharat and Dinesh as to the operative SACC and (2) an order adjudicating that there is no merit to the first, fourth and fifth causes of action contained in the SACC.

 

The motion is summarily denied for insufficient Code of Civil Procedure § 437c notice. The court notes that on February 1, 2023, Prakash and Hardika filed (and served via email) a “Motion for Summary Judgment and for Summary Adjudication;” said motion was set for hearing on April 19, 2023. The initial motion was directed to the First Amended Cross-Complaint (“FACC”). (See Amended Motion, 2:7-8). On February 28, 2023, the court granted Prakash’s and Hardika’s Motion for Judgment on the Pleadings as to the fifth cause of action in Bharat’s and Dinesh’s FACC, with 20 days’ leave to amend. On March 13, 2023, Bharat and Dinesh filed a SACC. On March 28, 2023, Prakash and Hardika filed (and served via email) the instant amended motion for hearing on April 19, 2023.

 

“Because there is but one complaint in a civil action, the filing of an amended complaint moots a motion directed to a prior complaint.” (State Compensation Ins. Fund v. Superior Court (2010) 184 Cal.App.4th 1124, 1131.) Prakash’s and Hardika’s February 1, 2023 filing was rendered moot by Bharat’s and Dinesh’s March 13, 2023 filing of the SACC.

 

Prakash’s and Hardika’s March 28, 2023 filing of the instant amended motion, moreover, reflects insufficient Code of Civil Procedure § 437c, subdivision (a)(2) notice [i.e., “Notice of the motion and supporting papers shall be served on all other parties to the action at least 75 days before the time appointed for hearing. . .”]. March 28, 2023 is a mere 22 calendar days prior to the April 19, 2023 hearing date.

 

Th express language of Code of Civil Procedure § 437c, subdivision (a) precludes a trial court from shortening the 75 day notice period for hearings on summary judgment motions, absent the consent of the parties. (McMahon v. Superior Court (2003) 106 Cal.App.4th 112, 118; Ushan v. Musicians’ Credit Union (2004) 120 Cal.App.4th 758.) Bharat and Dinesh have indicated that they do not consent.