Judge Yolanda Orozco, Case 21STCV28586 2022-11-14 Tentative Ruling

Judge: Yolanda Orozco, Case: 21STCV28586, Date: 2022-11-14 Tentative Ruling

Case Number: 21STCV28586 Hearing Date: November 14, 2022 Dept: 31

MOTION FOR SUMMARY JUDGMENT/SUMMARY ADJUDICATION IS GRANTED

BACKGROUND

On August 3, 2021, Plaintiff Jerrold A. Fine (“Plaintiff”) filed a complaint against Defendant Teri Lee Bernardi, Green Grown Bulk, Inc., and Does 1 through 10 for (1) breach of written contract, (2) money lent, (3) money had and received, (4) open book account, and (5) account stated. Plaintiff alleges Defendants borrowed money from Plaintiff and failed to repay him.

On July 08, 2022, Plaintiff filed a Motion for Summary Judgment or Summary Adjudication in the alternative.

Defendant filed opposing papers on November 01, 2022. Plaintiff filed a reply on November 07, 2022.

Legal Standard

The purpose of a motion for summary judgment or summary adjudication “is to provide courts with a mechanism to cut through the parties’ pleadings in order to determine whether, despite their allegations, trial is in fact necessary to resolve their dispute.”¿ (Aguilar v. Atl. Richfield Co. (2001) 25 Cal. 4th 826, 843.) “Code of Civil Procedure section 437c, subdivision (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.)¿¿¿¿¿

“On a motion for summary judgment, the initial burden is always on the moving party to make a prima facie showing that there are no triable issues of material fact.” (Scalf v. D. B. Log Homes, Inc. (2005) 128 Cal.App.4th 1510, 1519.) The moving party is entitled to summary judgment if they can show that there is no triable issue of material fact or if they have a complete defense thereto. (Aguilar, supra, 25 Cal. 4th at 843.)¿ Summary adjudication may be granted as to one or more causes of action within an action, or one or more claims for damages. (Cal. Code of Civ. Proc. §437c(f).)¿¿¿¿¿¿

A defendant moving for summary judgment bears two burdens: (1) the burden of production – presenting admissible evidence, through material facts, sufficient to satisfy a directed verdict standard; and (2) the burden of persuasion – the material facts presented must persuade the court that the plaintiff cannot establish one or more elements of a cause of action, or a complete defense vitiates the cause of action. (Code Civ. Proc., § 437c(p)(2);¿Aguilar,¿supra, 25 Cal.4th at p. 850-851.) A defendant may satisfy this burden by showing that the claim “cannot be established” because of the lack of evidence on some essential element of the claim.¿¿(Union Bank v. Superior Court (1995) 31 Cal.App.4th 574, 590.)¿¿Once the defendant meets this 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 defense thereto.”¿(Id.)¿¿¿¿¿

“On ruling on a motion for summary judgment, the court is to ‘liberally construe the evidence in support of the party opposing summary judgment and resolve doubts concerning the evidence in favor of that party.’” (Cheal v. El Camino Hospital¿(2014) 223 Cal.App.4th 736, 760.)¿¿¿

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.]” (Binder v. Aetna Life Ins. Co.¿(1999) 75 Cal.App.4th¿832, 839.)¿¿

Defeating summary judgment requires only a single disputed material fact. (See CCP § 437c(c) [a motion for summary judgment “shall be granted if all the papers submitted show that there is no triable issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.”] [emphasis added].) Thus, any disputed material fact means the court must deny the motion – the court has no discretion to grant summary judgment. (Zavala v. Arce (1997) 58 Cal.App.4th 915, 925, fn. 8; Saldana v. Globe-Weis Systems Co. (1991) 233 Cal.App.3d 1505, 1511-1512.)¿¿¿

EVIDENTIARY OBJECTIONS

Plaintiff’s Evidentiary Objections to the Declaration of Teri Lee Bernardi Filed in Opposition to the Motion.

Objection Nos. 1, 3-7,12, 14-15, and 17 are SUSTAINED

Objection Nos. 2, 8, 10, 11, AND 16 are OVERRULED.

Objections 9 and 13 are immaterial to the Court’s disposition of the motion. The Court thus declines to rule upon them. All objections not ruled upon are preserved for appeal. (Code Civ. Proc. § 437c(q).)

Discussion

Promissory Note and the Loan Agreement Executed by the Parties

Plaintiff and Defendant were previously married and divorced in 2016. Prior to and during the marriage, Defendant operated a business called Green Grown Bulk, Inc. (“GGB”).

Plaintiff alleges that on May 15, 2019, Plaintiff agreed to give Defendant a loan and Defendant signed a promissory note (the “Promissory Note”) for $150,000.00 to help her business, GGB. (Fine Decl. ¶ 4, Ex. 2.) Under the terms of the Promissory Note, Defendant agreed to pay the loan off with interest at the rate of 10.0% per annum. (Id.)

Defendant required additional cash infusions for GGB, so the parties executed a loan modification agreement (the “Loan Agreement”); which was executed on October 08, 2020, and effective as of January 9, 2020. (Fine Decl. ¶ 5, Ex. 3.) In the relevant part, the Loan Agreement states:

“TB is not only unable to repay the original loan but requires an additional cash infusion of an undetermined amount. JF has expressed a willingness to advance the funds on the following terms and conditions. Interest shall accrue from the last paid date. Although the original loan was unsecured, this modification requires that TB secures all of the debt to JF with all of the personal assets owned by TB.”

(Id.) The Loan Agreement set specific conditions that would allow Plaintiff to:

1) Have final approval on all business and personal money expenditures of Defendant and GGB in advance of disbursements,

2) Have total approval over all bank and credit cards to Teri and GGB,

3) Require Defendant to create a budget for her personal expenditures, and upon approval of the budget, Plaintiff would provide the funds for each expenditure,

4) The loan would be secured by all of Defendant’s personal property, and

5) The due date of repayment of the amounts owed would be December 30, 2021.

(See Id. Ex. 3)

On April 2021, Plaintiff discovered Defendant opened at least one bank account for GGB that was not disclosed to Plaintiff, in violation of the Loan Agreement. (Fine Decl. ¶ 6.) Plaintiff discovered that Defendant had deposited funds from GGB’s main customer into the undisclosed U.S. Bank account rather than GGB’s regular U.S. Bank account for GGB. (Id. ¶ 7.)

On June 11, 2021, Plaintiff provided Defendant with an accounting of all monies tendered to Defendant, all monies paid back to Plaintiff, and amounts owed under both the Promissory Note and the Loan Agreement (the “Loan Accounting”) (Fine Decl. ¶ 8, Ex. 4.) According to Plaintiff, Defendant owes $541,060.00 after accounting $23,00.00 in payments. (Id.) Plaintiff also provided Defendant an accounting of all expenditures (the “Expenditures Accounting”) paid on her behalf by Plaintiff, totaling $75,407.00. (Id. ¶ 9, Ex. 5.) Plaintiff now seeks recovery of the amount of $541,060.00 and $75,407.00 with pre and post-default interest, totaling $787,625.63. (Soffer Supp. Decl. ¶¶ 9, 10, Ex. 5 [interest calculations].)

Plaintiff filed a Complaint on August 03, 2022, for (1) Breach of Written Contract; (2) Money Lent; (3) Money had and received; (4) Open Book Account; and (5) Account Stated.

Plaintiff now seeks summary judgment against Defendant on the basis that she has no defense to the action, there are no triable issues as to any material fact as to any cause of action, and Plaintiff is entitled to Judgment as a matter of law.

Deemed Admissions Admitted

On May 18, 2022, this Court granted Plaintiff’s request for an Order that the Truth of the Matters be Deemed Admitted. (Min. Or. 10/04/22; Soffer Decl. ¶ 4, Ex. 2.) In denying Defendant’s motion for relief from deemed admissions, the Court found that Defendant’s failure to timely respond to the RFA’s or serve verified responses was not the result of mistake, inadvertence, or excusable neglect and she was not entitled to relief under the Code of Civil Procedure section 2033.300 subdivision (b). (Min. Or. 10/04/22)

“A party is bound by admissions made in the course of discovery and, on motion for summary judgment, no further evidence of the matters so deemed admitted is required.” (Hejmadi v. Amfac, Inc. (1988) 202 Cal.App.3d 525, 552.) Further, plaintiffs may not contradict these admissions. (See CCP § 2033.410 (a) [“Any matter admitted in response to a request for admission is conclusively established against the party making the admission in the pending action . . .”].) “As a general rule an admission is conclusive in the action as to the party making it.” (Murillo v. Superior Court (2006) 143 Cal.App.4th 730, 736; see also Jahn v. Brickey (1985) 168 Cal.App.3d 399, 404 [“Admissions are more than a mere discovery device. They also serve a function similar to the pleadings in a lawsuit in that they are ‘aimed primarily at setting at rest a triable issue so it will not have to be tried.’”].)

Consequently, Defendant’s declarations that she believed the monies tendered were a gift are inadmissible as to contradict the deemed admissions. (Soffer Decl. ¶ 3, Ex. 1 [RFAs].) Moreover, Defendant has failed to present admissible evidence to raise a triable issue of fact that the Promissory Note and Loan Agreement were gifts from Plaintiff.

1st COA: Breach of Contract

“To prevail on a cause of action for breach of contract, the plaintiff must prove (1) the contract, (2) the plaintiff’s performance of the contract or excuse for nonperformance, (3) the defendant’s breach, and (4) the resulting damage to the plaintiff. [Citation.]” (Richmond v. Hartley (2014) 224 Cal.App.4th 1182, 1186.)

The deemed admissions include admissions that Defendant signed the Promissory Note and the Loan Agreement and that she was loaned the money. (Soffer Decl. ¶¶ 3,4, Ex. 1 [RFA Nos. 1-2, 5-7], Ex. 2.) Plaintiff lent Defendant monies in connection with the Promissory Note and Defendant has not repaid the amount due under the Promissory Note, therefore, Defendant is liable for breach of the Promissory Note. (Id. Ex. 1 [RFA Nos. 3, 4, 55.].) Defendant admitted she is liable for the interest accrued under the Promissory at an annual rate of 10%, with interest beginning to accrue on May 19, 2019. (Id. [RFA Nos. 55].) Plaintiff performed all obligations under the Promissory Note and to the extent he did not so perform, Plaintiff was excused from such performance. (Id. [RFA Nos. 57, 58.) Defendant also admitted that she materially breached the 2019 Promissory Note and is liable for unpaid amounts. (Id. [RAF Nos. 54, 55.)

Defendant also admitted that under the Loan Agreement, Defendant was to give Plaintiff access to all her personal bank accounts and all bank accounts of GGB. (Soffer Decl. Ex. 1 [RFA Nos. 19-20.].) Defendant agreed to abide by all the terms set out in the Loan Agreement, including disclosing any account opened at U.S. Bank and access to all bank accounts. (Id. [RAF Nos. 22, 25].) Defendant admitted to not disclosing any of the accounts opened at U.S. Bank in Defendant’s name or GGB after October 08, 2020, and Defendant was obligated to make such a disclosure. (Id. [RAF Nos. 23-32].) Defendant and GGB admitted that they materially breached the Loan Agreement and are liable. (Id. [RFA Nos. 59, 60, 62, 63.) Defendant and GGB admit that they are liable for the sum of $541,060.00 plus interest at the annual rate of 10%, which sum includes Defendant’s liability under the 2019 Promissory Note. (Id. [RFA Nos. 61, 64.].) Defendant also admitted Plaintiff performed all obligations under the Loan Agreement and to the extent that he did not so perform, Plaintiff was excused from such performance. (Id. [RFA Nos. 65, 66.].

Lastly, Defendant also admitted she is liable for $75,407.00 as reflected in the Expenditures Accounting attached as Exhibit D to the RFA. (Soffer Decl. Ex. 1 [RFA Nos. 16, 18.].)

Defenses Asserted by Defendant

a. Defense - Economic Duress

“The doctrine of ‘economic duress’ can apply when one party has done a wrongful act which is sufficiently coercive to cause a reasonably prudent person, faced with no reasonable alternative, to agree to an unfavorable contract. (Citation.) The party subjected to the coercive act, and having no reasonable alternative, can then plead “economic duress” to avoid the contract.” (CrossTalk Productions, Inc. v. Jacobson (1998) 65 Cal.App.4th 631, 644.)

Defendant asserts that the contract is not enforceable because it was the product of economic duress. First, Plaintiff has the burden of proving economic duress by perdurance of the evidence. (See In re Marriage of Balcof (2006) 141 Cal.App.4th 1509, 1523.) Defendant’s declaration fails to establish economic duress. Moreover, Defendant has not shown that she had no reasonable alternative but to agree to the Promissory Note and the Loan Agreement. (See CrossTalk Production, Inc. 65 Cal.App.4th at. 644 [“When a party pleads economic duress, that party must have had no “reasonable alternative” to the action it now seeks to avoid (generally, agreeing to a contract). If a reasonable alternative was available, and there hence was no compelling necessity to submit to the coercive demands, economic duress cannot be established.”].) Lastly, duress is an affirmative defense, and Defendant failed to raise that defense in her Answer. (See Fio Rito v. Fio Rito (1961) 194 Cal.App.2d 311, 322 [defendant had burden of proving affirmative defense of duress]; see also Vitkievicz v. Valverde (2012) 202 Cal.App.4th 1306, 1314 [“The failure to assert an affirmative defense by demurrer or answer results in the waiver or, more accurately, forfeiture of the defense unless the defense concerns the lack of subject matter jurisdiction or failure to state facts sufficient to state a cause of action.”].)

Therefore, Defendant’s economic duress defense claim is forfeited because it was not raised in her Answer.

b. Waiver

Having presented no admissible evidence, Defendant’s claim that Plaintiff waived enforcement of money tendered is without merit. Moreover, the evidence cited by Defendant does not support the proposition that Plaintiff waived enforcement of the money tendered. (See generally Bernardi Decl.) Moreover, waiver is an affirmative defense, that is forfeited if not pled in an answer. (See Mission Housing Development Co. v. City and County of San Francisco (1997) 59 Cal.App.4th 55, 75 [“[T]he law is settled that waiver is an affirmative defense and a defendant relying thereon must set it up in his answer.”].)

Therefore, Defendant’s waiver defense is forfeited because it was not raised in her Answer.

c. Uncertainty

Defendant claims the Loan Agreement is unenforceable due to indefiniteness. “The defense of uncertainty has validity only when the uncertainty or incompleteness of the contract prevents the court from knowing what to enforce.” (Blackburn v. Charnley (2004) 117 Cal.App.4th 758, 766.) The Court finds that the Loan Agreement is not indefinite, and Defendant is liable for $787,625.63.

Accordingly, summary adjudication is GRANTED as to the first cause of action for breach of a written contract.

2nd COA: Money Lent

A common count is not a specific cause of action, however; rather, it is a simplified form of pleading normally used to aver the existence of various forms of monetary indebtedness, including that arising from an alleged duty to make restitution under an assumpsit theory. (McBride v. Boughton (2004) 123 Cal.App.4th 379, 394.) “A common count claim broadly applies ‘wherever one person has received money which belongs to another, and which in ‘equity and good conscience,’ or in other words, in justice and right, should be returned.’ (Citation.)” (Rubinstein v. Fakheri (2020) 49 Cal.App.5th 797, 809.)

As outlined above, Plaintiff has provided sufficient evidence that Defendant admitted she was loaned monies, totaling $564,060.00 but she only repaid $23,000.00. (Soffer Decl. ¶¶ 3, 4, Ex. 1 [RFA Nos. 8, 14,], Ex. 2.) Defendant also admitted Plaintiff paid additional expenses outlined in the Expenditures Accounting totaling $75,407.00. (Soffer Decl. Ex. 1 [RFA Nos. 16, 18.].)

Therefore, summary adjudication is GRANTED as to the second cause of action for money lent.

3rd COA: Money Had and Received

“A cause of action is stated for money had and received if the defendant is indebted to the plaintiff in a certain sum ‘for money had and received by the defendant for the use of the plaintiff.’” (Schultz v. Harney (1994) 27 Cal.App.4th 1611, 1623.)

As outlined above, Plaintiff has sufficiently proven that Defendant received money from Plaintiff in a sum certain of $541,060.00 and $75,407.00 and that Plaintiff is owed that money plus an annual rate of 10% interest. (Fine Decl ¶ 8,9, Ex. 4, 5; Soffer Decl. Ex. 1 [RFA Nos. 61, 64].) Plaintiff deposited sums to a U.S. Bank account ending with No. 7729 of which Defendant only repaid $23,000.00. (Soffer Decl. ¶¶ 3, 4, Ex. 1 [RFA No. 8, 10, 12, 14], Ex. 2) Defendant also admitted Plaintiff paid $75,407.00 in expenditures on Defendant’s behalf, that she was obligated to reimburse Plaintiff, and failed to dos so. (Id. Ex. 1 [RFA Nos. 16-18], Ex. 2.)

Therefore, summary adjudication is GRANTED as to the third cause of action for money had and received.

4th COA: Open Book Account

“A book account is defined as a detailed statement, kept in a book, in the nature of debit and credit, arising out of contract or some fiduciary relation. It is, of course, necessary for the book to show against whom the charges are made. ... It must also be made to appear in whose favor the charges run.” (Interstate Group Administrators, Inc. v. Cravens, Dargan & Co. (1985) 174 Cal.App.3d 700, 708 [internal citations and quotations omitted].) A book account is described as “open” when the debtor has made some payment on the account, leaving a balance due. (Id.) “Money loaned is the proper subject of an open book account.” (Joslin v. Gertz (1957) 155 Cal.App.2d 62, 66.)

As stated above, Plaintiff has sufficiently established that Plaintiff made a loan to Defendant, that he provided an accounting of the monies tendered to Defendant and repaid by Defendant in the Loan Accounting and in the Expenditures Accounting. (Fine Decl. ¶¶ 8,9, Ex. 4, Ex. 5; Soffer Decl. ¶¶ 3, 4, Ex. 1 [RFA Nos. 1-18], Ex. 2.) Defendant has admitted to the accuracy of the records and that she is obligated to repay Plaintiff. (Id. Ex. 1 [RFA Nos. 8, 9, 14, 15, 55, 60, 63].)

Therefore, summary adjudication is GRANTED s to the fourth cause of action for open book account.

5th COA Account Stated

“The essential elements of an account stated are: (1) previous transactions between the parties establishing the relationship of debtor and creditor; (2) an agreement between the parties, express or implied, on the amount due from the debtor to the creditor; (3) a promise by the debtor, express or implied, to pay the amount due.” (Zinn v. Fred R. Bright Co. (1969) 271 Cal.App.2d 597, 600.)

Defendant has admitted liability for both the Promissory Note and the Loan Agreement as well as the interest accrued. (Soffer Decl. Ex. 1 [RFA Nos.1-16, 59-65].) Defendant also admitted to signing the Promissory Note and the Loan Agreement and being liable to Plaintiff for the unpaid amount. (Id. Ex. [RFA Nos. 2, 6, 7, 55, 60, 63].)

Therefore, summary adjudication is GRANTED s to the fifth cause of action for account stated.

Conclusion

Plaintiff’s Motion for Summary Judgment is GRANTED.

Plaintiff to give notice.