Judge Yolanda Orozco, Case 21STCV42195 2023-05-01 Tentative Ruling

Judge: Yolanda Orozco, Case: 21STCV42195, Date: 2023-05-01 Tentative Ruling

Case Number: 21STCV42195 Hearing Date: May 1, 2023 Dept: 31

PROCEEDINGS:¿ MOTION FOR SUMMARY JUDGMENT/SUMMARY ADJUDICATION

MOVING PARTY:¿ Plaintiff Dongguan Youhou

RESP.¿ PARTY:¿ Defendants Hashtag Inc. and Brian Park

MOTION FOR SUMMARY JUDGMENT/SUMMARY ADJUDICATION

TENTATIVE RULING

Plaintiff’s Motion for Summary Judgment, or Summary Adjudication in the alternative, is DENIED.

BACKGROUND

On November 16, 2021, Plaintiff Dongguan Youhou Fashion Co. Ltd. filed a Complaint against Hashtag, Inc., Brian Park, (collectively “Defendants”), and Does 1 to 20 for:

1) Goods Sold and Delivered;

2) Account Stated;

3) Open Book Account; and

4) On Written Personal Guarantee Against.

On September 29, 2022, Plaintiff filed a Motion for Summary Judgment, or Summary Adjudication, in the alternative.

On March 23, 2023, Defendants filed opposing papers.

Plaintiff filed a reply on March 29, 2023.

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

Defendants submitted evidentiary objections cited by Plaintiff in this Motion.

Objections Nos. 1- 15 are OVERRULED.

The Court declines to rule on Plaintiff’s objections because they were included in its reply and not filed separately are required by California Rules of Court, rule 3.1354 subdivision (b). (See Hodjat v. State Farm Mut. Auto. Ins. Co. (2012) 211 Cal. App. 4th 1, 8-9 [court did not abuse its discretion in refusing to consider objections not filed separately as required by rule].)

DISCUSSION

Relevant Facts

Plaintiff’s Complaint alleges that Hashtag, Inc., Brian Park, (collectively “Defendants”) became indebted to Plaintiff in the sum of $226,658.38 for services, goods, and/or merchandise sold and delivered by Plaintiff to Defendants. (Compl. ¶ 5.) Interest at 10% per annum has accrued since August 22, 2019. (Comp. ¶ 6.) The Complaint also states that on August 22, 2019, Defendant Brian Park, in writing, guaranteed the obligations of Defendant Hashtag, Inc. (Compl. ¶ 14, Ex. 1.) The Complaint also seeks attorney’s fees pursuant to Civil Code section 1717.

Plaintiff’s Motion for Summary Judgment

Per Plaintiff’s notice of motion, Plaintiff moves for summary judgment, or summary adjudication in the alternative, as to all four causes and claim for attorney’s fees on the basis that Defendants have admitted their liability by way of Plaintiff’s business records, the Account/Statement maintained by Plaintiff and Payment Agreement, Personal Guaranty of Performance, and Financial Obligations (“Payment Agreement”). (Guo Decl. Ex. 1, 2.) Plaintiff asserts that under paragraphs 6 and 7 of the Payment Agreement, Defendants have waived all defenses. (Gua Decl. Ex. 1.)

Plaintiff’s three-page summary judgment motion asks the court grant summary judgment “in favor of Plaintiff on three causes of action and that Plaintiff’s additional claims for damages in the form of attorney’s fees and Court costs[.].” Plaintiff’s motion for summary judgment states that its complaint “is one presented by way of 3 Common Counts, and supported by a written Payment Agreement, Personal Guaranty of Performance and Financial Obligation document.”

a. Procedural Deficiencies in Plaintiff’s Separate Statement

First, Defendants object to the Motion on the basis that Plaintiff’s separate statement is procedurally defective. Defendants correctly point out that Plaintiff is required to set forth “plainly and concisely all material facts that the moving party contends are undisputed.” (Code Civ. Proc., § 437c subd. (b)(2); see also Cal. Rules of Court, rule 3.1350 subd. (e).)

Here, Defendants take issue with Undisputed Material Facts (“UMF”) Nos. 1.1, 2.1, and 5.2 because they cite evidence not facts:

· UMF No. 1.1 states: “Plaintiff Declaration, Exhibit 1”

· UMF No. 2.1 states: “Plaintiff Declaration, Exhibit 1 & 2; ¶ 6.”

· UMF For issue 5 – Unnumbered states: “Plaintiff’s Declaration, Exhibit 2 ¶ 7.”

The Court agrees that Plaintiff is not in compliance with the requirements of the separate statement. “The failure to comply with this requirement of a separate statement may in the court’s discretion constitute a sufficient ground for denying the motion.” (Code Civ. Proc., § 437c subd. (b)(2).” Here, the Court agrees that the fact deemed to be undisputed is not set out with the requisite particularity to allow the Court to determine if the fact is in fact disputed or not disputed.

b. Plaintiff has Failed to Show No Triable Issues of Fact Exist

“The issue of damages is ordinarily a triable issue of fact.” (R.J. Land & Associates Construction Co. v. Kiewit-Shea (1999) 69 Cal.App.4th 416, 429. When the issue of calculation of damages is undetermined, it is not appropriate to grant summary judgment. (See Department of Industrial Relations v. UI Video Stores, Inc. (1997) 55 Cal.App.4th 1084, 1097.)

Defendants also assert that UMF Nos. 1.2, 2.2, 3.1, and 4.1 provide that the sum due is $200,000.00 while the Declaration of Jinxiang Guo and Plaintiff’s Complaint states the amount owed is $237,658.38.

Issues 1, 2, and 3 in the separate statement pertain to the first three causes of action for common count and state the fact that is undisputed is that amount Defendants’ owe is $200,000.00. (UMF 1.2, 2.2, 3.1.) In reply, Plaintiff states that the sum owed is $237,657.38 as to Defendant Hashtag while Defendant Park, as the guarantor, is limited to a debt of $200,000.00 per the terms set forth in the Payment Agreement. (Reply at 3:13-16.) This is not reflected in Plaintiff’s separate statement. Moreover, Plaintiff’s Complaint asserts the first three common count claims against both Defendants, not just Defendant Hashtag, Inc. The Court agrees that the amount due is disputed and Plaintiff has not met its burden of showing not triable issues of fact exist as to the amount owed.

Moreover, Defendants dispute the amount owed because they assert that payments have been made by Defendants to Plaintiff but credits have not been applied to the debt. (Park Decl. ¶ 4, 5.) Defendants provide no evidence of this. However, the burden remains with Plaintiff to show no triable issues of fact exist before the burden shifts to Defendant. Since, Plaintiff failed to meet its initial burden of showing no triable issues of fact exists, the motion must be denied.

c. Allegation Plaintiff is a Foreign Corporation Unable to Maintain this Action

Defendants state that Plaintiff is a foreign corporation that has failed to qualify with the Secretary of State to transact in intrastate business and can therefore not maintain this action. (See United Medical Management Ltd. v. Gatto (1996) 49 Cal.App.4th 1732, 1739. (“United Medical”) A foreign corporation transacting intrastate business which has failed to qualify with the Secretary of State can commence or defend an action brought against it in state court, but it cannot maintain an action commenced prior to qualification, except upon meeting the conditions set out in section 2203 subdivision (c) of the Corporations Code. (See id.)

Defendants assert that in response to Requests for Admission, Plaintiff admitted it was not qualified to conduct business in California. (Hwang Decl. ¶¶ 3, 4, Ex. A, B.) Defendants Form Interrogatory 3.1 subdivision (e) asked Plaintiff whether it was qualified to do business in California. (Hwang Decl. ¶ 3, Ex. A.) Plaintiff’s response to For Interrogatory 3.1 subdivision (e) was “No.” (Hwang Decl. ¶ 4, Ex. B.)

In its reply, Plaintiff ignored the issue and did not address it. Assuming arguendo that Plaintiff’s declaration is correct and that this action arose out of multiple sales of goods by Plaintiff to Defendant, then this action arose intrastate business and cannot be maintained by Plaintiff until it is qualified to do business in California. Accordingly, this precludes granting summary judgment or summary adjudication in favor of Plaintiff.

Here, Defendants have presented Plaintiff’s own declaration which asserts that this action arose from business transactions between the parties related to the sale of products by Plaintiff to Defendant. (Guo Decl. ¶ 4.) Plaintiff’s Complaint also asserts that the Defendants are residents of California and that within the last four years, in Los Angeles, California, Defendants incurred the debt at issue “for services, goods, and/or merchandises sold and delivered by plaintiff to defendants[.].” (Compl. ¶ 5.) Therefore, Plaintiff has the burden of showing that it is qualified to conduct intrastate business in California or that this action did not arise out of intrastate business. Plaintiff has failed to meet this burden.

“The failure of a foreign corporation to qualify to transact business prior to commencing an action is a matter of abatement of the action.” (United Medical, supra, 49 Cal.App.4th at 1740.) “Section 2203, subdivision (c) is clear and unambiguous on its face. It provides for the abatement of an action brought by a foreign corporation upon intrastate business if the action is commenced prior to qualifying to transact intrastate business.” (Id.)

Unless Plaintiff can show that it is in compliance with section 2203(c), this action must be abated.

This also precludes the Court from granting summary judgment or summary adjudication in favor of Plaintiffs, since triable issues of fact exist as to whether Plaintiff is compliance with section 2203 subdivision (c). This also precludes the Court from finding that Plaintiff is entitled to attorney’s fees under Civil Code section 1717 since Plaintiff is not the prevailing party.

Therefore, Plaintiff’s Motion is DENIED.

Conclusion

Plaintiff’s Motion for Summary Judgment, or Summary Adjudication in the alternative, is DENIED.

Moving party to give notice.