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LAW & MOTION TENTATIVE RULINGS
TUESDAY, APRIL 15, 2014 - 8:30 a.m.
COURTROOM 19 – Judge Arthur A. Wick
3055 Cleveland Avenue, Santa Rosa, CA 95403
Court Call is now available for all Law and Motion appearances, EXCEPT parties in small claims cases and motions for claims of exemption which are mandatory appearances. ** To set up Court Call- Please call CourtCall directly at (888) 882-6878.
1. SCV-247137 Capri Creek v. Etter & Sons:
This is on calendar for AAA Energy Systems’ (AAA) Motion for Summary Judgment/Adjudication. Northern California Nail Co. has informed the court that it wishes to drop its motion from calendar.
The parties’ respective requests for judicial notice are granted, except as to AAA’s requests 1, 2 and 5, to which the Plaintiff’s objections are sustained.
The Plaintiff’s evidentiary objections to AAA’s evidence are sustained as to the Spark’s Declaration, and Exhibits 2-5, 10, 16-20, 22, 25-30, 33, 36-43, 46, & 48; the balance of the objections are overruled.
AAA Energy Systems’ (AAA) Motion for Summary Judgment/Adjudication
AAA argues that the Plaintiff did not exercise reasonable diligence to discover the cause of the water intrusion in 2001. AAA contends that Plaintiff knew or should have known about the issue that gave rise to the present legal action years before filing the present lawsuit. In particular, AAA argues that the Plaintiff knew about the water intrusion in 2001 and failed to fully investigate the root cause. AAA points to evidence submitted which suggests that the Plaintiff chose not to conduct additional testing recommended by its experts in 2001/2002. AAA contends that the Plaintiff’s failure to discover the cause was unreasonable, and as a result the Plaintiff’s claims are barred by the applicable statute of limitations set forth in CCP §§ 337 and 338. AAA’s argument, at its core, is that the Plaintiff should have done more to discover AAA’s alleged negligence, and that the Plaintiff did not act with reasonable diligence.
Plaintiff disputes AAA’s position, arguing that the water intrusion was reasonably investigated in 2001/2002, and thought to have been repaired. Further, the Plaintiff contends that whether it acted with reasonable diligence to discover the causes of the water intrusion, is a material question of fact that is in dispute, thus barring relief on summary judgment or adjudication.
A plaintiff’s cause of action for property damage caused by a latent defect accrues “from the point in time when plaintiffs became aware of defendant’s negligence as a cause [of damage to the property], or could have become so aware of defendant’s negligence through the exercise of reasonable diligence.” (Leaf v. City of San Mateo (1980) 104 Cal.App.3d 398, 408.) The law is equally clear that “whether the plaintiff exercised reasonable diligence is a question of fact for the court or jury to decide.” (Enfield v. Hunt (1979) 91 Cal.App.3d 417, 419.) On a motion for summary judgment, the court must construe declarations and evidence offered in opposition to the motion liberally, while the moving party's evidence must be construed strictly, in determining the existence of a “triable issue” of fact. (D'Amico v. Board of Medical Examiners (1974) 11 Cal.3d 1, 21; Binder v. Aetna Life Ins. Co. (1999) 75 Cal.App.4th 832, 839; Johnson v. American Standard, Inc. (2008) 43 Cal.4th 56, 64.)
Here, the evidence presents a dispute as to whether the Plaintiff acted with reasonable diligence in discovering the cause of the water intrusion. In particular the Plaintiff was relying on a group of people to provide opinions on the cause of the water intrusion. The Plaintiff contends that it was reasonable to believe that the moisture damage was caused by the stucco control joints—not the framing. For this court to decide the issue, it would be called upon to weigh the evidence—something that is impermissible on summary judgment. Whether the Plaintiff acted with reasonable diligence to discover all the cause of water intrusion is a question for the fact finder.
AAA also argues that the Plaintiff “is unable to prevail on its Third Cause of Action for Breach of Third Party Beneficiary Contract.” (AAA’s Notice of Motion 2:13-17.) There is no “Third Cause of Action for Breach of Third Party Beneficiary Contract,” the Plaintiff’s Second Cause of Action is identified as the Breach of Third Party Beneficiary. It is axiomatic that where summary adjudication is sought, the notice must specify the “specific cause of action, affirmative defense, claims for damages, or issues of duty” sought to be adjudicated… and be repeated, verbatim, in the separate statement of undisputed material facts.” (CRC Rule 3.1350(b).) Further, AAA’s Separate Statement identifies “Issue No. 3” as barring recovery on the Second Cause of Action for Breach of Third Party Beneficiary based on the statute of limitations and based on the Plaintiff’s affirmative claims against AAA. Adding to the confusion, AAA refers to the Third Cause of Action failing “because there is nothing to indemnify” in its memorandum of points and authorities in support of its motion—which then goes on to cite paragraphs from the Second Cause of Action. (AAA’s MPA 18:22-23.) AAA’s substantive arguments regarding the Second Cause of Action do not fare any better.
First, AAA appears to only attack the portion of the Second Cause of Action as it relates to indemnity and attorney fees—the Second Cause of Action is more broad than that. (SAC ¶ 35.) Further, AAA’s contract specifically states that it will “hold harmless…owner” at the very least this provides that the Plaintiff is an intended third party beneficiary of that contract; notwithstanding AAA’s argument that “owner” is only mentioned in ¶ 6 of the contract. (AAA Exhbt. 9 at ¶ 9; see also ¶¶ 4 [mentions owner],8[mentions owner], 10 [mentions owner].)
“The pleadings determine the scope of relevant issues on a summary judgment motion.” (See Nieto v. Blue Shield of Calif. Life & Health Ins. Co. (2010) 181 Cal.App.4th 60, 73.) The moving party must show that the undisputed facts, when applied to the issues framed by the pleadings, entitle the moving party to judgment. (Juge v. County of Sacramento (1993) 12 Cal.App. 4th 59, 66.) While the attorney fees clause at issue is less broad than that in Loduca v. Polyzos [153 Cal.App.4th 334, 343-344], AAA has not established that it is entitled to judgment as a matter of law as to the complete cause of action—as the claims in the Second Cause of Action go beyond just indemnification and attorney fees. (SAC ¶ 35.)
Accordingly, AAA’s motion is denied in its entirety. The Plaintiff is to draft an order consistent with this ruling.
2. SCV-252044 Mukherji v. Patel:
Defendant Commonwealth Land Title Company, successor to New Century Title Company, demurs to plaintiffs’ second amended complaint (SAC) on the grounds that the complaint fails to allege facts sufficient to state a cognizable claim because plaintiffs have alleged no legally cognizable injury, plaintiffs have failed to plead any legally breached duty, and because each and every cause of action is barred by the applicable statute of limitations.
Additionally, defendant demurs to the sixth cause of action for intentional misrepresentation on the grounds that plaintiffs allege no misrepresentation; defendant cannot be liable for a representation of title; plaintiffs have alleged no legal injury; the injury was caused by the superseding independent acts of others; the claim is barred by the applicable statute of limitations; plaintiffs otherwise fail to state a claim upon which relief can be granted; and, the cause of action is fatally uncertain.
Defendant demurs to the eighth cause of action for breach of escrow instructions and the ninth cause of action for breach of escrow instructions on the grounds that plaintiffs fail to adequately plead the breach of written escrow instructions in compliance with California law; the claims are barred by the applicable statute of limitations; the breach did not cause any legal injury to plaintiffs; the injury complained of was caused by the superseding independent acts of others; plaintiffs otherwise fail to state a claim upon which relief can be granted; and, the causes of action are fatally uncertain.
Defendant demurs to the tenth cause of action for negligence on the grounds that plaintiffs have failed to establish a cognizable legal duty or its breach; plaintiffs have alleged no legal duty; the injury complained of was caused by the superseding independent acts of others; plaintiffs otherwise fail to state a claim upon which relief can be granted; and, the cause of action is fatally uncertain.
Plaintiffs oppose the motion.
The court’s review of the SAC reveals plaintiffs’ sixth cause of action for intentional misrepresentation and seventh cause of action for negligent misrepresentation appear to allege that defendant New Century represented to plaintiffs both orally and in writing that their $80,000.00 personal loan to defendants Nitin and Sharmila Patel to purchase the Travelodge property could be secured by a deed of trust on the property and that such representation was knowingly false as New Century had prepared the preliminary title report showing that plaintiffs did not own fee simple interest in the Travelodge property—plaintiffs only owned a leasehold interest. Plaintiffs alleged they relied on New Century’s statements and agreed to accept the note and deed of trust from Nitin and Sharmila Patel rather than demanding that the $80,000.00 be paid in cash.
Plaintiffs’ eighth cause of action for breach of escrow instructions and ninth cause of action for breach of escrow instructions states that plaintiffs told New Century to close escrow on the sale of the Travelodge and the $80,000.00 loan from plaintiffs to Nitin and Sharmila Patel only when New Century had prepared and recorded the deed of trust securing the $80,000.00 note and that New Century breached this agreement by preparing and recording a faulty deed of trust because said deed of trust did not secure any interest in the Travelodge property.
Plaintiffs’ tenth cause of action for negligence appears to allege that plaintiffs employed defendant to draft a complete and valid note for $80,000.00 secured by a valid deed of trust, but that defendant breached this duty as the deed of trust could not be secured by the property because Nitin and Sharmila Patel did not own fee simple interest in the Travelodge property.
Plaintiffs’ entire complaint against New Century is based upon the idea that the deed of trust drafted by New Century was invalid because defendants Nitin and Sharmila Patel only purchased the interest plaintiffs had in the Travelodge property—a leasehold interest—but the deed of trust purported to secure a fee simple interest.
First, any interest in real property that is transferable may be collateral for a mortgage or deed of trust, including a leasehold estate, which is an estate for years. (See Miller & Starr, Cal. Real Est. 3d (2013) § 10:18, citing, in part, Civ.Code § 2947 [“Any interest in real property which is capable of being transferred may be mortgaged.”])
Second, as a general rule, the requirement of an unambiguous description of the property encumbered is the same for a deed of trust or mortgage as for a deed or other conveyancing instrument; the trust deed must describe the security with sufficient clarity to identify it to the exclusion of any other property. (Miller & Starr, supra, at § 10:19.) A mortgage can be created, renewed, or extended, only by writing, executed with the formalities required in the case of a grant of real property. (Id. at § 10:6, citing Civ. Code § 2922.) When a grant deed conveys land owned by the grantor, but the legal description also includes other land he or she does not then own, the deed is effective, but it conveys only the property then owned by the grantor. (Miller & Starr, Cal. Real Est. 3d (2013) § 8:58, citing Warden v. South Pasadena Realty & Imp. Co. (1918) 178 Cal. 440, 445; Cecil v. Gray (1915) 170 Cal. 137, 139-140; Gordon v. San Diego (1894) 101 Cal. 522, 530; Leoke v. San Bernardino County (1967) 249 Cal. App. 2d 767, 772-773 (tax deed); Stanley v. Shierry (1958) 158 Cal. App. 2d 373, 376.) Similarly, the subject deed of trust could only secure the obligation with the property interest actually owned by the mortgagor.
Plaintiffs claim that the causal connection between New Century’s conduct and plaintiffs’ damage is that if the deed of trust secured a fee simple interest in the Travelodge property, plaintiffs would be paid upon the sale of fee simple interest in the property. However, plaintiffs could have foreclosed upon the leasehold interest. Additionally, New Century had no part in the alleged destruction of the security interest in the leasehold, which is alleged to have occurred from various factors, including: from an agreement between Nitin Patel and Anil Patel to shorten the lease (original verified complaint, ¶ 32), from Nitin and Sharmila Patel’s agreement to release their Lessee’s interest under the 75 year lease (SAC ¶ 27); and, from when Granite Exchange Services reconveyed the deed of trust thereby extinguishing plaintiffs’ security interest (SAC ¶ 29, Ex. F).
Next, generally no liability attaches to the escrow holder for its failure to do something not required by the terms of the escrow or for a loss incurred while obediently following escrow instructions. (Hannon v. Western Title Ins. Co. (1989) 211 Cal.App.3d 1122, 1128, citing Schaefer v. Manufacturers Bank (1980) 104 Cal.App.3d 70, 77-78.) And, title companies are not required to give legal advice regarding the validity of a real property interest. (See Wilkinson v. Rives (1981) 116 Cal.App.3d 641, 650.)
Last, even if plaintiffs could allege that New Century represented that the deed of trust securing the $80,000 obligation would be secured by a fee simple interest in the Travelodge property, the plaintiffs have failed to allege facts showing delayed discovery of the alleged wrongdoing by New Century.
Here, the subject deed of trust was drafted and recorded by New Century in September 2003. (FAC, Ex. B.) This complaint was filed on July 24, 2013.Where a complaint shows on its face that it would be barred without the benefit of the discovery rule, the plaintiff must specifically plead facts to show (1) the time and manner of discovery and (2) the inability to have made earlier discovery despite reasonable diligence. In assessing the sufficiency of the allegations of delayed discovery, the court places the burden on the plaintiff to “show diligence.” Conclusory allegations will not withstand demurrer. (Grisham v. Philip Morris U.S.A., Inc. (2007) 40 Cal.4th 623, 638, citing Fox v. Ethicon Endo-Surgery, Inc. (2005) 35 Cal.4th 797, 808.) The alleged facts establish that plaintiffs had information of circumstances sufficient to put a reasonable person on inquiry and had the opportunity to obtain knowledge from sources open to their investigation that they did not actually own fee simple interest in the Travelodge property, that they did not sell the Patels more than the leasehold interest they owned, and that the security for the $80,000 loan consisted of the leasehold interest which they had sold to the Patels. (See McGee v. Weinberg (1979) 97 Cal.App.3d 798, 803 [reciting delayed discovery rule].)
For all reasons stated above, defendant’s general demurrer is sustained. As this is plaintiffs’ second attempt to allege facts establishing delayed discovery, the demurrer is sustained without leave to amend.
3. SCV-248256 Inoue v. GMAC Mortgage:
On February 28, 2014, Plaintiff/Cross-Defendant Hitoshi Inoue filed a notice of stay of proceedings, indicating that he had filed a notice of appeal. On calendar are two matters, expunge the notice of pendency of action, and a motion to tax costs.
CCP § 916(a) provides in pertinent part: “the perfecting of an appeal stays proceedings in the trial court upon the judgment or order appealed from or upon the matters embraced therein or affected thereby, including enforcement of the judgment or order, but the trial court may proceed upon any other matter embraced in the action and not affected by the judgment or order.”
The judgment in this case called for the “Plaintiffs [to] record a Notice of Withdrawal of the September 20, 2010 Notice of Pendency of Action…within five (5) days of the date of this judgment.” Judgment was entered on February 3, 2014. The motion on calendar is, effectively, seeking to enforce this aspect of the judgment, and is therefore stayed under CCP § 916(a)—meaning this court has been divested of jurisdiction of this matter pending the appeal. (See generally Varian Med. Systems, Inc. v. Delfino (2005) 35 Cal.4th 180, 189; and Dowling v. Zimmerman (2001) 85 Cal.App.4th 1400, 1427–1428.)
The motion to tax costs, however, is not stayed under CCP § 916(a). (See Bankes v. Lucas (1992) 9 Cal.App.4th 365, 368; cf. Nazemi v. Tseng (1992) 5 Cal.App.4th 1633, 1637–1641 [request for trial court costs filed after rendition of appellate court judgment held untimely].)
Accordingly, the motion to expunge is dropped from calendar, and the motion to tax costs will proceed.
4. SCV-250755 Rowe v. Christensen:
Court’s Own Motion CCP § 473(d)
On the court’s own motion, pursuant to CCP §§ 128(a)(8) and 473(d), the court will strike its Final Ruling dated March 4, 2014. That final ruling failed to include the court’s ruling with respect to the discovery cut-off, which was the result of a clerical error. The new final ruling is as follows:
Motions Denied without prejudice because they are untimely with respect to the discovery cut-off. Although this court granted Defendants’ application to continue the trial date, the application did not request any re-opening of discovery or continuance of the discovery cut-off and the order did not address the issue. The continuance of a trial date does not in of itself continue the discovery cut-off or otherwise re-open discovery. (CCP sections 2024.020(b), 2024.050, 2024.060.) Continuing or re-opening the discovery cut-off also requires a showing, and decision on, several factors, specifically the necessity and reasons for the additional discovery; the diligence and reasons why discovery was not earlier completed; whether permitting additional discovery would likely delay trial, interfere with the trial calendar, or prejudice any party; and the length of time elapsed between any previous trial date and the current trial date. (CCP section 2024.050(b). )
All requests for sanctions are denied as the court finds that both parties have acted with at least some substantial justification.
Compel Further Responses
As for the motion to Compel Further Responses, it is denied. There are two discovery cut-offs, discovery must be completed 30 days before trial, but discovery motions (such as the instant motion) may be heard up to 15 days prior to “the date initially set for trial. (See CCP § 2024.020.) Vacating the trial date did not reset the discovery cut-off dates. (CCP § 2024.020(b).) The authorities cited by the Defendants are inapposite and distinguishable. The Defendants’ attempt to equate this court vacating the trial date with the circumstances following a mistrial, new trial or reversal of the judgment on appeal is not well taken. Vacating the trial date acted to postpone that date alone.
In light of the circumstances, the court will not order any sanctions.
5. SCV-253644 Verbish v. Verbish:
This is on calendar for Plaintiff’s motion to compel further responses to form interrogatories. On November 12, 2013 the Plaintiff served form interrogatories on Defendant Chavelle Verbish. On December 12, 2013, the Defendant served responses. On January 16, 2014, the Plaintiff sent a meet and confer letter regarding the Defendant’s responses to Form Interrogatory 17.1—in particular, the Defendant failed to respond to each subpart of that interrogatory. Despite the efforts to meet and confer, the Defendant did not provide any further responses. The Defendant opposes, arguing that she has adequately responded to the discovery at issue.
Here, the Defendant has failed to completely respond to Form Interrogatory 17.1. Each answer in the response must be “as complete and straightforward as the information reasonably available to the responding party permits. If an interrogatory cannot be answered completely, it shall be answered to the extent possible.” (CCP §§ 2030.220(a), (b).) The Defendant’s responses do not follow the format required under 17.1, which includes four separate subparts, which the Defendant’s responses do not address. The Plaintiff is entitled to complete answers.
Accordingly, the Plaintiff’s motion is granted. The court will award the Plaintiff $300 in sanctions. The Plaintiff is to draft an order consistent with this ruling.
6. SCV-253837 Jonathan Neil & Assoc. v. One Call:
This is on calendar for Defendant Elizabeth Kenefik’s motion for leave to file a Cross-Complaint for Indemnity against Defendants James Kenefik and One Call Does it All, Inc. Defendant Elizabeth Kenefik alleges that Defendant James Kenefik (her ex-husband) indemnified her for the debt sought by the Plaintiffs against One Call Does it All, Inc. in the underlying action. The motion is unopposed
CCP § 428.50(c) provides: “The court, after notice to the adverse party, shall grant, upon such terms as may be just to the parties, leave to amend the pleading, or to file the cross-complaint, to assert such cause if the party who failed to plead the cause acted in good faith. This subdivision shall be liberally construed to avoid forfeiture of causes of action.”
Here, there is no opposition or claims of prejudice. The motion to file the Cross-Complaint is admittedly late, but there is a strong showing that the tardiness is not in bad faith. The moving Defendant was unrepresented at the time she was served, and was unaware of the need to file a cross-complaint. The moving Defendant obtained representation in January 2014 and filed this motion soon thereafter. (Dec. Zatman.)
Accordingly, the moving Defendant’s motion for leave to file a cross-complaint is GRANTED. The moving Defendant shall file and serve the proposed Cross-Complaint within 15 days of this order. The moving Defendant shall draft an order consistent with this ruling.