Opinion
NOT TO BE PUBLISHED
APPEAL from a judgment of the Superior Court of Los Angeles County No. SC087774, Allan J. Goodman, Judge.
Michael A. Abramson for Plaintiff and Appellant.
Charlston, Revich & Wollitz and Tim Harris for Defendant and Respondent.
JACKSON, J.
INTRODUCTION
Plaintiff Mark Slotkin appeals from a judgment of dismissal entered after a judicial referee granted defendant Diane Keith’s motion for summary judgment. We affirm.
FACTUAL AND PROCEDURAL BACKGROUND
Plaintiff and defendant were partners in a general partnership, Consolidated Investments Co. Plaintiff transferred his interest to the Alameda Living Trust U/A/D December 16, 1992, of which plaintiff’s attorney, Michael A. Abramson (Abramson), was Trustee. On December 22, 1992, defendant and Abramson formed Consolidated Assets Co. (Consolidated), a limited partnership of which defendant was the general partner.
Thereafter, plaintiff became a fifty percent limited partner of Consolidated. In 1996, he assigned his interest to the Slotkin Family Children’s Trust (Slotkin Trust).
Consolidated leased real property to Mr. and Mrs. Seo (Seos) at a rate of $17,000 per month. The Seos defaulted on their lease. An unlawful detainer action was initiated, but at that time the Seos were $64,000 in arrears. Consolidated ultimately obtained a judgment against them in the amount of $157,000.
Consolidated’s attorney made efforts to locate assets or funds belonging to the Seos that could be used to satisfy the judgment. None were found. Pursuant to an October 2, 2001 settlement agreement, the Seos agreed to pay $1,000 per month toward the judgment, but they ultimately stopped paying. In late 2003 or early 2004, Consolidated informed Abramson that the Seos had stopped paying and it had been unable to locate any assets with which to satisfy the judgment.
An asset location firm was contacted to find any assets of the Seos in exchange for a percentage of any assets located. It found none.
About this time, plaintiff filed an action for dissolution of Consolidated due to various disputes between the parties. They submitted the matter to Referee Jack Newman pursuant to an order of reference from the superior court. On March 12, 2003, the parties entered into an Agreement of Settlement and General Release (Settlement Agreement). The Settlement Agreement contained specific provisions for enforcement of the Seo judgment and distribution of the proceeds equally between plaintiff and defendant.
The relevant provisions of the Settlement Agreement will be set forth more fully in the discussion portion of the opinion.
In July 2004, defendant spoke to Abramson regarding the Seo matter. She forwarded the Seo settlement agreement and litigation file to him and requested that he enforce the agreement and collect the amounts due under it. Abramson advised plaintiff of defendant’s request, and plaintiff agreed that Abramson should take action. Abramson prepared for a judgment debtor’s exam.
In August 2004, Abramson sent defendant an invoice for $982 for legal work he did on another case. Defendant refused to pay, and Abramson advised her that he would not work on the Seo matter until she paid. She again refused to pay and demanded the Seo file back. Abramson returned it to her. He thereafter wrote to her requesting that she keep him advised of her progress in collecting the $153,923 due under the Seo judgment.
Defendant spoke to other attorneys about pursuing the matter. None would take it on a contingency basis, and some advised her not to throw “good money after bad.”
About two years after entry into the settlement, the Seos contacted defendant. They said they were moving to Korea and offered to settle the judgment for a small percentage of the amount owed, $10,000. Defendant discussed their offer with advisors, who “told [her] to ‘unload’ the judgment for the $10,000 offered by the Seos.”
As the partner in charge of liquidating Consolidated, defendant decided it would be prudent to accept the Seos’ offer, and she did so. She believed that if she did not accept the offer, the Seos would return to Korea and she would be unable to collect anything on the judgment.
Defendant did not discuss the Seos’ offer with plaintiff. On December 13, 2004, she entered into a settlement agreement with the Seos and accepted a $10,000 check to settle all claims against them. She cashed the check, then sent a check for $5,000 to plaintiff. Plaintiff cashed the check. He then instructed Abramson to write to defendant regarding the matter. In his December 30 letter, Abramson questioned defendant’s settlement of the matter for $10,000 and stated that she was not authorized to waive plaintiff’s right to half of the $157,000 judgment.
On November 29, 2005, plaintiff filed this action for breach of contract. He alleged that defendant breached the settlement agreement by settling with the Seos for $10,000 and sought $73,000 in damages—the approximate amount of his half of the $157,000 less the $5,000 he had already received.
The Settlement Agreement provided for judicial reference, and over plaintiff’s objection, the case was again referred to Referee Newman. Defendant moved for summary judgment on the ground the business judgment rule insulated her from liability for settling with the Seos. Plaintiff then filed his own motion for summary judgment on the ground the undisputed evidence established that defendant breached the Settlement Agreement.
Referee Newman denied plaintiff’s summary judgment motion, finding that under the Settlement Agreement defendant had the right to settle with the Seos. He granted defendant’s summary judgment, finding her actions were protected by the business judgment rule. The trial court then entered a judgment dismissing the action with prejudice.
DISCUSSION
A. Standard of Review
The decision of a judicial referee is treated as a judgment by the court. (Code Civ. Proc., § 644; Old Republic Ins. Co. v. St. Paul Fire & Marine Ins. Co. (1996) 45 Cal.App.4th 631, 636, disapproved on another ground in Cable Connection, Inc. v. DIRECTV, Inc. (2008) 44 Cal.4th 1334, 1361.) It is therefore reviewed in the same manner as a judgment by the court. (Code Civ. Proc., § 645; Old Republic Ins. Co., supra, at p. 636.)
Summary judgment properly is granted if there is no question of material fact and the issues raised by the pleadings may be decided as a matter of law. (Code Civ. Proc., § 437c, subd. (c); Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 843.) To secure summary judgment, a moving defendant may show that one or more elements of the cause of action cannot be established or that there is a complete defense to the cause of action. (Code Civ. Proc., § 437c, subd. (p)(2); Aguilar, supra, at p. 849.) The defendant must “demonstrate that under no hypothesis is there a material factual issue requiring a trial.” (Rosenblum v. Safeco Ins. Co. (2005) 126 Cal.App.4th 847, 856; accord, Guz v. Bechtel National, Inc. (2000) 24 Cal.4th 317, 334.)
Once the moving defendant has met its burden, the burden shifts to the plaintiff to show that a triable issue of material fact exists as to the cause of action or the defense thereto. (Code Civ. Proc., § 437c, subd. (p)(2); Aguilar v. Atlantic Richfield Co., supra, 25 Cal.4th at p. 849.) The plaintiff may not rely on his or her pleadings to meet this burden (Code Civ. Proc., § 437c, subd. (p)(2); Aguilar, supra, at p. 849), except to the extent they are uncontested by the opposing party (Wiler v. Firestone Tire & Rubber Co. (1979) 95 Cal.App.3d 621, 626). All doubts as to the propriety of granting the motion are resolved in favor of the opposing party. (Hamburg v. Wal-Mart Stores, Inc. (2004) 116 Cal.App.4th 497, 502.)
On appeal, we exercise our independent judgment in determining whether there are no triable issues of material fact and the moving party thus is entitled to judgment as a matter of law. (Wiener v. Southcoast Childcare Centers, Inc. (2004) 32 Cal.4th 1138, 1142.) Inasmuch as the grant or denial of a motion for summary judgment strictly involves questions of law, we must reevaluate the legal significance and effect of the parties’ moving and opposing papers. (Chevron U.S.A., Inc. v. Superior Court (1992) 4 Cal.App.4th 544, 548.) We must uphold the judgment if it is correct on any ground, regardless of the reasons the trial court gave. (Continental Ins. Co. v. Columbus Line, Inc. (2003) 107 Cal.App.4th 1190, 1196.)
B. Whether the Referee’s Decision is Contrary to Paragraph 1.4 of the Settlement Agreement
1. Paragraph 1.4 and the Referee’s Decision
Paragraph 1.4 of the Settlement Agreement deals with the allocation of Consolidated’s assets. In pertinent part, it provides:
“Consolidated currently collects $1,000 per month pursuant to a settlement agreement and/or judgment against the Seo parties (Consolidated v. Seo).... The settlement between Consolidated Assets and the Seo parties shall be left intact and the proceeds of the settlement shall be divided equally among Plaintiff and Defendants upon receipt thereof in good funds following the Effective date of this Agreement.... Defendant Keith or her designee shall remit Plaintiff’s 50% share of the proceeds received from the Seos within 10 days of receipt in good funds.... Neither Plaintiff nor defendants now or in the future shall be deemed to have in any way represented collectability to the other regarding the Seos and both acknowledge that now and into the future, there is some risk of nonpayment, delinquency etc. as to this obligation of the Seos. Neither party shall be in or construed to be in a fiduciary capacity as to the other with respect to the Seo settlement proceeds and their receipt, handling, disbursal or as to any collection action that a party might undertake but the rights of each party hereto shall be decided pursuant to this Agreement only. Neither party shall have any responsibility for any action to pursue, collect or enforce any judgment [or] claim against the Seos. Should the Seos default or become delinquent, the parties shall confer as to the agreed upon course of conduct but neither shall be entitled to take action at any cost to the other party and neither shall be obligated to compensate the other for the loss of payments, if any, from the Seos. Should any party elect to proceed against the Seos, they will do so at their own cost unless otherwise agreed in writing: provided, however, that any party may seek to enforce the Seo agreement not more than once every two years and if successful, recover not more than $1,500 (fifteen hundred U.S. dollars) for this effort from the Seo settlement as full payment for fees and costs.”
The referee found that plaintiff was “correct that the Seo judgment is treated differently than any other aspect of Consolidated Assets’ assets and liabilities in the settlement agreement, but it nonetheless remains an asset of the partnership. The provision in the Seo agreement which provides that neither plaintiff nor defendant shall have any fiduciary duty to the other with respect to the agreement pertaining to the Seo judgment confirms this conclusion; otherwise traditional partnership law would apply, in which the partners do have a fiduciary duty to each other. The parties could simply have provided that the Seo judgment is no longer an asset of Consolidated Assets, but did not do so.”
The referee also agreed with plaintiff “that the Seo agreement part of the parties’ settlement agreement in the underlying action includes a provision that the parties will confer on their course of conduct in the event of a Seos default or delinquency, and defendant Diane Keith did not confer with [plaintiff] Mark Slotkin, or his attorney Michael Abramson, prior to entering into the settlement agreement for $10,000 with the Seos, in apparent violation of that provision.”
The referee noted, however, that the Settlement Agreement provided that “neither [party] shall be entitled to take action at any cost to the other party and neither shall be obligated to compensate the other for loss of payments, if any, from the Seos.” The referee found it “significant that [plaintiff] testified in his deposition that it was his understanding and belief that [defendant] had complete discretion with respect to any action to be taken with respect to the Seo judgment.”
The referee found that defendant “did not act cavalierly in negotiating the $10,000 settlement with the Seos. Her pre-hearing declaration sets forth her efforts to discover assets from which the Seos judgment could be collected. She retained professionals to pursue such assets and they could discover none.”
The referee noted that just prior to the deadline to file opposition to the summary judgment motion, Abramson “found among plaintiff’s stored documents statements of assets evidently used when the underlying lease agreement was entered into by the Seos and Consolidated Assets.” However, paragraph 1.4 of the Settlement Agreement required plaintiff to turn over all documents and records of Consolidated within 45 days of the date of the Settlement Agreement. In any event, the referee observed that if the Seos still had the assets listed in the statements, it was unlikely they would have allowed the unlawful detainer action to proceed against them and thereafter arranged a payment schedule for money owed. It also was unlikely that defendant would have been unable to locate any assets against which to enforce the judgment against the Seos.
The referee found that the reason the case could be resolved by summary judgment was that the Settlement Agreement provided that “either party may proceed against the Seos in the event of default or delinquency without agreement by the other party (emphasis added), with restrictions only on recovering fees and costs.” Defendant, as general partner of Consolidated, “was empowered to enter into this settlement with the Seos because the Seos debt was an obligation to Consolidated Assets.” Her decision to do so was protected by the business judgment rule and, under the circumstances, reasonable.
2. The Judgment To Be Left Intact
Paragraph 4.3 of the Settlement Agreement provides that “[i]n any construction to be made of this Agreement, the same shall not be construed for or against any party, but shall be construed fairly according to its plain meaning.” Plaintiff contends “the referee’s construction goes against the plain meaning of the terms of the Settlement Agreement and is in error as a matter of law.”
In interpreting a written agreement, the goal of the court is to give effect to the mutual intent of the parties as it existed at the time, insofar as that intent can be ascertained and is lawful. (Civ. Code, § 1636; People ex rel. Lockyer v. R.J. Reynolds Tobacco Co. (2003) 107 Cal.App.4th 516, 525.) If the language of the agreement is clear and explicit and does not involve an absurdity, determination of the mutual intent of the parties and interpretation of the agreement is to be based on the language of the agreement alone. (Civ. Code, §§ 1638, 1639; People ex rel. Lockyer, supra, at p. 525.)
Plaintiff focuses on the provision that “[t]he settlement between Consolidated Assets and the Seo parties shall be left intact and the proceeds of the settlement shall be divided equally” between the parties. He contends that the term “left intact” is unambiguous and “means that both parties had to leave the obligation complete and entire.” Since defendant’s settlement with the Seos for less than the full amount of the judgment “did not leave the judgment ‘complete and entire,’” it violated the plain meaning of paragraph 1.4. We disagree.
In the construction of an agreement, the whole of the agreement is to be interpreted together, “so as to give effect to every part, if reasonably practicable, each clause helping to interpret the other.” (Civ. Code, § 1641; People ex rel. Lockyer v. R.J. Reynolds Tobacco Co., supra, 107 Cal.App.4th at p. 526.) Reading all the relevant provisions of paragraph 1.4, it is clear that “left intact” does not mean left “complete and entire.” Paragraph 1.4 clearly contemplates the possibility that the Seo judgment would not be collectible in its entirety. It also specifies that in collection efforts, any party taking action against the Seos would be acting on behalf of both parties, with the amount received then divided equally between the two parties. In context, “left intact” means that the Seo judgment is not to be divided between the two parties, each trying to collect his or her half, but rather there is to be one effort to collect the whole amount, with the proceeds then to be divided between the parties. Defendant therefore did not violate the “left intact” provision by agreeing to accept $10,000 from the Seos rather than continuing her fruitless attempts to collect the entire $157,000 judgment.
3. Duty to Confer
Plaintiff next focuses on the provision in paragraph 1.4 that the parties were to “confer as to the agreed upon course of conduct.” The referee agreed that defendant breached this provision. Plaintiff therefore contends that there was a triable issue of material fact precluding summary judgment.
A cause of action for breach of contract requires a contract, plaintiff’s performance, defendant’s breach, and resulting damages to plaintiff. (Careau & Co. v. Security Pacific Business Credit, Inc. (1990) 222 Cal.App.3d 1371, 1388.) Defendant argues that the uncontradicted evidence shows that the Seo judgment was not collectible. Absent a collectible judgment, plaintiff was not damaged by defendant’s breach, i.e., by defendant’s settlement with the Seos for $10,000 without first conferring with plaintiff. (Cf. DiPalma v. Seldman (1994) 27 Cal.App.4th 1499, 1507; Campbell v. Magana (1960) 184 Cal.App.2d 751, 754.)
Plaintiff argues that the authorities on which defendant relies are inapposite, in that none involves a breach of contract case. In such a case, “the measure of damages... is the amount which will compensate the party aggrieved for all the detriment proximately cause thereby, or which, in the ordinary course of things, would be likely to result therefrom.” (Civ. Code, § 3300.) Plaintiff contends that, “[b]y virtue of [defendant’s] release of the Seos, [plaintiff] was deprived of his ability to ever pursue the Seos for the money due him under the judgment while such judgment was valid or renewed.”
However, the ability to pursue the Seos for the money due under the judgment against them was of value only if the judgment was collectible, i.e., if the Seos had assets from which the judgment could be satisfied. In DiPalma v. Seldman, supra, 27 Cal.App.4th 1499, which involved a claim of attorney malpractice, the court noted that “‘[w]here a claim is alleged to have been lost by an attorney’s negligence, in order to recover more than nominal damages it must be shown that it was a valid subsisting debt, and that the debtor was solvent....’ The loss of a collectible judgment ‘by definition means the lost opportunity to collect a money judgment from a solvent [defendant] and is certainly legally sufficient evidence of actual damage.’...” (Id. at p. 1509, citations omitted.) Conversely, if the judgment debtor is insolvent, there is no damage from the loss of the ability to collect on the judgment. (See id. at pp. 1507-1508.)
The authorities on which plaintiff relies do not compel a contrary conclusion in a breach of contract case. As stated in Kashmiri v. Regents of University of California (2007) 156 Cal.App.4th 809 at page 848, “The basic object of damages is compensation, and in the law of contracts the theory is that the party injured by a breach should receive as nearly as possible the equivalent of the benefits of performance. (Civ. Code, § 3300.) The aim is to put the injured party in as good a position as he or she would have been had performance been rendered as promised. [Citation.] A person cannot recover ‘a greater amount in damages for the breach of an obligation, than he could have gained by the full performance thereof on both sides.’ (Civ. Code, § 3358.)”
Defendant presented evidence that no assets belonging to the Seos could be located from which judgment could be satisfied, and the Seos were moving to Korea. From this evidence, it is reasonably inferable that the judgment against them was not collectible. Therefore, if defendant had conferred with plaintiff and agreed to pursue satisfaction of the judgment, they would have been left with a valueless judgment. Full performance of the Settlement Agreement by defendant would have been worth less than breach of the agreement. To allow plaintiff to recover his half of the judgment due to defendant’s breach would improperly allow him to “recover ‘a greater amount in damages for the breach of an obligation, than he could have gained by the full performance thereof on both sides.’ (Civ. Code, § 3358.)” (Kashmiri v. Regents of University of California, supra, 156 Cal.App.4th at p. 848.)
Plaintiff also argues that when he entered into the Settlement Agreement, the Seo judgment was “valid and enforceable,” and he “had a reasonable expectation that the Seos owed him $78,000.” This is beside the point.
First, he acknowledged in the Settlement Agreement that “there is some risk of nonpayment, delinquency etc. as to this obligation of the Seos.” Therefore, he did not have a reasonable expectation that he would collect the $78,000 the Seos owed him.
Second, he points to no evidence, however, that he would ever have been able to collect the $78,000. The measure of damages is not the amount a party expected to obtain under the contract but the amount the party actually could have obtained. (Cf. DiPalma v. Seldman, supra, 27 Cal.App.4th at pp. 1507-1509.)
4. Partnership Asset
Plaintiff contends the trial court erred in treating the Seo judgment as a partnership asset, which defendant had the discretion to deal with in her capacity as Consolidated’s liquidating partner. Plaintiff argues that paragraph 1.4 provides that “‘neither party shall be in a... fiduciary capacity as to the other.’” Since a partnership requires a fiduciary relationship, and the parties “specifically agreed there was no fiduciary relationship,” “[i]t is therefore undisputed that the critical element for the existence of a partnership is entirely absent.” Plaintiff further argues that the referee agreed with this conclusion when he found that plaintiff was “correct that the Seo judgment is treated differently than any other aspect of Consolidated Assets’ assets and liabilities in the settlement agreement.” Therefore, plaintiff concludes, defendant is not shielded from liability in her capacity as the liquidating partner by the business judgment rule.
Even assuming arguendo that plaintiff is correct, there is still the problem of his failure to present evidence of damages from defendant’s breach of the Settlement Agreement. As stated above, we must uphold the judgment if it is correct on any ground, regardless of the reasons the trial court gave. (Continental Ins. Co. v. Columbus Line, Inc., supra, 107 Cal.App.4th at p. 1196.) Therefore, any error in the referee’s characterization of the Seo judgment as a partnership asset or application of the business judgment rule is harmless. Since plaintiff failed to demonstrate a triable issue of material fact as to an element of his cause of action for breach of contract, summary judgment properly was granted. (Code Civ. Proc., § 437c, subd. (p)(2); Aguilar v. Atlantic Richfield Co., supra, 25 Cal.4th at pp. 843, 849.)
DISPOSITION
The judgment is affirmed. Defendant is to recover her costs on appeal.
We concur: PERLUSS, P. J., ZELON, J.