Opinion
A151148
08-30-2018
WESTERN FEDERAL CREDIT UNION, Plaintiff and Respondent, v. DIANA GARDNER, Defendant and Appellant.
NOT TO BE PUBLISHED IN OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Alameda County Super. Ct. No. RG15771669)
INTRODUCTION
Diana Gardner ("Gardner") defaulted on two unsecured promissory notes issued by Western Federal Credit Union ("Western"). Western sued Gardner for breach of the notes, and the trial court granted Western's motion for summary judgment. Gardner, proceeding in propria persona, appeals, claiming she raised triable issues of material fact and the trial court should have granted her leave to amend to assert an unconscionability defense. We affirm.
BACKGROUND
In July 2014, Western made two loans to Gardner: one for $15,000 and one for $20,215.77. Both loan agreements included provisions regarding when payment was due, an acceleration clause, and a "Collection Costs" clause providing: "You promise to pay, subject to any limits under applicable law, all costs of collecting the amount you owe under this agreement. This includes but is not limited to, reasonable attorney fees and court costs as well as legal expenses for any bankruptcy, appeals or post judgment proceedings."
In December, Gardner failed to pay her monthly installment on both loans. Western sued, alleging nonpayment and demanding repayment in full, due immediately. When Gardner failed to answer, Western sought entry of her default and then sought a default judgment. In September 2015, the court issued a default judgment against her for $42,931.16. Gardner then moved for relief from the judgment, which the court granted.
Thereafter, Western moved for summary judgment. The court granted the motion and entered judgment in the amount of $48,468.41, which consisted of the principal and interest due on both loans, costs, and attorney fees of $8,800.00.
We discuss the evidentiary showings by the parties in the next section of our opinion.
DISCUSSION
Gardner does not dispute the basic validity of the notes or her liability for repayment. Rather, she maintains she raised a triable issue as to the date of default and that she should have been allowed to amend her answer to allege unconscionability of the attorney fee provisions.
The standard of review on appeal from a summary judgment is de novo. (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 860 (Aguilar); Guz v. Bechtel National, Inc. (2000) 24 Cal.4th 317, 334.) In general, summary judgment: "shall be granted if . . . there is no triable issue as to any material fact. In determining if the papers show that there is no triable issue as to any material fact, the court shall consider all of the evidence set forth in the papers . . . and all inferences reasonably deducible from the evidence . . . [unless] contradicted by other inferences or evidence that raise a triable issue as to any material fact." (Code Civ. Proc., § 437c, subd. (c).)
The moving party bears the burden of showing, to a degree equal to the standard of proof at trial, that there is no issue of material fact on any cause of action; if the moving party succeeds, then the opposing party bears the burden of presenting competent evidence raising an issue of material fact. (Aguilar, supra, 25 Cal.4th at p. 845 [describing the federal, and often state, summary judgment standards set forth in Celotex, Anderson, and Matsushita ]; see Code Civ. Proc., § 437c, subd. (p)(2).) In an action seeking summary judgment on a promissory loan note, the lender must prove "the existence of a contract, its terms which establish the obligation in issue, the occurrence of any conditions precedent to enforcement of the obligation, and the breach of that obligation." (FPI Development, Inc. v. Nakashima (1991) 231 Cal.App.3d 367, 383.)
Celotex Corp. v. Catrett (1989) 477 U.S. 317; Anderson v. Liberty Lobby, Inc. (1986) 477 U.S. 242; Matsushita Elec. Indus. Co. v. Zenith Radio Corp. (1986) 475 U.S. 574.
Here, Western met its burden to show the terms and breach of the promissory notes. The notes indicated the amount and due date of each monthly payment, and that nonpayment triggered default. They further provided that on default, Western was entitled to accelerate payment of the debt and "require immediate payment of what you owe." The evidence was also uncontroverted that Gardner did not make her required monthly payments beginning in December 2014, thus breaching the agreements. Accordingly, Western met its burden to show a breach of contract sufficient to shift the burden to Gardner to raise a triable issue.
Gardner first maintains she raised a triable issue as to the date of nonpayment.
An opposing party "shall not rely upon the allegations or denials of its pleadings to show that a triable issue of material fact exists but, instead, shall set forth the specific facts showing that a triable issue of material fact exists as to the cause of action or a defense thereto." (Code Civ. Proc., § 437c, subd. (p)(1), italics added.) An "issue of material fact" exists if "the evidence would allow a reasonable trier of fact to find the underlying fact in favor of the party opposing the motion." (Aguilar, supra, 25 Cal.4th at p. 845.) A material fact is one "essential to the judgment in some way." (Riverside County Community Facilities Dist. v. Bainbridge 17 (1999) 77 Cal.App.4th 644, 653.)
The difficulty with Gardner's position is that she did not present any competent evidence supporting her assertion that a triable issue exists as to the date of her default on the notes. Rather, all she submitted was her own declaration wherein she posited uncertainty about when she defaulted. This was not a sufficient evidentiary showing to counter the admissible evidence Western presented of Gardner's record of payment, the due dates, and her failure to pay. Accordingly, Gardner did not raise a triable issue as to her default.
Gardner secondly urges that she should have been allowed to amend her answer to include an unconscionability defense as to the attorney fee provisions in the loan agreements. She maintains an unconscionability defense would have raised a triable issue.
Generally, the existing pleadings define the scope of the case for purposes of summary judgment, and summary judgment cannot be denied on the basis of claims that have not been asserted in the pleadings. (Kendall v. Walker (2009) 181 Cal.App.4th 584, 598.) Nevertheless, it has also been said that a trial court should generally permit amendment of the pleadings at any stage of the proceedings, even during trial. (Melican v. Regents of University of California (2007) 151 Cal.App.4th 168, 175.) Thus, "[i]f either party wishes the trial court to consider a previously unpleaded issue in connection with a motion for summary judgment, it may request leave to amend." (Bostrom v. County of San Bernardino (1995) 35 Cal.App.4th 1654, 1663-1664.) "Such requests are routinely and liberally granted." (Id. at p. 1664.) "However, ' " '[i]n the absence of some request for amendment there is no occasion to inquire about possible issues not raised by the pleadings.' " ' " (Ibid.) "A party cannot raise new issues of materiality merely by submitting a declaration in opposition to the summary judgment motion." (Lewinter v. Genmar Industries, Inc. (1994) 26 Cal.App.4th 1214, 1223.) Moreover, even when a request for leave to amend is made, a trial court may deny the request if the proposed amendment would cause prejudice to the other party, or if the party seeking leave to amend has failed to act diligently in requesting amendment. (Melican, at p. 175.) Unwarranted delay in seeking leave to amend is, in and of itself, sufficient reason to deny a motion for leave to amend. (Huff v. Wilkins (2006) 138 Cal.App.4th 732, 746 (Huff); California Concrete Co. v. Beverly Hills Savings & Loan Assn. (1989) 215 Cal.App.3d 260, 272-273.)
We review a trial court's denial of leave to amend for abuse of discretion. (Huff, supra, 138 Cal.App.4th at p. 746 [trial court has " ' "wide discretion" ' " in allowing amendment and court's ruling will be upheld " ' "unless a manifest or gross abuse of discretion is shown," ' " quoting Record v. Reason (1999) 73 Cal.App.4th 472, 486 (Record)]; Leader v. Health Industries of America, Inc. (2001) 89 Cal.App.4th 603, 612.)
Here, Gardner never made a motion for leave to amend her answer, let alone to raise an unconscionability defense. Rather, she asked for leave to amend for the first time, and only by way of, her two-page "Opposition" to Western's motion for summary judgment. Further, in her opposing declaration she simply claimed, "I allege that I did not knowingly contract to pay attorney fees for each agreement and Plaintiff's request for attorney fees is unfair, unconscionable and oppressive." (See Record, supra, 73 Cal.App.4th at p. 486 [only facts supporting motion to amend were conclusory assertions in counsel's declaration].)
The trial court did not abuse its discretion in ruling that Gardner's informal request for leave to amend was made too late and that granting it would have prejudiced Western. In addition to the fact that Gardner never made a motion for leave to amend, this is not a case where she could only have belatedly discovered her proffered unconscionability defense. On the contrary, given her "allegation" in her declaration—that she "did not knowingly contract to pay attorney fees"—she could have asserted, and should have asserted, this claim at the time she answered the complaint. (See Record, supra, 73 Cal.App.4th at p. 486.) She also provided no explanation for this unwarranted delay. (Huff, supra, 138 Cal.App.4th at p. 746.)
In any case, Gardner's allegation that she did not "knowingly contract to pay attorney fees" was, given the evidentiary showing made by Western, insufficient to raise a triable issue of unconscionability. The attorney fee provisions are clearly set forth in the notes, in a section entitled "Collection Costs," which states: "You promise to pay, subject to any limits under applicable law, all costs of collecting the amount you owe under this agreement. This includes but is not limited to, reasonable attorney fees and court costs as well as legal expenses for any bankruptcy, appeals or post judgment proceedings." This language is straightforward and rebuts Gardner's conclusory allegation that she did not "knowingly contract" to pay reasonable fees incurred in collection. (See Lennar Homes of California, Inc. v. Stephens (2014) 232 Cal.App.4th 673, 694 ["there is nothing generally absurd or unconscionable about prevailing party clauses"].)
Unconscionability means an " ' " ' " 'absence of meaningful choice . . . [regarding] contract terms which are unreasonably favorable to the other party.' " ' " ' " (OTO, L.L.C. v. Kho (2017) 14 Cal.App.5th 691, 702, rev. granted Nov. 29, 2017, S244630.) --------
Accordingly, the trial court acted within its discretion in denying Gardner's request to amend her answer to assert a claim the attorney fee provision in the notes was unconscionable.
DISPOSITION
The summary judgment is affirmed. Each party to bear its own costs on appeal.
/s/_________
Banke, J. We concur: /s/_________
Humes, P.J. /s/_________
Dondero, J.