Opposition filed

Cal. Super. - 5th Dist.February 3, 2021

1 OPPOSITION TO PLAINTIFF’S BRIEF FOR PRELIMINARY INJUNCTION FRESNO COUNTY SUPERIOR COURT CASE NO. 21CEC00150 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 MICHELLE JORGENSEN, #225121 CIVIL LEGAL SERVICES 7472 N. FRESNO ST, STE 210 FRESNO, CA 93730 Phone: (559) 892-5202 ATTORNEY for Plaintiffs, JOHN R. CARTER SUPERIOR COURT OF CALIFORNIA COUNTY OF FRESNO MATTHEW R. WILLIAMS, an individual, Plaintiff, VS. JOHN R. CARTER and SALLY F. CATER, husband and wife as joint tenants; and DOES 1-25, inclusive, Defendants. Case No.: 21CECG00314 OPPOSITION TO PETITIONER’S BRIEF IN SUPPORT OF PRELIMINARY INJUCTION Date: 4/29/2021 Time: 3:30 am Dept: 404 Defendant’s JOHN R. CARTER and SALLY F. CARTER, (herein “Defendants”) hereby submit this Opposition to Petitioner MATTHEW R. WILLIAMS (herein “Plaintiff”) Brief in Support of Preliminary Injunction. I. INTRODUCTION The Plaintiff has rented the real property owned by Defendant’s at 1497Keats Avenue, Clovis, California 93611 for over ten years. Based upon Plaintiff’s failure to pay rent, Defendant’s brought an Unlawful Detainer action in Fresno County Superior Court Case No. 21CECL00150. The parties informally stipulated during a four-way conference at the March 1, 2021 hearing that Plaintiff would pay the outstanding rent for the period of May 2020 through August 2020 directly to Defendant; however, the remaining outstanding balance and ongoing rent payments would be put into a trust account pending the outcome of litigation in this case. Based thereon, the Defendants (Plaintiff’s in that case) dismissed without prejudice. E-FILED 4/8/2021 1:45 PM Superior Court of California County of Fresno By: I. Herrera, Deputy 2 OPPOSITION TO PLAINTIFF’S BRIEF FOR PRELIMINARY INJUNCTION FRESNO COUNTY SUPERIOR COURT CASE NO. 21CEC00150 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Defendants have filed a General Demurrer based upon the fact that Plaintiff’s entire case fails to state a cause of action for Breach of Contract because there never was written contract in this case. The Defendant’s hereby request that the Court grant the Defendant’s request without leave to amend. II. STATEMENT OF FACTS The Plaintiff created this Breach of Contract cause of action after being threatened with eviction for failure to make rent payments. The parties negotiated the sale of the house and the Escrow was opened in order for Petitioner to secure a loan. During the negotiation process, which took from May until November of 2020, Petitioner, as he presents in the form of text messages between himself and Defendant John R. Carter (herein “Defendant John”), Petitioner continued to lead Defendant’s into believing that the loan was only days away from going through. When Defendant John expressed doubt as to whether or not the Plaintiff was actually getting a loan, Plaintiff brought in an escrow company in order to give the appearance that he was actually getting a loan. However, this process also took months and, as of today, there is no evidence presented by Plaintiff that he secured a loan. What Plaintiff was doing, was getting out of paying rent while he led Defendant’s to believe that he was trying to secure a loan. When Defendant’s brought the Unlawful Detainer action for failure to pay rent, this case ensued. Plaintiff alleges that he has rented the real property owned by Defendant’s at 1497 Keats Avenue, Clovis, California 93611 for over ten years for $1,300 per month. Plaintiff further alleges that he and Defendant’s entered into an agreement whereby Plaintiff would purchase the property from Defendant’s for $160,000 and that Defendant John directed Plaintiff to “hold off” paying at some period between May 2020 and August 2020. Plaintiff 3 OPPOSITION TO PLAINTIFF’S BRIEF FOR PRELIMINARY INJUNCTION FRESNO COUNTY SUPERIOR COURT CASE NO. 21CEC00150 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 attaches as Exhibit 3 to the Verified Complaint a copy of the Escrow Instructions that were signed by Defendants. Further, Plaintiff states that on November 6, 2020 he requesting that his banking institution transfer $1,411.42 to Old Republic Title Company for credit to the Escrow. Plaintiff alleges that Defendant John contacted him on November 10, 2020 and notified him that he was not going to sign the final paperwork. Lastly, Plaintiff states that an unlawful detainer action was filed to evict him from the residence and that he admits to not making rent payments but alleges that his nonpayment of rent had been at Defendant John’s request. Plaintiff states in his Brief in Support of Request for Preliminary Injunction that Defendant consented to being bound to the agreement by signing the August 11, 2020 Sale Escrow Instructions. Plaintiff does not reference, in any documents submitted this Court, the September 3, 2020 Additional Escrow Instructions that contain new terms, to which he signed unilaterally. In fact, the Plaintiff does not present any Contract signed by both Plaintiff and Defendant’s. The only instrument presented to support the cause of action for a Breach of Written Contract for the sale of real property, is a document signed by the Defendant’s that expressly states that it alone is NOT a binding contract. Further, Defendant does not present any testimony as to the value of this property to support that the consideration of $160,000 was adequate. In light of the fact that there is no Contract for the sale of the property, the Plaintiff’s Request for Injunction should be denied. III. PRELIMINARY INJUNCTION SHOULD BE DENIED A. STANDARD OF REVIEW In deciding whether to grant a Preliminary injunction, a trial court evaluates: “(1) the 4 OPPOSITION TO PLAINTIFF’S BRIEF FOR PRELIMINARY INJUNCTION FRESNO COUNTY SUPERIOR COURT CASE NO. 21CEC00150 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 likelihood that the moving party will ultimately prevail on the merits and (2) the relative harm to the parties from issuance or nonissuance of the injunction.” Butt v. State of California (1992) 4Cal.4th. 668, 677-678. The two factors are interrelated. Id. at 677. B. PLAINTIFFS FAILS TO PRESENT EVIDENCE OF A CONTRACT An agreement to sell real property or an interest therein is invalid unless the agreement is in writing and subscribed by the party to be charged or his or her agent. Civ. Code §1624(a)(3); Elias Real Estate, LLC v. Tsent (2007) 156 Cal. App. 4th 425, 430. Plaintiff’s causes of action for Breach of Contract and the Remedies prayed for thereon, including Specific Performance, all require that there be a valid contract. Specific performance of a contract may be decreed whenever: (1) its terms are sufficiently definite; (2) consideration is adequate; (3) there is substantial similarity of the requested performance to the contractual terms; (4) there is mutuality of remedies; and (5) plaintiff’s legal remedy is inadequate. Blackburn v. Charnley, 117 Cal. App. 4th 758, 766 (Cal. Ct. App. 200 Here, the Plaintiff relies entirely on the Escrow Instructions attached as Exhibit 3 to the Verified Complaint. The Escrow Instructions presented as “the Contract” are woefully deficient as to signatures and critical terms and it is only one of multiple escrow instructions that were signed during the negotiation process. In addition, Escrow was cancelled by Defendant’s on November 17, 2020. According to the 2010 Publication of the State of California Department of Real Estate Information Relating to Real Estate Practice, Licensing and Examinations, “5. When all principals to the escrow have signed mutual (conforming) instructions, the escrow becomes perfected. If only one principal has signed, that principal may terminate the proposed escrow at any time prior to the other principal’s signing of conforming escrow 5 OPPOSITION TO PLAINTIFF’S BRIEF FOR PRELIMINARY INJUNCTION FRESNO COUNTY SUPERIOR COURT CASE NO. 21CEC00150 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 instructions. As an additional principal, the lender(s) typically reserve the right to withdraw their instructions, instruments, funds, and related documents if the escrow instructions of the buyer and seller do not conform to the instructions of the lender(s).” https://www.dre.ca.gov/files/pdf/refbook/ref08.pdf As the Plaintiff has failed to produce any evidence that both parties signed conformed Escrow Instructions, Defendant’s cancellation was appropriate and binding, rendering Plaintiff’s complete Breach of Contract action moot. The Exhibit 3 Escrow Instructions consists of nine pages that are all dated August 11, 2020. The last two pages of the are entitled Initial Instructions (herein “Initial Instructions”). The Defendant, Sally Carter is omitted. The Plaintiff did not sign this document. On page 1 of 2, it states, in part: “In order for Old Republic Title Company, as Escrow Holder, to proceed with the processing of this transaction, the undersigned agree to and understand the following: 1. A deposit of $500 is required prior to the acceptance of, or any work beginning on this transaction. 4. A title policy will be issued in conjunction with this transaction. The fee for this policy is estimate at $_______. An escrow fee, together with other fess incidental to the processing of the escrow, will also be charged. The fees for these services are estimated at $_______. 5. The escrow instructions to be prepared in connection with this transaction, alone, may not be enforceable as a binding agreement and will not address other concerns which are normally incorporated in a real estate purchased contract. 6 OPPOSITION TO PLAINTIFF’S BRIEF FOR PRELIMINARY INJUNCTION FRESNO COUNTY SUPERIOR COURT CASE NO. 21CEC00150 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 6. Old Republic Title Company is prohibited by law from drawing real estate purchase contracts. Buyer’s and Seller’s Instructions to Old Republic Title Company will be prepared after receipt of both this document fully executed by all parties and the deposit referred to above.” Plaintiff never claims in the Verified Complaint that he made the $500 deposit and the Instructions state that they alone are not enforceable as a binding contract. The initial first seven pages of Exhibit 3 are entitled and herein referred as “Sale Escrow Instructions”. The total consideration listed is $160,000. Again, this document is completely deficient. On page one, it does not indicate that the buyer deposited any money into escrow. In accordance with the Escrow Instructions, this indicates that escrow is not yet commenced. On page 2 there is no indication as to how the escrow holder is authorized to vest title and there are no initials. It lists the close of escrow to be estimated at August 28, 2020. The Plaintiff did not “approve and accept the foregoing instructions” as indicated by his lack of signature on page 6. An attempt to counter offer the Initial Escrow Instructions were signed by Plaintiff omitted from his Verified Complaint. The Estimated Settlement Statement dated September 3, 2020 attached hereto as Exhibit 1. This document states: “Escrow instructions previously handed you under date of July 20, 2020 are hereby supplemented and or amended as follows: As agreed to by current buyer and seller, the purchase price is to be $160,000. There is to also be a $5,000 credit to buyer from seller for closing costs.” The Petitioner has presented evidence to substantiate the fact that the parties were negotiating the sale of the property, but fails to present a prima facie case of Contract. In fact, 7 OPPOSITION TO PLAINTIFF’S BRIEF FOR PRELIMINARY INJUNCTION FRESNO COUNTY SUPERIOR COURT CASE NO. 21CEC00150 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 if the court were to interrupt the Exhibit 3 Escrow Instructions to be a valid contract, this contract moot was canceled when the Defendant’s did not accept the September 3, 2020 Escrow Instruction Amendment which effectively was a counteroffer that was not signed and therefore rejected. ". . . it cannot be said that we have a contract where a counterproposal to a written offer was never accepted by the original offeror." Ajax Holding Co. v. Heinsbergen (1944) 64 Cal.App.2d 665,671.) “[T]erms proposed in an offer must be met exactly, precisely and unequivocally for its acceptance to result in the formation of a binding contract; and a qualified acceptance amounts to a new proposal or counteroffer putting an end to the original offer.” Panagotacos v. Bank of America (1998) 60 Cal.App.4th 851,855-856 [70 Cal.Rptr.2d 595. Here, the Plaintiff did not sign the Exhibit 3 Escrow Instructions that were signed by Defendant’s, instead, he signed the amended instructions in September. The parties signed two different documents and Plaintiff’s September instructions created a new option that was not accepted by Defendants. There was never a Contract. “In order for acceptance of a proposal to result in the formation of a contract, the proposal ‘must be sufficiently definite, or must call for such definite terms in the acceptance, that the performance promised is reasonably certain.’ [Citation.]”Weddington Productions, Inc. v. Flick (1998) 60 Cal.App.4th 793, 811 [71Cal.Rptr.2d 265. An essential element of any contract is “mutual consent.” The “Consent is not mutual, unless the parties all agree upon the same thing in the same sense.” The existence of mutual consent is determined by objective rather than subjective criteria, the test being what the outward manifestations of consent would lead a reasonable person to believe. Accordingly, the primary focus in determining the existence of mutual consent is upon the acts of the parties involved. Monster EnergyCo. v. Schechter (2019) 7 Cal.5th 781, 789 [249 Cal.Rptr.3d 295, 444 P.3d 97. 8 OPPOSITION TO PLAINTIFF’S BRIEF FOR PRELIMINARY INJUNCTION FRESNO COUNTY SUPERIOR COURT CASE NO. 21CEC00150 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 The Defendant’s signed fatally incomplete escrow instructions that specifically state they alone are not a binding contract and were not even signed by Petitioner. The only document signed by Petitioner is the amendment signed by Petitioner, unilaterally, a month later. Again, evidence that there was not a meeting of the minds. Under California Law, an enforceable contract requires that there is a “meeting of the minds” on all material points. Krasley v. Superior Court (1980) 101 Cal.App. 3d. 425, 431-32. The Verified Complaint presents merely a lengthy negotiation process in which the parties failed to reach an agreement on the terms of the sale of the property and Defendant is now attempting to create a contract in the eyes of the court that never existed. ‘Consent is not mutual, unless the parties all agree upon the same thing in the same sense.’ ( Civ. Code, § 1580). The problem with uncertain contract provisions is the uncertain term “provides no rational method for determining breach or computing damages.” Lada v. Cal.State Auto.Ass’n, (1993) 19 Cal.App.4th 761, 771. Plaintiff’s tender of $1,411.42 on November 6, 2020 did not create a contract where there wasn’t one. C. EVIDENCE OF ADEQUATE CONSIDERATION WAS NOT PRESENTED “It is a rule of equity, embodied in section 3391 of the Civil Code, that specific performance cannot be enforced against a party to a contract if he has not received adequate consideration for the contract, and if the contract is not, as to him, just and reasonable. In other words, the complaint must show that the party against whom enforcement is sought has received adequate consideration and that the contract is just and reasonable.” Flood v. Templeton (1905) 148 Cal. 374, 377. As this court has said in Bruck v. Tucker, 42 Cal. 346, "The court is to be satisfied that the contract is founded upon, not merely a valuable, but an adequate, consideration. But how are we to be so satisfied here, where there is an absence of all 9 OPPOSITION TO PLAINTIFF’S BRIEF FOR PRELIMINARY INJUNCTION FRESNO COUNTY SUPERIOR COURT CASE NO. 21CEC00150 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 averment upon that point." (Windsor v. Miner, 124 Cal. 492, [57 P. 386]; Stiles v. Cain, 134 Cal. 170, [ 66 P. 231]. Id.@ 378. The Plaintiff grazes over the issue of whether the $160,000 purchase price for this property that Plaintiff’s alleges was the agreed to purchase price would adequately compensate Defendants. Instead, Plaintiff purposely focuses on the fact that all property is “unique” and then attempts to paint a picture of a close relationship” between these parties that never existed. Plaintiff states that Defendant demanded a “substantially higher price of $245,000” for this property in response to inability to reach an agreement. The parties negotiated the possibility of Petitioner purchasing this property at length and the understanding was that the Escrow was opened for the sole purpose of Plaintiff to qualify for a loan. The total purchase price was never discussed to be $160,000. The current value of the property is at issue; however, Petitioner has stated during the four-way conference on March 1, 2020 that he did in fact obtain an appraisal of the property in order to secure a loan. The Petitioner would not disclose the appraised amount outside of discovery. The online estimates on this property would be subject to objection and therefore not presented, but every one is over $245,000. In regards to specific performance, in the event that the Court does determine that there was a Contract, at the very least, an appraisal should be ordered prior to rendering a judgment on the issue of Specific Performance. D. BREACH OF IMPLIED COVENANT OF GOOD FAITH AND FAIR DEALING Plaintiff alleges that Defendants are in breach of this implied covenant because “in or around May 2020, the parties entered into the agreement for the sale and purchase of the Subject Property.” Verified Complaint, at P. 10, line 7-8. Thereafter, Defendant allegedly demanded 10 OPPOSITION TO PLAINTIFF’S BRIEF FOR PRELIMINARY INJUNCTION FRESNO COUNTY SUPERIOR COURT CASE NO. 21CEC00150 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 more money after the agreement was confirmed and breached the contract when Plaintiff refused to comply with the request for more money. Id. at line 13-14. The Plaintiff’s Verified Complaint fails to establish a contract as required to adequately plead this cause of action. “There is no obligation to deal fairly or in good faith absent an existing contract. If there exists a contractual relationship between the parties . . . the implied covenant is limited to assuring compliance with the express terms of the contract, and cannot be extended to create obligations not contemplated in the contract.” Racine & Laramie (1992) 11 Cal.App.4th 1026, 1032. If the allegations do not go beyond the statement of a mere contract breach and, relying on the same alleged acts, simply seek the same damages or other relief already claimed in a companion contract cause of action, they may be disregarded as superfluous as no additional claim is actually stated. Careau &Co. v. Security Pacific Business Credit, Inc. (1990) 222 Cal.App.3d 1371, 1395 [272Cal.Rptr. 387].) Here, the Plaintiff restates the same facts in support of the claim for Breach of Contract. CACI 325 states, in part, that “good faith means honesty of purpose without any intention to mislead or to take unfair advantage of another. Generally speaking, it means being faithful to one’s duty or obligation.” The only assertion made in the Verified Complaint is that the negotiations fell through. This does not substantiate allegations that Defendants acted to mislead or take unfair advantage of the Plaintiff. E. INTENTIONAL MISREPRESENTATION A complaint for intentional misrepresentation must allege the following elements: (1) a knowingly false representation by the defendant; (2) an intent to deceive or induce reliance; (3) justifiable reliance by the plaintiff; and (4) resulting damages.” Service by Medallion, Inc. v. Clorox Co. (1996) 44 Cal.App.4th 1807, 1816. 11 OPPOSITION TO PLAINTIFF’S BRIEF FOR PRELIMINARY INJUNCTION FRESNO COUNTY SUPERIOR COURT CASE NO. 21CEC00150 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 The Defendants have a cause of action for Intentional Misrepresentation in this case, not the Plaintiff. The Defendant’s went without rent, have held off listing their property for sale for a year now based upon the negotiations with Plaintiff that have resulted in this lawsuit for Breach of Contract. Over the course of the year, Plaintiff made false statements regarding getting loans both personal and through a lender that the Defendant’s relied on to their detriment. As such, the Defendants have now incurred great stress, legal fees and have not been able to sell this property in order to pay for extraordinary medical bills. Plaintiff’s “loss” was that he held back rent payments at the direction of Defendant’s with the intention of paying the Defendants upon the sale of the Property. Verified Complaint, Pg. 12, line 6-9. There is no indication that the Plaintiff was in any way damaged by not making rent payments and this cause of action will fail. E. NEGLIGENT MISREPRESENTATION All the elements of actionable fraud must be present before a claim can fall within the exception, and it must accordingly appear (1) that defendant made a material representation; (2) that it was false; (3) that he made it when he knew it was false, or made it recklessly, without any knowledge of its truth and as a positive assertion; (4) that he made it with the intention that it should be acted upon by plaintiff; (5) that plaintiff acted in reliance upon it; and (6) that he thereby suffered injury." Yellow Creek Logging Corp. v. Dare (1963) 216Cal.App.2d 50, 57. As previously stated, the Plaintiff presents only evidence of negotiations that were not tantamount to a valid contract for the sale of the property. Plaintiff fails to present specific statements made that were misrepresentations. The only statements and evidence presented are those that demonstrate that the parties, all of them, were back and forth in the negotiation process that entailed disagreeing on the purchase price, the time for payment, the time that escrow would 12 OPPOSITION TO PLAINTIFF’S BRIEF FOR PRELIMINARY INJUNCTION FRESNO COUNTY SUPERIOR COURT CASE NO. 21CEC00150 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 open and close and the payment of rent during the time of the negotiations. Therefore, this cause of action fails as matter of law. F. PERMANENT INJUNCTION A permanent injunction is very different from a pendente lite injunction. A permanent injunction is an equitable remedy for certain torts or wrongful acts of a defendant where a damage remedy is inadequate. A permanent injunction is a determination on the merits that a plaintiff has prevailed on a cause of action for tort or other wrongful act against a defendant and that equitable relief is appropriate. A permanent injunction is not issued to maintain the status quo but is a final judgment on the merits. (6 Witkin, Cal. Procedure (3d ed. 1985) Provisional Remedies, §§ 250, 251, pp. 216-218.) It is reviewed on appeal for the sufficiency of the evidence to support the judgment. Richards v. Dower (1883) 64 Cal. 62, 64 [28 P. 113]. A permanent injunction request would be sustained based on all the foregoing. IV. CONCLUSION In sum, the Defendant’s Request for Preliminary Injunction should be denied. Dated: April 7, 2021 ____________________________ MICHELLE JORGENSEN ATTORNEY FOR DEFENDANTS