Motion for Summary Judgment and or Adjudication

Cal. Super. - 2nd Dist.March 23, 2018

123 Judge SUPERIOR COURT OF CALIFORNIA, TENTATIVE RULINGS EVENT DATE: EVENT TIME: VENTURA DIVISION April 25, 2019 04/29/2019 08:20:00 AM DEPT.: 41 COUNTY OF VENTURA JUDICIAL OFFICER: Vincent O'Neill CASE NUM: CASE CATEGORY: EVENT TYPE: CASE TITLE: CASE TYPE:Civil - Limited Other Collections 56-2018-00509576-CL-CL-VTA BAZALDUA VS. GONZALEZ Motion for Summary Judgment and/or Adjudication - of Issues CAUSAL DOCUMENT/DATE FILED: Motion for Summary Judgment and/or Adjudication, 12/20/2018 stolo Tentative ruling for April 29, 2019 on Defendants Roberto and Ruth Gonzalez's Motion for Summary Judgment or Adjudication Evidentiary Issues Grant Defendants Roberto and Ruth Gonzalez's request for judicial notice. Grant Plaintiff Maria Del Rosario Bazaldua's request for judicial notice. Overrule Defendants' evidentiary objections to Plaintiff Bazaldua's declaration filed in support of her opposition to Defendants' motion. For the purposes of the present motion only, the Court finds that: (i) Defendants' Material Facts Nos. 3, 4, 7-9, and 12-15 are undisputed and established; (ii) Defendants' Material Facts Nos. 5, 6, 10, and 11 are not genuinely disputed as stated and established; (iii) Defendants' Material Facts Nos. 1 and 2 are disputed and not established; (iv) Defendants' Material Fact No. 17 is disputed in part and established as to the oral promise being made in early March 2016; (v) Defendants' Material Fact No. 18 is disputed in part and established; (vi) Defendants' Material Fact No. 16 is not a fact but rather a legal conclusion; (vii) Defendant's Material Fact No. 19 is not a fact but rather an incorporation by reference of prior Material Facts; (viii) Plaintiff's Additional Material Facts Nos. 20-36 and 38 are supported by the cited-to evidence and established; and (ix) Plaintiff's Additional Material Fact No. 37 is not supported by the cited-to evidence and not established. The Merits The court denies Defendants' motion for the following reasons. Defendants' Request for Summary Adjudication Defendants contend that they are entitled to summary adjudication in their favor of Plaintiff's first cause of action for breach of contract and her second cause of action for "Common Counts" (money lent) on the ground that they are each barred by the applicable statute of limitations. First Cause of Action for Breach of Written Contract Plaintiff's first cause of action for breach of written contract alleges that on October 19, 2006, Plaintiff entered into a written contract ("Contract") with Defendants whereby Plaintiff loaned Defendants $40,000 for the purchase of a tractor. It further alleges that Defendants agreed to repay the debt on a payment schedule of $200 per month, and that Defendants defaulted on the Contract by failing to make payments as agreed, leaving a principal balance due of $20,500. (See Complaint, p.3, ¶¶BC-1, BC-2, BC-4.) TENTATIVE RULINGS Page: 1 CASE NUMBER: CASE TITLE: BAZALDUA VS. GONZALEZ 56-2018-00509576-CL-CL-VTA Defendants contend that (i) pursuant to the terms of the Contract, Defendants agreed to make payments of $200 per month from November 16, 2006, through October 16, 2007, at which point the entire remaining balance on the loan was to be paid off in a balloon payment due on October 16, 2007; (ii) Defendants failed to pay off the balance on the loan on October 16, 2007, and failed to make any payments on the loan between October 16, 2007, and October 17, 2011; (iii) Defendants subsequently made a $10,000 payment to Plaintiff on February 17, 2012, and a $2,000 payment on May 22, 2013, which was the last payment made on the loan; (iv) Defendants never promised in writing to make any further payments after May 22, 2013; and (v) the 4-year statute of limitations for breach of written contract started to run on October 16, 2007, when the final balloon payment was due and Defendants failed to pay it, or - at the latest - the statute began to run when the final payment was made on May 22, 2013; and therefore Plaintiff's Complaint, filed on March 23, 2018, is time-barred. The Court construes the subject contract as it is written: As a threshold matter, the Court notes that the parties' loan agreement was apparently drafted by a notary (see Bazaldua Decl., ¶4) who was not an attorney. Notwithstanding this fact, the material terms of the parties' agreement can be gleaned from the written document, which is attached as Exhibit 1 to Defendant Roberto Gonzalez's declaration. The agreement includes the Promissory Note itself and a Deed of Trust on Defendants' real property securing it. The amount of the original indebtedness was $40,000. The Promissory Note sets forth the following material terms: (i) interest will accrue on the debt at the annual rate of 6% until paid in full; (ii) Defendants will make payments of $200 per month from November 16, 2006, through October 16, 2007; and (iii) the entire remaining principal balance plus interest would be due on October 16, 2007. (See Roberto Gonzalez Decl., Exh. 1.) The Court further notes that in the present action Plaintiff does not seek to enforce the Deed of Trust which was provided as security for the Promissory Note, apparently because Defendants' property which was the subject of the Deed of Trust was sold in a foreclosure sale in December 2011. (See Opposition Separate Statement, Material Fact No. 30; see also Pl.'s Request for Judicial Notice, Exh. 1 [Trustee's Deed Upon Sale].) As a result, Plaintiff's present action is a pure breach of contract action to enforce a now-unsecured debt in the form of the subject Promissory Note. Both Defendants and Plaintiff take some rather unusual positions with respect to the terms of the subject Contract. First, Defendants contend that the Deed of Trust was secured by the Promissory Note (see Opposition Separate Statement, Material Fact No. 1; see also Roberto Gonzalez Decl., ¶2), a contention which makes little sense (i.e., because the Promissory Note is the underlying obligation and the Deed of Trust is a security instrument, not vice versa) and is contrary to the actual terms set forth in Exhibit 1 to Roberto Gonzalez's declaration. Defendants also contend that the Deed of Trust "conveyed property to Defendants in exchange for payment of $40,000" (see Opposition Separate Statement, Material Fact No. 2; see also Roberto Gonzalez Decl., ¶2), another contention that appears unsupported: the Deed of Trust on its face encumbers real property belonging to Defendants, not Plaintiff, and that the purpose of the encumbrance is apparently to secure payment on the Promissory Note in favor of Plaintiff. (See Roberto Gonzalez Decl., Exh. 1.) Simply stated, the loan transaction does not appear to involve any conveyance of real property from Plaintiff to Defendants; instead, it involves a conveyance of a legal interest in Defendants' property to the Trustee under the Deed of Trust. (See Roberto Gonzalez Decl., Exh. 1; see also Bazaldua Decl., ¶3.) Plaintiff also takes an unusual position with respect to the subject Contract, arguing that she is not fluent in English and did not understand the terms of the Contract "other than that it reflected that "I had loaned Defendants $40,000 and that Defendants had to pay it back," and that she was not aware of the balloon payment clause in the Contract. (See Opposition Separate Statement, Additional Material Facts Nos. 23, 24; see also Bazaldua Decl., ¶4.) This appears to be an attempt by Plaintiff to avoid some of the terms of the written agreement that she is suing to enforce. However, Plaintiff's Complaint does not make any request for reformation or modification of the Contract, and her first cause of action is for breach of the written Contract (i.e., it seeks to enforce the terms of the written Contract). Plaintiff cites no authority for the proposition that she can ignore some terms of the written Contract while simultaneously enforcing others merely by claiming that she did not understand the former. In the absence of evidence of fraud or duress (and no such evidence has been submitted), Plaintiff cannot avoid the terms of a written contract merely by claiming she did not understand them. (See, e.g., Mission Viejo Emergency Medical Associates v. Beta Healthcare Group (2011) 197 Cal.App.4th 1146, 1154-1155.) In the absence of any claim or demonstration that the material terms of the written Contract are ambiguous, the Court will construe the Contract as it is written. Under that construction, the payment terms (as set forth above) are relatively clear, and the Contract was to be fully performed by Defendants by no later than October 16, 2007, when the final TENTATIVE RULINGS Page: 2 CASE NUMBER: CASE TITLE: BAZALDUA VS. GONZALEZ 56-2018-00509576-CL-CL-VTA balloon payment was due. There is no triable issue of fact as to whether Plaintiff's breach of contract claim is time-barred, unless Defendants are equitably estopped from invoking the statute of limitations: The statute of limitations for a cause of action for breach of written contract is four years. (See Code of Civil Procedure §337.) A claim for breach of contract generally accrues when a party to the contract fails to perform an obligation by the date such performance was due, such as a failure to make a timely payment. (See, e.g., Professional Collection Consultants v. Lauron (2017) 8 Cal.App.5th 958, 966.) Here, Defendants set forth Material Facts and cite to supporting evidence indicating that the final balloon payment was due on October 16, 2007, and Defendants failed to pay off the entire balance due on that date. (See Opposition Separate Statement, Material Facts Nos. 4, 5 [not genuinely disputed as stated and established].) Accordingly, the statute of limitations started to run on Plaintiff's first cause of action for breach of written contract on October 16, 2007. However, as acknowledged by Defendants in their Moving Brief, a payment made on a debt after the statute of limitations has started to run but before it has expired constitutes an acknowledgment of the debt that restarts the limitations period. (See Eilke v. Rice (1955) 45 Cal.2d 66, 72-73.) Defendants claim to have not made any payments to Plaintiff in the period from October 13, 2006, and October 17, 2011. (See Roberto Gonzalez Decl., ¶3.) However, Plaintiff submits evidence indicating that Defendants made regular monthly payments of $200 on the debt through June 26, 2009. (See Opposition Separate Statement, Additional Material Fact No. 25; see also Bazaldua Decl., ¶7; Exh. 3 [bank statements reflecting such payments].) Each of these $200 payments which occurred after the statute of limitations started to run on October 16, 2007, "restarted" the 4-year limitations period, which therefore was restarted again with the June 26, 2009 payment. It is undisputed that an additional $10,000 payment was made on February 17, 2012 (see Opposition Separate Statement, Material Fact No. 7 [undisputed and established], before the 4-year limitations period restarted on June 26, 2009 had run, and this February 17, 2012 payment again restarted the 4-year limitations period. It is also undisputed that Defendants made another payment of $2,000 on May 22, 2013. (Id. at Material Fact No. 8 [undisputed and established].) This May 22, 2013 payment again restarted the 4-year limitations period. However, it is undisputed that no additional payments were made after May 22, 2013. (Id. at Material Fact No. 9 [undisputed and established].) Accordingly, the 4-year limitation period that was restarted on May 22, 2013, expired four years from that date on May 22, 2017. Plaintiff's Complaint in this action was not filed until March 23, 2018 (id. at Material Fact No. 14 [undisputed and established]), after the 4-year statute had run on May 22, 2017, and therefore is time-barred unless Plaintiff establishes a triable issue of fact as to whether Defendants are equitably estopped from enforcing the statute of limitations. There is a triable issue of fact as to whether Defendants are equitably estopped from invoking the statute of limitations: In her Opposition Brief, Plaintiff contends that Defendants are equitably estopped from asserting the statute of limitations because they made promises to Plaintiff that the debt would be paid. The doctrine of equitable estoppel as applied to statutes of limitation is not a tolling provision; instead, where applicable, it can preclude application of the statute of limitations altogether. As stated by the California Supreme Court in a construction defect case: "One aspect of equitable estoppel is codified in Evidence Code section 623, which provides that '[w]henever a party has, by his own statement or conduct, intentionally and deliberately led another to believe a particular thing true and to act upon such belief, he is not, in any litigation arising out of such statement or conduct, permitted to contradict it.' [Citation.] But ' "[a]n estoppel may arise although there was no designed fraud on the part of the person sought to be estopped. [Citation.] To create an equitable estoppel, "it is enough if the party has been induced to refrain from using such means or taking such action as lay in his power, by which he might have retrieved his position and saved himself from loss.' ... '... Where the delay in commencing action is induced by the conduct of the defendant it cannot be availed of by him as a defense.' " ' [Citations.] "Accordingly, (1) if one potentially liable for a construction defect represents, while the limitations period is still running, that all actionable damage has been or will be repaired, thus making it unnecessary to sue, (2) the plaintiff reasonably TENTATIVE RULINGS Page: 3 CASE NUMBER: CASE TITLE: BAZALDUA VS. GONZALEZ 56-2018-00509576-CL-CL-VTA relies on this representation to refrain from bringing a timely action, (3) the representation proves false after the limitations period has expired, and (4) the plaintiff proceeds diligently once the truth is discovered [citation] the defendant may be equitably estopped to assert the statute of limitations as a defense to the action." (Lantzy v. Centex Homes (2003) 31 Cal.4th 363, 383-384.) As indicated above, the evidence before the Court indicates that the 4-year statute of limitations on Plaintiff's breach of contract claim did not expire until May 22, 2017. Plaintiff sets for an Additional Material Fact and cites to supporting evidence indicating that in March 2016, Defendants promised Plaintiff that they would pay their remaining debt to Plaintiff (see Opposition Separate Statement, Additional Material Fact No. 34 [supported and established]), that Plaintiff relied on this promise in refraining from bringing suit (id. at Additional Material Fact Nos. 35 and 35 [both supported and established]), that Plaintiff continued to believe that Defendants would fulfill their promise until 2018 (id. at Additional Material Fact No. 38 [supported and established]; see also Bazaldua Decl., ¶¶17-19). Plaintiff filed her present action relatively early in 2018 (i.e., on March 23), and therefore apparently acted with reasonable diligence once she realized that Defendants were not going to pay off the debt. Finally, due to the close familial relationship between Plaintiff and Defendants - namely, Defendant Ruth Gonzalez is Plaintiff's sister and Defendant Roberto Gonzalez is her brother-in-law and Plaintiff trusted them (see Additional Material Fact No. 20 [supported and established]; see also Bazaldua Decl., ¶4 - there appears to be a triable issue of fact as to whether Plaintiff's reliance on Defendants' promises to pay notwithstanding that the debt was long overdue was "reasonable." As a general rule, the question of whether reliance was reasonable is a jury question unless the circumstances are so clear that reasonable minds could only reach one conclusion. (See, e.g., Superior Dispatch, Inc. v. Insurance Corp. of New York (2010) 181 Cal.App.4th 175, 187; Grisham v. Philip Morris U.S.A., Inc. (2007) 40 Cal.4th 623, 637-638.) Although Plaintiff's longstanding reliance on Defendants' promises might not be reasonable in the commercial context, in the context of a loan made between close family members the question of reasonableness is sufficiently unclear to allow reasonable minds to reach differing conclusions. Accordingly, there is a triable issue of fact as to the reasonableness of Plaintiff's reliance. In their Reply Brief, Defendants make several arguments against the application of equitable estoppel. First, Defendants contend that there were no concealments or misrepresentations of fact by Defendants. However, as indicated above, there is evidence before the Court indicating (and therefore a triable issue of fact as to whether) Defendants represented to Plaintiff in March 2016 that they would pay the debt, but then failed to do so. This is all that is required to satisfy the first element of equitable estoppel. Second, Defendants argue that Plaintiff contemplated suing Defendants in 2013, and had her counsel send letters to Defendants in August 2016 and January 2017, and therefore cannot claim to have been reasonably relying on Defendants' promises. However, Plaintiff explicitly states in her declaration that the reason she refrained from taking legal action (despite her frustration and having her attorney send demand letters in an attempt to get Defendants to make payments) is that she trusted Defendants and ultimately believed their promises that they would pay the debt. (See Bazaldua Decl., ¶¶10, 12, 15, 17-19.) On a motion for summary judgment/adjudication, the Court cannot make determinations as to whether Plaintiff's declaration statements are credible. (See, e.g., Kids' Universe v. In2Labs (2002) 95 Cal.App.4th 870, 890 ['if the credibility of witnesses was determinative, summary judgment would be inappropriate']; AARTS Productions, Inc. v. Crocker National Bank (1986) 179 Cal.App.3d 1061, 1065.) Accordingly, the Court must accept these statements by Plaintiff as true for the purposes of ruling on the present motion. Finally, Defendants note that it is undisputed that they made no payments on the debt after May 22, 2013, and argue that it was unreasonable for Plaintiff to wait for over five years to bring the present lawsuit. However, again, the question of whether Plaintiff's reliance on promises from close family members for such a lengthy period was reasonable appears sufficiently debatable to constitute a question for the trier of fact, and one that may not be resolved on a motion for summary judgment/adjudication. Based on the above, there is a triable issue of fact as to whether Defendants are equitably estopped from invoking the statute of limitations against Plaintiff's first cause of action for breach of contract, and Defendants' request for summary adjudication of the first cause of action should be denied. Second Cause of Action for Common Count (Money Lent) Defendants contend that Plaintiff's second cause of action, a common count for money lent, is also subject to a 4-year statute of limitations and that the statute expired no more than 4 years after Defendants' last payment on May 22, 2013, or no later than May 22, 2017, and therefore Plaintiff's second cause of action is time-barred. Assuming arguendo that Defendants are correct as to the date on which the statute of limitations expired, this is the same date on which it is TENTATIVE RULINGS Page: 4 CASE NUMBER: CASE TITLE: BAZALDUA VS. GONZALEZ 56-2018-00509576-CL-CL-VTA concluded above that the statute of limitations expired on the breach of contract claim. However, as with the breach of contract claim, Plaintiff's equitable estoppel argument is potentially a complete bar to Defendants invoking the statute of limitations with respect to the second cause of action. Moreover, the conclusion above - namely, that there is a triable issue of fact as to whether Defendants are equitably estopped from invoking the statute of limitations - applies equally to the common count. Accordingly, the Court must also deny Defendant's request for summary adjudication of the second cause of action. Defendants' Request for Summary Judgment Because Defendants are not entitled to summary adjudication of either of the two causes of action in Plaintiff's Complaint, their request for summary judgment must also be denied. TENTATIVE RULINGS Page: 5