CREDITORS ADJUSTMENT BUREAU, INC. VS UMAYA RAMEN LLC.

Tentative Rulings

Case Number: 19STLC00730    Hearing Date: October 07, 2020    Dept: 26

Creditors Adjustment Bureau, Inc. v. Umaya Ramen, LLC, et al.Plaintiff Creditor Adjustment Bureau, Inc.’s Motion for Summary Adjudication of the third cause of action for breach of contract is DENIED.

ANALYSIS:

Plaintiff Creditors Adjustment Bureau, Inc. (“Plaintiff”) filed the instant action against Defendants Umaya Ramen, LLC (“Defendant”) on January 23, 2019. Plaintiff filed the instant Motion for Summary Judgment on October 30, 2019. Defendant filed an opposition on January 27, 2020 and Plaintiff replied on January 30, 2020.

Discussion

Plaintiff alleges that Defendant entered into a contract with Plaintiff’s assignor and now brings this action for (1) open book account for money owed for goods sold and delivered and/or services rendered; (2) account stated; and (3) breach of contract. The Complaint attaches a copy of the written agreement for linen and garment rental executed on April 4, 2013 by Keith Lukasavage on Defendant’s behalf. (Compl., Exh. 1.)

In order to prevail on a motion for summary adjudication the plaintiff has the burden of showing that there is no defense to the cause of action. (Code Civ. Proc., § 437c, subd. (p)(1).) The plaintiff may show this by proving each element of the cause of action thereby entitling the party to adjudication on the cause of action. (Code Civ. Proc., § 437c, subd. (p)(1).) Upon this showing, the burden shifts to Defendant to show the existence of a triable issue of one or more material facts in the cause of action or a defense thereto. (Code Civ. Proc., § 437c, subd. (p)(1).)

Plaintiff’s Initial Burden of Proof

In order to prevail on a cause of action for breach of contract, Plaintiff must demonstrate through undisputed facts the following elements: (1) the contract; (2) plaintiff’s performance or excuse for non-performance; (3) defendant’s breach; and (4) damage to plaintiff therefrom. (Acoustics, Inc. v. Trepte Constr. Co. (1971) 14 Cal.App.3d 887, 913.)

In support of the Motion, Plaintiff presents evidence that Defendant entered into a linen and garment rental agreement (“the Agreement”) with Republic Master Chefs on April 4, 2013. (Motion, Separate Statement Fact No. 1; Pallan Decl., Exh. 1.) The agreement was signed by Keith Lukasavage in the capacity of “Consultant” on Defendant’s behalf. (Motion, Separate Statement Fact No. 2; Pallan Decl., Exh. 1.) The initial contract term was 36 months with an automatic 60-month renewal unless cancelled upon written 60-day notice delivered to the other party by certified mail. (Motion, Separate Statement Fact No. 3; Pallan Decl., Exh. 1, ¶ “Term of Agreement”.) Cancellation of the Agreement can be made only upon formal complaint to Republic of its failure to meet industry standards and by giving Republic 45 days to correct problem. (Motion, Separate Statement Fact No. 4; Pallan Decl., Exh. 1, ¶¶ “General Purpose Garments” and “Customer’s Promise.”) On December 14, 2017, Defendant unilaterally cancelled the Agreement in violation of the cancellation terms. (Motion, Separate Statement Fact No. 1; Pallan Decl., ¶6.) Per the terms of the Agreement, Defendant owes Plaintiff $6,098.03 principal and interest at the rate of 18% per annum owed from December 20, 2017. (Motion, Separate Statement Fact No. 1; Pallan Decl., ¶10.)

This evidence carries Plaintiff’s initial burden of proof with respect to the elements of the breach of contract cause of action. The burden now shifts to Defendant to raise a triable issue of material fact with respect to the elements or a defense to the cause of action.

Defendant’s Burden of Proof to Demonstrate the Existence of a Triable Issue of Material Fact

In opposition, Defendant presents the declaration of its general manager, Jane G. Hwang. Plaintiff’s evidentiary objections to Hwang’s declaration are overruled. The declaration disputes that Lukasavage had any authority to sign agreements on Defendant’s behalf. Hwang states that Lukasavage was a one-time, short-term contractor for Defendant in 2013 who had no actual or ostensible authority to bind Defendant. (Opp., Separate Statement Fact Nos. 1-4; Hwang Decl., ¶¶4-6.) Hwang declares that Lukasavage was never employed by Defendant and she was the only person authorized to enter into contracts for Defendant. (Opp., Separate Statement Fact Nos. 1-4; Hwang Decl., ¶¶5-11.)

An agent has the authority that the principal, actually or ostensibly, confers upon him. (Civ.Code, s 2315.) Actual authority is the authority the principal intentionally confers upon the agent or allows the agent to believe that he possesses. (Civ.Code, s 2316.) Ostensible authority, on the other hand, is the authority of the agent which the principal causes or allows a third person to believe that the agent possesses. (Civ.Code, s 2317.)

(Van Den Eikhof v. Hocker (1978) 87 Cal.App.3d 900, 905.) Hwang declares she was unaware of any written agreement for linen and garments until December 2017 and that the linen products and services rented from Republic were always cash on delivery. (Opp., Separate Statement Fact Nos. 1-4; Hwang Decl., ¶¶3-4.) Finally, Hwang declares that Republic was aware she did not want to enter into a written term agreement for linen and garment services based on her refusal to sign such an agreement. (Opp., Separate Statement Fact Nos. 1-4; Hwang Decl., ¶7.)

Conclusion