FOREMAN FINANCIAL, INC. VS MIRANDA AUTO SALES, INC., ET AL.

Tentative Rulings

Case Number: 18STLC13901    Hearing Date: July 07, 2020    Dept: 26

Foreman Financial, Inc. v. Miranda Auto Sales, Inc., et al.

MOTION FOR SUMMARY JUDGMENT

(CCP § 437c)

TENTATIVE RULING:

Plaintiff Foreman Financial, Inc.’s Motion for Summary Judgment is GRANTED.

ANALYSIS:

On November 14, 2018, Plaintiff Foreman Financial, Inc. (“Plaintiff”) filed the instant action for breach of contract against Defendants Miranda Auto Sales, Inc. (“Defendant MAS”) and Raymundo Miranda (“Defendant Miranda”). On January 21, 2020, Plaintiff filed the instant Motion for Summary Judgment against Defendants. On February 25, 2020, Defendant MAS filed a Notice of Stay of Proceedings due to its bankruptcy filing. The next day, Plaintiff dismissed Defendant MAS from the action.

Discussion

The Court, therefore, will consider the Motion for Summary Judgment only as to Defendant Miranda. The Complaint alleges that on September 9, 2013, Plaintiff and Defendant MAS entered into a Used Car Dealer Agreement (“the Agreement”), which was personally guaranteed by Defendant Miranda. (Compl., ¶BC-1 and Exhs. A-B.) Plaintiff allegedly assigned Defendant MAS a Retail Installment Sales Contract (“RISC”) on June 10, 2016 with respect to a 2013 Nissan Altima. (Id. at ¶BC-2.) Defendant MAS allegedly refused to repurchase the RISC when requested on July 24, 2018 following the customer’s default. (Ibid.) As a result, Plaintiff suffered damages from the customer’s default, which the parties’ agreement was intended to protect against. (Id. at ¶BC-4.)

In order to prevail on a claim for breach of guaranty, Plaintiff must demonstrate (1) Defendant guaranteed payment of the indebtedness of the primary obligor to the plaintiff; (2) default on the indebtedness; (3) plaintiff notified the guarantor of the default; and (4) the guarantor did not remit funds to the plaintiff under the guaranty agreement. (Torrey Pines Bank v. Sup. Ct. (1989) 216 Cal.App.3d 813, 819; Civ. Code, § 2787.) Plaintiff moves for summary judgment on the grounds that it is undisputed Defendant Miranda failed to make payment as required by the guaranty after Defendant MAS, the primary obligor, breached the Agreement. In support of the Motion, Plaintiff presents the following evidence.

Plaintiff is in the business of providing financing to qualified individuals for the purchase of motor vehicles. (Motion, Separate Statement of Facts No. 1; Foreman Decl., ¶2.) Plaintiff routinely purchases financing agreements from automobile dealers. (Motion, Separate Statement of Facts No. 2; Foreman Decl., ¶2.) On September 11, 2013, Plaintiff entered into a Master Dealer Agreement with Defendant MAS. (Motion, Separate Statement of Facts No. 3; Foreman Decl., ¶3 and Exh. 1.) The Agreement was personally guaranteed by Defendant Miranda pursuant to a written “Continuing Guaranty” executed on September 9, 2013. (Motion, Separate Statement of Facts No. 4; Foreman Decl., ¶4 and Exh. 2.)

The Agreement provides that Defendant MAS is obligated to make “payment equal to the amount of the check which was issued from Plaintiff to Defendant [MAS]” 30 days after the customer that purchased a motor vehicle under the RISC defaults. (Motion, Separate Statement of Facts No. 5; Foreman Decl., ¶5 and Exh. 1 at ¶4.) On June 10, 2016, Defendant MAS assigned Plaintiff its rights under a RISC for purchase of a 2013 Nissan Altima. (Motion, Separate Statement of Facts No. 7; Foreman Decl., ¶6 and Exh. 1.) Plaintiff accepted the RISC under a six-payment default basis. (Motion, Separate Statement of Facts No. 8; Foreman Decl., ¶6 and Exhs. 1, 4.) This meant that if the customer defaulted on the RISC within six payment periods (six months), Defendant MAS was obligated to repurchase the RISC. (Motion, Separate Statement of Facts No. 9; Foreman Decl., ¶7 and Exhs. 1, 4.) Plaintiff made payment to Defendant MAS under the terms of the Agreement. (Motion, Separate Statement of Facts No. 10; Foreman Decl., ¶8.) Following two defaults by the customer and two reinstatements of the RISC, the parties entered into an amended guaranty where the recourse period was four payments. (Motion, Separate Statement of Facts Nos. 11-14; Foreman Decl., ¶¶9-12 and Exh. 5.)

Based on the evidence presented, Plaintiff has carried its initial burden of proof to demonstrate Defendant MAS’ breach of the parties’ Agreement, and Defendant Miranda’s subsequent breach of the Continuing Guaranty. The burden now shifts to Defendant Miranda to create a triable issue of material fact regarding Plaintiff’s inability to prove the elements of its cause of action or the viability of an affirmative defense. As no opposition has been filed, however, Defendant Miranda has not met his burden. Therefore, Plaintiff Foreman Financial, Inc.’s Motion for Summary Judgment is GRANTED.

Moving party to give notice.