This case was last updated from Los Angeles County Superior Courts on 01/15/2021 at 04:22:38 (UTC).

BELL HOSPITAL CORPORATION ET AL VS WESTERN FIDELITY TRUSTEES

Case Summary

On 03/05/2013 BELL HOSPITAL CORPORATION filed an Other - Injunction lawsuit against WESTERN FIDELITY TRUSTEES. This case was filed in Los Angeles County Superior Courts, Stanley Mosk Courthouse located in Los Angeles, California. The Judges overseeing this case are JOHN L. SEGAL, ALLAN J. GOODMAN, ROBERT H. O'BRIEN, RUTH ANN KWAN, JOSH M. FREDRICKS, JOSEPH R. KALIN, CONRAD R. ARAGON and TERESA A. BEAUDET. The case status is Disposed - Judgment Entered.

Case Details Parties Documents Dockets

 

Case Details

  • Case Number:

    ****2267

  • Filing Date:

    03/05/2013

  • Case Status:

    Disposed - Judgment Entered

  • Case Type:

    Other - Injunction

  • Court:

    Los Angeles County Superior Courts

  • Courthouse:

    Stanley Mosk Courthouse

  • County, State:

    Los Angeles, California

Judge Details

Presiding Judges

JOHN L. SEGAL

ALLAN J. GOODMAN

ROBERT H. O'BRIEN

RUTH ANN KWAN

JOSH M. FREDRICKS

JOSEPH R. KALIN

CONRAD R. ARAGON

TERESA A. BEAUDET

 

Party Details

Plaintiffs, Cross Defendants and Appellants

AMERICAN CARDIOCARE MEDICAL CENTER INC

BELL HOSPITAL CORPORATION

AMERICAN CARDIOCARE MEDICAL CENTER INC.

COLLINS RITA

TURNER CHERYL C.

Defendants, Respondents and Cross Plaintiffs

COLLINS EARL

DOES 1 TO 50

FRAN DEPALMA (DOE 2)

HERRERA KATHLEEN

NEW AID MEDICAL SUPPLY INC.

T. D. SERVICE COMPANY (DOE 1)

TIFFANY POHL (DOE 3)

WESTERN FIDELITY TRUSTEES

EARL COLLINS ASSIGNEE OF NEW AID MEDICAL

DEPALMA FRAN [DOE 2]

T.D. SERVICE COMPANYY [DOE 1]

POHL TIFFANY [DOE 3]

COLLINS RITA

Cross Plaintiffs and Respondents

AGUOLO JEREMAIH

COLLINS EARL

NEW AID MEDICAL SUPPLY INC.

EARL COLLINS ASSIGNEE OF NEW AID MEDICAL

Not Classified By Court

TEST PARTY FOR TRUST CONVERSION

3 More Parties Available

Attorney/Law Firm Details

Plaintiff Attorney

LAW OFFICES OF EPHRAIM O. OBI

Cross Plaintiff, Defendant and Respondent Attorneys

GUSSNER J. WALTER ESQ.

LAW OFFICES OF CHERYL C. TURNER

PERRY ROSARIO ESQ.

THE DREYFUSS FIRM

Other Attorneys

TURNER CHERYL C.

OBI EPHRAIM OKECHUKWU

VEIGUELA PETER J.

 

Court Documents

NEW AID DEFENDANTS' NOTICE OF MOTION AND MOTION TO STRIKE PORTIONS OF THE THIRD AMENDED COMPLAINT; ETC

5/23/2018: NEW AID DEFENDANTS' NOTICE OF MOTION AND MOTION TO STRIKE PORTIONS OF THE THIRD AMENDED COMPLAINT; ETC

NOTICE OF RULING RE: DEMURRER TO THE THIRD AMENDED COMPLAINT AND MOTION TO STRIKE PORTIONS OF THE THIRD AMENDED COMPLAINT BY THE NEW AID DEFENDANTS

8/14/2018: NOTICE OF RULING RE: DEMURRER TO THE THIRD AMENDED COMPLAINT AND MOTION TO STRIKE PORTIONS OF THE THIRD AMENDED COMPLAINT BY THE NEW AID DEFENDANTS

Minute Order -

9/28/2018: Minute Order -

Opposition - OPPOSITION PLAINTIFFS' OPPOSITION TO DEFENDANTS' DEMURRER TO 4TH AMENDED COMPLAINT AND REQUEST FOR JUDICIAL NOTICE

5/29/2019: Opposition - OPPOSITION PLAINTIFFS' OPPOSITION TO DEFENDANTS' DEMURRER TO 4TH AMENDED COMPLAINT AND REQUEST FOR JUDICIAL NOTICE

Certificate of Mailing for - CERTIFICATE OF MAILING FOR (HEARING ON DEMURRER - WITHOUT MOTION TO STRIKE) OF 07/19/2019

7/19/2019: Certificate of Mailing for - CERTIFICATE OF MAILING FOR (HEARING ON DEMURRER - WITHOUT MOTION TO STRIKE) OF 07/19/2019

Objection - OBJECTION TO REQUEST FOR JUDICIAL NOTICE

2/28/2020: Objection - OBJECTION TO REQUEST FOR JUDICIAL NOTICE

Minute Order - MINUTE ORDER (NON-APPEARANCE CASE REVIEW RE LODGE TRIAL BINDERS)

7/17/2020: Minute Order - MINUTE ORDER (NON-APPEARANCE CASE REVIEW RE LODGE TRIAL BINDERS)

ANSWER TO COMPLAINT BY EARL COLLINS, ASSIGNEE OF NEW AID MEDICAL SUPPLY, INC.

4/4/2013: ANSWER TO COMPLAINT BY EARL COLLINS, ASSIGNEE OF NEW AID MEDICAL SUPPLY, INC.

NOTICE OF NO WRITTEN OPPOSITION TO PLAINTIFFS? REQUEST TO STRIKE EARL COLLIN?S ANSWER TO COMPLAINT

5/30/2013: NOTICE OF NO WRITTEN OPPOSITION TO PLAINTIFFS? REQUEST TO STRIKE EARL COLLIN?S ANSWER TO COMPLAINT

NOTICE OF MOTION AND MOTION TO STRIKE EARL COLLINS' CROSS-COMPLAINT; MEMORANDUM OF POINTS AND AUTHORITIES;

6/12/2013: NOTICE OF MOTION AND MOTION TO STRIKE EARL COLLINS' CROSS-COMPLAINT; MEMORANDUM OF POINTS AND AUTHORITIES;

REQUEST FOR ENTRY OF DEFAULT -

8/12/2013: REQUEST FOR ENTRY OF DEFAULT -

Minute Order -

3/10/2014: Minute Order -

NOTICE OF DEMURRER AND DEMURRER OF DEFENDANTS TO PLAINTIFFS' VERIFIED FIRST AMENDED COMPLAINT; ETC

7/13/2015: NOTICE OF DEMURRER AND DEMURRER OF DEFENDANTS TO PLAINTIFFS' VERIFIED FIRST AMENDED COMPLAINT; ETC

PLAINTIFFS' OPPOSITION TO DEFENDANTS NEW AID MEDICAL SUPPLY, INC., EARL COLLINS AND RITA COLLINS' MOTION TO STRIKE PLAINTIFFS' FIRST AMENDED COMPLAINT

8/26/2015: PLAINTIFFS' OPPOSITION TO DEFENDANTS NEW AID MEDICAL SUPPLY, INC., EARL COLLINS AND RITA COLLINS' MOTION TO STRIKE PLAINTIFFS' FIRST AMENDED COMPLAINT

REPLY TO DEFENDANTS' OPPOSITION TO MOTION FOR RECONSIDERATION OF THE RULING SUSTAINING DEFENDANTS' DEMURRER TO THE FIRST AMENDED COMPLAINT WITHOUT LEAVE TO AMEND WITH PREJUDICE

10/8/2015: REPLY TO DEFENDANTS' OPPOSITION TO MOTION FOR RECONSIDERATION OF THE RULING SUSTAINING DEFENDANTS' DEMURRER TO THE FIRST AMENDED COMPLAINT WITHOUT LEAVE TO AMEND WITH PREJUDICE

NOTICE OF DEMURRER AND DEMURRER BY T.D. SERVICE COMPANY AND FRAN DEPALMA TO CROSS-COMPLAINT OF JEREMIAH AGUOLU

12/9/2015: NOTICE OF DEMURRER AND DEMURRER BY T.D. SERVICE COMPANY AND FRAN DEPALMA TO CROSS-COMPLAINT OF JEREMIAH AGUOLU

NOTICE OF DEMURRER AND DEMURRER BY T.D. SERVICE COMPANY AND FRAN DEPALMA TO FIRST AMENDED CROSS-COMPLANT OF JEREMIAH AGUOLU

1/20/2016: NOTICE OF DEMURRER AND DEMURRER BY T.D. SERVICE COMPANY AND FRAN DEPALMA TO FIRST AMENDED CROSS-COMPLANT OF JEREMIAH AGUOLU

NOTICE RE: CONTINUANCE OF HEARING

10/3/2016: NOTICE RE: CONTINUANCE OF HEARING

368 More Documents Available

 

Docket Entries

  • 11/12/2020
  • DocketAppeal - Notice of Default Issued ("U1"); Filed by Clerk

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  • 11/12/2020
  • DocketAppellate Order Dismissing Appeal (NOA: 10/15/20-U1 B308190); Filed by Clerk

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  • 10/16/2020
  • DocketNotice of Filing of Notice of Appeal (Unlimited Civil) (N.O.A. 10/15/2020 "U1"); Filed by Clerk

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  • 10/15/2020
  • DocketAppeal - Notice of Appeal/Cross Appeal Filed ("U1"); Filed by American Cardiocare Medical Center, Inc. (Appellant); Bell Hospital Corporation (Appellant)

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  • 08/18/2020
  • DocketNotice (OF ENTRY OF JUDGMENT OR ORDER); Filed by New Aid Medical Supply, Inc. (Defendant)

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  • 08/14/2020
  • Docketat 4:00 PM in Department 50, Teresa A. Beaudet, Presiding; Non-Appearance Case Review (re submission of judgment) - Held

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  • 08/14/2020
  • DocketMinute Order ( (Non-Appearance Case Review re submission of judgment)); Filed by Clerk

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  • 08/07/2020
  • Docketat 08:41 AM in Department 50, Teresa A. Beaudet, Presiding; Court Order

    Read MoreRead Less
  • 08/07/2020
  • DocketCertificate of Mailing for ((Court Order) of 08/07/2020); Filed by Clerk

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  • 08/07/2020
  • DocketMinute Order ( (Court Order)); Filed by Clerk

    Read MoreRead Less
723 More Docket Entries
  • 03/05/2013
  • DocketCIVIL DEPOSIT

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  • 03/05/2013
  • DocketOrder, Preliminary Injunction; Filed by American Cardiocare Medical Center, Inc. (Legacy Party); Bell Hospital Corporation (Legacy Party)

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  • 03/05/2013
  • DocketEx-Parte Application; Filed by American Cardiocare Medical Center, Inc. (Legacy Party); Bell Hospital Corporation (Legacy Party)

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  • 03/05/2013
  • DocketNotice of Lodging; Filed by American Cardiocare Medical Center, Inc. (Legacy Party); Bell Hospital Corporation (Legacy Party)

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  • 03/05/2013
  • DocketCOMPLAINT FOR (1) WRONGFUL FORECLOSURE; ETC

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  • 03/05/2013
  • DocketComplaint; Filed by American Cardiocare Medical Center, Inc. (Legacy Party); Bell Hospital Corporation (Legacy Party)

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  • 03/05/2013
  • DocketMinute order entered: 2013-03-05 00:00:00; Filed by Clerk

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  • 03/05/2013
  • DocketEx-Parte Application; Filed by American Cardiocare Medical Center, Inc. (Legacy Party); Bell Hospital Corporation (Legacy Party)

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  • 03/05/2013
  • DocketMinute Order

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  • 03/05/2013
  • Docket) NOTICE OF LODGMENT OF ) TITLE REPORT

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Tentative Rulings

Case Number: BC502267    Hearing Date: June 26, 2020    Dept: 50

 

 

Superior Court of California

County of Los Angeles

Department 50

bell hospital corporation, et al.

Plaintiffs,

vs.

new aid medical supply, inc., et al.

Defendants.

Case No.:

BC 502267

Hearing Date:

June 26, 2020

Hearing Time:

10:00 a.m.

[TENTATIVE] ORDER RE:

MOTION FOR SUMMARY JUDGMENT OF DEFENDANTS AS AGAINST PLAINTIFF AMERICAN CARDIOCARE

Background

Plaintiffs Bell Hospital Corporation (“Bell Hospital”) and American Cardiocare Medical Center, Inc. (“American Cardiocare”) (jointly, “Plaintiffs”) filed this wrongful foreclosure action on March 5, 2013. Plaintiffs filed a First Amended Complaint (“FAC”) on June 9, 2015 against Defendants New Aid Medical Supply, Inc. (“New Aid”); Earl Collins, as assignee of New Aid Medical Supply; Earl Collins; Rita Collins; T.D. Service Company (“T.D. Service”); and Fran DePalma (collectively, “Defendants”). On September 2, 2015, the Court sustained with prejudice the demurrers by New Aid, Earl Collins and Rita Collins and dismissing the action with prejudice as to all Defendants. Plaintiffs filed a motion for reconsideration, which was denied on October 15, 2015. Plaintiffs appealed. On May 16, 2017, the Court of Appeal issued a ruling upholding the ruling on the demurrer to eleven of the twelve causes of action and reversing as to the quiet title cause of action as brought by only American Cardiocare. A remittitur was issued on July 21, 2017.

The Second Amended Complaint (“SAC”) was filed by American Cardiocare on September 18, 2017, asserting a quiet title cause of action. On March 19, 2018, this Court sustained the demurrer by Defendants New Aid, Earl Collins (in both his capacity as assignee of New Aid and in his individual capacity), and Rita Collins (collectively, the “New Aid Defendants”) with leave to amend.

The Third Amended Complaint (“TAC”) was filed on April 18, 2018. The New Aid Defendants again demurred, and, on August 13, 2018, the Court sustained the demurrer without leave to amend. American Cardiocare moved for reconsideration of the order sustaining the demurrer without leave to amend, submitting a proposed Fourth Amended Complaint (“4AC”) that stated new or different facts to support its claims. On December 14, 2018, the Court granted the motion for reconsideration, and the 4AC was filed on December 18, 2018. The 4AC asserts one cause of action for quiet title against the New Aid Defendants.

The New Aid Defendants now move for summary judgment. American Cardiocare opposes.[1]

Request for Judicial Notice

The New Aid Defendants’ Request for Judicial Notice is granted (Exhibits 1-49).

American Cardiocare’s Request for Judicial Notice is granted as to Exhibits 2, 3, 4, 5, 9, 10, 11, 12, 13, 14, 15, 18, 19, and 24. American Cardiocare’s Request for Judicial Notice is denied as to Exhibit 1. The New Aid Defendants’ objection to American Cardiocare’s Request for Judicial Notice as to Exhibits 1 is sustained. The New Aid Defendants’ objections to American Cardiocare’s Request for Judicial Notice as to Exhibit 4, Exhibit 10, and Exhibit 24 are overruled.

The New Aid Defendants’ Supplemental Request for Judicial Notice is granted (Exhibits 1-3.)

As to any documents in court and public records, the Court does not take judicial notice of the truth of the facts stated therein, but only of the fact of the filing. ((See Sosinsky v. Grant (1992) 6 Cal.App.4th 1548, 1565 [“[T]he taking of judicial notice that the judge made a particular factual finding is a far cry from the taking of judicial notice that the ‘facts’ found by the judge must necessarily be the true facts….”] (emphasis in original).)

Evidentiary Objections

The New Aid Defendants’ objections to the deposition transcripts of Earl Collins and Rita Collins are overruled.

The Court rules on the New Aid Defendants’ objections to the Declaration of Jeremiah Aguolu as follows[2]:

Objection 1: overruled

Objection 2: sustained

Objection 3: sustained

Objection 4: overruled as to “I was not an officer for that entity” and sustained as to the remainder

Objection 5: sustained

Objection 6: sustained

Objection 7: sustained

Objection 8: sustained

Objection 9: overruled but admitted only for context as to the next statement by the declarant.

Objection 10: same as for objection 9

Objection 11: overruled

Objection 12: overruled

Objection 13: overruled

Objection 14: sustained

Objection 15: sustained

Objection 16: sustained

Objection 17: overruled

Objection 18: overruled

Objection 19: overruled

Objection 20: sustained

Objection 21: sustained

Objection 22: sustained

Objection 23: sustained

Objection 24: overruled

Objection 25: sustained

Objection 26: sustained

Objection 27: overruled

Objection 28: sustained as to “falsely” and overruled as to the remainder

Objection 29: sustained

Objection 30: sustained

Objection 31: sustained

Objection 32: sustained

Objection 33: sustained

Objection 34: sustained

The Court notes that American Cardiocare filed untimely evidentiary objections on March 3, 2020. When American Cardiocare’s opposition was filed on February 20, 2020, no evidentiary objections pursuant to CRC 3.1352 and 3.1354 were included in the filing. Therefore, the Court declines to consider American Cardiocare’s objections.

Legal Standard

“[A] motion for summary judgment shall be granted if all the papers submitted show that there is no triable issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” ((Code Civ. Proc., § 437c, subd. (c).) The moving party bears the initial burden of production to make a prima facie showing that there are no triable issues of material fact. ((Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 850.) If the moving party carries this burden, the burden shifts to the opposing party to make a prima facie showing that a triable issue of material fact exists. ((Ibid. .) Courts “liberally construe the evidence in support of the party opposing summary judgment and resolve doubts concerning the evidence in favor of that party.” ((Dore v. Arnold Worldwide, Inc. (2006) 39 Cal.4th 384, 389.)

When a defendant seeks summary judgment, he/she must show either (1) that one or more elements of the cause of action cannot be established; or (2) that there is a complete defense to that cause of action. ((Code Civ. Proc., § 437c, subd. (p)(2).)

Discussion

The essential facts underlying this case as alleged in the 4AC and as set forth in judicially noticeable documents are as follows:

On February 7, 2005, a grant deed confirming Bell Hospital’s title to real property located at 1125 Cherry Avenue, Long Beach, California (the “Property”) was recorded. (4AC,

¶¶ 10-11.) On the same day, a Deed of Trust in favor of Cal Vista Home Loans, Inc. (“Cal Vista DOT”) securing Bell Hospital’s obligation to repay a $355,000 loan as set forth in a promissory note was recorded against the Property. (4AC, ¶ 11, New Aid Defendants’ RFJN, Ex. 10.)

Beginning in approximately September 2003 through August 2005, a series of unsecured loan transactions were made, whereby Earl Collins and Rita Collins loaned money to Bell Hospital. (4AC, ¶ 12.) Subsequently, Earl Collins requested deeds of trust to document the loans. (4AC, ¶ 12.) This resulted in a Deed of Trust dated September 9, 2003, with the Property as security, in favor of Earl Collins (“2003 DOT”). (4AC, ¶ 12; New Aid Defendants’ RFJN, Ex. 7.) The 2003 DOT was signed by Jeremiah Aguolu Okonkwo (“Aguolu”), president of Bell Hospital. (New Aid Defendants’ RJFN, Ex. 7.)

On February 7, 2005, a Subordination Agreement was recorded, wherein it was agreed that the 2003 DOT would be junior and subordinate to the Cal Vista DOT. (New Aid Defendants’ RFJN, Ex. 11.)

Bell Hospital executed a “Corporation Grant Deed Conveyances to Secure A Debt,” dated August 18, 2005 (the “2005 Corporation Deed”). (4AC, ¶ 13,[3] New Aid Defendants’ RFJN, Ex. 20.) American Cardiocare alleges that the 2005 Corporation Deed was a deed of trust and not a grant deed, and that Earl Collins was the lender. (4AC, ¶¶ 12-13.) Elsewhere, American Cardiocare alleges that the 2005 Corporation Deed was between Bell Hospital and New Aid. (4AC, ¶ 15.) The 2005 Corporation Deed was recorded on December 14, 2005. On the first page, the document is simply titled a “Deed.” The second page of the document is titled “Corporation Grant Deed Conveyances to Secure A Debt” (emphasis added). The third page of this document is titled “Corporation Grant Deed” (emphasis added). American Cardiocare alleges that Earl Collins took the position that the 2005 Corporation Deed was a grant deed, and that it effectively transferred title to the Property from Bell Hospital to Earl Collins. (See 4AC, ¶¶ 13, 25.)

Cal Vista recorded Notices of Default (initiating foreclosure against the Property) twice, in May 2005 and October 2005. (New Aid Defendants’ RFJN, Exs. 13, 18.)

Beginning in December 2005, the New Aid Defendants had possession of the Property and Bell Hospital was out of possession. (4AC, ¶ 14.) American Cardiocare alleges that at the time of the New Aid Defendants’ possession, Earl Collins and Rita Collins were creditors of Bell Hospital pursuant to the 2003 DOT and the 2005 Corporation Deed. (4AC, ¶ 14.) American Cardiocare alleges that at some point in time, Earl Collins and Rita Collins testified under oath that “Aguolu gave them a key along with BELL HOSPITAL’S permission and consent to enter into and possess the Property. (4AC, ¶ 15.) American Cardiocare alleges that Earl Collins and Rita Collins were “creditors in possession of the Property from December 2005 until June 2012, collecting rents and profits, and occupying the Property which had a reasonable rental value.” (4AC, ¶ 15.)

Beginning in or about February 2006, New Aid began to purchase all of the beneficial interest in the Cal Vista DOT, which purchase was completed in October 2012. (New Aid Defendants’ RFJN, Exs. 21-31; 4AC, ¶ 17.) American Cardiocare alleges that, while in possession of the Property, New Aid was a creditor and it operated the Property as a medical supply business, utilizing the patients and patient files from the medical facility located on the Property, and collected rents of approximately $7,500 per month from other tenants. (4AC, ¶ 18.)

A dispute then arose over the nature of the 2005 Corporation Deed (the “Deed Dispute”). (4AC, ¶¶ 13, 25.) Earl Collins asserted that the 2005 Corporation Deed was a grant deed and not a deed of trust. (4AC, ¶ 25.) American Cardiocare alleges that, pursuant to the settlement of that dispute in June 2012, (1) Earl Collins conveyed his lien interest in the Property to Bell Hospital and removed the cloud of title created by the 2005 Corporation Deed (4AC, ¶¶ 13, 25; New Aid Defendants’ RFJN, Ex. 36); (2) Earl Collins gave Bell Hospital the key to the Property (4AC, ¶ 25); and Bell Hospital paid Earl Collins back all of the money loaned to bring the Cal Vista DOT and note (which by that time had been assigned to New Aid) current.[4] (4AC, ¶¶ 13, 27.)

Subsequently, in a “wrap around” transaction, Bell Hospital transferred its interest in the Property to American Cardiocare. (4AC, ¶ 26.) On or about June 28, 2012, Bell Hospital executed a grant deed transferring its interest to the Property to American Cardiocare. (4AC,

¶ 28.)

American Cardiocare alleges that immediately after Bell Hospital paid back the monies owed to Earl Collins to bring the Cal Vista note current, the New Aid Defendants tried to foreclose on the Cal Vista DOT. (4AC, ¶ 27.) When the New Aid Defendants filed to foreclose, they declared they had not received any mortgage payments, amortized interest, and late fees from Bell Hospital “from 2006 to 2012.” (4AC, ¶ 27.) American Cardiocare alleges that this was false. (4AC, ¶ 27.)

On or about May 7, 2015, New Aid foreclosed on the Cal Vista DOT and acquired the Property at the foreclosure sale. (4AC, ¶ 38; New Aid Defendants’ RFJN, Ex. 42.) New Aid is alleged to be an alter ego of Earl and Rita Collins. (4AC, ¶ 6.)

The linchpin of American Cardiocare’s quiet title action is that at the time of the foreclosure, American Cardiocare was entitled to setoffs for the rents and profits collected by the New Aid Defendants during their possession of the Property that equaled or exceeded the balance of the note. (4AC, ¶¶ 30, 41.)

As noted by the Court of Appeal and by this Court in previous rulings sustaining the New Aid Defendants’ demurrers to various versions of American Cardiocare’s complaints, to prevail on the quiet title claim, American Cardiocare must allege and prove that it was entitled to reduce the balance due under the promissory note and that the amount owed on the promissory note was zero. (See New Aid Defendants’ RFJN, Ex. 44, pp. 37-38.)

To support the theory that the rents collected could and should offset the balance on the loan, American Cardiocare asserts that the New Aid Defendants were “mortgagees in possession” from the time after the dispute over whether the 2005 Corporation Deed was a grant deed or not, until 2012, when Earl Collins transferred title back to Bell Hospital. (See, e.g., 4AC, ¶ 34.) Additionally, American Cardiocare asserts that American Cardiocare is entitled to setoffs during that time period because the Cal Vista DOT legally required the New Aid Defendants to apply the rents and profits as a setoff against the loan. (4AC, ¶ 20.) American Cardiocare also asserts that the New Aid Defendants had a statutory duty to offset collected rents during its possession of the Property pursuant to Civil Code section 2938, subdivision (c)(2). (4AC, ¶ 21.)

To show that the amount due on the promissory note was zero, American Cardiocare alleges that the principal balance due under the note was approximately $80,000 at the time of the settlement of the Deed Dispute, and that a tenant at the Property was paying $7,500 per month in rent between 2006 and 2012, bringing the balance on the note to zero (or less than zero). (4AC, ¶¶ 33, 35.)

In support of their motion for summary judgment, the New Aid Defendants argue that all of American Cardiocare’s theories of their entitlement to setoffs are without merit. The New Aid Defendants also argue that there is no evidence that they collected any rents or made any profits while in possession of the Property such that the balance on the promissory note was zero. (Motion, pp. 10: 12 – 11:7; 24:13 – 25:7; New Aid Defendants’ Undisputed Material Fact (“UMF”) 68; E. Collins Decl., ¶73)

The Court begins with the latter argument first. The New Aid Defendants present evidence that in 2005, when Earl Collins took possession of the Property, he delivered all of the equipment and furniture at the Property to Aguolu. (UMF 56; E. Collins Decl., ¶ 61.) The New Aid Defendants also present evidence that during most of the time between December 2008 and 2012, the Property was vacant and unrented. (UMF 59; E. Collins Decl., ¶ 64.) According to Earl Collins, a physician named Dr. Prudencia Kintaudi occupied the Property from May 2006 to December 2008, but Earl Collins did not charge her any rent. (UMF 59; E. Collins Decl., ¶ 64, Ex. 41.) The Property then sat empty until it was handed over to Bell Hospital in July 2012. (UMF 59, 60; E. Collins Decl., ¶¶ 64-65.) The New Aid Defendants also present unrefuted evidence that Bell Hospital had not made any payments on the promissory note since mid-2005. (UMF 63; E. Collins Decl., ¶ 68.)

American Cardiocare disputes many of the above facts, but the Court first notes procedural issues with American Cardiocare’s response. First, American Cardiocare attempts to interpose evidentiary objections into their responsive separate statement. This is improper. (See Cal. Rules of Court, rules 3.1352 and 3.1354.) Even if the Court were to consider those objections, the objections are vague and ambiguous, making it unclear as to what evidence American Cardiocare is objecting. Therefore, the Court declines to consider any of American Cardiocare’s purported objections. Second, much of the evidence cited by American Cardiocare in support of raising a triable issue of fact is inadmissible. Indeed, although American Cardiocare submits evidence that the medical equipment and patient files were never delivered (Aguolu Decl., ¶ 16), American Cardiocare does not submit any admissible evidence that the New Aid Defendants were collecting any rent from any tenants at the Property during the relevant time period. (See Response to UMF 59.) Assuming that the value of the equipment could also offset the loan balance (although American Cardiocare does not explicitly make this argument), American Cardiocare also does not provide any evidence of the value of the equipment or patient files.

American Cardiocare argues that even if there is no evidence of actual rent paid on the Property, the New Aid Defendants were required to “be responsible for a reasonable rental value for the Property.” (Opp’n, p. 15: 3-4.) In other words, American Cardiocare contends that the New Aid Defendants were “responsible to set off [] the reasonable rental value from the balance of the deed of trust.” (Opp’n, p. 12: 13-14.) In support of this contention, American Cardiocare cites to three cases: Bank of America Nat'l Trust & Sav. Assn. v. Bank of Amador County (Bank of America) (1933) 135 Cal.App. 714, Davis v. Stewart (1944) 67 Cal.App.2d 415, and Murdock v. Clarke (1891) 90 Cal. 427, 438. (Opp’n, p. 15:3-4.)

In Bank of America, the Court of Appeal defined a “mortgagee in possession” as “one who has lawfully acquired actual possession of the premises mortgaged to him, standing upon his rights as mortgagee, and not claiming under another title, for the purpose of enforcing his security upon such property, or making its income pay his debts; but the fact that the mortgagee receives the rents and profits does not constitute him a mortgagee in possession unless he takes the rent in such a way as to take out of the hands of the mortgagor the management and control of the estate.” (Bank of America, supra, at p. 719.) However, there is no holding in Bank of America regarding a mortgagee in possession’s obligations or duties regarding those rents. In Davis v. Stewart, the Court of Appeal held that a mortgagee in possession who failed to collect rents due from certain tenants had breached the standard of care of “a reasonably prudent business man” and was therefore liable for “the uncollected rentals.” (Davis v. Stewart, supra, at p. 418.) In Murdock v. Clarke, the Supreme Court of California held that “[w]here no negligence or improper conduct is alleged, a mortgagee in possession is chargeable with what he has actually received, and no more.” (Murdock v. Clarke, supra, at p. 438.) The appropriate standard of care is “reasonable care.” (Murdock v. Clarke, supra, at page 439-440.) Thus, there is authority for the proposition that a mortgagee in possession is held to a “reasonable care” standard in its collection of rents during its possession of the underlying property, but American Cardiocare offers no evidence that the New Aid Defendants acted unreasonably with regard to the collection of rents during his possession of the Property.

As noted above, the New Aid Defendants submit evidence that there was one tenant at the Property between 2006 and 2008, and then no more tenants after that. Earl Collins asserts that this tenant, Dr. Kintaudi, was not charged rent because “she was struggling to build her practice.” (E. Collins Decl., ¶ 64.) Mr. Collins also asserts that he provided more than $120,000 to Dr. Kintaudi to fix up the Property, but that Dr. Kintaudi squandered that money. (E. Collins Decl., ¶ 64.) Mr. Collins testifies that there was no interest in leasing the Property because it was located in a bad location and had limited parking. (E. Collins Decl., ¶ 65.) Those that were interested did not have the means to pay rent and demanded that the building be fixed up first. (E. Collins Decl., ¶ 65.) American Cardiocare disputes these facts by submitting evidence that prior to possession by the New Aid Defendants, the Property was a fully operating community clinic. (Aguolu Decl., ¶ 16.) Mr. Aguolu attests to the fact that the clinic had passed health and safety inspections, and that only the roof required repairs. (Aguolu Decl., ¶ 16.) But what American Cardiocare fails to offer is evidence of a reasonable rental value for the property during possession by the New Aid Defendants that reasonably could have been collected by a “reasonably prudent business man” that would have, at the very least, equaled approximately $80,000 “from 2006 through 2012.” (4AC, ¶¶ 33, 35.) Without this evidence, there is no triable issue as to whether the balance on the loan was actually zero.

Because American Cardiocare’s quiet title action is dependent on a showing of both an entitlement to setoffs and that the balance on the promissory note was zero, and because the Court finds that American Cardiocare has failed to raise a triable issue as to the second element, the Court finds it unnecessary to consider the parties’ arguments regarding the first element. The Court also finds it unnecessary to consider the other arguments raised by the New Aid Defendants in their motion.

Conclusion

For the foregoing reasons, the New Aid Defendants’ motion for summary judgment is granted. The New Aid Defendants are ordered to file and serve a proposed form of judgment within 10 days of the date of this order.

The New Aid Defendants are ordered to give notice of this ruling.

DATED: June 26, 2020 ________________________________

Hon. Teresa A. Beaudet

Judge, Los Angeles Superior Court


[1] The Opposition is filed by “Plaintiffs,” but American Cardiocare is the only proper opposing party since the Motion for Summary Judgment is made as to the 4AC which is brought only by American Cardiocare. As noted above, Bell Hospital’s causes of action were dismissed with prejudice on September 2, 2015, and the dismissal was upheld by the Court of Appeal.

[2] The Court notes that the New Aid Defendants’ evidentiary objections are not all serially numbered. For ease of reference, the Court will number the objections in the order that they appear.

[3] The document is erroneously described in the 4AC as “Corporation Deed Conveyance to Secure A Debt.”

[4] At various points in the 4AC, American Cardiocare refers to the Cal Vista note and deed of trust as the New Aid or New Aid Medical Supply note and deed of trust. (See e.g., 4AC, ¶¶ 18, 27.) To avoid confusion, the Court will refer to the Cal Vista DOT and note as the Cal Vista DOT and note, notwithstanding that the beneficial interest in the note was eventually transferred to New Aid.

Case Number: BC502267    Hearing Date: March 05, 2020    Dept: 50

 

 

Superior Court of California

County of Los Angeles

Department 50

bell hospital corporation, et al.

Plaintiffs,

vs.

new aid medical supply, inc., et al.

Defendants.

Case No.:

BC 502267

Hearing Date:

March 5, 2020

Hearing Time:

8:30 a.m.

ORDER RE:

MOTION FOR SUMMARY JUDGMENT OF DEFENDANTS AS AGAINST PLAINTIFF AMERICAN CARDIOCARE

Background

Plaintiffs Bell Hospital Corporation (“Bell Hospital”) and American Cardiocare Medical Center, Inc. (“American Cardiocare”) (jointly, “Plaintiffs”) filed this wrongful foreclosure action on March 5, 2013. Plaintiffs filed a First Amended Complaint (“FAC”) on June 9, 2015 against Defendants New Aid Medical Supply, Inc. (“New Aid”); Earl Collins, as assignee of New Aid Medical Supply; Earl Collins; Rita Collins; T.D. Service Company (“T.D. Service”); and Fran DePalma (collectively, “Defendants”). On September 2, 2015, the Court issued an order striking the FAC and dismissing the action with prejudice as to all Defendants. Plaintiffs filed a motion for reconsideration, which was denied. Plaintiffs appealed. On May 16, 2017, the Court of Appeal issued a ruling upholding the ruling on the demurrer to eleven of the twelve causes of action and reversing as to the quiet title cause of action as brought by American Cardiocare. A remittitur was issued on July 21, 2017.

The Second Amended Complaint (“SAC”) was filed by American Cardiocare on September 18, 2017, asserting a quiet title cause of action. This Court sustained the demurrer by Defendants New Aid, Earl Collins (in both his capacity as assignee of New Aid and in his individual capacity), and Rita Collins (collectively, the “New Aid Defendants”) with leave to amend.

The Third Amended Complaint (“TAC”) was filed on April 18, 2018. The New Aid Defendants again demurred, and the Court sustained the demurrer without leave to amend. American Cardiocare moved for reconsideration of the order sustaining the demurrer without leave to amend, submitting a proposed Fourth Amended Complaint (“4AC”) that stated new or different facts to support its claims. The Court granted the motion for reconsideration, and the 4AC was filed on December 18, 2018. The 4AC asserts one cause of action for quiet title against the New Aid Defendants.

The New Aid Defendants now move for summary judgment. Plaintiffs oppose.

Request for Judicial Notice

The New Aid Defendants’ Request for Judicial Notice is granted (Exhibits 1-49).

Plaintiffs’ Request for Judicial Notice is granted as to Exhibits 2, 3, 4, 5, 9, 10, 11, 12, 13, 14, 15, 18, 19, and 24. Plaintiffs’ Request for Judicial Notice is denied as to Exhibit 1. The New Aid Defendants’ objection to Plaintiffs’ Request for Judicial Notice as to Exhibits 1 is sustained. The New Aid Defendants’ objections to Plaintiffs’ Request for Judicial Notice as to Exhibit 4, Exhibit 10, and Exhibit 24 are overruled.

The New Aid Defendants’ Supplemental Request for Judicial Notice is granted (Exhibits 1-3.)

As to any documents in court and public records, the Court does not take judicial notice of the truth of the facts stated therein, but only of the fact of the filing. (See Sosinsky v. Grant (1992) 6 Cal.App.4th 1548, 1565 [“[T]he taking of judicial notice that the judge made a particular factual finding is a far cry from the taking of judicial notice that the ‘facts’ found by the judge must necessarily be the true facts….”] (emphasis in original).)

Evidentiary Objections

The New Aid Defendants’ objections to the deposition transcripts of Earl Collins and Rita Collins are overruled.

The Court rules on the New Aid Defendants’ objections to the Declaration of Jeremiah Aguolu as follows[1]:

Objection 1: overruled

Objection 2: sustained

Objection 3: sustained

Objection 4: overruled as to “I was not an officer for that entity” and sustained as to the remainder

Objection 5: sustained

Objection 6: sustained

Objection 7: sustained

Objection 8: sustained

Objection 9: overruled but admitted only for context as to the next statement

Objection 10: same as for no. 9

Objection 11: overruled

Objection 12: overruled

Objection 13: overruled

Objection 14: sustained

Objection 15: sustained

Objection 16: sustained

Objection 17: overruled

Objection 18: overruled

Objection 19: overruled

Objection 20: sustained

Objection 21: sustained

Objection 22: sustained

Objection 23: sustained

Objection 24: overruled

Objection 25: sustained

Objection 26: sustained

Objection 27: overruled

Objection 28: sustained as to “falsely” and overruled as to the remainder

Objection 29: sustained

Objection 30: sustained

Objection 31: sustained

Objection 32: sustained

Objection 33: sustained

Objection 34: sustained

The Court notes that Plaintiffs filed untimely evidentiary objections on March 3, 2020. When Plaintiffs’ opposition was filed on February 20, 2020, no evidentiary objections pursuant to CRC 3.1352 and 3.1354 were included in the filing. Therefore, the Court declines to consider Plaintiffs’ objections.

DUE TO THE NUMBER OF ORIGINAL OBJECTIONS, THE COURT WILL REQUIRE ADDITIONAL TIME TO FINALIZE ITS TENTATIVE ORDER REGARDING THE ISSUES RAISED IN THE MOTION FOR SUMMARY JUDGMENT. THE CLERK WILL CONTACT THE PARTIES TO SET A NEW HEARING DATE. NO APPEARANCE IS NECESSARY. DEFENDANTS ARE ORDERED TO GIVE NOTICE.

DATED: March 4, 2020 ________________________________

Hon. Teresa A. Beaudet

Judge, Los Angeles Superior Court


[1] The Court notes that the New Aid Defendants’ evidentiary objections are not all serially numbered. For ease of reference, the Court will number the objections in the order that they appear.