This case was last updated from Los Angeles County Superior Courts on 06/20/2019 at 02:57:16 (UTC).

LORENA GARCIA ET AL VS JAMES WOOD PROPERTIES LLC ET AL

Case Summary

On 09/25/2017 LORENA GARCIA filed a Contract - Other Contract lawsuit against JAMES WOOD PROPERTIES LLC. This case was filed in Los Angeles County Superior Courts, Stanley Mosk Courthouse located in Los Angeles, California. The Judges overseeing this case are ERNEST HIROSHIGE, DAVID SOTELO and DANIEL S. MURPHY. The case status is Pending - Other Pending.

Case Details Parties Documents Dockets

 

Case Details

  • Case Number:

    ****7175

  • Filing Date:

    09/25/2017

  • Case Status:

    Pending - Other Pending

  • Case Type:

    Contract - Other Contract

  • Court:

    Los Angeles County Superior Courts

  • Courthouse:

    Stanley Mosk Courthouse

  • County, State:

    Los Angeles, California

Judge Details

Presiding Judges

ERNEST HIROSHIGE

DAVID SOTELO

DANIEL S. MURPHY

 

Party Details

Plaintiffs, Petitioners and Guardian Ad Litems

GONZALEZ JORGE RIGOBERTO

GARCIA LORENA

CRUZ ALBERTO ESTRELLA

FLORES-GARCIA MARIA FELIX

GONZALEZ JOSE ALFREDO

ORTIZ ITZEL MARGARITA PEREZ

ORTIZ CARLOS YANETH

ORTIZ-CARLOS ANTONIA

ORTIZ MARIA ANANIN PEREZ

GREGORIO-MARCEL ABAD

VALERIO-MARTINEZ PAULINA

CARLOS VIRGINIA ORTIZ

Defendants, Respondents and Cross Plaintiffs

JAMES WOOD PROPERTIES LLC

DOES 1 TO 100

1723 JAMES WOOD BLVD. LLC

DOES 1-100 INCLUSIVE

Defendant, Respondent and Cross Defendant

1723 JAMES WOOD BLVD. LLC

Minors

GONZALEZ CRISTIAN

NINO-ORTIZ DAVID JOSHUA

ESTRELLA DIEGO ALBERTO

GREGORIO ORTIZ YOSELIN MARGARITA

2 More Parties Available

Attorney/Law Firm Details

Plaintiff, Petitioner and Minor Attorneys

CASTELBLANCO ERIC E. ESQ.

MERE NATALIE D

ANAND SHILPA CHRISTINE ESQ.

RODAS CATALINA

Defendant and Respondent Attorneys

STARK FRIEDMAN & CHAPMAN LLP

CP LAW GROUP

POULADIAN VANESSA

STARK PATRICK JOHN

WILLIAMS WARREN MCKAY

 

Court Documents

Unknown

9/24/2018: Unknown

Minute Order

11/20/2018: Minute Order

Motion for Leave to Amend

11/21/2018: Motion for Leave to Amend

Minute Order

12/3/2018: Minute Order

Opposition

1/3/2019: Opposition

Opposition

1/3/2019: Opposition

Reply

1/7/2019: Reply

Minute Order

1/15/2019: Minute Order

Notice of Ruling

2/14/2019: Notice of Ruling

Answer

4/19/2019: Answer

Minute Order

5/7/2019: Minute Order

Notice of Ruling

5/8/2019: Notice of Ruling

Declaration

5/20/2019: Declaration

DEFENDANT, 1723 JAMES WOOD BLVD., LLC'S NOTICE OF POSTING JURY FEES

1/30/2018: DEFENDANT, 1723 JAMES WOOD BLVD., LLC'S NOTICE OF POSTING JURY FEES

CIVIL DEPOSIT

1/30/2018: CIVIL DEPOSIT

NOTICE OF CASE MANAGEMENT CONFERENCE

1/19/2018: NOTICE OF CASE MANAGEMENT CONFERENCE

Minute Order

12/6/2017: Minute Order

NOTICE OF CASE MANAGEMENT CONFERENCE

9/28/2017: NOTICE OF CASE MANAGEMENT CONFERENCE

54 More Documents Available

 

Docket Entries

  • 05/20/2019
  • Declaration ( 0.F DEMURRING PARTY IN SUPPORT OF AUTOMATIC EXTENSION); Filed by MR INVESTMENT (Defendant)

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  • 05/20/2019
  • Declaration (DECLARATION 0.F DEMURRING PARTY IN SUPPORT OF AUTOMATIC EXTENSION); Filed by 1723 James Wood Blvd., LLC (Defendant)

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  • 05/20/2019
  • Declaration (0.F DEMURRING PARTY IN SUPPORT OF AUTOMATIC EXTENSION); Filed by Rami Grinwald (Defendant)

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  • 05/08/2019
  • Notice of Ruling; Filed by Virginia Ortiz Carlos (Plaintiff); Alberto Estrella Cruz (Plaintiff); Abad Perez De La Cruz (Plaintiff) et al.

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  • 05/07/2019
  • at 08:30 AM in Department 40; Order to Show Cause Re: Failure to File Proof of Service (as to new defendants) - Held

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  • 05/07/2019
  • Answer; Filed by 1723 James Wood Blvd., LLC (Defendant); Rami Grinwald (Defendant); MR INVESTMENT (Defendant)

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  • 05/07/2019
  • Minute Order ( (Order to Show Cause Re: Failure to File Proof of Service as t...)); Filed by Clerk

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  • 04/22/2019
  • Declaration re: Due Diligence; Filed by Virginia Ortiz Carlos (Plaintiff); Alberto Estrella Cruz (Plaintiff); Abad Perez De La Cruz (Plaintiff) et al.

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  • 04/22/2019
  • Proof of Service by Substituted Service; Filed by Virginia Ortiz Carlos (Plaintiff); Alberto Estrella Cruz (Plaintiff); Abad Perez De La Cruz (Plaintiff) et al.

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  • 04/19/2019
  • Answer (TO FIRST AMENDED COMPLAINT); Filed by JAMES WOOD PROPERTIES, LLC (Defendant); 4R Management, Inc. (Defendant); Rodney Goldberg (Defendant)

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93 More Docket Entries
  • 09/25/2017
  • APPLICATION AND ORDER FOR APPOINTMENT OF GUARDIAN AD LITEM

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  • 09/25/2017
  • APPLICATION AND ORDER FOR APPOINTMENT OF GUARDIAN AD LITEM

    Read MoreRead Less
  • 09/25/2017
  • EX PARTE APPLICATION AND ORDER FOR APPOINTMENT OF GUARDIAN AD LITEM-CIVIL

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  • 09/25/2017
  • HABITABILITY COMPLAINT FOR DAMAGES; DEMAND FOR JURY TRIAL

    Read MoreRead Less
  • 09/25/2017
  • Application ; Filed by Plaintiff/Petitioner

    Read MoreRead Less
  • 09/25/2017
  • Application ; Filed by Plaintiff/Petitioner

    Read MoreRead Less
  • 09/25/2017
  • Application ; Filed by Plaintiff/Petitioner

    Read MoreRead Less
  • 09/25/2017
  • Application ; Filed by Plaintiff/Petitioner

    Read MoreRead Less
  • 09/25/2017
  • Application ; Filed by Plaintiff/Petitioner

    Read MoreRead Less
  • 09/25/2017
  • Application ; Filed by Plaintiff/Petitioner

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Tentative Rulings

Case Number: BC677175    Hearing Date: July 09, 2020    Dept: 76

Due to the social distancing requirements and other measures implemented by the Court in response to the COVID-19 pandemic, the Court will hold the hearing on this matter telephonically at the time noted on the Court's calendar.  No physical appearances will be entertained at that time.  Any party wishing to appear physically to argue the motion may contact Department 76 to request that a hearing be scheduled.  The Court will then continue the hearing to the earliest available hearing time that allows for appropriate social distancing.

CROSS-DEFENDANTS' MOTION FOR SUMMARY JUDGMENT, OR IN THE ALTERNATIVE, SUMMARY ADJUDICATION

STATEMENT OF FACTS

Plaintiff tenants allege that Defendants failed to correct, remediate and repair the uninhabitable conditions at Defendants’ apartment building.

Cross-Complainants James Wood Properties, LLC, 4R Management, Inc. and Rodney Goldberg filed a Cross-Complaint seeking indemnity from Cross-Defendants 1723 James Wood Blvd., LLC, MR Investments, and Rami Grinwald. Cross-Complainants allege that Cross-Defendants misrepresented the condition of the property to Cross-Complainant James Wood Properties, LLC in connection with the sale of the property.

Cross-Defendants 1723 James Wood Blvd., LLC, Rami Grinwald and MR Investments move for summary judgment or, in the alternative, summary adjudication as to the Cross-Complaint filed by Cross-Complaint filed by Defendants James Wood Properties, LLC, 4R Management, Inc. and Rodney Goldberg.

TENTATIVE RULING

Cross-Defendants 1723 James Wood Blvd., LLC, Rami Grinwald and MR Investments’ motion for summary judgment is DENIED based on Issue No. 1.

Cross-Defendants’ alternative motion for summary adjudication is GRANTED as to Issue No. 3 re: the second cause of action and DENIED as to Issue No. 2 re: MR Investments, Inc. as a named Cross-Defendant, Issue No. 3 re: the first cause of action, Issue No. 4 re: the third cause of action, Issue No. 5 re: the fourth cause of action, Issues No. 6, 7 and 8 re: the fifth, sixth and seventh causes of action, Issue No. 9 re: punitive damages, and Issues Nos. 10 and 11 re: attorney’s fees.

ANALYSIS

Motion For Summary Judgment

For the reasons discussed below, Cross-Defendants have not demonstrated that they are entitled to judgment as to each cause of action asserted in the Cross-Complaint. Accordingly, the motion for summary judgment based on Issue No. 1 is DENIED.

The Court will proceed to address the alternative motion for summary adjudication.

Motion For Summary Adjudication

According to the motion, Defendant/Cross-Complainant James Wood Properties, LLC is the current owner of the subject apartment building, while Cross-Defendant 1723 James Wood Blvd, LLC is the previous owner. Defendant/Cross-Defendant Rami Grinwald is the managing member of 1723 James Wood Blvd., LLC. (UF No. 48; Decl. of Rami Grinwald, ¶ 1).

On August 31, 2015, James Wood Properties, LLC, assignee of Richard Stromberg, entered into a Purchase Agreement to Purchase the subject property from 1723 James Wood Blvd, LLC. (Cross-Complaint, ¶ 21.)

Although Stromberg had been involved in real property sales and acquisitions for over thirty years, he does not have a contractor’s license, has no education or background with respect to plumbing, nor any training regarding the eradication of rodent infestations or pest control requirements at multifamily properties. (UF Nos. 7, 30 – 33; Stromberg Depo., Page 10:13-11:2 (Pouladian Decl., Exh. E).) Vanguard Investments, Inc. was the agent for both the seller and buyer of the subject property. (UF No. 23; Grinwald Decl., ¶ 4 and Exh. A thereto).

4R Management, Inc. has managed the property during James Wood Blvd., LLC’s ownership. (UF No. 6; 1AC, ¶ 12.) Both Richard Stromberg and Defendant/Cross-Complainant Rodney Goldberg are members of James Wood Properties, LLC. (UF Nos. 8 and 9; Stromberg Depo. at 12:2-6; Cross-Complaint, ¶ 1.) Goldberg is also a member of 4R Management, Inc. (UF No. 9; Cross-Complaint. ¶ 1)

1. Issue No. 1: “Cross-Defendants Are Entitled To Summary Judgment as Cross-Complainants’ Claims Are Explicitly Barred By the Purchase Agreement.”

Cross-Defendants frame this issue as defeating each of the seven causes of action in the Cross-Complaint, thus meriting summary judgment. As such, this issue must defeat all causes of action, otherwise it must be denied.

Cross-Defendants argue that the subject property was purchased as-is and the physical condition of the property was not guaranteed by the seller. (UF Nos. 12, 13; Grinwald Decl., Exh. A, Purchase Agreement, Addendum No. 2, ¶ 14.)

First, an “as-is” clause does not exculpate a party from its own fraud, nor does it conclusively establish unjustifiable reliance upon misrepresentations. (McClain v. Octagon Plaza, LLC (2008) 159 Cal.App.4th 784, 794- 98.) At most, Cross-Complainants are barred by an “as is” provision from complaining about conditions that were visible and observable to the buyer, but not as to passively concealed conditions. “An ‘as is’ provision, ‘generally speaking, . . . means that the buyer takes the property in the condition visible to or observable by him. [Citations].’ (Citation omitted.) ‘It . . . does not in itself protect . . . or absolve [a seller] from liability for . . . passive concealment.’ (Citation omitted.)” (Katz v. Department of Real Estate (1979) 96 Cal.App.3d 895, 901.)

Here, the Cross-Complaint alleges that Cross-Defendants intentionally misrepresented the condition of the property to Cross-Complainants. (Cross-Complaint, ¶ 8.) The “as-is” provision would not bar any actively concealed conditions.

As such, the “as-is” provisions and warnings that the buyer was advised to conduct its own property inspection an investigation (UF Nos. 14 - 19; Grinwald Decl., Exh. A, Purchase Agreement, ¶ 14(c); ¶ 14(d); Buyer’s Inspection Advisory, Section A, “IMPORTANT OF PROPERTY INVESTIGATION,” Section C, ¶ E) would not protect Cross-Defendants from liability for active concealment (i.e. intentional fraud) of conditions which visual inspections would not reveal to the buyer. (Whether or not Cross-Complainants have evidence of such fraud is another matter, addressed below.)

Cross-Defendants also cite Addendum No. 2, which was incorporated in and made a part of the Purchase Agreement, and which contains the following release language:

“Upon closing, Buyer shall be deemed to have waived any and all objections to the property condition whether or not known to the buyer.” (UMF 20; Addendum No. 2, ¶ 2 of Purchase Agreement (Grinwald Decl., Exh. A.).

Upon closing, Buyer hereby waives, releases, acquits, and forever discharges seller, and seller’s agents, directors, officers, and employees to the maximum extent permitted by law from any and all claims, actions, causes of action, demands, rights, liabilities, damages, losses, costs, expenses, or compensation whatsoever, direct or indirect, known or unknown, foreseen or unforeseen, that it now has or which may arise in the future on account of or in any way growing out of or connected with the property. Buyer expressly waives any of its rights granted under California civil code section 1542[1], which the creditor does not know or suspect to exist in his favor at the time of the executing the release which if known by him must have materially affected his settlement with debtor.

(UF No. 51; Addendum No. 2, ¶ 2 of Purchase Agreement, Grinwald Decl., Exh. A)(bold emphasis added.)

However, under Civil Code § 1668, even this general release language cannot exculpate Cross-Defendants from fraudulent concealment.

Cross-Defendants have not demonstrated that they are entitled to summary judgment based on this Issue. The burden does not shift to Cross-Complainants to raise a triable issue of material fact.

The motion for summary judgment based on Issue No. 1 is DENIED.

2. Issue No . 2: “MR Investments, Inc. is Improperly Named in the Cross-Complaint.”

According to Cross-Defendants, Defendant/Cross-Defendant MR Investments is a non-existent entity, and is only a “dba” which acted as the property management property of 1723 James M. Wood Blvd. during 1723 James Wood Blvd., LLC’s ownership. (UF Nos. 49, 50; Grinwald Decl., ¶¶ 2, 3).

However, the Grinwald Declaration is made on information and belief that MR Investments, Inc. is a non-existent entity. (Grinwald Decl., ¶ 2.) “Statements in a declaration on information and belief are of no evidentiary value.” (Goodman v. Citizens Life & Casualty Ins. Co. (1967) 253 Cal.App.2d 807, 820.) Further, Grinwald does not indicate the real entity as to which MR Investment was a dba. (Grinwald Decl., ¶ 3.) In this regard, it would still be proper to retain the Defendant identified by the fictitious business name MR Investments until the true identity of MR Investments is established by Cross-Defendants.

Indeed, it is proper to sue and serve an entity under its fictitious business name. (Pinkerton's, Inc. v. Superior Court (1996) 49 Cal.App.4th 1342, 1348.)  The Court also notes that if Cross-Complaint were to obtain a judgment against the true entity, it may be appropriate to include the fictitious business name on the judgment to facilitate judgment collection procedures.

Cross-Defendants have not demonstrated that they are entitled to summary adjudication of this Issue. The burden does not shift to Cross-Complainants to raise a triable issue of material fact.

The motion for summary adjudication as to Issue No. 2 re: MR Investments, Inc. as a named Cross-Defendant is DENIED.

3. Issue No. 3: “Cross-Complainants’ Equitable Indemnity and Contribution Claims are Barred.”

The first cause of action in the Cross-Complaint is for implied equitable indemnity.

The second cause of action is for contribution.

Cross-Defendants argues that Cross-Complainants cannot state a claim for implied or comparative indemnity against Cross-Defendants because 1723 James Wood Blvd., LLC and its agents, officers or employees are immune from liability under the express terms of the Purchase Agreement, Addendum 2.

Buyer hereby waives, releases, acquits, and forever discharges seller, and seller’s agent, directors, officers, and employees to the maximum extent permitted by law from any and all claims, actions, causes of action, demands, rights, liabilities, damages, losses, costs, expenses, or compensation whatsoever, direct or indirect, known or unknown, foreseen or unforeseen, that it now has or which may arise in the future on account of or in any way growing out of or connected with the property. Buyer expressly waives any of its rights granted under California [C]ivil [C]ode section 1542, which the creditor does not know or suspect to exist in his favor at the time of the executing the release which if known by him must have materially affected his settlement with the debtor.

(UF No. 51; Addendum No. 2, ¶ 2 of Purchase Agreement, Grinwald Decl, Exh. A)(bold emphasis added.)

For the reasons discussed above re: Issue No. 1, Cross-Defendants are not immunized from liability for fraud.

Equitable indemnity and contribution may be applicable if Cross-Complainants and Cross-Defendants are found to be joint tortfeasors vis-à-vis the Plaintiff tenants. Without a basis for finding Cross-Complainants and Cross-Defendants liable as joint tortfeasors relative to the Plaintiff tenants, there is no basis by which Cross-Complainants may recover equitable indemnity or contribution against Cross-Defendants. (Stop Loss Ins. Brokers, Inc. v. Brown & Toland Medical Group (2006) 143 Cal.App.4th 1036, 1040-41; Greystone Homes, Inc. v. Midtec, Inc. Herrero v. Atkinson (1964) 227 Cal.App.2d 69, 73-74.)

It is well settled in California that equitable indemnity is only available among tortfeasors who are jointly and severally liable for the plaintiff's injury. (Leko v. Cornerstone Bldg. Inspection Service (2001) 86 Cal.App.4th 1109, 1115 [103 Cal. Rptr. 2d 858]; Munoz v. Davis (1983) 141 Cal. App. 3d 420, 425 [190 Cal. Rptr. 400].) With limited exception, there must be some basis for tort liability against the proposed indemnitor. (Munoz v. Davis, supra, 141 Cal. App. 3d at p. 425.) “Generally, it is based on a duty owed to the underlying plaintiff [citations], although vicarious liability [citation] and strict liability [citation] also may sustain application of equitable indemnity. In addition, implied contractual indemnity between the indemnitor and the indemnitee can provide a basis for equitable indemnity. [Citation.]”  [*1041]  (BFGC Architects Planners, Inc. v. Forcum/Mackey Construction, Inc. (2004) 119 Cal.App.4th 848, 852 [14 Cal. Rptr. 3d 721].)

(Stop Loss Ins. Brokers, Inc. v. Brown & Toland Medical Group (2006) 143 Cal.App.4th 1036, 1040-41 [italics in original].)

Equitable indemnity is one manner by which joint tortfeasors may apportion such joint and several liability. “The right to indemnity flows from payment of a joint legal obligation on another's behalf. [Citations.]” (Expressions at Rancho Niguel Assn., supra, 86 Cal.App.4th at p. 1139.) “[J]oint and several liability in the context of equitable indemnity is fairly expansive. … [I]t is not limited to ‘the old common term “joint tortfeasor” … .’ It can apply to acts that are concurrent or successive, joint or several, as long as they create a detriment caused by several actors. [Citation.] [¶] One factor is necessary, however. With limited exception, there must be some basis for tort liability against the proposed indemnitor. [Citation.]” (BFGC Architects Planners, Inc. v. Forcum/Mackey Construction, Inc. (2004) 119 Cal.App.4th 848, 852 [14 Cal. Rptr. 3d 721].)

(Greystone Homes, Inc. v. Midtec, Inc. (2008) 168 Cal.App.4th 1194, 1208 [bold emphasis and underlining added.)

Indemnity seeks to transfer the entire loss imposed upon one tortfeasor to another who in justice and equity should bear it. Contribution distributes the loss equally among all tortfeasors, each bearing his pro rata share. (Code Civ. Proc., §§ 875, 876; Cahill Bros., Inc. v. Clementina Co., 208 Cal.App.2d 367, 376 [25 Cal.Rptr. 301]; Prosser, Torts, p. 249.) Where one tortfeasor is entitled to  [*74]  indemnity from the other, the right of contribution does not exist. (Code Civ. Proc., § 875, subd. (f).)

(Herrero v. Atkinson (1964) 227 Cal.App.2d 69, 73-74.)

The Cross-Complaint alleges that Cross-Complainants were, at most, passively negligent while Cross-Defendants were actively negligent by allowing the condition of the Premises to degrade due to a lack of maintenance and repairs. The Cross-Complaint further alleges that Cross-Defendants concealed the true extent of the degradation of the Premises at the time they marketed and sold the property to Cross-Complainants. Notably, the Complaint alleges that through the four years prior to the filing of the Complaint on September 25, 2017, (i.e., September 25, 2013), Plaintiff tenants had experienced uninhabitable conditions. (Complaint, ¶¶ 3 – 8.) As noted above, on August 31, 2015, James Wood Properties, LLC, assignee of Richard Stromberg, entered into a Purchase Agreement to Purchase the subject property from 1723 James Wood Blvd, LLC. (Cross-Complaint, ¶ 21.) As such, for at least two years prior to Cross-Complainants’ purchase of the subject property, Cross-Defendants owned the subject property, during which time a nuisance could have existed which continued into the period of Cross-Complainants’ ownership.

The Complaint alleges a third cause of action for private nuisance against Defendants, which include Cross-Complainants James Wood Properties, LLC. Both Cross-Complainants and Cross-Defendants may be held liable for such nuisance as joint tortfeasors. (Civil Code, § 3483; Wilshire Westwood Associates v. Atlantic Richfield Co. successive owner property property, created by the former owner, is liable

As noted above, the purported release of claims against Cross-Defendants in Addendum No. 2, ¶ 2 of the Purchase Agreement will not be enforced if Cross-Defendants are found to have engaged in fraudulent concealment of conditions which constitute a nuisance. Moreover, although the release of claims purports to waive the protections of Civil Code § 1542, whether Cross-Complainants intended to discharge equitable indemnity and contribution claims against Cross-Defendants is ultimately a question of fact. (Leaf v. City of San Mateo (1980) 104 Cal.App.3d 398, 411.)

Furthermore, mere recital, as in the release signed by plaintiffs, that the protection 1542 waived, or that the release covers unknown claims or unknown parties is not controlling. Whether the releaser intended to discharge such claims or parties is ultimately a question of fact. (Grebe v.  (1968) 265 Cal.App.2d 901, 903 [71 Cal.Rptr. 662]; Casey v.  (1963) 59 Cal.2d 97, 110 [28 Cal.Rptr. 307, 378 P.2d 579].)

(Leaf v. City of San Mateo (1980) 104 Cal.App.3d 398, 411.)

Cross-Defendants also argue that the claims for indemnity and contribution are premature because Cross-Complainants have not suffered any actual loss through payment of a judgment or settlement. This argument is as not persuasive as to indemnity, but persuasive as to contribution.

Claims for equitable indemnity may be sought by filing a cross-complaint in the original action. (Greystone Homes, Inc. v. Midtec, Inc. (2008) 168 Cal.App.4th 1194, 1209.) However, a claim for contribution is not ripe for adjudication until after a judgment has been entered and paid by a joint tortfeasor. (Code Civ. Proc., § 875; Coca-Cola Bottling Co. v. Lucky Stores, Inc.

Accordingly, Cross-Defendants have demonstrated that they are entitled to summary adjudication as to Issue No. 3 re: the second cause of action for contribution, but not as to the first cause of action for implied equitable indemnity.

The motion for summary adjudication re: Issue No. 3 is DENIED as to the first cause of action and GRANTED as to the second cause of action.

4. Issue No. 4: “Cross-Complainants’ Third Cause of Action for Declaratory Relief Is Duplicative Of Cross-Complainants’ Other Claims.”

The third cause of action for declaratory relief seeks a declaration regarding Cross-Complainants’ entitlement to indemnification from Cross-Defendant in an amount of any judgment that may be entered against Cross-Complainants as Defendants in the First Amended Complaint filed by Plaintiffs.

Cross-Defendants argue that this cause of action is duplicative of the indemnity and contribution causes of action. This argument is not persuasive.

The remedies provided by this chapter are cumulative, and shall not be construed as restricting any remedy, provisional or otherwise, provided by law for the benefit of any party to such action, and no judgment under this chapter shall preclude any party from obtaining additional relief based upon the same facts.

(Code Civ. Proc, § 1062.)

Thus, Cross-Complainants may be entitled to declaratory relief in addition to equitable indemnity[2].

Cross-Defendants have not demonstrated that they are entitled to summary adjudication as to Issue No. 4. The burden does not shift to Cross-Complainants to raise a triable issue of material fact.

The motion for summary adjudication as to Issue No. 4 re: the third cause of action is DENIED.

5. Issue No. 5: “James Wood Properties, LLC’s Cause of Action for Breach of Contract Fails Because There Was No Breach.”

The fourth cause of action is for breach of contract as follows:

Pursuant to Addendum 1 of the Contract, Cross-Defendant promised to “provide full disclosure through the closing of escrow any building code violations and systemic code enforcement inspections.” (Cross-Complaint, ¶ 22.) Cross-Defendant 1723 James Wood Blvd. LLC allegedly did not provide the full disclosure required under the agreement. (Id.)

Accordingly, to demonstrate a breach of this provision, Cross-Complainant would have to show that there were building code violations and code enforcement inspections which Cross-Defendant did not fully disclose.

Also, pursuant to ¶ 14 of the Contract, Seller was to “DISCLOSE KNOWN MATERIAL FACTS AND DEFECTS affecting the Property” and “make other disclosures required by law.” (Cross-Complaint, ¶ 23.) Cross-Defendant 1723 James Wood Blvd. LLC allegedly did not provide the full disclosure required under the agreement. (Id.) ¶ 27 of the Cross-Complaint alleges that “[t]he defects were not capable of being discovered by a pre-purchase visual inspection because they were all concealed behind walls, beneath flooring, etc.”

Accordingly, to demonstrate a breach of this provision, Cross-Complainant would have to show that there were material facts and defects known by Cross-Defendant 1723 James Wood Blvd. LLC, that Cross-Complainant could not discover by a visual inspection.

As to disclosure required by law, Cross-Defendant would have an obligation to disclose known facts materially affecting the value or desirability of the property which Cross-Defendant knew were not known to, or within the reach of a diligently attentive and observant buyer. (Calemine v. Samuelson (2009) 171 Cal.App.4th 153, 161.)

In order to prevail on this issue, Cross-Defendants must cite evidence demonstrating that: (1) there were no known building code violations and code enforcement inspections which Cross-Defendant did not fully disclose; (2) there were no material facts and defects known by Cross-Defendant 1723 James Wood Blvd. LLC, that Cross-Complainant could not discover by a visual inspection; and (3) there were no known facts materially affecting the value or desirability of the property which Cross-Defendant knew were not known to, or within the reach of a diligently attentive and observant buyer.

Here, Cross-Defendant’s evidence is that Cross-Defendant 1723 James Wood Blvd., LLC, as Seller of the subject property, produced the following disclosures to Vanguard Investments, Inc. for the Buyer’s review: Lead-Based Paint Hazard Disclosures, Natural and Environmental Hazards Disclosure, and Megan’s Law Database Disclosures. (UF No. 24; Decl. of Rami Grinwald, ¶ 6, Exh. B) Also, a Seller Property Questionnaire, telling the Buyer about known material or significant items affecting the value or desirability of the Property, was produced to the Buyer. (UF Nos. 25, 26; Grinwald Decl., ¶ 7; Exh. C; Stromberg Depo., 27:12-17.) Moreover, 1723 James Wood Blvd. produced the following materials to Vanguard Investments, Inc. for the Buyer’s review: rental agreements, list of deposits, rent rolls, last rent increases, profit & loss statements, title report, department of water and power/gas bills, Los Angeles Department of Building and Safety property records, copy of tax bill, pest control records, elevator service records, appliance receipts, loss run reports and documents relating to lawsuits involving the subject property. (UF No. 27 Grinwald Decl., ¶ 8.)

Cross-Defendants also cite evidence that Richard Stromberg, on behalf of the Buyer, performed a visual inspection of the subject property prior to the close of escrow, and no mold or lead testing was performed during the inspections prior to the close of escrow. (UF Nos. 28, 29; Response to SROGs Nos. 44 and 46; Stromberg Depo. at 31:12-24, 149:21-150:1.) Stromberg reviewed rental agreements, income and expense statements, tenant estoppels, insurance data, Systematic Code Enforcement records, building permits, and housing department records. (UF No. 34; Stromberg Depo., 30:9-21, 42:6-11, 98:13-19, 99:4-9.)

In support of the breach of contract cause of action, Cross-Complainant James Wood Properties, LLC claims that certain defects were not disclosed on the Seller Property Questionnaire. (UF No. 36; Response to SROGs Nos. 16, 30, 34 and 38.) Cross-Complainants state that the defects were not capable of being discovered by a pre-purchase visual inspection because they were all concealed behind walls/beneath flooring. (UF No. 37; Stromberg Depo., Page 37:9-11). Stromberg testified at deposition that his belief that the Seller had knowledge of the leaks behind the walls is an assumption based on the fact that they previously owned it. (UF No. 38; Stromberg Depo. at 142:4-11.)

In response to Special Interrogatory No. 27, which asked James Wood Properties, LLC to state all facts that support its contention that 1723 James Wood Blvd., LLC had knowledge of the alleged material defect which it failed to disclose, James Wood Properties, LLC responses: “ … responding party can generally state that the property contained many defects that were not disclosed by seller to buyer . . . These issues were not disclosed on the Seller Property Questionnaire . . . Most of the defects as listed herein would have been known to a reasonably diligent property owner.” (UF No. 39; Response to SROG No. 27.)

Rami Grinwald, the managing member of Seller 1723 James Wood Blvd., LLC, completed the Seller Property Questionnaire, and the information contained in the Questionnaire was true and accurate to the best of Grinwald’s knowledge at the time of completion. (UF Nos. 45, 48; Grinwald, ¶¶ 1, 7.) 1723 James Wood Blvd., LLC, as Seller, was unaware of the existence of any material defects at the time of the sale of the subject property. (UF No. 47; Grinwald Decl., ¶ 9.) Following the inspection of the subject property prior to the close of escrow, James Wood Properties, LLC did not request the seller make repairs pursuant to ¶ 14(c) of the Purchase Agreement. (UF No. 46; Response to RFA No. 15.)

The above evidence is sufficient to meet the initial burden on summary adjudication by pointing to Cross-Complainants’ factually devoid discovery responses which show that Cross-Complaints do not have, and cannot reasonably obtain, evidence of undisclosed material facts known to Cross-Defendants. (Ganoe v. Metalclad Insulation Corp. (2014) 227 Cal.App.4th 1577, 1582.)

A defendant moving for summary judgment must make a prima facie showing that there are no triable issues of fact in order to meet its initial burden of production. (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 861 [107 Cal. Rptr. 2d 841, 24 P.3d 493].) “[A] defendant moving for summary judgment [must] present evidence, and not simply point out that the plaintiff does not possess, and cannot reasonably obtain, needed evidence.” (Id. at p. 854, fn. omitted.) Circumstantial evidence supporting a defendant's summary judgment motion “can consist of ‘factually devoiddiscovery responses from which an absence of evidence can be inferred,” but “the burden should not shift without stringent review of the direct, circumstantial and inferential evidence.” (Scheiding, supra, 69 Cal.App.4th at p. 83.) Once the defendant has met that burden, the burden shifts to the plaintiff to make a prima facie showing that a triable issue of material fact exists. (Aguilar v. Atlantic Richfield Co., supra, 25 Cal.4th at p. 850.) “A prima facie showing is one that is sufficient to support the position of the party in question. [Citation.] No more is called for.” (Id. at p. 851.)

(Ganoe v. Metalclad Insulation Corp. (2014) 227 Cal.App.4th 1577, 1582.)

The burden shifts to Cross-Complainants to show a triable issue of material fact exists as to Cross-Defendants’ failure to disclose material facts in breach of contract.

In the Opposition, Cross-Complainants argue that 1723 James Wood Blvd., LLC made the following representations, which were not true: (1) that there was no “ongoing or recurring maintenance at the Property” including the sewer line or with pest control; (2) that there were no defects (including past defects that have been repaired) with the electrical, plumbing, water/sewer supply lines, roof, gutters, foundation, windows, walls, ceilings, floors or appliances; (3) that there was no water intrusion or leaks from any part of the structure; (4) that there was no inspection reports regarding the condition of the property; and (5) that there were no other known material defects (past or present) at the property.

Cross-Complainants argue that the Sellers did not disclose the following: (1) plumbing leaks, including in sewer drain lines that were hidden behind walls; (2) foundation slippage; (3) multiple layers for roofing in violation of code; (4) dry rot of roofing sheeting; (5) vermin issues; (6) problems with gas line shut off valves; and (7) severe gang activity at the premises, including members who live in Units 216 and 302. (Opp. Fact No. 47; Grinwald Responses to SROGs, Set One, Nos. 17-20, 56-61, 66, 68 69 (Stark Decl., Exh. 2); Property Management Agreement between 1723 James Wood Blvd., LLC and MR Investments (Stark Decl., Exh. 3); Grinwald Responses to SROGs, Set One Nos. 22-23, 28, 32-38 (Stark Dec., Exh. 4); Depo. of Paulina Valerio-Martinez at Pages 17:1-2, 25:11-26:14, 26:25-27:12, 28:9-29:14, 29:23-30:18, 31:1-34:14, 35:1-26, 35:19-22, 36:1-37:4, 37:8-19, 38:2-16, 39:8-19, 40:2-25, 83:18-20 (Stark Decl., Exh. 8); Depo. Of Maria Felix Flores- Garcia at Pages 10:22-11:2, 22:10-13, 35:2-39:16, 41:17-43:5, 49:8-51:19, 52:24-55:10 (Stark Decl., Exh. 9); Depo. of Lorena Garcia at Pages 11:3-13, 36:13-38:4 (Stark Decl., Exh. 10);[3] Declaration of R. Stromberg, ¶¶ 2-4, 68-69, Exh. 24.)

These conditions were known to Rami Grinwald personally and by virtue of his positions as the sole owner of the management company, MR Investments, and managing member of 1723 James Wood Blvd., LLC. (Opp. Fact No. 48; R. Grinwald Responses to SROGs, Set One, No. 88 (Stark Decl., Exh. 2); Property Management Agreement (Stark Decl., Exh. 3); R. Grinwald’s Responses to SROGs, Set One No. 51 (Stark Decl., Exh. 4); R. Grinwald Depo. 2/14/20, Pages 9:24-10:6, 12:9-13:2 (Stark Decl., Exh. 7.) They were also known to employees of MR Investments and/or 1723 James Wood Blvd. LLC (id.) and thus such knowledge of the agents were imputed to the principal. (Civil Code, § 2332.)

The foregoing evidence is sufficient to raise a triable issue of material fact as to whether Cross-Defendants failed to disclose material facts in breach of contract. It is for the jury to decide whether there were facts or conditions which were not observable upon a visual inspection by Cross-Complainants, which were known to Cross-Defendants, and whether such facts or conditions were material to the desirability of the property.

The motion for summary adjudication as to Issue No. 5 re: the fourth cause of action is DENIED.

6. Issue No. 6: “Cross-Complainant Cannot Establish the Essential Element of Misrepresentation of a Material Fact with respect to Cross-Complainant’s Concealment and Misrepresentation Causes of Action.”

The fifth cause of action is for intentional misrepresentation. The Cross-Complaint alleges at ¶ 31 that the limited disclosure that Cross-Defendant 1723 James Wood Blvd., LLC made deceived Cross-Complainant as to the condition of the Premises. Cross-Defendant allegedly knew that it was withholding information from Cross-Complainant, and thus misrepresenting the true extent of the dilapidation of the Premises to obtain a higher purchase price. (Id.) Cross-Defendant allegedly actively concealed known material defects at the property, and Rami Grinwald made material misrepresentations about the condition of the Premises to Cross-Complainant and/or failed to disclose the true condition of the Premises. (Id. at ¶ 33, 34.) The defects were allegedly not capable of being discovered by a pre-purchase visual inspection because they were all concealed behind walls, beneath flooring, etc. (Id. at 36.)

The sixth cause of action is for negligent misrepresentation. The Cross-Complaint alleges that, even if Cross-Defendant believed it was making a complete disclosure, it negligently failed to do so. (Cross-Complaint, ¶ 41.)

The seventh cause of action is for fraudulent concealment. The Cross-Complaint alleges that Cross-Defendant concealed the true condition of the Premises to induce Cross-Complaint to purchase the same. (Cross-Complaint, ¶ 51.)

For the reasons discussed above re: Issue No. 5, a triable issue of material fact exists as to whether Cross-Defendant 1723 James Wood Blvd., LLC made a misrepresentation of material fact which induced Cross-Complainant James Wood Properties, LLC to purchase the Premises.

The motion for summary adjudication as to Issue No. 6 re: the fifth, sixth and seventh causes of action is DENIED.

7. Issue No. 7: “Cross-Complainant’s Fifth, Sixth and Seventh Causes of Action Fail For Lack Of Scienter.”

First, scienter is not an element of a cause of action for negligent misrepresentation. (Small v. Fritz Companies, Inc. (2003) 30 Cal.4th 167, 173-74.)

The elements of negligent misrepresentation are ‘(1) the misrepresentation of a past or existing material fact, (2) without reasonable ground for believing it to be true, (3) with intent to induce another's reliance on the fact misrepresented, (4) justifiable reliance on the misrepresentation, and (5) resulting damage.’ (Citation omitted.)” (National Union Fire Ins. Co. of Pittsburgh, PA v. Cambridge Integrated Services Group, Inc. (2009) 171 Cal.App.4th 35, 50.)

Second, as to intentional misrepresentation and fraudulent concealment, scienter is a question of fact. (See Civ. Code, § 1574: “Actual fraud is always a question of fact.”)

Intent to induce reliance is usually a “question of fact” for the jury. (Bily, supra, 3 Cal.4th at p. 414.) Moreover, “‘[i]ntent to influence is a threshold issue. In its absence there is no liability even though a plaintiff has relied on the misrepresentation to his or her detriment, and even if such reliance were reasonably foreseeable.’ [Citation], italics added.)” (Bily, supra, 3 Cal.4th at p. 412.)

(Public Employees' Retirement System v. Moody's Investors Service, Inc. (2014) 226 Cal.App.4th 643, 668.)

“To establish a claim for deceit based on intentional misrepresentation, the plaintiff must prove seven essential elements: (1) the defendant represented to the plaintiff that an important fact was true; (2) that representation was false; (3) the defendant knew that the representation was false when the defendant made it, or the defendant made the representation recklessly and without regard for its truth; (4) the defendant intended that the plaintiff rely on the representation; (5) the plaintiff reasonably relied on the representation; (6) the plaintiff was harmed; and (7) the plaintiff's reliance on the defendant's representation was a substantial factor in causing that harm to the plaintiff. (Citations omitted.)” (Manderville v. PCG&S Group, Inc. (2007) 146 Cal.App.4th 1486, 1498 [italics omitted].)

[T]he elements of a cause of action for fraud based on concealment are: “ ‘(1) the defendant must have concealed or suppressed a material fact, (2) the defendant must have been under a duty to disclose the fact to the plaintiff, (3) the defendant must have intentionally concealed or suppressed the fact with the intent to defraud the plaintiff, (4) the plaintiff must have been unaware of the fact and would not have acted as he did if he had known of the concealed or suppressed fact, and (5) as a result of the concealment or suppression of the fact, the plaintiff must have sustained damage. [Citation.]’ [Citation.]” (Citation omitted.) 

(Kaldenbach v. Mutual of Omaha Life Ins. Co. (2009) 178 Cal.App.4th 830, 850.)

In any event, Cross-Defendants have not presented evidence which would negate scienter. The only evidence as to scienter presented by Cross-Defendants is Rami Grinwald’s Declaration that 1723 James Wood Blvd., LLC was unaware of the existence of any material defects at the time of the sale of the subject property. (UF No. 47; Grinwald Decl., ¶ 9.) In this regard, the Court exercises its discretion to deny summary adjudication because the only evidence sought to establish Cross-Defendant’s state of mind is Grinwald’s affirmation thereof. (Code Civ. Proc., § 437c(e).)

[S]ummary judgment may be denied in the discretion of the court . . . if a material fact is an individual’s state of mind, or lack thereof, and that fact is sought to be established solely by the individual’s affirmation thereof.

(Code Civ. Proc., § 437c(e).)

Accordingly, Cross-Defendants have not demonstrated that they are entitled to summary adjudication as to Issue No. 7.

The motion for summary adjudication as to Issue No. 7 re: the fifth, sixth and seventh causes of action is DENIED.

8. Issue No. 8: “Cross-Complainant’s Fifth, Sixth and Seventh Causes of Action Fail For Lack of Reliance.”

Cross-Defendants argue that Cross-Complainants cannot demonstrate justifiable reliance because both Stromberg and Goldberg are sophisticated businessmen relative to real estate transactions. (UF Nos. 7, 11; Stromberg Depo. at 10:13-11:2; 25:15-26:1.) Moreover, the property was purchased “as-is” and the Purchase Agreement repeatedly advised the buyer that the seller makes no representations as to the physical condition of the property. (UF Nos. 12, 13, 19; Stromberg Depo. at 26:12-17; Purchase Agreement, Addendum No. 2, ¶¶ 1, 2.) Cross-Defendants argue that this language in the Agreement gave Cross-Complainants ample notice that 1723 James Wood Blvd., LLC made no representations, warranties or disclosures about the Property and they would have to investigate the status of the Property for themselves. Cross-Defendants argue that Cross-Complainants had access to inspect the property and the right to review public records relating to the property. Cross-Defendants argue that Cross-Complainants chose not to conduct a reasonably diligent search of records or the property prior to closing escrow, and thus, could not have justifiably relied on any purported representation or concealment regarding supposed defects.

However, given the discussion above re: the preceding issues, the “as-is” language does not bar fraud-based claims. Moreover, a triable issue of material fact exists as to whether Cross-Complainant’s reliance was reasonable given Cross-Complainant’s evidence as to what Grinwald represented to Cross-Complaints, and the alleged issues and defects of which Cross-Defendants were aware and which were not apparent upon a visual inspection of the property. The reasonableness of reliance is ordinarily a question of fact, taking into account the knowledge, education and experience of the person claiming reliance, unless reasonable minds can come to only one conclusion based on the facts. (Hasso v. Hapke (2014) 227 Cal.App.4th 107, 131-32.)

Accordingly, Cross-Defendants have not demonstrated that they are entitled to summary adjudication as to Issue No. 8.

The motion for summary adjudication as to Issue No. 8 re: the fifth, sixth and seventh causes of action is DENIED.

9. Issue No. 9: “Cross- Complainants are not entitled to Punitive Damages.”

The Cross-Complaint prays for exemplary (punitive) damages against Cross-Defendants pursuant to the fifth through seventh causes of action, which are for intentional misrepresentation, negligent misrepresentation and fraudulent concealment.

Cross-Defendants argue that there is no clear and convincing evidence that Cross-Defendants engaged in any malicious, oppressive or fraudulent acts. However, for the reasons discussed above, triable issues of material fact exists as to the fifth through seventh causes of action. In this regard, triable issues of material fact also exist as to whether Cross-Defendants engaged in “fraud” as that term is defined in Civil Code § 3294(c)(3) (at least as to the intentional misrepresentation and fraudulent concealment causes of action) to include “an intentional misrepresentation, deceit, or concealment of a material fact known to the defendant with the intention on the part of the defendant of thereby depriving a person of property or legal rights . . . .” Accordingly, the motion for summary adjudication as to Issue No. 9 re: punitive damages is DENIED.

10. Issue No. 10: “Cross-Complainants are Not Entitled to Attorney’s Fees Pursuant to the Purchase Agreement as they failed to mediate the Matter Prior to Commencing their Cross-Complaint.”

This is not an issue which may be summarily adjudicated because it would not dispose of a cause of action, an affirmative defense, a claim for damages, or an issue of duty. (Code Civ. Proc., § 437c(f)(1).)

Also, had Cross-Defendants successfully obtained summary judgment by way of this motion, then, presumably, there would be no basis for Cross-Complainants to be deemed the prevailing party.

The motion for summary adjudication as to Issue No. 10 re: attorney’s fees is DENIED.

11. Issue No. 11: “Should 1723 James Wood Blvd., LLC Prevail on This Motion for Summary Judgment or Summary Adjudication, Cross-Defendant Is the Prevailing Party and Is Entitled to Attorney’s Fees under the Terms of the Purchase Agreement.”

This is not an issue which may be summarily adjudicated because it would not dispose of a cause of action, an affirmative defense, a claim for damages, or an issue of duty. (Code Civ. Proc., § 437c(f)(1).)

If Cross-Defendants had obtained summary judgment, then would have to seek to recover attorney’s fees by way of a noticed motion.

In any event, Cross-Defendants did not prevail on the motion for summary judgment, or alternative motion for summary adjudication in any degree.

The motion for summary adjudication as to Issue No. 11 re: attorney’s fees is DENIED.


[1] Civil Code § 1542 provides: “A general release does not extend to claims that the creditor or releasing party does not know or suspect to exist in his or her favor at the time of executing the release and that, if known by him or her, would have materially affected his or her settlement with the debtor or released party.”

[2] As discussed above at Issue No. 3, the cause of action for contribution is not yet ripe.

[3] Although Plaintiffs cites their responses to SROGs, Set One, by Abad Perez De La Cruz, Jorge Rigoberto Gonzalez, Paulina Valerio Martinez, Lorena Gacia, Yaneth Ortiz Carlos, Alberto Estrella Cruz, Abab Greorio Marcel, Maria Felix Flores Garcia, Antonia Ortiz-Carlos, Itzel Margaritz Perez Ortiz, Maria Ananin Perez Ortiz, Virginia Ortiz Carlos, Yidara Gregorio Ortiz, and Jose Alfredo Gonzalez, Nos. 6-10 (Stark Decl., Exhs. 11- 24), a party responding to interrogatories may not use those responses in its favor. (Cal. Civ. Proc., § 2030.410.)