STEVEN M COBIN ET AL VS RODGER MARTIN GARIANO ET AL

Tentative Rulings

Case Number: BC696805    Hearing Date: November 24, 2020    Dept: T

[TENTATIVE] ORDER: The Demurrer to the Second Amended Complaint is MOOT as to the first cause of action and OVERRULED as to the second thru fifth, eighth and twelfth causes of action. Defendants’ Request for Judicial Notice as to Exhibit 1 is GRANTED except as to matters in dispute and as to Exhibit 2 is DENIED. Answer to be filed within 20 days.

INTRODUCTION

Defendants Marquee Funding Group Inc (“MFG”), Megan Lagerson (“Lagerson”) and Ryan Solovy aka R.J. Solovy (“Solovy”) (collectively “Defendants”) demur to the Second Amended Complaint (“SAC”) filed by Plaintiff North American Title Insurance Company (“NATIC” or “Plaintiff.”) Placed into issue are all causes of action (“COA”) except the sixth, seventh, ninth, tenth and eleventh COAs.

PROCEDURE

Despite Plaintiff Counsel Chris Greinke’s contention otherwise, Defendant sufficiently attempted to meet and confer in good faith prior to the filing of the demurrer to the SAC. (See Reply, Exh A.)

When a contract relates to a complaint, the court may take judicial notice of the contract in ruling on a demurrer. Ascherman v. General Reinsurance Corp. (1986) 183 Cal.App.3d 307, 310 (“Ascherman”). Defendants’ request for judicial notice (“RJN”) of the “Agreement to Procure a Loan & Lender-Borrower Escrow Instructions” (“Agreement”; RJN Exh. 1) is proper because it is expressly identified in the SAC with verbatim citation to certain provisions in the Agreement and it also forms the grounds for negligently performing under the Agreement and/or on the escrow. (SAC ¿¿18-19, 37, 43, 48, 56, 66, 90.)

Defendants further request judicial notice of a Payoff Demand Statement (“Payoff.”) (RJN Exh 2.) Judicial Notice of this document is improper under Ascherman because it is not a contract.

The Court notes that the first COA in the SAC is not alleged against moving Defendants. Therefore, the demurrer against the 1^st COA is MOOT.

DISCUSSION

Defendants rely upon the exculpatory clause (Agreement ¿7.8) to show an absolute bar to the claims in the SAC. However, Plaintiff argues that the provision is ambiguous and/or is susceptible to more than one reasonable interpretation. “ ‘Joslin, supra, at page 375, 228 Cal.Rptr. 878 stated further, “ ‘judicial notice of matters upon demurrer will be dispositive only in those instances where there is not or cannot be a factual dispute concerning that which is sought to be judicially noticed.’ (Internal Citation Omitted.) The proper interpretation of a contract is disputable if the contract is susceptible of more than one reasonable interpretation, that is, if the contract is ambiguous. An ambiguity may appear on the face of a contract, or extrinsic evidence may reveal a latent ambiguity. (Internal Citation Omitted.) A court determining whether a contract is ambiguous must first consider extrinsic evidence offered to prove the parties' mutual intention. If the court determines that the contract is reasonably susceptible of an interpretation supported by extrinsic evidence, the court must admit that evidence for purposes of interpreting the contract. (Internal Citation Omitted.) A court cannot determine based on only the four corners of a document, without provisionally considering any extrinsic evidence offered by the parties, that the meaning of the document is clear and unambiguous. (Internal Citation Omitted.) Instead, a court must provisionally consider extrinsic evidence offered by the parties in the manner we have stated.” Fremont Indemnity Co. v Fremont General Corp. (2007) 148 Cal. App. 4^th 97, 114-115. The facts alleged in the SAC show that two phrases of the exculpatory clause are in conflict. The conflict arises between the phrases: 1) “…failure to ascertain or comply with the provisions of any DOCUMENT delivered in escrow except for such DOCUMENTS that have been prepared or caused to have been prepared by [Marquee];” and 2) “forgeries or false impersonations;” (Agreement ¿7.8.) The SAC alleges that Co-Defendants Rone and Shanker committed fraud by providing Defendants with a Payoff Statement that did not identify the correct lender – Aslan Holdings Corp. (SAC ¿¿21-24, 29.) However, the SAC also alleges that the Payoff Statement was “caused to have been prepared” by Defendants. Plaintiff expressly alleges that Defendants contacted Co-Defendants Jacobson, Rone and Shanker and requested the Payoff Statement. (SAC ¿¿22-23.) Because it is alleged that Defendants caused the Payoff Statement to be prepared there is showing that an exception to the exculpatory clause could apply. With these competing applications of the exculpatory clause, there is sufficiently shown two reasonable interpretations of the exculpatory provision based upon the facts alleged in the SAC. With this conflict and ambiguity, it cannot be determined at the demurrer stage that the claims alleged against Defendants are absolutely barred. On this ground, the Demurer is not persuasive.

Plaintiff’s argument that the exculpatory clause being unenforceable is moot and not considered because the demurrer’s reliance upon the exculpatory clause is unpersuasive at this pleading stage.

Answer to be filed within 20 days.

Case Number: BC696805    Hearing Date: August 31, 2020    Dept: T

[TENTATIVE] ORDER: The Motion for Leave to File a Second Amended Complaint is GRANTED. Plaintiff’s Request for Judicial Notice submitted with the Reply is GRANTED.

1. Introduction

   Plaintiff North America Title Insurance Company (“Plaintiff” or “NATIC”) moves for leave to file a Second Amended Complaint. The Court notes that NATIC was substituted-in as party plaintiff per the Court’s Order of March 12, 2019. (The party plaintiff identified on the caption of the FAC, the Trust, was substituted-out by the same order.) The First Amended Complaint (“FAC”) was filed on April 15, 2019 by NATIC.

   Defendant/Doe 2 Priority Capital Corporation (“Defendant”) was thereafter added to the FAC as a doe defendant on December 31, 2019.

2. Discussion

Defendant argues that the Proposed SAC is a sham pleading in that they deny the factual allegations made in the Proposed SAC and further on the grounds that they are not the probable culprit of the misconduct. Courts generally do not consider the validity of proposed amendments to a pleading. Kittredge Sports Co. v. Sup. Ct. (1989) 213 Cal.App.3d 1045, 1047; Atkinson v. Elk Corp. (2006) 109 Cal.App.4th 739, 760 (“the better course of action would have been to allow … [plaintiff] to amend the complaint and then let the parties test its legal sufficiency in other appropriate proceedings.”). The veracity of the factual allegations are not grounds to deny the motion. Defendant’s adamant denial is based upon facts not before the Court and outside the four corners of the pleading and/or motion. It is beyond the Court’s purview on this motion to determine based upon the Proposed SAC ¿61 to determine that Defendant is without liability simply because the payoff amount was given to Co-Defendant Marquee. Further, Defendant’s reliance on discovery responses from NATIC showing that the “probable culprit” is Co-Defendant Provident Title Company is in and of itself insufficient to show that Defendant is completely absolved from liability, even if such issues could be determined on the instant motion. Further, it is noted that the allegations in the Proposed SAC expressly allege a conspiracy. Defendant’s denial of the allegations in the Proposed SAC does not make the Proposed SAC a sham pleading. Defendant’s opposition attempts to improperly change the instant law and motion into a motion for summary judgment.

Defendant argues that the claim for civil conspiracy lacks sufficient facts to show a duty owed and is grounded in conclusory allegations. This is insufficient to show futility and arguments regarding defective factual pleading are not proper for the instant motion and should be made at the demurrer stage once the Proposed SAC is filed.

Defendant PCC further requests joinder in the other defendants’ opposition. However, the Court record only shows Defendant PCC as a single party opposing the motion. There is no other opposition to join.

IT IS SO ORDERED, ____________________ TO GIVE NOTICE.