On 10/10/2017 TRIWEST DEVELOPMENT, LLC filed a Contract - Other Contract lawsuit against SAM OSTAYAN. This case was filed in Los Angeles County Superior Courts, Stanley Mosk Courthouse located in Los Angeles, California. The Judges overseeing this case are ROBERT B. BROADBELT, DEIRDRE HILL, RAMONA G. SEE and CRAIG D. KARLAN. The case status is Pending - Other Pending.
Pending - Other Pending
Los Angeles County Superior Courts
Stanley Mosk Courthouse
Los Angeles, California
ROBERT B. BROADBELT
RAMONA G. SEE
CRAIG D. KARLAN
TRIWEST DEVELOPMENT LLC A CALIFORNIA...
TRIWEST HOMES II LLP
ARDEN MANAGEMENT LLC A CALIFORNIA...
OSTAYAN SAM AN INDIVIDUAL
DOES 1 THROUGH 100 INCLUSIVE
DAVID J. MYERS
MYERS DAVID JOHN
TIMOTHY M. TYAN
RYAN TIMOTHY MATTHEW
1/24/2018: Legacy Document - LEGACY DOCUMENT TYPE: NOTICE OF MOTION
2/22/2018: Case Management Statement
4/19/2018: Legacy Document - LEGACY DOCUMENT TYPE: MISCELLANEOUS-OTHER
5/9/2018: Notice of Ruling
5/11/2018: Legacy Document - LEGACY DOCUMENT TYPE: STIPULATION AND ORDER
9/24/2018: Minute Order - MINUTE ORDER ENTERED: 2018-09-24 00:00:00
1/10/2020: Separate Statement - SEPARATE STATEMENT OF UNDISPUTED FACTS IN SUPPORT OF DEFENDANT SAM OSTAYAN'S MOTION FOR SUMMARY JUDGMENT OR , IN THE ALTERNATIVE, SUMMARY ADJUDICATION
1/10/2020: Declaration - DECLARATION OF SAM OSTAYAN, IN SUPPORT OF DEFENDANT SAM OSTAYAN'S MOTION FOR SUMMARY JUDGMENT OR, IN THE ALTERNATIVE, SUMMARY ADJUDICATION
1/23/2020: Notice - NOTICE DEMAND FOR EXCHANGE OF EXPERT WITNESS INFORMATION
2/27/2020: Ex Parte Application - EX PARTE APPLICATION FOR: (1) ISSUE SANCTIONS; (2) EVIDENCE SANCTIONS; (3) MONETARY SANCTIONS; (4) AN ORDER ALLOWING A RENEWED MOTION FOR SUMMARY JUDGMENT; (5) COMPELLING PLAINT
3/2/2020: Opposition - OPPOSITION TO EX PARTE APPLICATION FOR TERMINATING SANCTIONS
3/6/2020: Motion in Limine - MOTION IN LIMINE 8- IMPROPER SUBPOENA RECORDS
3/6/2020: Motion in Limine - MOTION IN LIMINE 5- WAIVER
3/6/2020: Supplemental Declaration - SUPPLEMENTAL DECLARATION SUPPLEMENTAL DECLARATION OF SAM OSTAYAN IN SUPPORT OF DEFENDANT SAM OSTAYANS MOTION FOR SUMMARY JUDGMENT OR, IN THE ALTERNATIVE, SUMMARY ADJUDICATI
3/9/2020: Proof of Service (not Summons and Complaint)
8/8/2018: Notice - OF WITHDRAWL
10/1/2018: Notice -
1/4/2019: Minute Order - Minute Order (Court Order The Court is in receipt of Peremptory Challenge...)
Hearing04/06/2020 at 09:30 AM in Department M at 1725 Main Street, Santa Monica, CA 90401; Jury TrialRead MoreRead Less
Hearing04/01/2020 at 08:30 AM in Department M at 1725 Main Street, Santa Monica, CA 90401; Hearing on Motion to BifurcateRead MoreRead Less
Hearing03/30/2020 at 09:00 AM in Department M at 1725 Main Street, Santa Monica, CA 90401; Final Status ConferenceRead MoreRead Less
Hearing03/30/2020 at 08:30 AM in Department M at 1725 Main Street, Santa Monica, CA 90401; Hearing on Ex Parte Application for Sanctions/Advance Motion for ReliefRead MoreRead Less
Hearing03/26/2020 at 08:30 AM in Department M at 1725 Main Street, Santa Monica, CA 90401; Hearing on Motion for Summary JudgmentRead MoreRead Less
Hearing03/12/2020 at 08:30 AM in Department M at 1725 Main Street, Santa Monica, CA 90401; Hearing on Ex Parte Application ADVANCE HEARING DATES ON: (1) MOTION FOR LEAVE TO FILE CROSS-COMPLAINT; AND (2) MOTION FOR LEAVE TO FILE A FIRST AMENDED ANSWERRead MoreRead Less
DocketEx Parte Application (EX PARTE APPLICATION TO ADVANCE HEARING DATES ON: (1) MOTION FOR LEAVE TO FILE CROSS-COMPLAINT; AND (2) MOTION FOR LEAVE TO FILE A FIRST AMENDED ANSWER); Filed by SAM, OSTAYAN (Defendant)Read MoreRead Less
DocketProof of Service (not Summons and Complaint); Filed by ARDEN MANAGEMENT, LLC, A CALIFORNIA... (Defendant); SAM, OSTAYAN (Defendant)Read MoreRead Less
DocketProof of Personal Service; Filed by TRIWEST HOMES II, LLP (Plaintiff)Read MoreRead Less
DocketSupplemental Declaration (SUPPLEMENTAL DECLARATION OF SAM OSTAYAN IN SUPPORT OF DEFENDANT SAM OSTAYAN?S MOTION FOR SUMMARY JUDGMENT OR, IN THE ALTERNATIVE, SUMMARY ADJUDICATION); Filed by SAM, OSTAYAN (Defendant)Read MoreRead Less
DocketMinute order entered: 2018-03-09 00:00:00; Filed by ClerkRead MoreRead Less
DocketCase Management Statement; Filed by ARDEN MANAGEMENT, LLC, A CALIFORNIA... (Defendant); SAM, OSTAYAN (Defendant)Read MoreRead Less
DocketCase Management Statement; Filed by TRIWEST DEVELOPMENT, LLC, A CALIFORNIA... (Plaintiff)Read MoreRead Less
DocketStipulation and Order; Filed by Stipulated by all PartiesRead MoreRead Less
DocketNotice of Motion; Filed by TRIWEST DEVELOPMENT, LLC, A CALIFORNIA... (Plaintiff)Read MoreRead Less
DocketOther - (Civil Deposit); Filed by TRIWEST DEVELOPMENT, LLC, A CALIFORNIA... (Plaintiff)Read MoreRead Less
DocketAnswer; Filed by ARDEN MANAGEMENT, LLC, A CALIFORNIA... (Defendant); SAM, OSTAYAN (Defendant)Read MoreRead Less
DocketSummons; Filed by TRIWEST DEVELOPMENT, LLC, A CALIFORNIA... (Plaintiff)Read MoreRead Less
DocketNotice of Case Management Conference; Filed by ClerkRead MoreRead Less
DocketComplaint; Filed by TRIWEST DEVELOPMENT, LLC, A CALIFORNIA... (Plaintiff); TRIWEST HOMES II, LLP (Plaintiff)Read MoreRead Less
Case Number: YC072373 Hearing Date: March 25, 2021 Dept: M
CASE NAME: Triwest Development, LLC v. Sam Ostayan, et al.
CASE NUMBER: YC072373
MOTION: Motion for attorney’s fees
HEARING DATE: 3/25/2021
On September 14, 2020, Defendants Sam Ostayan (“Ostayan”) and Arden Management, LLC (“Arden”) (collectively “Defendants”) filed a motion for attorney’s fees under Code of Civil Procedure §§ 1021, 1032 and 1033.5 and Civil Code § 1717. Defendants seek $360,965.50 in attorney’s fees.
“In any action on a contract, where the contract specifically provides that attorney’s fees and costs, which are incurred to enforce that contract, shall be awarded either to one of the parties or to the prevailing party, then the party who is determined to be the party prevailing on the contract, whether he or she is the party specified in the contract or not, shall be entitled to reasonable attorney’s fees in addition to other costs.” (Civ. Code, §1717(a).) “The court, upon notice and motion by a party, shall determine who is the party prevailing on the contract for purposes of this section, whether or not the suit proceeds to final judgment. Except as provided in paragraph (2), the party prevailing on the contract shall be the party who recovered a greater relief in the action on the contract. The court may also determine that there is no party prevailing on the contract for purposes of this section.” (Civ. Code, § 1717(b)(1).)
Any party seeking attorney’s fees “bear[s] the burden of establishing entitlement to an award and documenting the appropriate hours expended and hourly rates. [Citation omitted.]” (ComputerXpress, Inc. v. Jackson (2001) 93 Cal.App.4th 993, 1020.) “Testimony of an attorney as to the number of hours worked on a particular case is sufficient evidence to support an award of attorney fees, even in the absence of detailed time records.” (Martino v. Denevi
Defendants argues that they entitled to reasonable attorney fees under Code of Civil Procedure § 1021 and Civil Code § 1717 on the grounds that, despite the fact the Court found that Plaintiff was not assigned the contract, the underlying agreement contained an attorney fees provision, and Plaintiff would have been entitled to attorney’s fees if Plaintiff had prevailed. In opposition, Plaintiff argues that Defendants are not entitled to attorney’s fees because of Defendants’ fraud, contending that the Court has discretion to deny any recovery and should exercise that discretion due to the supposed admitted breach of contract and fraud that Defendants were able to avoid based on technicalities. In reply, Defendants argue that Plaintiff’s arguments as to fraud are without merit and a belated motion for reconsideration of the Court’s summary judgment ruling.
Defendants argue that the purchase agreement contained an attorney’s fees provision. Specifically, Paragraph 21 of the Purchase Agreement provided:
21. ATTORNEY FEES: In any action, proceeding, or arbitration between Buyer and Seller arising out of this Agreement, the prevailing Buyer or Seller shall be entitled to reasonable attorney fees and costs from the non-prevailing Buyer or Seller, except as provided in paragraph 26A.
(Ostayan Decl. ¶ 5, Ex. 1, Purchase Agreement, ¶ 21 [emphasis added].) Ostayan signed the agreement as the managing member of Arden. (Id.) Defendants further argue that paragraph 26A does not apply. Defendants argue that paragraph 26A would only allow Plaintiff to escape liability for Defendants’ fees had it made a demand to Defendants to mediate the dispute before filing this action and Defendants refused to do so; however, Plaintiff made no such demand and Defendants issued no such refusal. Indeed, paragraph 26(A) in relevant part provides, “if, for any dispute or claim to which this paragraph applies, any party (i) commences an action without first attempting to resolve the matter through mediation, or (ii) before commencement of an action refuses to mediate after a request has been made, then that party shall not be entitled to attorney fees, even if they would have been available to that party in any such action.” (Ostayan Decl. ¶ 5, Ex. 1, Purchase Agreement, ¶ 26(A).) Defendants contend that if Plaintiff had attempted to mediate the dispute, Defendants would have agreed to mediate the dispute but that Plaintiff did not attempt to mediate this dispute prior to filling this action. (See Ostayan Decl. ¶¶ 6 – 10.) Here, Defendants are the prevailing parties since they prevailed at the summary judgment hearing. Therefore, they are entitled to attorney’s fees.
Defendant also argues that it does not need to apportion attorney’s fees because the language in the contract is broad and encompasses tort claims. Defendants argue that under California law, if the contract provides for attorneys’ fees “in any action arising out of” the contract, attorneys’ fees are awardable on both contract and tort claims that “arise out of” the contract. (Santisas v. Goodinu (1998) 17 Cal.4th 599, 608.) Plaintiff does not dispute this contention. The Court finds that the contract provision is broad enough to encompass the non-contract claims.
Defendants further argue that the requested amount of attorney’s fees is reasonable under the lodestar analysis. “The trial court makes its [reasonableness] determination after consideration of a number of factors, including the nature of the litigation, its difficulty, the amount involved, the skill required in its handling, the skill employed, the attention given, the success or failure, and other circumstances in the case.” (PLCM Group v. Drexler (2000) 22 Cal.4th 1084, 1096, as modified (June 2, 2000) [quoting Melnyk v. Robledo (1976) 64 Cal.App.3d 618, 623–624].) “California courts have consistently held that a computation of time spent on a case and the reasonable value of that time is fundamental to a determination of an appropriate attorneys' fee award.” (Margolin v. Regional Planning Com. (1982) 134 Cal.App.3d 999, 1004–1005, 185 Cal.Rptr. 145.) The reasonable hourly rate is that prevailing in the community for similar work. (Id. at p. 1004, 185 Cal.Rptr. 145; Shaffer v. Superior Court (1995) 33 Cal.App.4th 993, 1002, 39 Cal.Rptr.2d 506.) (Id. at 1095.)
Plaintiff argues that the requested attorney’s fees are unreasonable because this case was over-litigated. Plaintiff argues that the motion seeks excessive fees without substantiation, citing as an example over 37 hours to review a supplemental document production (pp. 16-17), over 118 hours reviewing documents in total with no explanation (p. 70), over $195,000 for unexplained “Case Assessment, Development and Administration” (p. 70), and nearly $50,000 for the summary judgment motion (p. 70), an inherently excessive charge that also presumably includes unspecified time devoted to the unauthorized “augmented” summary judgment motion that the Court refused to consider. Plaintiff also contends that Defendants billed excessive hours, particularly that 852 hours is excessive given that this case did not involve novel questions of law.
In reply, Defendants argue that they substantiated their fee request by submitting 70 pages of time entries, which included a detailed breakdown of all of the time incurred by Defendants’ counsel, and which they were not required to do. (See Ryan Decl. ¶ 11; see also Martino v. Denevi, supra, 182 Cal.App.3d at 559.) Furthermore, Defendants argue that Plaintiff’s own authority holds that “[t]he court is not required to apportion counsel's time between successful and unsuccessful motions or issues, awarding fees only for the former. (Sundance v. Municipal Court (1987) 192 Cal.App.3d 268, 273–274, 237 Cal.Rptr. 269.) While a court may reduce an award to eliminate time unreasonably spent on a specific motion that was frivolous or improper, the trial court did not abuse its discretion in failing to consider the motions at issue, although unsuccessful, not frivolous.” (Cheema v. L.S. Trucking, Inc. (Oct. 7, 2019).) Defendant argues that Plaintiff has not established that the complained of motion practice was frivolous.
The Court finds that the hourly rate is reasonable, and in fact, below market rate for the services performed. Defendants provided a summary of their counsel’s billing task codes as well as full time records. In addition, this case involved complex factual issues and was on the eve of trial prior to the pandemic, as is evident from the number of motions in limine filed by the parties. While this case did not involve extensive motion practice as this court usually sees with discovery motions, there were many ex parte motions filed and extensive discovery by the parties. Defendants present evidence that the attorneys that formerly worked at the firm were licensed since 2013, 2014, and 2015. (See Suppl. Ryan Decl.) In addition, other attorney’s on this case have extensive litigation experience. (See Id.). Based on the evidence presented by Defendants, the Court finds that the requested attorney’s fees is reasonable. Therefore, the motion for attorney’s fees is GRANTED.
Case Number: YC072373 Hearing Date: June 29, 2020 Dept: M
CASE NAME: Triwest Development, LLC v. Sam Ostayan, et al.
CASE NO.: YC072373
MOTION: Defendant Sam Ostayan’s Motion for Summary Judgment or, in the alternative, Motion for Summary Adjudication
On October 17, 2017, Plaintiff Triwest Development, LLC filed a complaint against Sam Ostayan, Arden Management, LLC (“Arden”), and Does 1 -100 alleging breach of contract; breach of the covenant of good faith and fair dealing; fraud; negligent misrepresentation; rescission and restitution; and common counts arising out of the purchase of a property in Palos Verdes, CA.
On March 9, 2018, the Court granted a motion to substitute Triwest Homes II, LP (“Triwest Homes”) as the plaintiff. The Court found that the substitution related back to the filing of the complaint, based upon the parties’ stipulation to the substitution, and Plaintiff’s evidence that Triwest Homes was the assignee under the contract and real party in interest. The Court notes that Plaintiff’s counsel presented the deed to the Palos Verdes property as evidence that Triwest Homes II was the actual assignee under the contract. Plaintiff’s counsel did not present evidence of an actual contract where Triwest Development, LLC or DAS Fund assigned to Plaintiff Triwest Homes the rights under the contract.
On September 24, 2018, the Court approved the substitution of parties as to Defendants pursuant to a stipulation of the parties. The Court permitted the substitution of Sam Ostayan in the place and stead of Defendant Arden Management LLC, struck the Answer by Arden, entered default against Arden but not a judgment, and found that his stipulation was not deemed to be an admission by Arden or Ostayan of an alter ego relationship. (Signed Proposed Order 9/24/2018)
Plaintiff Triwest Homes alleges that on November 3, 2014, Plaintiff closed escrow with Arden on the purchase of a single-family residence under construction at 2950 Crownview Lane, Palos Verdes, CA 90275 for $1,275,000. Plaintiff further alleges that under the terms of the applicable written contract, which was made between Arden, DAS Fund I, LLC ("DAS"), and Plaintiff the permitted assignee of DAS, the close of escrow was subject to various conditions precedent, including delivery to Plaintiff of a “Full set of original approved building plans and existing drawings.” (Comp. ¶ 7.) Plaintiff alleges that it suffered damages in connection with Defendants’ failure to deliver the complete plans.
Basis for Summary Judgment/Summary adjudication
Defendant Sam Ostayan moves the Court for summary judgment on the complaint filed by Plaintiff Triwest Homes or, in the alternative, summary adjudication of the: (1) first cause of action for breach of contract; (2) the second cause of action for breach of the implied covenant of good faith and fair dealing; (3) the third cause of action for fraud; (4) the fourth cause of action for negligent misrepresentation; (5) the fifth cause of action for rescission and restitution; and (6) the sixth cause of action for common counts.
With respect to summary adjudication, Defendant seeks summary adjudication as to the following thirteen issues:
Issue No. 1: Plaintiff Triwest Homes lacks capacity to pursue any of the causes of action pled in the complaint.
Issue No. 2: The first cause of action for breach of contract and second cause of action for breach of implied covenant of good faith and fair dealing are without merit since the undisputed facts establish that Plaintiff Triwest Homes was never assigned any rights under the contract, and thus, no contract exists between Plaintiff Triwest Homes and Defendant.
Issue No. 3: The first cause of action for breach of contract and second cause of action for breach of implied covenant of good faith and fair dealing are without merit since the undisputed facts establish that Plaintiff Triwest Homes waived the alleged breach of contract (i.e., delivery of the “Required Plans,” as alleged in Paragraphs 7, 9, and 14 of the complaint).
Issue No. 4: The first cause of action for breach of contract and second cause of action for breach of implied covenant of good faith and fair dealing are without merit since the undisputed facts establish that Defendant’s alleged breach(es) were not a substantial factor in causing Plaintiff Triwest Homes’ alleged damages.
Issue No. 5: The second cause of action for breach of the implied covenant of good faith and fair dealing is without merit since the undisputed facts establish that Plaintiff Triwest Homes cannot establish one or more elements of this cause of action, including, but not limited to, any contractual breach in failing to disclose the “Road Widening Requirements” (as alleged in Paragraph 14 of the complaint).
Issue No. 6: The third cause of action for fraud and fourth cause of action for negligent misrepresentation are without merit since the undisputed facts establish that Plaintiff Triwest Homes was not a party to nor assigned the Purchase Agreement.
Issue No. 7: The third cause of action for fraud and fourth cause of action for negligent misrepresentation are without merit since the undisputed facts establish that Defendant had no reason to expect the Purchase Agreement would be assigned to Plaintiff Triwest Homes.
Issue No. 8: The third cause of action for fraud and fourth cause of action for negligent misrepresentation are without merit since the undisputed facts establish that Defendant did not knowingly or negligently make any actionable misrepresentation to, or conceal any material facts from, Das Fund or its alleged assignees.
Issue No. 9: The third cause of action for fraud and fourth cause of action for negligent misrepresentation are without merit since the undisputed facts establish that Defendant did not intend to induce reliance on the part of Das Fund or its alleged assignees.
Issue No. 10: The third cause of action for fraud and fourth cause of action for negligent misrepresentation are without merit since the undisputed facts establish that neither Das Fund nor its alleged assignees actually and justifiably relied on any misrepresentations and/or concealment on the part of Defendant.
Issue No. 11: The fourth cause of action for negligent misrepresentation is without merit since the undisputed facts establish that neither Das Fund nor its alleged assignees actually and justifiably relied on any misrepresentations on the part of Defendant due to the fact that, among other things, the Purchase Agreement drafted by Das Fund provided that the sale of the Construction Project would be “as is, where is.”
Issue No. 12: The fifth alleged cause of action for rescission and restitution is without merit since the undisputed facts establish that Plaintiff Triwest Homes cannot establish one or more elements of this cause of action, including, but not limited to, the fact that this purported cause of action is merely a remedy, not a cause of action.
Issue No. 13: The sixth cause of action for common counts is without merit since the undisputed facts establish that Plaintiff Triwest Homes cannot establish one or more elements of this cause of action.
Plaintiff submits evidentiary objections to the declaration of Sam Ostayan, Amy Seerati, as well as objections to supplemental exhibits.
OBJECTIONS TO DECLARATION OF SAM OSTAYAN
Plaintiff submits three objections to the declaration of Sam Ostayan.
Objection no. 1, sustained
Objection no. 2, sustained
Objection no. 3, sustained.
OBJECTIONS TO DECLARATION OF AMY SEERATI
Plaintiff submits four objections to the declaration of Amy Seerati.
Objection no. 4, overruled.
Objection no. 5, sustained in part, from “included, at Page 12, a Boundary Retracement, which provided a . . . (the “Boundary Retracement Page”).”
Objection no. 6, overruled
Objection no. 7, overruled
Objections to Supplemental exhibits
Defendant submitted supplemental exhibits 46-47 in the supplemental declaration of Sam Ostayan. (3/6/2020.)
Defendant also submitted supplemental exhibits 48-52 in the supplemental declaration of Timothy Ryan. (3/6/2020.)
Plaintiff submits objections to exhibits 46-49, 51-52. Defendant did not include any of the exhibits in its March 6, 2020 filing. Since these exhibits are not filed with the Court, the Court does not consider the additional separate statement that the Court permitted Defendant to submit.
Defendant’s reply was due on March 20, 2020 pursuant to the Court’s March 3, 2020 order. A reply was filed on June 19, 2020.
Request for judicial notice
Defendant requests judicial notice of six documents, exhibits 1 – 5 and exhibit 43. Exhibits 1 – 3 are documents that were Los Angeles County recorded documents and as such are judicially noticeable. The Court GRANTS judicial notice with respect to exhibits 1 – 3. Exhibit 5 is a record of the Secretary of State of California and is also judicially noticeable. Therefore, the Court GRANTS judicial notice to exhibit 5. Exhibits 4 and 45 are court records and are judicially noticeable. Therefore, the Court grants judicial notice.
The purpose of a motion for summary judgment or summary adjudication “is to provide courts with a mechanism to cut through the parties’ pleadings in order to determine whether, despite their allegations, trial is in fact necessary to resolve their dispute.” (Aguilar v. Atl. Richfield Co. (2001) 25 Cal. 4th 826, 843.) “Code of Civil Procedure section 437c, subdivision (c), requires the trial judge to grant summary judgment if all the evidence submitted, and ‘all inferences reasonably deducible from the evidence’ and uncontradicted by other inferences or evidence, show that there is no triable issue as to any material fact and that the moving party is entitled to judgment as a matter of law.” (Adler v. Manor Healthcare Corp. (1992) 7 Cal.App.4th 1110, 1119.)
“The supporting papers shall include a separate statement setting forth plainly and concisely all material facts which the moving party contends are undisputed. Each of the material facts stated shall be followed by a reference to the supporting evidence. The failure to comply with this requirement of a separate statement may in the court's discretion constitute a sufficient ground for denial of the motion.” (Code Civ. Proc., § 437c(b)(1); see also Cal. Rules of Court, rule 3.1350(c)(2) & (d).)
“The opposition papers shall include a separate statement that responds to each of the material facts contended by the moving party to be undisputed, indicating if the opposing party agrees or disagrees that those facts are undisputed. The statement also shall set forth plainly and concisely any other material facts the opposing party contends are disputed. Each material fact contended by the opposing party to be disputed shall be followed by a reference to the supporting evidence. Failure to comply with this requirement of a separate statement may constitute a sufficient ground, in the court's discretion, for granting the motion.” (Code Civ. Proc., § 437b(b)(3))
“On a motion for summary judgment, the initial burden is always on the moving party to make a prima facie showing that there are no triable issues of material fact.” (Scalf v. D. B. Log Homes, Inc. (2005) 128 Cal.App.4th 1510, 1519.) The moving party is entitled to summary judgment if they can show that there is no triable issue of material fact or if they have a complete defense thereto. (Aguilar v. Atlantic Richfiend Co. (2001) 25 Cal.4th 826, 843.)
In analyzing motions for summary judgment, courts must apply a three-step analysis: “(1) identify the issues framed by the pleadings; (2) determine whether the moving party has negated the opponent's claims; and (3) determine whether the opposition has demonstrated the existence of a triable, material factual issue.” (Hinesley v. Oakshade Town Center (2005) 135 Cal.App.4th 289, 294.) Pursuant to Code of Civil Procedure section 437c(p)(2):
A defendant or cross-defendant has met his or her burden of showing that a cause of action has no merit if that party has shown that one or more elements of the cause of action, even if not separately pleaded, cannot be established, or that there is a complete defense to that cause of action. Once the defendant or cross-defendant has met that burden, the burden shifts to the plaintiff or cross-complainant to show that a triable issue of one or more material facts exists as to that cause of action or a defense thereto. The plaintiff or cross-complainant may not rely upon the mere allegations or denials of its pleadings to show that a triable issue of material fact exists but, instead, shall set forth the specific facts showing that a triable issue of material fact exists as to that cause of action or a defense thereto.
When deciding whether to grant summary judgment, the Court must consider all of the evidence set forth in the papers, except evidence to which the Court has sustained an objection, as well as all reasonable inferences that may be drawn from that evidence, in the light most favorable to the party opposing summary judgment. (Avivi, 159 Cal.App.4th at 467.)
“A moving defendant now has two means by which to shift the burden of proof under subdivision (o)(2) of section 437c to the plaintiff to produce evidence creating a triable issue of fact. The defendant may rely upon factually insufficient discovery responses by the plaintiff to show that the plaintiff cannot establish an essential element of the cause of action sued upon…. Alternatively, the defendant may utilize the tried and true technique of negating (‘disproving’) an essential element of the plaintiff's cause of action.” (Brantley v. Pisaro (1996) 42 Cal.App.4th 1591, 1598. See also Code Civ. Proc., § 437c(p)(2).) A moving defendant must show that plaintiff cannot reasonably obtain evidence to prove a cause of action, which is more than simply arguing that there is an absence of evidence. (Gaggero v. Yura (2003) 108 Cal.App.4th 884, 891.)
A motion for summary adjudication shall be granted only if it completely disposes of a cause of action, an affirmative defense, a claim for damages, or an issue of duty. (Code Civ. Proc., § 437c(f)(1).)
The Court permitted the parties to submit supplemental briefing during an ex parte hearing. However, the Court did not permit the refiling of a summary judgment motion. On March 6, 2020, Defendant essentially filed a new motion for summary judgment. Since this March 6, 2020 motion is not supplemental briefing as permitted by the Court, the Court declines to consider the merits of the augmented motion. The Court will instead consider the January 10, 2020 motion for summary judgment. However, the Court will consider the additional 10 facts Defendant included that were not in violation of the Court’s order, to the extent that the Court has not sustained an objection to the evidence supporting those facts.
Since Defendant mainly seeks summary judgment on the complaint and seeks summary adjudication on certain issues in the alternative, the Court first proceeds with the causes of action in the complaint.
COA 1 & 2: Breach of Contract & Breach of the Covenant of Good Faith and Fair Dealing
In order to prevail on the breach of contract and breach of the covenant of good faith and fair dealing claims, Defendant must provide evidence that Plaintiff cannot prove one of the elements of breach of contract, or that Defendant has an affirmative defense to the alleged breach. Defendant’s affirmative defenses are limited to those that were raised in the answer.
The elements of a breach of contract claims are (1) the existence of contract; (2) plaintiffs’ performance or excuse for nonperformance; (3) defendants’ breach (or anticipatory breach); and (4) resulting damage to plaintiff. (Reichert v. General Ins. Co. (1968) 68 Cal.2d 822, 830; Hale v. Sharp Healthcare (2010) 183 Cal.App.4th 1373, 1387.) The essential elements of a contract are: “(1) Parties capable of contracting; [¶] (2) Their consent; [¶] (3) A lawful object; and, [¶] (4) A sufficient cause or consideration.” (Civil Code, § 1550.) Only a signatory to the contract may be liable for any breach. (Clements v. American Warranty Corp. (1987) 193 Cal.App.3d 444, 452.)
Every contract imposes upon each party a duty of good faith and fair dealing in the performance of the contract such that neither party shall do anything which will have the effect of destroying or injuring the right of the other party to receive the fruits of the contract. (Waller v. Truck Ins. Exchange, Inc. (1995) 11 Cal.4th 1, 36.) The elements of a breach of the covenant of good faith and fair dealing are: (1) the parties entered into a contract or are in a contractual relationship; (2) plaintiff fulfilled his/her contractual obligations; (3) any conditions precedent to defendant’s performance occurred; (4) defendant unfairly interfered with plaintiff’s right to receive the benefits of the contract; and (5) plaintiff was harmed by defendant’s conduct.
Contract between the parties
In his motion, Defendant attacks the first element of the breach of contract and breach of the covenant of good faith and fair dealing causes of action. Defendant argues that Plaintiff cannot prevail on this cause of action (as well as the breach of the covenant of good faith and fair dealing) because Plaintiff is not the assignee of the purchase agreement.
The general rule is that the interpretation of a writing (e.g. land sale contracts and deeds) is a question of law. (Parsons v. Bristol Development Co. (1965) 62 Cal.2d 861, 865–866.) “[Courts] infer the parties' intent from the written provisions of the contract. [Citation.] The written provisions of a contract ‘are to be understood in their ordinary and popular sense, rather than according to their strict legal meaning; unless used by the parties in a technical sense, or unless a special meaning is given to them by usage....’ [Citation.] [¶] ‘Thus, if the meaning a lay person would ascribe to contract language is not ambiguous, we apply that meaning.’ [Citation.] ‘An ambiguity arises only if “... there [is] more than one construction in issue which is semantically permissible....” [Citation.]’ ” (Ibid.) (Schaffter v. Creative Capital Leasing Group, LLC
Plaintiff Triwest Homes alleges that there was a contract between Defendant Arden and DAS Fund and that Triwest Homes was the “permitted assignee” of the Purchase Agreement by DAS Fund. (Comp. ¶ 7.) Triwest Homes further alleges that Defendant breached the contract by failing to deliver the full set of approved building plans and instead only delivered partial plans for the development of 2950 Crownview Lane, Palos Verdes, CA 90275. (Compl. ¶ 9.) Plaintiff alleges that the omitted papers referenced a road widening requirement that the city of Palos Verdes imposed (Comp. ¶ 9.) Plaintiff alleges that it was damaged in the amount of at least $750,000 as a result of this breach.
The Court notes that Triwest Homes’ complaint did not include the operative contract that was breached. Defendant, however, provides evidence of the documents consisting of the negotiations of the contract, the four counteroffers, addendum, and an escrow amendment. It is worth the time to review the various documents. The original offer/contract here is included as exhibit 26. Exhibit 26 is the California Residential Purchase Agreement and Joint Escrow Instructions Offer from “DAS Fund I, LLC and/or assigne[e], and or assignee,” dated September 26, 2014, and is a form contract offer for the residence at 2950 Crownview Lane, Palos Verdes, CA 90275. (Ex. 26.)
Exhibit 28 is counter offer no.1 to the California Residential Purchase Agreement sent by the seller, Arden Management, LLC. (Ex. 28.) Exhibit 29 is the counter offer that the buyer “DAS Fund I, LLC and/or assigne[e], and or assignee” dated October 2, 2014 made in response to the seller’s counter offer, counter offer no. 2. Exhibit 32 is the counter offer (counter offer no. 3) sent by the seller to the buyer “Das Fund I, LLC” on October 7, 2014. Finally, exhibit 34 is counter offer no. 4, sent by the buyer, listed as DAS Fund I, LLC. This counter offer was signed by the buyer “DAS Fund I, LLC and/and or assigne[e]” and signed and accepted by the seller on October 9, 2014. Exhibit 40 is the Addendum to the purchase agreement between Das Fund I, LLC and Arden Management, LLC, executed on November 3, 2014 between the buyer and the seller. It appears that the terms regarding the “required plans” are in exhibit 40. The Addendum states the following:
Buyer request[s] a $25,000.00 price reduction in liue [sic] of missing items and repairs, final purchase price to be $1,275,000.00.
Buyer to release their deposit through escrow to seller upon acceptance of all terms.
Final closing date to be on or before 11/7/2014.
Seller to provide the buyer the following documentation:
Full set of original approved building plans and working drawings.
Copy of building cards
Active building permits.
Building and permit applications
Sub-contractor list and their contact information.
Seller to disclose of any non-recorded Mechanic liens to and any outstanding bills. Buyer to be indemnified from any vendors/contractors with outstanding payments.
Final purchasing entity to be Triwest Development LLC
Buyer hereby removes all contingencies upon seller[’s] acceptance of all said terms.
Finally, exhibit 44 is a signed escrow amendment that purports to assign DAS Fund, I’s rights to Triwest Development LLC, this amendment is not signed by DAS Fund or Triwest Development.
Defendant argues that it is undisputed that the original buyer of the property under the purchase agreement was DAS Fund I, LLC. (SSUF Nos. 72 – 73; Ostayan Decl. ¶ 26; Index of Exhibits, Ex. 32; Ostayan ¶ 28; Index of Exhibits, Ex. 34.) Defendant further argues that on November 3, 2014, the parties executed an “Addendum” providing that the “final purchasing entity” would be Triwest Development LLC. (SSUF No 74; Ostayan Decl. ¶ 36; Index of Exhibits, Ex. 40, item 5.).) Defendant provides evidence that Triwest Development LLC signed the Buyer and Seller Advisory. (Ex. 42, at THOMAS 000445.) Defendant argues that on November 5, 2014, Defendant executed an Escrow Amendment, stating that “DAS Fund I, LLC hereby assign(s) all their right, title, interest and obligation as Buyer in and to this transaction to Triwest Development LLC.” While exhibit 40 shows that Defendant Arden Management executed this amendment, the evidence fails to show that the agreement was executed by the buyer. The addendum merely states that another entity, specifically Triwest Development LLC, is to be the final purchasing entity. In addition, the original form contract, exhibit 28, does not contain any clauses prohibiting the assignment of rights. Finally, Defendant’s own evidence shows that Arden Management, LLC, executed a grant deed conveying real property to Triwest Homes II, LP, a Delaware Limited Partnership, and that this deed was recorded in the Official Records of Los Angeles County, California, on November 10, 2014. (RJN Ex. 3.)
In their opposition, Plaintiff’s argued that Defendants waived their argument regarding standing by not asserting the issue as an affirmative defense. (Opp. At pp. 10-11). Plaintiff further argues that Defendants are estopped from raising this issue because of their agreement to substituting Triwest Homes into the case. (Id. at 11). The issue, however is standing and standing can be raised at any time in the proceeding. (McKinny v. Board of Trustees (1982) 31 Cal. 3d 79, 90). Moreover, as argued by Defendants: “[There is] no authority . . . holding the transfer of title to real property also transfers rights the seller may have had under the land sale contract with his grantor.” (Drake v. Martin (1994) 30 Cal.App.4th 984, 994-95.)
Defendant has presented evidence that DAS Fund did not separately assign its rights under the purchase agreement to another entity, including Triwest Development. For the purpose of summary adjudication, the Court believes that Defendant has met his burden establishing that the purchase agreement was not assigned to Plaintiff. In reaching this conclusion, the Court recognizes that Defendant has not shown that DAS Fund was prevented from doing so under the contract, or that DAS Fund or Triwest Development LLC did not in separate documents assign their rights under the purchase agreement. If that assignment occurred, however, the Court would expect Plaintiff to have produced evidence of the assignment in their opposition. Plaintiff attempts to frame the issue as Defendants challenging the assignment, but the issue is the existence of an assignment not whether it is valid or not. Without any evidence of that assignment, Plaintiff’s claim must fail.
A motion for summary judgment is framed by the pleadings. Here, Defendant failed to plead waiver as an affirmative defense in its Answer to the Complaint. As such, the Court does not consider Defendant’s arguments as to waiver.
No Causation of damages/constructive knowledge
Even though the Court believes that Defendant would prevail on the contract causes of action due to a lack of assignment, as an alternative grounds, the Court will address the causation issue. In their motion, Defendant also attacked the last element of breach of contract, namely resulting damages. In the complaint, Plaintiff alleges that it was damaged by Defendants breach of the contract by failing to deliver the Required Plans to Plaintiff. (Comp. ¶ 9.) Plaintiff alleges that these plans “referenced extensive road widening, retaining wall, and easement requirements (the ‘Road Widening Requirements’) that the City of Palos Verdes imposed on the project during the previous year to complete construction. The requirements were not otherwise known or disclosed to Plaintiff.” (Id.) Defendant argues that Plaintiff was not damaged by the alleged breach because Plaintiff knew about the road widening requirements prior to the closing of escrow. Defendant argues that DAS Fund through its agent, Justin Thomas, viewed the plans with the City of Palos Verdes (“the City”) multiple times during escrow and so had constructive knowledge. Defendant argues that any alleged failure to deliver the required plans before close of escrow did not cause Plaintiff Triwest Homes’ alleged damages.
“By statute, notice may be actual or constructive. Actual notice is defined as ‘express information of a fact,’ while constructive notice is that ‘which is imputed by law.’ (Civ. Code, § 18.) “A person generally has ‘notice’ of a particular fact if that person has knowledge of circumstances which, upon reasonable inquiry, would lead to that particular fact.” (In re Marriage of Cloney (2001) 91 Cal.App.4th 429, 436–437 (citing First Fidelity Thrift & Loan Assn. v. Alliance Bank (1998) 60 Cal.App.4th 1433, 1443; Civ. Code, § 19; 5 Miller & Starr, Cal. Real Estate (3rd ed. 2000) Recording and Priorities, §§ 11:49–11:51, 11:58–11:59) (footnote omitted).) In addition, “[i]t is . . . well-settled law in this state that notice given to or possessed by an agent within the scope of his employment and in connection with and during his agency, is notice to the principal.” (Id. at 439.)
Defendant argues that since DAS Fund requested and was given additional time to complete its due diligence during the closing, and that since DAS Fund’s agent Justin Thomas, visited the City “at least twice” to review the City’s files for the Construction Project, (SSUF No. 112) DAS Fund is deemed to have constructive notice of the required plans referencing the road widening requirements such that Defendant’s alleged failure to provide the complete plans did not cause Plaintiff damage.
Defendant provides evidence that from at least September 1, 2014, and December 1, 2014, both the Building and Safety and the Planning Divisions of the City of Rancho Palos Verdes maintained a file for the construction project at 2950 Crownview Lane, Palos Verdes, CA 90275. In the form of the declaration of Amy Seeraty, Defendant presents evidence that the files including all current and past permit applications, permits, plans, drawings, and permit cards for the construction project at 2950 Crownview Lane, Palos Verdes, CA 90275, including the March 2014 Plans and the Boundary Page, were available for review and inspection by the general public. (SSUF Nos. 129 – 30; Seeraty Decl. ¶¶ 15-16.) Defendant also provides evidence that on October 10, 2014, Mr. Thomas informed Das Fund that he visited the Building and Safety Department and viewed “a set of plans” for the construction project (SSUF No. 117, Ex. 16, Thomas Depo. 215:2 – 217:5, (TW000699)). On October 11, 2014, Justin Thomas informed DAS Fund that he would “go scan all 250+” pages. (SSUF No. 18, Ex. 15, Thomas Depo. at 83:11 – 24, Depo Ex. 56 at TW000099).) Defendant has met his initial burden of showing that Plaintiff had constructive notice of the plans such that Defendant’s alleged failure to provide the plans did not cause Plaintiff damages.
Defendant also provides evidence that the contract contained terms that the property was sold “as is, where is” and that DAS Fund inserted this language in the original offer. (Ex. 26, item 11.D, page 4 of 8.) Exhibit 27 is the Buyer’s Inspection Advisory which contains terms that impose affirmative duties on the buyer, specifically, the “duty to exercise reasonable care to protect yourself.” (Ex. 27, item B.) The Buyer’s Inspection Advisory also notes that “the physical condition of the land and improvements being purchased is not guaranteed by either Seller or Brokers. For this reason, you should conduct thorough investigations of the Property personally and with professionals who should provide written reports of their investigations . . . .” (Id. Item. A.)
As a result, the burden shifts to Plaintiff to show that its agent did not have constructive knowledge of the plans. Plaintiff does not address this issue with respect to the breach of contract claim, and instead argues that constructive knowledge is not an element of breach of contract. (See Opp. at 15:15-19.) The Court agrees that constructive knowledge is not an element of breach of contract. In their motion, however, Defendant negated the damages element of the breach of contract cause of action, namely that Defendant’s alleged breach of failing to provide the complete plans to the property did not cause Plaintiff damages because Plaintiff already had constructive knowledge of the plans. Since Plaintiff does not address this issue, Plaintiff has failed to meet its burden.
Therefore, the Court grants summary adjudication as to counts one and two.
COA 3 & 4: Fraud and Negligent Misrepresentation
Defendant argues that he is entitled to summary adjudication on the fraud and negligent misrepresentation cause of action.
The elements of fraud are: (1) misrepresentation, knowledge of falsity (or “scienter”); (2) intent to defraud (induce reliance); (3) justifiable reliance; and, (4) resulting damage. (Lazar v. Superior Court (1996) 12 Cal.4th 631, 638.) “The existence of actual fraud is always a question of fact. (Civ. Code, § 1574; Blankenheim v. E.F. Hutton & Co. (1990) 217 Cal.App.3d 1463, 1475, 266 Cal.Rptr. 593.)” (Guido v. Koopman (1991) 1 Cal.App.4th 837, 843.) The Court of Appeal also noted that:
Justifiable reliance is an essential element of a claim for fraudulent misrepresentation, and the reasonableness of the reliance is ordinarily a question of fact. [citations.] However, whether a party's reliance was justified may be decided as a matter of law if reasonable minds can come to only one conclusion based on the facts. (9 Witkin, Cal. Procedure (3d ed. 1985) Appeal, § 289, p. 301.
The elements of negligent misrepresentation are (1) the assertion of an untrue fact; (2) that was honestly made in the belief it is true; (3) but without a reasonable ground for such belief; (4) defendant’s intent to induce plaintiff’s reliance upon the representation; (5) plaintiff’s justifiable reliance upon the representation; and (6) resulting damage. (Melican v. Regents of University of California (2007) 151 Cal.App.4th 168, 182; County of Kern v. Sparks (2007) 149 Cal.App.4th 11, 20.) Since fraud and negligent misrepresentation actions are subject to strict pleading, a plaintiff would need to also prove how, when, where, to whom, and by what means the representations were made, and, in the case of a corporate defendant, the plaintiff must allege the names of the persons who made the representations, their authority to speak on behalf of the corporation, to whom they spoke, what they said or wrote, and when the representation was made. (Lazar v. Superior Court (1996) 12 Cal.4th 631, 645; West v. JPMorgan Chase Bank, N.A. (2013) 214 Cal.App.4th 780, 793.)
In order to meet his initial burden, Defendant has to show that Plaintiff cannot establish one of the elements of intentional misrepresentation, or that Defendant has a defense. Likewise, in order to meet his initial burden as the negligent misrepresentation, Defendant has to show that Plaintiff cannot establish one of the elements or that Defendant has a defense.
“[I]t is commonly held that the right of action for fraud and deceit is not assignable. But where property is obtained by a deceit or fraudulent device of any sort, the cause of action is assignable, for here the injury is done in respect of the particular property which is wrongfully acquired.” (Wikstrom v. Yolo Fliers Club (1929) 206 Cal. 461, 463 (quoting Street's Foundations of Legal Liability, vol. III, pp. 86, 87.)) While not at the summary judgment phase, the Court of Appeal held that a trial court properly sustained a demurrer as to an assignee Plaintiff’s tort claims based on fraud on a contract, because the assignee failed to sufficiently allege that the assignor intended to transfer its tort rights to the assignee under the contract. (Heritage Pacific Financial, LLC v. Monroy
Here, Plaintiff alleges that Defendant Ostayan, “as the managerial representative of Arden, Century, and the other defendants, and as a compensated real estate agent in the transaction, falsely and fraudulently concealed, failed to disclose, and affirmatively misrepresented to the general public and to Plaintiff and its representatives in the transaction, including without limitation, Thomas, (1) his reason for selling the property, (2) that defendants had obtained all required permits, (3) that all work had been inspected and approved by the City, and (4) the existence, scope, and expense of compliance with the Road Widening Requirements” (Comp. ¶ 19.) Plaintiff also alleges that it is the permitted assignee under the contract. (Comp. ¶ 7.) However, nowhere in the complaint does Plaintiff allege that the tort claim was expressly assigned to it. This critical omission is fatal to Plaintiff’s case.
Since the issues on summary judgment are framed by the pleadings and since Plaintiff failed to allege that Plaintiff was assigned the tort claims, Defendant is entitled to summary adjudication as to the fraud and negligent misrepresentations.
COA: 5 Rescission and restitution
Plaintiff’s fifth cause of action is labeled as rescission and restitution. (Comp. ¶¶ 32-37.) Plaintiff alleges that “Plaintiff is making its best efforts to complete construction and to sell the property, but is not assured of success due to the Road Widening Requirement. If not, Plaintiff should be excused from Performance and the contract should be rescinded, cancelled and terminated, and Plaintiff’s consideration restored due to, inter alia, the breach of contract, fraud, negligent misrepresentation, failure of consideration, excusable mistake, surprise, and the extreme unjust enrichment of defendants and economic and business hardship and oppressive additional cost on Plaintiff.” (Comp. ¶ 33.) Defendant argues that he is entitled to summary adjudication on this cause of action because rescission and restitution are not causes of action but instead, remedies. Defendant also argues that he has shown that the underlying cause of actions that Plaintiff bases the fifth cause of action have no merit.
The Court agrees with Defendant. In opposition, Plaintiff acknowledges that while rescission and restitution are equitable remedies, Plaintiff has properly supported this remedy based on failure of consideration and mistakes. This is insufficient to meet Plaintiff’s burden. Therefore, Defendant is entitled to summary adjudication as to the fifth cause of action for rescission and restitution.
COA: 6 Common counts
Plaintiff’s final cause of action is for common counts. (Comp. ¶¶ 38-42.) Plaintiff bases this common count claim on the breach of contract cause of action. (Comp. ¶ 39.) Plaintiff alleges that “[u]nder the terms of the contract, Defendants have wrongly received money from Plaintiff for which Plaintiff is entitled repayment, plus compensation for the use the money in the form of interest, plus costs and expenses as permitted by law.” Defendant argues that since this common count is based on the failed breach of contract cause of action, he is entitled to summary adjudication. In opposition, Plaintiff argues that this cause of action is not based on contract and instead is an unjust enrichment claim.
The Court of Appeal, Second District, has held that “there is no cause of action in California for unjust enrichment.” (Melchior v. New Line Prods., Inc. (2003) 106 Cal.App.4th 779, 793; McKell v. Wash. Mut., Inc. (2006) 142 Cal.App.4th 1457, 1490; Jogani v. Superior Court (2008) 165 Cal.App.4th 901, 911.) Courts have repeatedly concluded that unjust enrichment is “not a cause of action . . . or even a remedy, but rather a principle, underlying various legal doctrines and remedies. It is synonymous with restitution.” (McBride v. Boughton (2004) 123 Cal.App.4th 379, 387.) Since unjust enrichment is not a cause of action and since the Court has already found that Plaintiff has failed to meet its burden on the first and second causes of action, as well as the fifth cause of action for restitution, Defendant is entitled to summary adjudication.
Defendant met his initial burden of showing that the causes of action in the complaint lack merit. The burden shifted to Plaintiff to show that there is a triable issue of material fact as to the elements of the causes of action. Plaintiff failed to meet its burden. Therefore, for the reasons stated above, the Court GRANTS Defendant’s motion for summary judgment.
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