SUPERIOR COURT, STATE OF CALIFORNIA
COUNTY OF SANTA CLARA
Department 3, Honorable Kevin McKenney
NOTE: This calendar will be heard
in Dept. 3.
191 North First Street, San Jose, CA 95113
Telephone: 408.882.2320
To contest the ruling, call (408) 808-6856 before 4:00 P.M.
LAW AND MOTION TENTATIVE RULINGS
DATE:
January 21, 2014 TIME: 9 A.M.
PREVAILING PARTY SHALL PREPARE THE ORDER
(SEE RULE OF COURT 3.1312)
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CASE #
CASE TITLE
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108CV115994 Edu-Cap v. Hernandez
112CV220663 Hidden Oaks Group v. Traino
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113CV239696
112CV226964
113CV254980
113CV255901
RULING
OEX. Served 11/22/13.
OEX. Served?
Discover Bank v. Nguyen
OEX. Served?
Desert Development v. Ad-Way Signs Click “LINE 4” for tentative ruling.
Meridian Financial Services v. Phan Click “LINE 5” for tentative ruling.
Lee v. Prison Inmates
Case is stayed by court order.
113CV238904 Advent v. National Union Fire
Insurance Company
LINE 8 113CV242216 Naegele v. DeVries
LINE 9 106CV076689 Epic Communications v. ALi
LINE 10 112CV224377 Litchko v. Koroleva
LINE 11 113CV241671 Lohbeck v. Chaddock Fiduciary
Services
Click “LINE 7” for tentative ruling.
LINE 12 113CV247361 Wells v. Kehriotis
Second motion for reconsideration is denied.
LINE 13 113CV250783 Cach v. Flores
Off calendar
LINE 14 113CV258043 In Re: Shirley Salmond
LINE 15 113CV250001 Capital One Bank v. Liu
No lien is attached as exhibit.
Motion to set aside dismissal is granted.
LINE 16 113CV254647 Bygdnes v. Sonic MS
LINE 17 109CV149131 Cheng v. Brening
Off calendar by moving party
Off calendar – no moving papers filed
LINE 18 111CV206812 Glasner v. Freeman
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Motion for good faith settlement granted.
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Click “LINE 8” for tentative ruling.
Off calendar
Attorneys and parties must appear.
Motion to furnish security is granted. Plaintiff
must post security of $15,000 by February 20,
2014, or case will be dismissed. Settlement
Conference and Trial dates are vacated. Case
set for dismissal review February 20, 2014, at
10:00 a.m. in Department 3.
SUPERIOR COURT, STATE OF CALIFORNIA
COUNTY OF SANTA CLARA
Department 3, Honorable Kevin McKenney
NOTE: This calendar will be heard
in Dept. 3.
191 North First Street, San Jose, CA 95113
Telephone: 408.882.2320
To contest the ruling, call (408) 808-6856 before 4:00 P.M.
LAW AND MOTION TENTATIVE RULINGS
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DESERT DEVELOPMENT, LLC v. AD-WAY SIGNS, INC.
Case No.: 1-12-CV-226964
DATE: January 21, 2014
TIME: 9:00 a.m.
DEPT.: 3
Plaintiff/Cross-Defendant’s Request for Judicial Notice of two documents 1) The
original Cross-Complaint in this matter filed July 15, 2013, and; 2) This Court’s September 25,
2013 Order on the demurrer to the original Cross-Complaint is GRANTED pursuant to Evid.
Code §452(d). Only the Court’s prior order is noticed as to the truth of its contents.
As an initial matter Plaintiff/Cross-Defendant is correct that Cross-Complainant has
added new claims without prior leave of court. Accordingly the Court on its own motion
pursuant to CCP §436(b) strikes the Amended Cross-Complaint’s newly added 2nd cause of
action (Slander of Title), 3rd cause of action (Action to Cancel Instrument), and 5th cause of
Action (Common Count). The Court also strikes the requests for punitive damages associated
with the 2nd and 3rd causes of action listed in the Prayer. Cross-Complainant lost its right to
freely amend once under CCP §472 after a ruling was made on the demurrer to the original
cross-complaint. When a demurrer is sustained with leave to amend, the leave must be
construed as permission to the pleader to amend the causes of action to which the demurrer has
been sustained, not add entirely new causes of action. Patrick v. Alacer Corp. (2008) 167 Cal
App 4th 995, 1015. To raise claims entirely unrelated to those originally alleged requires either
a new lawsuit or a noticed motion for leave to amend. Absent prior leave of court an amended
complaint raising new and different causes of action is subject to a motion to strike. Leave to
amend to add these claims, or any other new claims, by any means other than a properly
noticed motion for leave to amend or a stipulation between the parties is DENIED.
Plaintiff/Cross-Defendant’s demurrer to the 2nd, 3rd and 5th causes of action is deemed
MOOT in light of the above ruling.
Plaintiff/Cross-Defendant’s demurrer to the Amended Cross-Complaint’s 4th cause of
action for “Unjust Enrichment by Economic Duress, “ formerly the 3rd cause of action in the
original Cross-Complaint, on the ground that it fails to state sufficient facts is SUSTAINED. It
is now apparent that this claim is solely based on Plaintiff/Cross-Defendant’s alleged threat to
file suit to seek to enforce its interpretation of the lease between the parties. See Amended
Cross-Complaint at 43. As the Court previously explained in the prior order, “[t]he doctrine of
‘economic duress’ can apply when one party has done a wrongful act which is sufficiently
coercive to cause a reasonably prudent person, faced with no reasonable alternative, to agree to
an unfavorable contract. [Citation.] The party subjected to the coercive act, and having no
reasonable alternative, can then plead ‘economic duress’ to avoid the contract. . . . When a
party pleads economic duress, that party must have had no ‘reasonable alternative’ to the action
it now seeks to avoid (generally, agreeing to a contract). If a reasonable alternative was
available, and there hence was no compelling necessity to submit to the coercive demands,
economic duress cannot be established. Whether the party asserting economic duress had a
reasonable alternative is determined by examining whether a reasonably prudent person would
follow the alternative course, or whether a reasonably prudent person might submit. [Citation.]
Clearly this inquiry is a factual one, rarely if ever susceptible to determination on demurrer.”
CrossTalk Productions, Inc. v. Jacobson (1998) 65 Cal.App.4th 631, 644, emphasis added.
“The test in any case is whether the complaining party was or was not in a position to
exercise his own will. If the unlawful threats overcome the will of the person threatened, and
‘induce him to do an act which he would not otherwise have done and which he was not bound
to do,’ duress, as it is viewed today, is effectuated. (5 Williston on Contracts, sec. 1605.) It is
not, however, unlawful to threaten to refuse to proceed under a contract or to pay what is due
under it or what is otherwise due. Hence a threat to stand suit is not in the category of
unlawful threats.” Sistrom v. Anderson (1942) 51 Cal.App.2d 213, 221, emphasis added. The
facts alleged here do not support the claim A dispute over the terms of the lease or as to
whether a lease has lapsed and been replaced by a month-to-month tenancy, etc. is not in and
of itself unlawful or coercive. Parties have a right to avail themselves of the courts to resolve
their disputes, including a dispute as to the terms of a lease. Threatening to exercise that right
is not “wrongful conduct” and is not economic duress. Accordingly there is no wrongful
conduct for which restitution might be required here that can support a claim of unjust
enrichment. See also Durell v. Sharp Healthcare (2010) 183 Cal App 4th 1350, 1370 (as a
matter of law, an unjust enrichment claim does not lie where the parties have an enforceable
contract). Further leave to amend is DENIED. See Medina v. Safe-Guard Products (2008)
164 Cal App 4th 105, 112 fn. 8 (“As the Rutter practice guide states: ‘It is not up to the judge to
figure out how the complaint can be amended to state a cause of action. Rather, the burden is
on the plaintiff to show in what manner he or she can amend the complaint, and how that
amendment will change the legal effect of the pleading.’”)
Plaintiff/Cross-Defendant’s demurrer to the Amended Cross-Complaint’s 7th cause of
action for Breach of the Implied Covenant of Good Faith and Fair Dealing (formerly the 5th
cause of action in the original cross-complaint) on the ground that it fails to state sufficient
facts is SUSTAINED.
“The implied covenant of good faith and fair dealing rests upon the existence of some
specific contractual obligation. ‘The covenant of good faith is read into contracts in order to
protect the express covenants or promises of the contract, not to protect some general public
policy interest not directly tied to the contract’s purpose.’ . . . ‘In essence, the covenant is
implied as a supplement to the express contractual covenants, to prevent a contracting party
from engaging in conduct which (while not technically transgressing the express covenants)
frustrates the other party’s rights to the benefits of the contract.’ . . . There is no obligation to
deal fairly or in good faith absent an existing contract. If there exists a contractual relationship
between the parties . . . the implied covenant is limited to assuring compliance with the express
terms of the contract, and cannot be extended to create obligations not contemplated in the
contract.” Racine & Laramie, Ltd. v. Dept. of Parks & Recreation (1992) 11 Cal App 4th 1026,
1031-1032, internal citations omitted. See also Guz v. Bechtel National, Inc. (2000) 24 Cal 4th
317, 350 (“[The covenant] cannot impose substantive duties or limits on the contracting parties
beyond those incorporated in the specific terms of their agreement.”) “[W]here breach of an
actual term is alleged, a separate implied covenant claim, based on the same breach, is
superfluous.” Id. at 327.
With the improperly added claims stricken, this claim remains based almost entirely on
the incorporated allegations of breach of contract and interference (which are based on the
same alleged facts), does not reference any other specific contractual obligation or identify any
other benefit that is being frustrated and thus fails to state a separate cause of action. The
Court also notes that Cross-Complainant continues to make references to a violation of Bus. &
Prof. Code §17200 without pleading any claim for unlawful business practices. Further leave
to amend is DENIED.
Plaintiff/Cross-Defendant’s motion to strike the requests for punitive damages in the
Prayer associated with the 2nd, 3rd and 4th causes of action are MOOT in light of the above
rulings. The motion to strike to request for punitive damages in the Prayer associated with the
6th cause of action for intentional interference with prospective economic advantage is
GRANTED with 10 days’ leave to amend. Plaintiff/Cross-Defendant has not demurred to this
claim, so it is assumed to be properly stated. However the only surviving claims in the
Amended Cross-Complaint are now the 1st cause of action for breach of contract, the 6th cause
of action, and the 8th cause of action for Declaratory Relief. Even read as a whole, the
surviving portions of the Amended Cross-Complaint do not support the conclusory allegation
at 64 that “[t]he aforementioned acts of cross-defendant were willful and oppressive, fraudulent
and malicious.”
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Case Name: Meridian Financial Services, Inc., et al. v. Phan, et al.
Case No.: 1-13-CV-254980
Defendant Chicago Title Company (“Chicago Title”) demurs to the complaint
(“Complaint”) filed by plaintiffs Meridian Financial Services, Inc. and Mark Yazdani
(collectively, “Plaintiffs”) and moves to strike portions contained therein.
On October 22, 2013, Plaintiffs filed a complaint against Chicago Title, Lananh Phan
(“Phan”) and Diane Do (“Do”) asserting claims for (1) breach of contract, (2) fraud, (3) fraud
in the inducement, (4) negligent misrepresentation, (5) violation of unfair business practices
act, (6) escrow negligence, (7) negligent supervision and (8) breach of fiduciary duty.
According to the allegations of the Complaint, from April 12, 2012 to June 26, 2013, Plaintiffs
invested over $5 million with Phan in a gold investment scheme that she touted. (Complaint, ¶
16.) Phan purportedly guaranteed Plaintiffs a monthly return of 5%-6% plus full return of their
principal. (Id.) As they reinvested their guaranteed monthly returns, the total amount of
money invested with Phan was over $9 million as of October 22, 2013. (Id., ¶ 18.)
Plaintiffs’ investments operated without incident throughout 2012, during which time
Phan verbally confirmed that their monthly returns were “reinvested” into the venture.
(Complaint, ¶ 23.) However, in 2013, Phan informed Plaintiffs that she could not return their
money to them because it was located in offshore accounts controlled by her unidentified
colleagues. (Complaint, ¶ 24.)
Plaintiffs’ allege that Phan, Do and Do’s employer, Chicago Title, formed and operated
a conspiracy to defraud them out of their money. (Complaint, ¶¶ 43-45.) Plaintiffs further
allege that the deeds of trust and promissory notes purportedly executed by certain property
owners as security for a portion of the funds invested that were notarized and processed by
Chicago Title as escrow holder were not in fact signed by those individuals. (Id., ¶ 26.)
On December 9, 2013, Chicago Title filed the instant demurrer to each of the seven
claims asserted against it in the Complaint, i.e., the second through eighth causes of action, on
the grounds of uncertainty and failure to state facts sufficient to constitute a cause of action.
(See Code Civ. Proc., § 430.10, subds. (e) and (f).
Chicago Title’s demurrer on the ground of uncertainty is OVERRULED. A demurrer
for uncertainty is disfavored and sustained only where the allegations of the pleading are so
unintelligible that the defendant cannot reasonably respond to them. (See Khoury v. Maly’s of
Calif., Inc. (1993) 14 Cal.App.4th 612, 616; see also Williams v. Beechnut Nutrition Corp.
(1986) 185 Cal.App.3d 135, 139, fn. 2.) The allegations of the Complaint do not qualify as
such.
As an initial matter, Chicago Title maintains that no claim has been stated against it in
the Complaint because (1) as an escrow company, its only obligation was to follow the escrow
instructions provided to it and thus it had no general duty to police the affairs of the parties
involved and (2) Do’s investment activities with Phan were outside the course and scope of her
duties and thus it has no respondeat superior liability for her conduct. The Court finds only the
former of these arguments to be persuasive.
“An escrow involves the deposit of documents and/or money with a third party to be
delivered on the occurrence of some condition.” (Summit Financial Holdings, Ltd. v.
Continental Lawyers Title Co. (2002) 27 Cal.4th 705, 711.) While an escrow holder is an agent
and fiduciary of the parties to the escrow, the agency created by the escrow is “limited to the
obligation to the escrow holder to carry out the instructions of each of the parties to the
escrow.” (Id., citing Vournas v. Fidelity Nat. Tit. Ins. Co. (1999) 73 Cal.App.4th 668, 674.)
Accordingly, an escrow holder “has no general duty to police the affairs of its depositors.
[Citations.]” (Id.) Here, there are no allegations concerning the content of the escrow
instructions at issue and thus no facts which demonstrate that Chicago Title breached its
obligations as escrow holder. The Court is also not aware of any authority, and Plaintiffs do
not identify any, which provides that an escrow holder has an obligation to verify all signatures
before it absent instructions requiring as much.
Consequently, Chicago Title’s demurrer to the sixth (Escrow Negligence), seventh
(Negligent Supervision) and eighth (Breach of Fiduciary Duty) causes of action on the ground
of failure to state facts sufficient to constitute a cause of action is SUSTAINED WITH 10
DAYS’ LEAVE TO AMEND.
With regard to Chicago Title’s second argument, “[t]he rule of respondeat superior is
familiar and simply stated: an employer is vicariously liable for the torts of its employees
committed within the scope of the employment.” (Lisa M. v. Henry Mayo Newhall Memorial
Hospital (1995) 12 Cal. 4th 291, 296.) The term “scope of employment” has been interpreted
broadly, with courts holding that “the employer’s liability extends beyond his actual or
possible control of the employee to include risks inherent in or created by the enterprise.”
(Farmers Ins. Group v. County of Santa Clara (1995) 11 Cal. 4th 992, 1004.) Courts have
similarly found that “the fact that an employee is not engaged in the ultimate object of his
employment at the time of his wrongful act does not preclude attribution of liability to an
employer.” (Id.) Consequently, “an employer’s vicarious liability may extent to the
employee’s negligence, willful and malicious torts, or acts that contravene an express company
rule and confer no benefit to the employer.” (Id.) Generally, the question of whether an
employee has acted within the scope of employment is one of fact; however, it becomes a
question of law when “the facts are undisputed and no conflicting inferences are possible.”
(Mary M. v. City of Los Angeles (1991) 54 Cal. 3d 202, 213.)
“[A]n employer may be vicariously liable for an employee’s tort if the employee’s act
was an outgrowth of his employment, inherent in the working environment, typical of or
broadly incidental to the employer’s business, or, in a general way, foreseeable from the
employee’s duties.” (Purton v. Marriott International, Inc. (2013) 218 Cal.App.4th 499, 505
(internal quotations and citations omitted).) In the context of respondeat superior liability,
foreseeability means that “in the context of the particular enterprise an employee’s conduct is
not so unusual or startling that it would seem unfair to include the loss resulting from it among
other costs of the employer’s business.” (Farmers Ins. Group, supra, 11 Cal. 4th at 1004.) At
this juncture of the proceedings, it cannot necessarily be said that Do’s, an escrow officer
employed by Chicago Title, alleged falsification of documents relating to the escrow
proceedings for the purpose of inducing Plaintiffs to invest with Phan is “so unusual or
startling that it would seem unfair to include the loss resulting from it among other costs” of
Chicago Title’s business. Thus, for the purposes of demurrer, Plaintiffs have sufficiently
pleaded respondeat superior liability against Chicago Title based on Do’s conduct.
As currently pleaded, Plaintiffs’ fraud claims are insufficient. The elements of fraud
are (1) misrepresentation (false representation, concealment, or nondisclosure), (2) knowledge
of falsity (scienter), (3) intent to defraud, i.e., to induce reliance, (4) justifiable reliance, and (5)
resulting damage. (See Lazar v. Superior Court (1996) 12 Cal. 4th 631, 638.) It is well-settled
that fraud claims must be pleaded with particularity; this necessitates pleading facts showing
how, when, where, to whom and by what means the alleged misrepresentations were tendered.
(Id. at 645.) The allegations of Plaintiffs’ second, third and fourth causes of action fail to
conform to the foregoing requirements.
Accordingly, Chicago Title’s demurrer to the second (Fraud), third (Fraud in the
Inducement) and fourth (Negligent Misrepresentation) causes of action on the ground of failure
to state facts sufficient to constitute a cause of action is SUSTAINED WITH 10 DAYS’
LEAVE TO AMEND.
Chicago Title’s demurrer to the fifth cause of action (Violation of Unfair Business
Practices Act) on the ground of failure to state facts sufficient to constitute a cause of action is
OVERRULED. Plaintiffs’ claims against Chicago Title are based upon tort and not contract;
consequently, the argument asserted by Chicago Title in support of its demurrer relative to this
cause of action is inapplicable.
In light of the ruling on Chicago Title’s demurrer, its motion to strike various
allegations of the Complaint relating to exemplary and punitive damages and attorney fees is
MOOT.
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ADVENT, INC. v. NATIONAL UNION FIRE INS. CO.
Case No.: 1-13-CV-238904
DATE: January 21, 2014
TIME: 9:00 a.m.
DEPT.: 3
As an initial matter the Court has questions as to what is the operative pleading in this
matter. The First Amended Complaint (“FAC”) filed in federal court was never filed in state
court after remand and is not a part of the court file for this matter. The Court’s only
awareness of it is its presentation as Exhibit 1 to the Declaration P. Betty Su (“Su Dec.”)
offered by National Union.
Plaintiff-in-Intervention Topa Insurance Company’s Joinder to Advent’s motion is
DENIED. See Frazee v. Seely (2002) 95 Cal App 4th 627, 636 (“Each moving party shall
support their motion for summary judgment with a separate statement.”) Emphasis in original.
Advent’s request for judicial notice of five documents, exhibits A-E, various court
filings from other actions is GRANTED pursuant to Evid. Code §452(d). Notice is only taken
as to the existence and filing dates of the documents, and not as to the truth of any of their
contents.
National’s request for judicial notice of five documents, exhibits 1-5, is also
GRANTED pursuant to Evid. Code §452(d). Only exhibits 2 and 3, prior orders of this Court,
are noticed as to the truth of their contents. The others are noticed only as to their existence
and filing dates where applicable.
Advent’s motion is treated as one for summary judgment only as that is all that is
requested in the notice of motion. Accordingly, the request for summary adjudication of “issue
1” at the end of Advent’s Separate Statement must be disregarded. See Rule of Court
3.1350(b).
Advent’s Motion is DENIED for failure to meet the initial burden. Advent is bound by
its pleading on summary judgment. Nieto v. Blue Shield of Calif. Life & Health Ins. (2010)
181 Cal App 4th 60, 73 (“the pleadings determine the scope of relevant issues on a summary
judgment motion.”) In both the state Complaint and the federal FAC Advent seeks a
declaration “that Advent is an additional insured under the Excess Policy and that Advent is
entitled is entitled to coverage under the Excess Policy.” Complaint at 21; “FAC” at 22,
emphasis added. In its Motion Advent states that it “seeks a determination that it is an
additional insured under National Union’s excess policy. At this time, it does not seek a
determination as to whether National Union has a duty to defend or the duty to indemnify
Advent in the underlying matter. Those issues are reserved for resolution after Advent is
declared an additional insured.” P&As at 1:15-18. The moving party bears the initial burden
of production to make a prima facie showing that there are no triable issues of material fact.
Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 850. Where a plaintiff (or crosscomplainant) seeks summary judgment, the burden is to produce admissible evidence on each
element of a “cause of action” entitling him or her to judgment. CCP §437c(p)(1). LLP
Mortgage v. Bizar (2005) 126 Cal App 4th 773, 776 (burden is on plaintiff to persuade court
there is no triable issue of material fact). Advent cannot move for a “partial” summary
judgment. See McClasky v. California State Auto. Ass’n (2010) 189 Cal App 4th 947, 975 (“If
a cause of action is not shown to be barred in its entirety, no order for summary judgment—or
adjudication—can be entered.”)
Even if this defect were overlooked, the motion would be DENIED as the Court is not
persuaded that Advent’s interpretation of the relevant documents establishes that it is entitled
to a declaration that it is an additional insured entitled to coverage under the Excess Policy.
“The interpretation of a contract is a question of law unless the interpretation turns on the
credibility of extrinsic evidence.” Sierra Vista Regional Medical Center v. Bonta (2003) 107
Cal.App.4th 237, 245; See also Consolidated Theatres, Inc. v. Theatrical Stage Employees
Union (1968) 69 Cal.2d 713, 724 (“It is . . . solely a judicial function to interpret a written
instrument unless the interpretation turns on the credibility of extrinsic evidence.”)
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Case Name: Naegele v. DeVries
Case No.: 1-13-CV-242216
Defendant Donald J. DeVries (“Defendant”) moves for summary judgment or
alternative, for summary adjudication as to the claims filed by plaintiff Charles Joseph Naegele
(“Naegele”).
DeVries’ motion for summary judgment or alternatively, for summary adjudication is
DENIED. DeVries’ assertion that the undertaking filed by Naegele with the Court on February
11, 2013 was ineffective does not comport with Code of Civil Procedure section 995.420,
subdivision (a), which provides that a bond is deemed effective “at the time it is given,” i.e.,
when it is executed. (See also Lewin v. Anselmo (1997) 56 Cal.App.4th 696, 699-700.) Once
filed, the undertaking stayed enforcement of the judgment and extinguished all liens based
thereon. (See Code Civ. Proc., § 697.040, subd. (a)(1).) Additionally, the evidence presented
by both parties indicates that DeVries had actual notice of the filing of the undertaking before
he obtained the funds from the escrow account to satisfy his judgment against Naegele.
(DeVries Decl., ¶ 14; Mancuso Decl., ¶¶ 2, 5, 7.)
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