Case Name: Naren Chaganti v. Cricket Communications, Inc., et al.
Case No.: 2015-1-CV-288323

This is an action primarily based on two written lease agreements pertaining to real property located in Missouri with choice-of-law provisions expressly stating that they are to be governed by Missouri law. (See exhibits A and D to the declaration of defense counsel Raymond Bolanos.) Currently before the Court is the joint motion for summary judgment/adjudication by Defendants Cricket Communications, Inc. (“Cricket”) and New Cingular Wireless PCS LLC (“New Cingular”) directed at the Complaint filed by Plaintiff Naren Chaganti (“Plaintiff.”)

Plaintiff’s November 20, 2015 Complaint states four causes of action (labeled “counts”): 1) Breach of Contact (against Defendant Cricket, alleging that at an unspecified time it failed to secure insurance required by the lease and violated the terms by terminating the lease without good cause); 2) Fraud (against Cricket, alleging it never intended to comply with the requirements to secure insurance and only terminate for good cause); 3) Breach of Contract (against Defendant New Cingular, alleging a failure to get required insurance and using more space than was contracted for), and; 4) Negligence (against both Defendants, alleging at 23 that “[a]n employee of New Cingular or Cricket unplugged a heating coil that protected Whispering Oaks’ water pipes from freezing during winter,” causing damage to the property). Defendants assert that “Plaintiff cannot establish all of the required elements of the first, second, third, and/or fourth causes of action in the Complaint, and/or that there is a complete defense to Plaintiff’s first, second, third and/or fourth causes of action.” (Notice of Motion at 1:24-26.)

Request for Judicial Notice
A precondition to judicial notice in either its permissive or mandatory form is that the matter to be noticed be relevant to the material issue before the Court. (Silverado Modjeska Recreation and Park Dist. v. County of Orange (2011) 197 Cal.App.4th 282, 307, citing People v. Shamrock Foods Co. (2000) 24 Cal.4th 415, 422 fn. 2.)

With his opposition to the motion, Plaintiff has submitted a request for judicial notice (“RJN”) asking the Court to take notice of six purported facts “pursuant to Evid. Code §§ 352 & 353” (RJN at 1:20-21). The request is DENIED as §§ 352 and 353 do not support judicial notice.

Motion for Summary Judgment/Adjudication
The targeted pleading limits the issues presented for a motion for summary judgment or adjudication, and such a motion may not be granted or denied based on an issue not raised by the targeted pleading. (See Government Employees Ins. Co. v. Sup. Ct. (2000) 79 Cal.App.4th 95, 98; Laabs v. City of Victorville (2008) 163 Cal.App.4th 1242, 1258; 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.”].) 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.) 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. (See CCP §437c(f)(1); 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.”]; Palm Spring Villas II Homeowners Association, Inc. v. Parth (2016) 248 Cal.App.4th 268, 288.) Summary adjudication of general “issues” or of facts is not permitted. (See Raghavan v. The Boeing Company (2005) 133 Cal.App.4th 1120, 1136.)

The moving party’s declarations and evidence will be strictly construed in determining whether they negate or disprove an essential element of a plaintiff’s claim “in order to resolve any evidentiary doubts or ambiguities in plaintiff’s (or opposing party’s) favor.” (Johnson v. American Standard, Inc. (2008) 43 Cal.4th 56, 64, parentheses added.) While the same standards of admissibility govern both, the opposition declarations are liberally construed while the moving party’s evidence is strictly scrutinized. (Saelzler v. Advanced Group 400 (2001) 25 Cal.4th 763, 768.) The evidence must be liberally construed in support of the opposing party, resolving any doubts in favor of that party. (Yanowitz v. L’Oreal USA, Inc. (2005) 36 Cal.4th 1028, 1037.) The moving party may generally not rely on additional evidence filed with its Reply papers. (San Diego Watercrafts, Inc. v. Wells Fargo Bank, N.A. (2002) 102 Cal.App.4th 308, 316.)

“A defendant seeking summary judgment [or adjudication] must show that at least one element of the plaintiff’s cause of action cannot be established, or that there is a complete defense to the cause of action. … The burden then shifts to the plaintiff to show there is a triable issue of material fact on that issue.” (Alex R. Thomas & Co. v. Mutual Service Casualty Ins. Co. (2002) 98 Cal.App.4th 66, 72; internal citations omitted, brackets added.)

Defendants’ motion for summary judgment/adjudication is DENIED as follows. Defendants’ motion makes two main arguments: first that all of Plaintiff’s claims in the Complaint are time-barred under California law and second that Plaintiff cannot show that either Defendant breached the contracts (the leases) in the manner alleged in the Complaint (Plaintiff being bound by his Complaint on summary judgment).

In Nedlloyd Lines B.V. v. Superior Court (1992) 3 Cal.4th 459, the California Supreme Court announced that “[i]n determining the enforceability of arm’s-length contractual choice-of-law provisions, California courts shall apply the principles set forth in Restatement section 187, which reflects a strong policy favoring enforcement of such provisions.” (Id. at 464-465, emphasis added.) “[T]he proper approach under Restatement section 187, subdivision (2) is for the court first to determine either: (1) whether the chosen state has a substantial relationship to the parties or their transaction, or (2) whether there is any other reasonable basis for the parties’ choice of law. If neither of these tests is met, that is the end of the inquiry, and the court need not enforce the parties’ choice of law. If, however, either test is met, the court must next determine whether the chosen state’s law is contrary to a fundamental policy of California. If there is no such conflict, the court shall enforce the parties’ choice of law. If, however, there is a fundamental conflict with California law, the court must then determine whether California has a ‘materially greater interest than the chosen state in the determination of the particular issue ….’ (Rest., § 187, subd. (2).) If California has a materially greater interest than the chosen state, the choice of law shall not be enforced, for the obvious reason that in such circumstance we will decline to enforce a law contrary to this state’s fundamental policy.” (Id. at 467. See also Washington Mutual Bank, FA v. Superior Court (2001) 24 Cal.4th 906, 914-915 [“When the parties have an agreement that another jurisdiction’s law will govern their disputes, the appropriate analysis for the trial court to undertake is set forth in Nedlloyd . . . which addresses the enforceability of contractual choice-of-law provisions.”]) “No fundamental state policy prohibits applying a foreign jurisdiction’s statutes of limitation to claims brought in California Courts. In the absence of a choice-of-law provision, California’s conflict of laws principles recognize that it may be appropriate to apply a foreign state’s statute of limitations instead of California’s.” (1 Witkin, Summary of Cal. Law, (11th ed. 2017), Contracts § 70. See also ABF Capital Corp. v. Berglass (2005) 130 Cal.App.4th 825, 836 [contracting parties may “both shorten and extend limitation periods”].)

Both contracts at issue here have choice of law provisions, and both clearly have a “substantial relationship” to Missouri as they are each a lease of real property located within Missouri. The lease between Whispering Oak Health Center and Defendant Cricket (“Water Tank Lease with Option”), submitted as Exhibit A to the declaration of Defense Counsel Raymond Bolanos, expressly states in paragraph 18(e) that “This Lease shall be construed in accordance with the laws of the state of Missouri.” The “Option to Lease and Tower Lease Agreement,” between Whispering Oaks and AT&T Wireless PCS, Inc. “by and through its agent” Wireless PCS, Inc., submitted as Exhibit D to the Bolanos Declaration, does not expressly name Missouri, but does state in paragraph 22(f) that “This Lease shall be construed in accordance with the laws of the state in which the Property is located,” and the “Property” is clearly identified in exhibits to the Lease as a portion of the Whispering Oaks site located in St. Louis County in Missouri.

Defendants have failed to meet their initial burden as to their first argument that all of Plaintiff’s claims are time-barred under California law. Defendants have failed to perform the analysis set forth in the Nedlloyd decision (citing exclusively to authority which predates it) and the Restatement to establish that the contracts’ choice-of-law provisions should be disregarded and California law applied. Missouri clearly has a substantial relationship with the transactions in dispute here and a fundamental interest in what limitation periods apply to contract disputes concerning real property located within its borders. Enforcing the choice-of-law provisions in the leases also does not conflict with any fundamental policy of California law as California has no particular interest in the dispute and allows for both the enforcement of express contractual choice-of-law provisions and the application of foreign state statutes of limitations where appropriate. Defendants notably fail to make any argument that any of Plaintiff’s claims are time-barred under Missouri law. The statute of limitations argument is the only argument made against the Complaint’s fourth cause of action for Negligence.

Defendants have also not established their second argument; that they did procure the insurance policies the Complaint’s breach of contract claims (the first cause of action alleged against Cricket and the third cause of action alleged against New Cingular) allege they failed to acquire. Plaintiff is correct that the declarations offered by Robert Killingsworth (the sole support for Defendants’ undisputed material facts 7-9 and 21-23) and by Jacob Neely (the sole support for Defendants’ undisputed material facts 36-37) are both from out-of-state declarants (Kansas and Texas respectively) who fail to state that their declarations are made “under penalty of perjury under the laws of the state of California,” as required by CCP § 2015.5. They are therefore inadmissible. “[S]ection 2015.5 specifies that a declaration must either reveal a ‘place of execution’ within California, or recite that it is made ‘under the law of the State of California.’ . . . We now decide if declarations signed under penalty of perjury outside this state satisfy section 2015.5, and are admissible in summary judgment and other authorized proceedings, even though the contents are not certified as true ‘under the laws of the State of California.’ The answer to this narrow question is no.” (Kulshrestha v. First Union Commercial Corp. (2004) 33 Cal.4th 601, 606, emphasis in original. See also ViaView, Inc. v. Retzlaff (2016) 1 Cal.App.5th 198, 217 (6th Dist., citing Kulshrestha) [“[The] declaration in opposition to the motion to quash was not signed under penalty of perjury under the laws of the State of California as required by section 2015.5. It therefore had no evidentiary value and we shall not consider it in our review of the jurisdictional issue.”]) As the Killingsworth and Keely declarations are inadmissible, and Defendants have not cited any other evidence to demonstrate that they had the contractually required insurance policies, they cannot meet their initial burden as to either breach of contract claim or the third cause of action for fraud against Defendant Cricket (alleging in part that it had no intention of acquiring the required insurance when it promised to do so).

The Court will not consider the purported “corrected” declarations filed on February 23, 2018, 11 days before the hearing date. Defendants’ motion was filed on December 11, 2017. Pursuant to CCP § 437c(a)(2) all “supporting papers shall be served . . . at least 75 days before the time appointed for hearing.”

Even if the inadmissibility of the Killingsworth and Neely declarations could be overlooked (and it cannot) the declarations do not state quite what Defendants claim. Both of the leases state that the Lessee must provide “Commercial General Liability Insurance in an aggregate amount” of 1 million dollars. (See exhibit A to the Bolanos declaration at 10(a) and exhibit D to the Bolanos declaration at 12a). Mr. Killingworth and Mr. Neely do not actually state that either Defendant acquired such a policy. Each of them only states that Defendants acquired “a Commercial Insurance Policy” with coverage of 1 million dollars. (See Killingsworth declaration at 4-5 and the Neely declaration at 4-5.) There may be no meaningful distinction between these terms but this cannot be established based on the scant evidence submitted by Defendants.

As for Defendant Cricket’s argument that it did in fact terminate its lease (exhibit A to the Bolanos declaration) for good cause, even if it is assumed that the declaration submitted by Victoria Forbes sufficiently establishes this, this is not enough to meet the initial burden for summary adjudication of the first and second causes of action as the argument does not “wholly dispose” of either claim as required by CCP §437c(f)(1).

In granting or denying a motion for summary judgment or summary adjudication, the court need rule only on those objections to evidence that it deems material to its disposition of the motion. Objections to evidence that are not ruled on for purposes of the motion shall be preserved for appellate review.” (CCP § 437c(q).) The Court notes that with his opposition Plaintiff has submitted objections to portions of the declarations submitted by Victoria Forbes, Robert Killingsworth, Jacob Neely and Raymond Bolanos. These objections do not fully comply with Rule of Court 3.1354, which requires the filing of two documents, evidentiary objections and a separate proposed order on the objections, both of which must be in one of the two approved formats set forth in the Rule. Therefore the Court will not rule on the objections. (See Vineyard Spring Estates v. Super. Ct. (2004) 120 Cal.App.4th 633, 642 [trial courts only have duty to rule on evidentiary objections presented in proper format]; Hodjat v. State Farm Mutual Automobile Ins. Co. (2012) 211 Cal.App.4th 1 [trial court not required to rule on objections that do not comply with Rule of Court 3.1354 and not required to give objecting party a second chance at filing properly formatted papers].)