Case Name: Chiocchi Development Company v. Arman, et al.
Case No.: 16-CV-297244

Plaintiff/cross-defendant Chiocchi Development Company (“Chiocchi Development” or “Plaintiff”) moves for summary judgment, or in the alternative, summary adjudication, in its favor and against defendants/cross-complainants Mark Arman and Christine Arman (the “Armans”) as to Plaintiff’s complaint (“Complaint”). Chiocchi Development and cross-defendants William Alan Chiocchi (“Chiocchi”), Suretec Insurance Company, Inc. (“Suretec”) and Old Republic Surety Company (“Old Republic”) (collectively, “Cross-Defendants”) move for summary judgment, or in the alternative, summary adjudication in their favor and against the Armans as to their first amended cross-complaint (“FACC”).

After full review of the evidence, authorities and separate statements submitted by the parties, the Court makes the following rulings:

Chiocchi and Cross-Defendants’ request for judicial notice is DENIED. Judicial notice, “since it is a substitute for proof, is always confined to those matters which are relevant to the issue at hand.” (Gbur v. Cohen (1979) 93 Cal.App.3d 296, 301.) The Court cannot discern how the Arman’s marital status is relevant to the claims at issue and thus will not take judicial notice of materials relating thereto.

Chiocchi and Cross-Defendants’ motion for summary judgment, or in the alternative, summary adjudication, is DENIED.

First, with respect to the Arman’s FACC, given the express terms of the written “Contract for Construction” (“Construction Contract”) signed by the parties on October 28, 2011, the Court finds that the limitations provision contained therein does not apply to the claims asserted in the cross-complaint. By its terms, the Construction Contract applied to the bathroom and bedroom remodel that began in 2011. There is no mention in the agreement of any of the work that followed that gave rise to the claims in the FACC. It is undisputed that the Armans hired Plaintiff to perform further remodeling work on their residence in August 2012 and that this work included a substantial renovation affecting the living room, master bath, master hallway, master bedroom, main outdoor living area, outdoor kitchen and the backyard. (UMF No. 145; Chiocchi Decl., ¶ 7; Declaration of Mark Arman in Support of Opposition to Motion for Summary Judgment/Adjudication (“M. Arman Decl.”) ¶ 4.) None of these projects are discussed, much less contemplated in the Construction Contract. Chiocchi is clearly attempting to bootstrap the latter project into the agreement expressly created for the former, but offers no authority or facts to support such an approach. There is simply no language in the Construction Contract which evidences that it was the parties’ mutual intention that the agreement and all of its terms apply to any subsequent projects performed by Chiocchi on the Arman’s residence. And, by its own language, the limitation provision only applies to actions “arising from or relating to the [Construction Contract]” or its performance. The claims in the FACC do not relate at all to the work that was performed under the Construction Contract, i.e., the bathroom and bedroom remodel, and thus the limitations provision does not apply. The mere fact that the Armans agreed to also have the work done on Phase 2 on a cost plus 15% contract without a fixed price as they did in Phase 1 does not establish that the parties’ intended for all of the terms of the Construction Contract to apply to the second project.

As for Chiocchi’s Complaint, with regard to the first cause of action for breach of contract, the Court finds that Chiocchi has met its initial burden by producing admissible evidence on each element of the claim. (See Chiocchi’s Separate Statement of Undisputed Material Fact in Support of Motion for Summary Judgment, or in the Alternative, Summary Adjudication (“UMF”), Nos. 5, 66- 68; Declaration of William Chiocchi in Support of Motion for Summary Judgment/Adjudication (“Chiocchi Decl.”), ¶¶ 21, 27.) However, the Court also finds that the Armans have demonstrate a triable issue in opposition- namely, whether or not they agreed to enter into the Note based on a mistake of fact, that mistake being believing that the amounts claimed by Chiocchi were accurate. (Declaration of Mark Arman in Support of Opposition to Motion for Summary Judgment/Adjudication (“M. Arman Decl.”) ¶¶ 10, 12-17, 21, 26, 28, 31, 34, 36-39.)

Further, the one things that seems clear in this whole situation is that there is a lack of clarity regarding how much was actually expended by Chiocchi on the remodeling work and thus how much is owed by the Armans. This lack of clarity calls into question whether the mutual consent necessary to create an enforceable contract (the Note) ever took place between the Armans and Chiocchi. It would be inappropriate to award summary adjudication in such circumstances.

Summary adjudication of the common counts is not appropriate for the same reason. An account stated may be attacked by proof of “fraud, duress, mistake, or other grounds cognizable in equity for the avoidance of an instrument.” (Id.; see also Wenben Estate, Inc. v. Hewlett (1924) 193 Cal. 675, 702.) As set forth above, the Armans have submitted evidence which supports their contention that they mistakenly believed that they owed the amounts claimed by Chiocchi when they entered into the Note. Given such a mistake, there is a question as to whether the Armans’ truly assented to the account stated (i.e., the Note) such that they can be held to its terms.