Case Name: Horatio Ulescu, et al. v. Janice Battistella, et al.
Case No.: 2015-1-CV-278978

(1) Thrifty Car Sales, Inc.’s Motion for Summary Judgment or Summary Adjudication of Issues as to Plaintiff Horatio Ulescu
(2) Thrifty Car Sales, Inc.’s Motion for Summary Judgment or Summary Adjudication of Issues as to Plaintiff Vito Riggio

Factual and Procedural Background

Plaintiffs Horatio Ulescu, Rupinder Judge, My International Fund, LLC, Vito and Shirley Riggio, Vincent W. and Tina Q. Guan, Jeffrey D. and Marian K. Urman, Sushrut Gogte, and Carolyn Whitley (collectively, “Plaintiffs”) allege defendant Thrifty Car Sales, Inc. (“Thrifty”) entered into a Car Sales Dealer Agreement (“Agreement”) with defendant Stevens Creek Ventures, Inc. dba Thrifty Car Sales (“SCV”) on or about March 31, 2008. (Second Amended Complaint (“SAC”), ¶5.) Pursuant to the Car Sales Dealer Agreement, defendant Thrifty was a franchisor and defendant SCV a franchisee of a used vehicle sales business. (SAC, ¶3.) Ronald Battistella (“Battistella”) executed the Agreement as President of defendant SCV and individually as a guarantor. According to the allegations, Battistella was an agent of defendant Thrifty. (SAC, ¶6.)

In June 2010, Battistella placed an advertisement offering exceptional returns on investment with defendant Autofirst Financial. (SAC, ¶7 and Exh. J.) Between May 2010 and April 2011, Battistella fraudulently induced Plaintiffs into entering promissory note agreements whereby Plaintiffs loaned money to “Thrifty Car Sales/ Ronald Battistella” who promised to repay Plaintiffs with 10 percent to 12 percent interest and purportedly secured repayment with title to vehicles. (SAC, ¶¶7 – 16 and 26.) Battistella was able to induce Plaintiffs, in part, by representing that Plaintiffs’ investments were backed by “Dollar Thrifty Auto Group, a National Auto Group” and defendant Thrifty’s national offices. (SAC, ¶¶9 and 11.) Plaintiffs relied on Battistella because defendant Thrifty’s name appeared on signage, the promissory notes identified “Thrifty Car Sales” as the borrower, and Battistella requested Plaintiffs issue checks to “Thrifty Car Sales” and not to Battistella individually. Plaintiffs did not receive repayment of their funds and the purported security (title to vehicles) was, in reality, worthless because the associated vehicles did not exist or had already been sold. (SAC, ¶¶10, 45 and 47.)

On or about May 30, 2012, Battistella filed a petition for bankruptcy. (SAC, ¶35.) In July 2014, Battistella pleaded guilty to and was convicted of nine felony counts stemming from the above-discussed fraudulent acts. (SAC, ¶38.) On or about October 3, 2014, Battistella was sentenced to five years in state prison. (Id.)

On April 6, 2015, Plaintiffs filed a complaint against Battistella’s wife (Janice Battistella), SCV, Autofirst Financial, and Thrifty, among others asserting causes of action for:

(1) Breach of Contract
(2) Fraud
(3) Vicarious Liability
(4) Conspiracy

On May 22, 2015, defendant Janice Battistella filed a demurrer to Plaintiffs’ complaint. On June 29, 2015, Plaintiffs filed a first amended complaint (“FAC”) which asserted causes of action for:

(1) Breach of Contract
(2) Fraud
(3) Conspiracy to Commit Fraud

On June 30, 2015, defendant Janice Battistella filed another demurrer to Plaintiffs’ FAC. On August 12, 2015, the court sustained defendant Janice Battistella’s demurrer to the FAC with leave to amend.

On August 21, 2015, Plaintiffs filed the SAC which now serves as the operative pleading in this action. The SAC asserts causes of action for:

(1) Breach of Contract
(2) Fraud
(3) Conspiracy to Commit Fraud

On September 15, 2015, defendant Thrifty filed its answer to the SAC.

On January 20, 2016, defendant Janice Battistella filed a general denial.

On January 24, 2017, defendant Thrifty filed the motions now presently before the court: (1) a motion for summary judgment/ adjudication of issues as to plaintiff Horatio Ulescu (“Ulescu”); and (2) a motion for summary judgment/ adjudication of issues as to plaintiff Vito Riggio (“Riggio”).

On April 4, 2017, plaintiff Riggio filed opposition.

On April 5, 2017, plaintiff Ulescu filed opposition.

Discussion

I. Procedural violation.

As a preliminary matter, the court notes that plaintiffs Riggio and Ulescu’s oppositions are untimely filed. Code of Civil Procedure section 437c, subdivision (b)(2) states, “Any opposition to the motion shall be served and filed not less than 14 days preceding the notice or continued date of hearing, unless the court for good cause orders otherwise.” Based on a hearing date of April 13, 2017, plaintiffs’ oppositions were due on March 30, 2017. Plaintiff Riggio did not file opposition until April 4, 2017, five calendar days late. Plaintiff Ulescu did not file opposition until April 5, 2017, six calendar days late.

California Rules of Court, rule 3.1300, subdivision (d) states, “No paper may be rejected for filing on the ground that it was untimely submitted for filing. If the court, in its discretion, refuses to consider a late filed paper, the minutes or order must so indicate.”

Defendant Thrifty filed summary judgment/ adjudication motions against each of the named plaintiffs with hearing dates on April 4, 6, 11, 13, and 18, 2017. Plaintiffs are all represented by the same counsel. Plaintiffs Koichi Yube and My International Fund, LLC already filed late opposition for a summary judgment/ adjudication motion heard on April 4, 2017. Plaintiffs Vincent W. Guan and Sushrut Gogte filed late opposition for summary judgment/ adjudication motions heard on April 6, 2017. Plaintiffs Rupinder Judge and Jeffrey D. Urman filed late opposition for summary judgment/ adjudication motions heard on April 11, 2017. At the hearing on April 4, 2017, the court explained how untimely filings greatly impact not only opposing counsel’s ability to prepare a reply, but the court’s ability to prepare a tentative ruling. The court previously admonished plaintiffs’ counsel that there would be consequences for the failure to timely file oppositions. Having again filed untimely oppositions, plaintiffs’ counsel is hereby ordered to personally appear on April 13, 2017 and show cause why the court should not issue $1,000 in sanctions pursuant to Code of Civil Procedure section 177.5.

II. Defendant Thrifty’s motion for summary judgment as to plaintiff Ulescu is DENIED.

A. Agency Liability.

The two causes of action directed against defendant Thrifty are breach of contract and fraud. Defendant Thrifty’s liability for either cause of action is premised on plaintiffs’ allegation that Battistella was an agent of defendant Thrifty. “Under the theory of respondeat superior, a principal/employer is vicariously liable for an agent/employee’s torts committed within the scope of the agency/employment.” (Perez v. Van Groningen & Sons, Inc. (1986) 41 Cal.3d 962, 967; see also CACI, No. 3700.)

Defendant Thrifty moves for summary judgment/ adjudication by arguing that Battistella/SCV was not its agent. Defendant Thrifty proffers the following background facts: Thrifty franchises car dealerships. In the spring of 2008, defendant Thrifty issued a franchise to defendant SCV. Pursuant to the franchise agreement, SCV is an independent contractor and not authorized to act as an agent for defendant Thrifty. Under the franchise agreement, defendant Thrifty has no right to control the day to day operations of SCV or any other franchisee. Defendant Thrifty has never had any role in financing franchisee vehicles and franchisees are allowed to use any financing from any source. Defendant Thrifty does not provide any financing and does not control how a franchisee finances its business operations. SCV’s use of Thrifty’s mark is limited to selling cars and Thrifty’s control is limited to controlling the manner in which its trademark and trade dress are displayed. Franchisees could purchase showroom posters from Thrifty. Each poster states the location is “independently owned and operated.”

Plaintiff Ulescu first met Battistella when Ulescu responded to newspaper ads featuring the name “Autofirst Financial” and offering 10% interest. Neither “Thrifty Care Sales, Inc.” nor “Thrifty” appeared in any of the advertisements. Plaintiff Ulescu’s first met with Battistella at the end of May 2010. Plaintiff Ulescu did not recall seeing any Thrifty signs at the first meeting. Prior to making the loan, plaintiff Ulescu did not recall seeing any words on the door or posters, etc. Plaintiff Ulescu saw a power point or pdf slide deck about Autofirst Financial. None of the slides referred to “Thrifty Car Sales, Inc.” The slide deck was the only promotional material plaintiff Ulescu received. Plaintiff Ulescu received a business card from Battistella. According to defendant Thrifty the business card identified SCV as a licensee. [There is no admissible evidence as to whether plaintiff Ulescu read the business card or observed any writings contained therein.] Plaintiff Ulescu thinks he “probably” saw stationery which described SCV as a licensee. [There is no admissible evidence as to whether plaintiff Ulescu read the stationery or observed any writings contained therein.] On June 5, 2010, plaintiff Ulescu made an initial loan of $50,000 to “Thrifty Car Sales/ Ronald Battistella, owner of 3565 Stevens Creek Boulevard.” Plaintiff Ulescu made a second loan for $100,000 on July 3, 2010.

Under the Franchise Investment Law, a franchise agreement confers the right to use a trade name, service mark, or logo pursuant to a marketing plan prescribed by the franchisor. (Corp. Code, § 31005, subd. (a)(1).) “[T]he franchisor’s interest in the reputation of its entire [marketing] system allows it to exercise certain controls over the enterprise without running the risk of transforming its independent contractor franchise into an agent.” (Cislaw v. Southland Corp., supra, 4 Cal.App.4th 1284, 1292.)

In determining whether a true agency relationship exists between a franchisor and franchisee, the courts focus on the right to control. (Wickham v. Southland Corp. (1985) 168 Cal.App.3d 49, 59 [213 Cal.Rptr. 825]; Nichols v. Arthur Murray, Inc. (1967) 248 Cal.App.2d 610, 613 [56 Cal.Rptr. 728].) If the “franchise agreement gives the franchisor the right of complete or substantial control over the franchisee, an agency relationship exists. [Citation.] ‘[I]t is the right to control the means and manner in which the result is achieved that is significant in determining whether a principal-agency relationship exists.’ [Citation].” (Cislaw v. Southland Corp., supra, 4 Cal.App.4th 1284, 1288.)

(Kaplan v. Coldwell Banker Residential Affiliates, Inc. (1997) 59 Cal.App.4th 741, 745 (Kaplan).)

The evidence proffered by defendant Thrifty is that it had no right to control defendant SCV. Plaintiff Ulescu does not challenge defendant Thrifty’s assertion that a true agency did not exist. Under Kaplan and Cislaw, it is proper for the court to decide that, as a matter of law, a true agency relationship did not exist between defendant Thrifty and Battistella/SCV under these circumstances.

Even in the absence of a true agency relationship, defendant Thrifty may be liable under an ostensible agency theory.

Civil Code section 2300 provides: “An agency is ostensible when the principal intentionally, or by want of ordinary care, causes a third person to believe another to be his agent who is not really employed by him.” (See also Civ. Code, § 2317.)
…

“ ‘It is elementary that there are three requirements necessary before recovery may be had against a principal for the act of an ostensible agent. The person dealing with the agent must do so with belief in the agent’s authority and this belief must be a reasonable one; such belief must be generated by some act or neglect of the principal sought to be charged; and the third person in relying on the agent’s apparent authority must not be guilty of negligence. [Citation.]’ ” (Associated Creditors’ Agency v. Davis (1975) 13 Cal.3d 374, 399 [118 Cal.Rptr. 772, 530 P.2d 1084].)

The ostensible authority of an agent cannot be based solely upon the agent’s conduct. (Lindsay-Field v. Friendly (1995) 36 Cal.App.4th 1728, 1734 [43 Cal.Rptr.2d 71].) “Liability of the principal for the acts of an ostensible agent rests on the doctrine of ‘estoppel,’ the essential elements of which are representations made by the principal, justifiable reliance by a third party, and a change of position from such reliance resulting in injury. [Citation.]” (Preis v. American Indemnity Co. (1990) 220 Cal.App.3d 752, 761 [269 Cal.Rptr. 617].)

(Kaplan, supra, 59 Cal.App.4th at p. 747.)

In Kaplan, “[the plaintiff’ purchased three parcels of agricultural property from [the sellers] for approximately $1 million. [Plaintiff] later discovered that the property was not as represented. [Plaintiff], a superior court judge, was an experienced investor and had employed real estate brokers in other transactions. Before purchasing the property, he had been involved in the purchase or sale of an office building, some storefront commercial property, five single-family residences, an apartment building, and commercial property. [¶] [Plaintiff] filed suit against [the sellers] and their real estate broker … for fraud, misrepresentation, and breach of fiduciary duty. [Plaintiff] also sued his own broker, Eric L. Marsh doing business as Coldwell Banker Citrus Valley Realtors, and salesperson, Philip Davidson, who assisted him in the transaction. [¶] Coldwell Banker was named as a defendant on a respondeat superior theory. [Plaintiff] alleged that he “… placed great faith and trust in said defendants, and each of them, particularly because … [Marsh] was part of the Coldwell Banker organization which had an established reputation for honesty, integrity and expertise.” [¶] However, Marsh independently owned and operated his real estate office, Coldwell Banker Citrus Valley Realtors, a Coldwell Banker franchise. The franchise agreement required Marsh to hold himself out to the public as “an independently owned and operated member of Coldwell Banker Residential Affiliates, Inc.” This disclaimer language was printed on Marsh’s advertising but much smaller than that touting Coldwell Banker. [Footnote.] [¶] [Plaintiff] testified that he “went for the sign,” did not notice the disclaimer language, and trusted Coldwell Banker, a large reputable company with a national existence.”

(Id. at p. 744.)

The trial court in Kaplan granted summary judgment in favor of Coldwell Banker. In reversing the trial court ruling, the Kaplan court explained:

Here Coldwell Banker made no specific representations to appellant personally. It did, however, make representations to the public in general, upon which appellant relied. We understand why appellant, and members of the public generally, might believe that Coldwell Banker “stood behind” Marsh’s realty company. The venerable name, Coldwell Banker, the advertising campaign, the logo, and the use of the word “member” were and are designed to bring customers into Coldwell Banker franchises. As appellant stated at his deposition: Coldwell Banker’s “outreach was successful. I believed they [Marsh and Davidson] were Coldwell Banker. They do a good job of that.”

Appellant, a sophisticated real estate investor and superior court judge, did not notice the small print disclaimer language. Instead, he relied on the large print and believed that he was dealing with Coldwell Banker, i.e., that Coldwell Banker “stood behind” Marsh. An ordinary reasonable person might also think that Marsh was an ostensible agent of Coldwell Banker. We obviously express no opinion on whether a trier of fact will so conclude or whether appellant was himself negligent. (Associated Creditors’ Agency v. Davis, supra, 13 Cal.3d at p. 399.)

Whether ostensible agency exists “… is a question of fact … and may be implied from circumstances. [Citation.]” (Yanchor v. Kagan (1971) 22 Cal.App.3d 544, 550 [99 Cal.Rptr. 367]; see also Walker v. Signal Companies, Inc. (1978) 84 Cal.App.3d 982, 999 [149 Cal.Rptr. 119].) For summary judgment purposes, it is sufficient to observe that a triable issue of material fact is present. …

Our holding is not a declaration that Coldwell Banker, or other large real estate franchise companies, are routinely fair game for any real estate transaction gone awry. However, where, as here, the plaintiff introduces some evidence raising a triable issue of fact on an ostensible agency theory, such is sufficient to withstand summary judgment.

(Id. at pp. 747–48.)

In opposition, plaintiff Judge presents evidence which, like the plaintiff in Kaplan, would create a triable issue of material fact with regard to the first two of the three requirements necessary for finding a principal liable under an ostensible agency theory. For instance, there is a dispute with regard to whether the promotional material given to plaintiff Ulescu referenced defendant Thrifty. Plaintiff Ulescu testified that at least one of the pages stated that “Auto First Financial is a Division of Dollar Thrifty Auto Group.” (See Deposition Ulescu, p. 30, lines 19 – 22.) This goes to the issue of whether plaintiff Ulescu had reason to believe he was dealing with an agent of Thrifty.

Plaintiff Ulescu also testified that he still does not understand the distinction between defendant Thrifty and Battistella’s companies. (See Deposition Ulescu, p. 26, lines 4 – 12.) Plaintiff Ulescu also testified that he did not understand SCV and Thrifty were distinct entities. (See Deposition Ulescu, p. 38, line 23 – p. 39, line 6.) Plaintiff understood Battistella to be the owner of Thrifty Car Sales and understood Thrifty Car Sales to be the borrower. (See Deposition Ulescu, p. 41, line 17 – p. 42, line 3.)

Just as in Kaplan, the evidence is in dispute and at least creates a triable issue with regard to whether “[t]he person dealing with the agent [Ulescu] did so with belief in the agent’s authority” and this belief was “generated by some act or neglect of the principal sought to be charged.” Defendant Thrifty’s evidence acknowledges that SCV had authority to use its trademark pursuant to the car sales dealer agreement. Thrifty’s own evidence also acknowledges that the words, “Thrifty Car Sales” and “Dollar Thrifty Auto Group” appeared in materials that plaintiff Judge received and the promissory notes identified “Thrifty Car Sales/Ronald Battistella Owner of 3939 Stevens Creek Blvd., Santa Clara, CA 95050” as the borrower. Just as in Kaplan, this evidence is sufficient to at least present a triable issue as to whether an ordinary reasonable person might think that Battistella was an ostensible agent of defendant Thrifty.

In moving for summary judgment, defendant Thrifty also takes aim at the third requirement necessary for ostensible agency liability, i.e., the third person in relying on the agent’s apparent authority must not be guilty of negligence. Defendant Thrifty proffers evidence that plaintiff Ulescu acted negligently in relying on Battistella/SCV’s apparent authority. “A principal is bound by acts of his agent, under a merely ostensible authority, to those persons only who have in good faith, and without want of ordinary care, incurred a liability or parted with value, upon the faith thereof.” (Civ. Code, §2334.) “[T]he third person in relying on the agent’s apparent authority must not be guilty of negligence.” (Kaplan, supra, 59 Cal.App.4th at p. 747.) “A third person, such as appellant, is not compelled to deal with an agent; but if he does so, he must take the risk. He takes the risk not only of ascertaining whether the person with whom he is dealing is the agent, but also of ascertaining the scope of his powers.” (Ernst v. Searle (1933) 218 Cal. 233, 240.) Kaplan does not aid plaintiff Ulescu on this issue because Kaplan specifically declined to address whether the plaintiff was himself negligent.

In another decision relied upon by plaintiff Judge, Beck v. Arthur Murray, Inc. (1966) 245 Cal.App.2d 976 (Beck), the court touched on the issue of a plaintiff’s duty to investigate.

Defendant alleges that plaintiff had a duty to investigate the existence and scope of authority. (Ernst v. Searle (1933) 218 Cal. 233, 240 [22 P.2d 715].) However, once all the necessary elements of ostensible agency have been established, there would be no additional duty to investigate. It is true that a finding of “reasonable” reliance may or may not require an original investigation by the plaintiff, depending on the facts of the case; but it is conceivable that a reasonable belief can be engendered in the mind of a third party by certain factors, such that there would be no necessity for further inquiry. If the reliance is found to be reasonable, there is no further duty to investigate.

(Beck, supra, 245 Cal.App.2d at p. 981.)

The Beck court held that a duty to investigate will depend upon the facts of a particular case. Unlike some of the other plaintiffs in this case, there is at least a triable issue as to whether plaintiff Ulescu understood defendant Thrifty was a separate and distinct entity from Battistella/SCV. In that regard, the facts here are more akin to Beck. In Beck, the plaintiff there was not made aware of and did not notice that a dance studio was operated by a licensee of a dance studio rather than the licensor. Similarly here, there is at least a triable issue as to whether plaintiff Ulescu had sufficient awareness of the distinction between Battistella/SCV and Thrifty. This triable issue must be decided first before the court can determine whether a duty to investigate arises. If plaintiff Ulescu reasonably engendered a belief that there was no distinction, then under Beck, he would have no duty to further investigate.

Accordingly, defendant Thrifty’s motion for summary judgment as to plaintiff Ulescu is DENIED.

B. Statute of Limitations.

“While resolution of the statute of limitations issue is normally a question of fact, where the uncontradicted facts established through discovery are susceptible of only one legitimate inference, summary judgment is proper.” (Jolly v. Eli Lilly & Co. (1988) 44 Cal.3d 1103, 1112.)

Defendant Thrifty additionally moves for summary adjudication of the first cause of action for breach of contract on the ground that it is barred by the statute of limitations. Defendant Thrifty contends the two year statute of limitations applies for “[a]n action upon a contract, obligation or liability not founded upon an instrument of writing” [Code Civ. Proc., §339] because it did not sign the promissory notes at issue. The promissory notes were signed by Battistella. Defendant Thrifty relies upon James De Nicholas Associates, Inc. v. Heritage Constr. Corp. (1970) 5 Cal.App.3d 421 (Heritage). In Heritage, the court addressed the issue of whether “a cause of action may be founded on an instrument in writing notwithstanding that such instrument was not signed by defendant, where the defendant accepts the contract.” (Heritage, supra, 5 Cal.App.3d at p. 425.) Defendant Thrifty contends that it did not sign the promissory note and did not otherwise accept the promissory note. Defendant Thrifty’s reliance on Heritage is misplaced. There is no dispute defendant Thrifty did not sign the promissory notes at issue and did not otherwise accept them. The issue here is whether defendant Thrifty is liable on the promissory notes based on the actions of its purportedly ostensible agent, Battistella/SCV. As noted above, a triable issue exists with regard to whether Battistella/SCV is an ostensible agent.

Defendant Thrifty argues further that even if the four year statute of limitation for breach of written contract [Code Civ. Proc., §337] applies, plaintiff Ulescu’s claim is barred because the cause of action accrued in June 2010 and plaintiff Judge should have filed a complaint no later than June 2014, but did not commence this action until April 6, 2015.

“The cause of action for breach of contract ordinarily accrues at the time of breach, and the statute begins to run at that time regardless of whether any damage is apparent or whether the injured party is aware of his right to sue.” (3 Witkin, California Procedure (4th ed. 1996) Actions, §486, p. 611.) However, the discovery rule is also applied to breach of contract claims. In April Enterprises v. KTTV (1983) 147 Cal.App.3d 805, 832, the court held, “the discovery rule may be applied to breaches [of contract] which can be, and are, committed in secret and, moreover, where the harm flowing from those breaches will not be reasonably discoverable by plaintiffs until a future time.”

Defendant Thrifty contends the cause of action accrued in June 2010 when Battistella gave plaintiff worthless title to the vehicles as security for repayment. According to Thrifty, plaintiff Judge either knew or should have known that the title to the vehicles was worthless and thereby creating a suspicion in his mind that the promissory notes had been breached. “Under the discovery rule, the statute of limitations begins to run when the plaintiff suspects or should suspect that her injury was caused by wrongdoing, that someone has done something wrong to her. The limitations period begins once the plaintiff has notice or information of circumstances to put a reasonable person on inquiry. A plaintiff need not be aware of the specific ‘facts’ necessary to establish the claim; that is a process contemplated by pretrial discovery. Once the plaintiff has a suspicion of wrongdoing, and therefore an incentive to sue, she must decide whether to file suit or sit on her rights. So long as a suspicion exists, it is clear that the plaintiff must go find the facts; she cannot wait for the facts to find her.” (Mills v. Forestex Co. (2003) 108 Cal.App.4th 625, 642 – 643.)

Upon closer inspection, defendant Thrifty’s evidence does not establish that plaintiff Judge had any knowledge or suspicion that the title to the vehicles was worthless.

Q: Did you ever take any of those pink slips and verify that the cars with the same vehicle identification numbers were actually in his possession?
A: I did. I went several time to this lots and verified that those VINs exist actually, the cars exist.

(Deposition Ulescu, p. 21, lines 21 – 25.)

Defendant Thrifty also argues plaintiff Judge should have had a suspicion from the outset because Judge knew that a reasonable lender will appraise collateral to make sure there was sufficient equity for the loan, but never appraised the security from Battistella. However, upon closer inspection, there is evidence which would create a triable issue as to whether plaintiff Judge should have been put on inquiry.

Q: When you got the first round of pink slips, did you do anything to check to see whether the value of the vehicles represented by the pink slips were equal to the $50,000 loan?
A: I did, and they weren’t. They weren’t summing up to 50K.
…
Q: What did you do when you discovered that the value of the pink slips didn’t add up to the 50K?
A: I mentioned that to Ron and Julie I think.
Q: And what did they say?
A: They’ll send me more.

(Deposition Ulescu, p. 43, line 10 – p. 44, line 8.)

This evidence shows that to the extent plaintiff had any suspicion, those suspicions were allayed. Accordingly, defendant Thrifty’s alternative motion for summary adjudication of plaintiff Judge’s first cause of action for breach of contract is DENIED.

With regard to the cause of action for fraud, defendant Thrifty argues the claim is barred by the three year statute of limitations. (See Code Civ. Proc., §338, subd. (d).) Thrifty again argues the fraud cause of action accrued in June 2010 when Battistella gave plaintiff worthless title to the vehicles as security for repayment. As discussed above, this presents a question of fact.

Additionally, defendant Thrifty contends the cause of action accrued no later than March when Battistella stopped making interest payments. In December 2011, plaintiff Ulescu asked Battistella for repayment of the principal loan amount, but Battistella did not repay in 30 days as set forth in the promissory note. Defendant Thrifty misstates the evidence. Ulescu testified that the first missed payment occurred in March or April of 2012.

Q: When did he miss his first payment with you?
A: What was it April? March/April, if I recall, 2012.
Q: March or April?
A: Yeah.

(Deposition Ulescu, p. 47, lines 5 – 9.)

If the missed payment occurred in March 2012, the three year statute of limitations would have expired by end of March 2015 and plaintiffs did not file this action until April 6, 2015. However, since the testimony is equivocal as to whether the missed payment occurred in March or April, defendant Thrifty has not met its burden of demonstrating that the cause of action is barred. Defendant Thrifty’s alternative motion for summary adjudication of plaintiff Judge’s second cause of action for fraud is DENIED.

C. Reliance.

Defendant Thrifty separately moves for summary adjudication of the fraud cause of action by arguing that plaintiff Ulescu did not actually or reasonably rely on any representation. “It is settled that a plaintiff, to state a cause of action for deceit based on a misrepresentation, must plead that he or she actually relied on the misrepresentation.” (Mirkin v. Wasserman (1993) 5 Cal.4th 1082, 1088, internal citations omitted; see also CACI No. 1907.) Thrifty contends plaintiff Ulescu did not actually rely on any representation but instead made the decision to lend money “because he wanted a high rate of return and thought the loan was fully secured.” However, defendant Thrifty proffers no evidentiary support for this factual assertion that a high rate of return was the sole or even primary reason he loaned money. Moreover, “In establishing the reliance element of a cause of action for fraud, it is settled that the alleged fraud need not be the sole cause of a party’s reliance. Instead, reliance may be established on the basis of circumstantial evidence showing the alleged fraudulent misrepresentation or concealment substantially influenced the party’s choice, even though other influences may have operated as well.” (Sangster v. Paetkau (1998) 68 Cal.App.4th 151, 170, internal citations omitted.) Defendant Thrifty has not met its initial burden of negating actual reliance.

Thrifty argues additionally that plaintiff Ulescu did not reasonably rely. “After establishing actual reliance, the plaintiff must show that the reliance was reasonable by showing that (1) the matter was material in the sense that a reasonable person would find it important in determining how he or she would act, and (2) it was reasonable for the plaintiff to have relied on the misrepresentation.” (Hoffman v. 162 North Wolfe LLC (2014) 228 Cal.App.4th 1178, 1194, internal citations omitted.) “[T]he issue is whether the person who claims reliance was justified in believing the representation in the light of his own knowledge and experience.” (Gray v. Don Miller & Associates, Inc. (1984) 35 Cal.3d 498, 503, internal citations omitted.)

Thrifty contends it was unreasonable, as a matter of law, for plaintiff Ulescu to rely on the representations made by Battistella/SCV because plaintiff Ulescu is a computer engineer with a master’s in computer programming and a MBA and has worked as a senior manager for multiple companies including Sun Microsystems and Oracle. Thrifty proffers evidence of the minimal efforts at due diligence by plaintiff Ulescu. Plaintiff Ulescu did a general web search but found no lawsuits against Battistella. Plaintiff Ulescu did no web search for Thrifty Car Sales, Inc., Dollar Thrifty Auto Group, or any Thrifty related website. Ulescu borrowed money and understood due diligence but did not undertake any due diligence. Ulescu did not understand how to secure a loan with a vehicle and had never foreclosed on a vehicle that was security for a loan. Ulescu did not consult with an accountant, attorney, or advisor prior to making the loan.

“[G]enerally speaking, ‘ “[a] plaintiff will be denied recovery only if his conduct is manifestly unreasonable in the light of his own intelligence or information. It must appear that he put faith in representations that were ‘preposterous’ or ‘shown by facts within his observation to be so patently and obviously false that he must have closed his eyes to avoid discovery of the truth.’ [Citation.] Even in case of a mere negligent misrepresentation, a plaintiff is not barred unless his conduct, in the light of his own information and intelligence, is preposterous and irrational. … The effectiveness of disclaimers is assessed in light of these principles. [Citation.]” ’ ” (Public Employees’ Retirement System v. Moody’s Investors Service, Inc. (2014) 226 Cal.App.4th 643, 673.) “Except in the rare case where the undisputed facts leave no room for a reasonable difference of opinion, the question of whether a plaintiff’s reliance is reasonable is a question of fact.” (Beckwith v. Dahl (2012) 205 Cal.App.4th 1039, 1067.) Here, defendant Thrifty’s evidence does not demonstrate, as a matter of law, that plaintiff Ulescu’s conduct was manifestly unreasonable or that Ulescu put faith in representations that were “preposterous” or “shown by facts within his observation to be so patently and obviously false that he must have closed his eyes to avoid discovery of the truth.”

Accordingly, defendant Thrifty’s alternative motion for summary adjudication of plaintiff Judge’s second cause of action for fraud is DENIED.

D. Indispensable Party.

Finally, defendant Thrifty seeks summary judgment/ adjudication on the basis that Battistella is an indispensable party and the action should not proceed in his absence. A defect or “nonjoinder” of parties exists where “some third person is a ‘necessary’ or ‘indispensable’ party to the action; and hence must be joined before the action may proceed.” (Weil & Brown, et al., CAL. PRAC. GUIDE: CIV. PROC. BEFORE TRIAL (The Rutter Group 2016) ¶7:80, p. 7(I)-39.) A “[p]laintiff must join as parties to the action all persons whose interests are so directly involved that the court cannot render a fair adjudication in their absence.” (Id. at ¶2:151, p. 2-59 citing Code Civ. Proc., §389.)

A person who is subject to service of process and whose joinder will not deprive the court of jurisdiction over the subject matter of the action shall be joined as a party in the action if (1) in his absence complete relief cannot be accorded among those already parties or (2) he claims an interest relating to the subject of the action and is so situated that the disposition of the action in his absence may (i) as a practical matter impair or impede his ability to protect that interest or (ii) leave any of the persons already parties subject to a substantial risk of incurring double, multiple, or otherwise inconsistent obligations by reason of his claimed interest. If he has not been so joined, the court shall order that he be made a party.

(Code Civ. Proc. §389, subd. (a).)

Defendant Thrifty proffers no evidence in support of its argument. Defendant Thrifty merely asserts Battistella is the sole tortfeasor and is not a party to this action. Even so, defendant Thrifty provides no legal analysis as to how these facts render Battistella an indispensable party. Defendant Thrifty suggests there may be inconsistent rulings if plaintiffs are allowed to litigate against Thrifty in the present action and then allowed to separately litigate against Battistella. Defendant Thrifty provides no factual or legal support this conclusion.

In summary, defendant Thrifty’s motion for summary judgment or summary adjudication of issues as to plaintiff Ulescu is DENIED.

III. Defendant Thrifty’s motion for summary judgment as to plaintiff Riggio is DENIED. Defendant Thrifty’s alternative motion for summary adjudication is GRANTED, in part, and DENIED, in part.

A. Agency Liability.

Defendant Thrifty seeks summary judgment against plaintiff Riggio on the same grounds that it sought summary judgment against plaintiff Ulescu. Defendant Thrifty again argues that it is not liable to plaintiff Riggio for the actions of Battistella/SCV because Battistella/ SCV were not agents of defendant Thrifty.

Plaintiff Riggio first met Battistella when Riggio responded to a newspaper ad featuring the name “Auto Source Financial” and offering 10% interest. Neither “Thrifty Care Sales, Inc.” nor “Thrifty” appeared in the advertisement. In December 2010, plaintiff Riggio and his wife met with Battistella at “Auto Sales,” but did not remember seeing any signs, posters, or writing on the doors or windows of the showroom. Plaintiff Riggio received a business card from Battistella’s assistant. According to defendant Thrifty the business card identified SCV as a licensee. [There is no admissible evidence as to whether plaintiff Ulescu read the business card or observed any writings contained therein.] The only other thing Riggio received in writing at the first meeting was the promissory note. At that first meeting in December 2010, plaintiff Riggio loaned $50,000 to “Thrifty Car Sales/ Ronald Battistella, owner of 3939 Stevens Creek Blvd., Santa Clara, CA 95050.” Plaintiff Riggio made a second loan for $50,000 in February 2011 following a phone call from Battistella. In June or July 2011, plaintiff Riggio loaned another $50,000 after Battistella promised 12% interest. In July 2011, Battistella consolidated the three notes into one single note for $150,000. Defendant Thrifty asserts Riggio understood that Thrifty Car Sales, Inc. was the franchisor, but the evidence cited by defendant Thrifty does not actually support such an assertion or it is equivocal as seen below.

Q: Okay. Now, did you ever understand that [Battistella] was a franchise?
A: No.
Q: Did you ever think about whether [Battistella] was part of a bigger organization or whether he was a separate franchise?
A: I thought he was an individual, separate.

(Deposition Riggio, p. 13, line 25 – p. 14, line 6.)

In moving for summary judgment, defendant Thrifty contends the evidence establishes that Riggio did not reasonably believe he was dealing with Thrifty because he decided to invest having only seen Battistella’s business card and the promissory note. According to Thrifty, Battistella’s business card adequately disclosed SCV as a licensee, but as noted above, there is no evidence to suggest plaintiff Riggio read or understood that SCV was a licensee. In proffering a copy of the actual card itself, Thrifty must concede that its logo also appeared on the business card. Moreover, the promissory notes themselves include “Thrifty Car Sales” in the name of the borrower and plaintiff wrote a check to “Thrifty Car Sales.” (See Deposition Riggio, p. 53, lines 15 – 18.) Defendant Thrifty’s evidence does not go far enough to negate ostensible agency or, at the very least, triable issues of material fact exist.

In addition, as discussed above with regard to plaintiff Ulescu, the failure to investigate whether an agency relationship existed between Battistella/SCV and Thrifty (or its scope) does not necessarily arise here because there is no evidence that plaintiff Riggio recognized or acknowledged any distinction between Battistella/SCV and corporate defendant Thrifty.

Accordingly, defendant Thrifty’s motion for summary judgment as to plaintiff Vito Riggio is DENIED.

B. Statute of Limitations.

Defendant Thrifty recycles the same statute of limitations argument it argued in seeking summary adjudication against plaintiff Ulescu to argue that plaintiff Riggio’s breach of contract is barred. For the same reasons discussed above, the argument fails. Moreover, there is no evidence that plaintiff had knowledge that the pink slips were worthless in December 2010.

However, with regard to the fraud cause of action, defendant Thrifty proffers evidence that the cause of action accrued no later than February 2012 when plaintiff Riggio stopped receiving interest payments. In opposition, Riggio does not dispute this fact and also concedes that he sent a letter to Battistella dated April 1, 2012 demanding either title to the vehicles or repayment. “Under the discovery rule, the statute of limitations begins to run when the plaintiff suspects or should suspect that her injury was caused by wrongdoing, that someone has done something wrong to her. The limitations period begins once the plaintiff has notice or information of circumstances to put a reasonable person on inquiry. A plaintiff need not be aware of the specific ‘facts’ necessary to establish the claim; that is a process contemplated by pretrial discovery. Once the plaintiff has a suspicion of wrongdoing, and therefore an incentive to sue, she must decide whether to file suit or sit on her rights. So long as a suspicion exists, it is clear that the plaintiff must go find the facts; she cannot wait for the facts to find her.” (Mills v. Forestex Co. (2003) 108 Cal.App.4th 625, 642 – 643.)

The evidence establishes plaintiff Riggio suspected wrongdoing no later than April 1, 2012. Plaintiff Judge had to commence a fraud cause of action no later than April 1, 2015 to avoid being barred by the statute of limitations. Plaintiff Riggio did not do so until April 6, 2015. Plaintiff Riggio’s fraud cause of action is barred. Accordingly, defendant Thrifty’s alternative motion for summary adjudication of plaintiff Riggio’s second cause of action for fraud is GRANTED.

C. Indispensable Party.

For the same reasons discussed above, the court rejects defendant Thrifty’s argument that Battistella is an indispensable party.

In summary, defendant Thrifty’s motion for summary judgment is DENIED. Defendant Thrifty’s alternative motion for summary adjudication of plaintiff Riggio’s first cause of action for breach of contract is DENIED. Defendant Thrifty’s alternative motion for summary adjudication of plaintiff Riggio’s second cause of action for fraud is GRANTED.