Case Name: Mary Ann Roberts, et al. v. Jacob Peters, et al.
Case No.: 16CV299932

I. Background

Plaintiffs Richard Moore (“Moore”) and his mother Mary Ann Roberts (“Roberts”) (collectively, “Plaintiffs”) allege they were the victims of unlawful collections practices after they obtained a bail bond to secure Moore’s release from jail.

In January 2007, shortly after Moore’s arrest, Plaintiffs obtained a bond from defendant Jake’s Bail Bonds, Inc. (“JBB”), operated by defendant Jacob Peters (“Peters”), to secure Moore’s release on $250,000 bail. (First Amended Complaint (“FAC”), ¶¶ 10-11.) Plaintiffs paid a $17,500 premium for the bail bond with $10,000 due immediately and $7,500 payable in monthly installments of $416.66. (FAC, ¶ 11.) Defendant Bankers Insurance Company served as the bond’s surety and required that the bond be secured by six different parcels of real property. (FAC, ¶ 11.)

Plaintiffs made their monthly premium payments until January 2008, at which time the remaining balance of the premium was $2,499.30. (FAC, ¶ 12.) At that time, Moore surrendered himself into custody. (FAC, ¶ 14.) Peters promised Plaintiffs that he would not charge them for renewal of the bail bond despite the surrender occurring a few days after the renewal date. (FAC, ¶ 13.) But after Moore’s surrender, Peters broke his promise and recorded a notice of default in connection with a property in Oakland, California reflecting a renewal premium and related charges in the amount of $34,315.62 were due. (FAC, ¶ 15.)

Plaintiffs tried to work with Peters to reverse the charges. (FAC, ¶¶ 16-18.) Plaintiffs provided Peters with an order exonerating the bond nunc pro tunc as he requested, but he refused to reverse the renewal charges and threatened to hire an attorney to vacate the exoneration order. (FAC, ¶¶ 17-18.) Consequently, Plaintiffs filed a complaint with the California Department of Insurance, which thereafter determined that the renewal premium and related charges were unlawful. (FAC, ¶ 19.) Both the California Department of Insurance and Plaintiffs informed Bankers Insurance Company and its Senior Vice President, defendant Brian Kesneck (“Kesneck”), about the unlawful charges and Peters’s conduct. (FAC, ¶¶ 18-20.) Plaintiffs also reaffirmed that they would pay the balance of the premium and asked that the deeds of trust for their properties be reconveyed. (FAC, ¶¶ 20-21.) Although Bankers Insurance Company and Kesneck stated they would ensure Peters complied with these requests, Peters thereafter recorded a new notice of default seeking even more money on top of the unlawful premium charges. (FAC, ¶¶ 22-23.) The Oakland property was foreclosed upon, and Bankers Insurance Company obtained title to the property by making a credit bid at the trustee’s sale. (FAC, ¶ 27.) Peters continued to try to collect money from Plaintiffs and eventually sold their purported debt in the amount of $250,000 to defendant Bridgeport Financial, Inc. (“Bridgeport”), who thereafter carried on with collection efforts. (FAC, ¶¶ 31-35.) In February 2016, Bankers Insurance Company reconveyed the deeds for two of the properties used to secure the bond. (FAC, ¶¶ 37-38.)
Plaintiffs assert the following causes of action: (1) breach of contract (against Peters and JBB); (2) breach of fiduciary duty (against Peters and JBB); (3) fraud (against Peters and JBB); (4) negligent misrepresentation (against Peters and JBB); (5) negligence per se (against Peters and JBB); (6) fraud based on conspiracy and aiding and abetting theories (against Bankers Insurance Company, Kesneck, and Bridgeport); (7) extortion (against Peters, JBB, and Bridgeport); (8) elder abuse (against Peters, JBB, Bankers Insurance Company, and Kesneck); (9) intentional infliction of emotional distress (against Peters, JBB, Bankers Insurance Company, and Kesneck); and (10) declaratory relief (against Peters, JBB, and Bridgeport).

Currently before the Court is a motion by Bankers Insurance Company and Kesneck (collectively, “Defendants”) for summary judgment or summary adjudication of the sixth, eighth, and ninth causes of action as asserted by Roberts, which are the only causes of action she asserts against them. Defendants’ motion and Roberts’s opposition are accompanied by requests for judicial notice.

II. Standard of Review

A. Summary Judgment

“A party may move for summary judgment in an action or proceeding if it is contended that the action has no merit [ ].” (Code Civ. Proc., § 437c, subd. (a)(1).) “A defendant [ ] has met his or her burden of showing that a cause of action has no merit if the 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 the cause of action.” (Code Civ. Proc., § 437c, subd. (p)(2).) To carry this burden, the defendant must present evidence, such as “affidavits, declarations, admissions, answers to interrogatories, depositions, and matters of which judicial notice shall or may be taken.” (Code Civ. Proc., § 437c, subd. (b)(1).)

“Once the defendant [ ] has met that burden, the burden shifts to the plaintiff [ ] to show that a triable issue of one or more material facts exists as to the cause of action or a defense thereto.” (Code Civ. Proc., § 437c, subd. (p)(2).) The plaintiff “must make an independent showing by a proper declaration or by reference to a deposition or another discovery product that there is sufficient proof of the matters alleged to raise a triable question of fact if the moving party’s evidence, standing alone, is sufficient to entitle the party to judgment.” (Wiz Technology, Inc. v. Coopers & Lybrand LLP (2003) 106 Cal.App.4th 1, 10-11; Code Civ. Proc., § 437c, subds. (b)(2), (p)(2).)

“The motion for summary judgment shall be granted if all the papers submitted show that there is no triable issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.” (Code Civ. Proc., § 437c, subd. (c).)
B. Summary Adjudication

“A party may move for summary adjudication as to one or more causes of action within an action, one or more affirmative defenses, one or more claims for damages, or one or more issues of duty, if the party contends that the cause of action has no merit, that there is no affirmative defense to the cause of action, that there is no merit to an affirmative defense as to any cause of action, that there is no merit to a claim for damages, as specified in Section 3294 of the Civil Code, or that one or more defendants either owed or did not owe a duty to the plaintiff or plaintiffs.” (Code Civ. Proc., § 437c, subd. (f)(1).)

“A motion for summary adjudication may be made by itself or as an alternative to a motion for summary judgment and shall proceed in all procedural respects as a motion for summary judgment.” (Code Civ. Proc., § 437c, subd. (f)(2).) “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, subd. (f)(1).)

III. Requests for Judicial Notice

Judicial notice is a substitute for formal proof. (Sosinky v. Grant (1992) 6 Cal.App.4th 1548, 1563-64.) The matters of law and fact that are proper subjects of judicial notice are set forth in Evidence Code sections 451 and 452. (Ibid.) A court may accept such matters as true instead of admitting evidence to prove their truth. (Ibid.) Even if a matter comes within Evidence Code section 451 or 452, a court need not take judicial notice of it if it is not “necessary, helpful, or relevant.” (Jordache Enterprises, Inc. v. Brobeck, Phleger & Harrison (1998) 18 Cal.4th 739, 748, fn. 6.)

A. Defendants’ Request

Defendants first request judicial notice of court records from this action, namely the docket, the order on the demurrer to the original complaint, and the operative FAC. The Court may take judicial notice of court records pursuant to Evidence Code section 452, subdivision (d). With that said, it is unnecessary to take judicial notice of the FAC because it frames the issues for purposes of this motion (see Van v. Target Corp. (2007) 155 Cal.App.4th 1375, 1382) such that it must necessarily be considered by the Court. (See Paul v. Patton (2015) 235 Cal.App.4th 1088, 1091, fn. 1.) It is also unnecessary to take judicial notice of the docket and order on the demurrer because these records are not material to the issues and arguments presented; Defendants simply do not discuss them.

Next, Defendants request judicial notice of a petition and discharge order from Roberts’s 2011 bankruptcy proceeding. These court records are relevant to the disposition of the motion because Defendants rely on them in presenting their supporting arguments. Consequently, the bankruptcy petition and discharge order are proper subjects of judicial notice.

Finally, Defendants request judicial notice of the rescission of a declaration of default recorded in 2008 in connection with one of the properties in Oakland, California. A court may take judicial notice of undisputed facts appearing on the face of a recorded document. (Fontenot v. Wells Fargo Bank, N.A. (2011) 198 Cal.App.4th 256, 265, citing Evid. Code, § 452, subds. (c), (h), disapproved on another ground in Yvanova v. New Century Mortgage Corp. (2016) 62 Cal.4th 919, 939, fn. 13.) Even so, the Court need not take judicial notice of the rescission because it is not relevant to the arguments advanced by Defendants in support of their motion.

For these reasons, Defendants’ request for judicial notice is GRANTED with respect to the bankruptcy petition and discharge order and DENIED with respect to the other court records and the recorded document.

B. Roberts’s Request

Roberts also requests judicial notice of the FAC and the order on the demurrer to the original complaint. It is unnecessary to take judicial notice of these court records for the same reasons articulated above with respect to Defendants’ request. Roberts additionally requests judicial notice of a cease and desist order issued by the California Department of Insurance concerning immigration bonds. It is not especially clear why Roberts requests judicial notice of this document as its only apparent connection to the case at bench is the fact that Bankers Insurance Company is listed therein. Because the notice is not relevant to the issues presented, the Court need not take judicial notice of it. For these reasons, Roberts’s request for judicial notice is DENIED.

IV. Merits of Motion

Defendants present several arguments with respect to all three causes of action collectively before addressing the sixth, eighth, and ninth causes of action individually. The arguments applicable to all causes of action are addressed first.

A. All Causes of Action

Defendants argue all three causes of action lack merit because they are barred by the doctrines of judicial estoppel and laches and because Roberts lacks standing.

1. Judicial Estoppel

Defendants argue Roberts is judicially estopped from pursuing her claims because she did not disclose them to the bankruptcy court when she filed her petition in 2011.

“Judicial estoppel is an equitable doctrine designed to maintain the integrity of the courts and to protect the parties from unfair strategies.” (Owens v. County of Los Angeles (2013) 220 Cal.App.4th 107, 121.) “The doctrine prohibits a party from asserting a position in a legal proceeding that is contrary to a position he or she successfully asserted in the same or some earlier proceeding.” (Ibid.)

The party invoking the doctrine of judicial estoppel must establish five elements: “(1) the same party has taken two positions; (2) the positions were taken in judicial or quasi-judicial administrative proceedings; (3) the party was successful in asserting the first position (i.e., the tribunal adopted the position or accepted it as true); (4) the two positions are totally inconsistent; and (5) the first position was not taken as a result of ignorance, fraud, or mistake.” (Owens, supra, 220 Cal.App.4th at p. 121 [internal quotation marks and citation omitted].)

California courts have recognized “‘a debtor’s assertion [in a civil action] of legal claims not disclosed in earlier bankruptcy proceedings constitutes an assumption of inconsistent positions.’ [Citations.]” (Gottlieb v. Kest (2006) 141 Cal.App.4th 110, 137-38.) To evaluate whether there has been such a nondisclosure, it is necessary to first determine whether Roberts was required to disclose the claims asserted here. (See id. at pp. 132-33.)

In general, “[t]he Bankruptcy Code and rules require a debtor to file various ‘schedules,’ including a ‘schedule of assets.’” (Gottlieb, supra, 141 Cal.App.4th at pp. 132-33.) In this schedule, a debtor must disclose all property he or she owns, including claims of any nature. (Id. at p. 133.) This includes potential causes of action. (Ibid.) “The debtor need not know all the facts or even the legal basis for the cause of action; rather, if the debtor has enough information. . . to suggest that it may have a possible cause of action, then that is a ‘known’ cause of action such that it must be disclosed.” (Ibid. [internal quotation marks and citation omitted].) With that said, “[d]ebtors are not required to ‘list hypothetical claims that are so tenuous as to be fanciful.’ [Citations.]” (Ibid.) Ultimately, there are four different tests that may be applied to determine whether a claim has “arisen” such that it must be disclosed. (Id. at p. 134.)

Here, Defendants fail to demonstrate Roberts was required to disclose the claims now asserted against them. Defendants do not provide sufficient legal analysis to demonstrate the causes of action constituted potential causes of action subject to disclosure. Additionally, and contrary to what Defendants suggest, these causes of action do not appear to be based on conduct occurring solely in 2008 and 2009 prior to the bankruptcy proceeding; these causes of action are based on conduct occurring as recently as 2015 and 2016. Put differently, Defendants do not demonstrate and it is not otherwise obvious that all of the conduct giving rise to these claims had occurred at the time Roberts filed for bankruptcy. Thus, there is no basis for concluding that, when Roberts petitioned for bankruptcy in 2011, the sixth, eighth, and ninth causes of action constituted potential claims that must have been disclosed.

Assuming the claims had to be disclosed, Defendants’ evidence shows Roberts did not disclose these claims in what appears to be her initial bankruptcy petition. Even so, Defendants do not present evidence showing Roberts succeeded in advancing her original position that she had no potential claims against them. Defendants simply present a discharge order which, in the absence of other information about what transpired in the bankruptcy proceeding, does not actually reflect whether the bankruptcy court adopted or accepted Robert’s representation as true. Defendants do not cite any authority to support the proposition that a discharge order constitutes an acceptance or adoption of a particular representation by a bankruptcy court for purposes of establishing the third element of judicial estoppel. (Compare Gottlieb, supra, 141 Cal.App.4th at pp. 139-41 with Cloud, supra, 67 Cal.App.4th at pp. 998-99.)

Finally, Defendants do not establish the last element of judicial estoppel, namely that the inconsistent positions were not the result of ignorance, fraud or mistake. This particular element is significant because it ensures the doctrine of judicial estoppel will be applied “sparingly” and only in those circumstances where “a debtor has engaged in a deliberate scheme to mislead and gain unfair advantage, as opposed to having made a mistake born of misunderstanding, ignorance of legal procedures, lack of adequate legal advice, or some other innocent cause. . . .” (Cloud, supra, 67 Cal.App.4th at p. 1020.) Defendants offer only a conclusory assertion that the omission from the initial petition was not the result of ignorance, fraud, or mistake; they do not actually present any evidence or legal analysis to substantiate their assertion. Thus, Defendants do not establish the fifth element of judicial estoppel.

For the reasons set forth above, Defendants do not substantiate their judicial estoppel argument. Accordingly, it is not a basis for concluding the sixth, eighth, and ninth causes of action lack merit.

2. Standing

Defendants also argue Plaintiff lacks standing based on separate but related principles of bankruptcy law. “The widely accepted rule is that after a person files for bankruptcy protection, any causes of action previously possessed by that person become the property of the bankrupt[cy] estate.” (Cloud, supra, 67 Cal.App.4th at p. 1001.) Because the claims become part of the bankruptcy estate, the trustee of the estate has standing to assert those claims. (Id. at pp. 1001-02.) The debtor lacks standing to pursue claims that are the property of the estate unless and until the trustee abandons them. (Id. at pp. 1002-03.) Defendants’ position is apparently that Roberts’s claims became part of the estate in 2011 such that she lacks standing to assert them. But as explained above, Defendants do not demonstrate and it is not otherwise obvious these claims were in existence at that time. Additionally, even assuming the claims existed, Defendants do not present evidence or legal analysis sufficient to demonstrate if and to what extent these claims were either administered or abandoned by the bankruptcy trustee. Thus, Defendants do not substantiate their standing argument.

3. Laches

Defendants argue Roberts’s claims are barred by the doctrine of laches. “Laches is based on the principle that those who neglect their rights may be barred, in equity, from obtaining relief.” (City of Oakland v. Oakland Police & Fire Retirement System (2014) 224 Cal.App.4th 210, 248.) To establish laches, a defendant must first show the plaintiff unreasonably delayed in pursuing his or her claims. (Feduniak v. California Coastal Com. (2007) 148 Cal.App.4th 1346, 1381.) Additionally, a defendant must show it will suffer prejudice as a result or that the plaintiff acquiesced in the conduct he or she complains of. (Ibid.)
Defendants conclude, without more, that there has been an unreasonable delay. But it is not obvious and they do not cite any analogous authority to support the conclusion that the circumstances presented here constitute unreasonable delay. Thus, Defendants to not substantiate the first element of their laches defense.

Next, Defendants do not show Roberts acquiesced or that they will be prejudiced. They merely assert in a conclusory manner that they will be prejudiced and do not address acquiescence. They state “[m]emories have naturally faded” and appear to take the position that evidence and witnesses have become inaccessible. (Mem. of Pts. & Auth. at p. 19:1-3.) Defendants do not identify what witnesses or evidence they are referring to or present any evidence to support their assertion. Additionally, Defendants cite no authority recognizing stale evidence, without more, as prejudicial for purposes of laches. Thus, Defendants do not establish the second prerequisite for application of the doctrine of laches.

Finally, “it is well-established, both in California and generally, that laches applies to equitable actions, not actions at law.” (Connolly v. Trabue (2012) 204 Cal.App.4th 1154, 1164.) “[T]he laches defense is unavailable in an action at law for damages. . . .” (Wells Fargo Bank v. Bank of America (1995) 32 Cal.App.4th 424, 439.) Roberts seeks damages in connection with her claims. Because she seeks legal and not equitable relief, the defense of laches is inapplicable.

For these reasons, Defendants’ laches argument is not meritorious.

B. Sixth Cause of Action

Defendants argue the sixth cause of action for fraud lacks merit because Roberts’s discovery responses show she has no evidence to support her claim.

When moving for summary judgment, a “defendant may. . . conclusively negate an element of the plaintiff’s cause of action [or] present evidence that the plaintiff does not possess, and cannot reasonably obtain, needed evidence — as through admissions by the plaintiff following extensive discovery to the effect that he [or she] has discovered nothing.” (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 854-55.) If taking this latter approach, a defendant must present “factually devoid discovery responses from which an absence of evidence can be inferred.” (Weber v. John Crane, Inc. (2006) 143 Cal.App.4th 1433, 1439-40.) If a plaintiff answers a discovery request but provides an incomplete or evasive response, a court may infer the plaintiff lacks and cannot reasonably obtain needed evidence. (Id. at p. 1440.) For example, if a plaintiff responds to a comprehensive interrogatory seeking all known facts with a boilerplate answer restating his or her allegations or a nonresponsive list of witnesses and documents, his or her response constitutes a factually devoid discovery response for purposes of a motion for summary judgment or summary adjudication. (Ibid.)

In contrast, if a plaintiff simply objects to a discovery request, it is not reasonable to infer he or she lacks and cannot obtain evidence. (Weber, supra, 143 Cal.App.4th at pp. 1439-40.) An objection, even if improper, is “not the equivalent of a factually devoid response, and therefore cannot be used to shift the burden from the moving defendant to the plaintiff under Code of Civil Procedure section 437c, subdivision (p)(2).” (Gaggero v. Yura (2003) 108 Cal.App.4th 884, 892-93.)

Here, Defendants do not present factually devoid discovery responses from which the Court can infer Roberts does not have and cannot reasonably obtain needed evidence. Defendants rely almost exclusively on Roberts’s objection-only responses to interrogatories. Defendants otherwise rely on responses to narrowly-drafted form interrogatories that do not obviously show Roberts lacks and cannot obtain evidence to support her claim. Moreover, Defendants do not discuss any particular element of a fraud claim or the related conspiracy and aiding and abetting theories of liability Roberts alleges in the complaint as necessary to show she admittedly has no evidence thereof. (See Gaggero, supra, 108 Cal.App.4th at pp. 892-93.) A court has “no obligation to undertake its own search of the record ‘backwards and forwards to try to figure out how the law applies to the facts’ of the case. [Citation.]” (Quantum Cooking Concepts, Inc. v. LV Associates, Inc. (2011) 197 Cal.App.4th 927, 934.) For these reasons, Defendants’ showing is insufficient to carry their initial burden with respect to the sixth cause of action.

C. Eighth Cause of Action

Although Defendants take the position that the eighth cause of action for financial elder abuse lacks merit, their reasoning is especially unclear. Defendants do not clearly articulate whether they are attempting to disprove one of the essential elements, demonstrate Roberts lacks and cannot reasonably obtain needed evidence, or raise an affirmative defense. It appears Defendants are essentially advancing two arguments, namely that Roberts cannot establish she suffered an injury and the claim is time-barred.

To establish a claim for financial elder abuse, a plaintiff must show: (1) he or she was an elder at the time of his or her injury; (2) the defendant took, secreted, appropriated or retained, or assisted another in taking, secreting, appropriating or retaining, real or personal property; and (3) the defendant wrongfully used the property or intended to defraud the elder plaintiff. (Welf. & Inst. Code, § 15610.30; see also Covenant Care, Inc. v. Super. Ct. (2004) 32 Cal.4th 771, 790.)

It is undisputed Roberts turned 65 and became an elder in December 2014. (FAC, ¶ 106.) She alleges that from December 2014 until February 2016, Defendants refused to reconvey the deeds of trust for the properties securing the bond in order to try to extort money from her. (FAC, ¶ 110.) Defendants do not present any argument with respect to whether this constitutes financial elder abuse. Instead, although not especially clear, it appears their position is that they did not engage in this misconduct. But Defendants do not provide a clear explanation or evidence to support the conclusion that Roberts cannot establish the abuse alleged in the eighth cause of action. Consequently, Defendants do not demonstrate Roberts cannot establish one or more elements of her financial elder abuse claim.

Next, to substantiate their statute of limitations argument, Defendants must demonstrate (1) which statute of limitations applies and (2) when the cause of action accrued. (E-Fab, Inc. v. Accountants, Inc. Services (2007) 153 Cal.App.4th 1308, 1315-16.) Defendants are correct that the statute of limitations for elder abuse is four years pursuant to Welfare and Institutions Code section 15657.7. With that said, Defendants do not demonstrate Roberts commenced this action more than four years after her claim accrued. Defendants simply conclude Roberts’s claim accrued when she filed for bankruptcy in 2011. But it is fundamentally unclear how this conclusion is justified by the allegations in the pleading, evidence, and applicable law, none of which is discussed by Defendants. Thus, Defendants do not substantiate their statute of limitations argument.

Based on the foregoing, Defendants do not show the eighth cause of action lacks merit.

D. Ninth Cause of Action

Defendants argue the ninth cause of action for intentional infliction of emotional distress lacks merit because Roberts does not have evidence to support her claim. Defendants rely exclusively on one objection-only response to an interrogatory, and so they do not present a response from which the Court can infer Roberts lacks and cannot obtain evidence to support her claim. (See Gaggero, supra, 108 Cal.App.4th at pp. 892-93.) Despite framing their argument in this manner, they also appear to be attempting to affirmatively disprove one or more of the essential elements of Roberts’s claim. Defendants assert that they eventually reconveyed deeds of trust for some of the properties. But it is fundamentally unclear how this shows, based on the allegations in the pleading or applicable law, that Roberts cannot establish one or more of the essential elements of her claim. Defendants do not provide legal analysis to illuminate their position. Consequently, Defendants do not demonstrate the ninth cause of action lacks merit.

E. Conclusion

For the reasons set forth above, Defendants do not carry their initial burden of showing Roberts’s sixth, eighth, and ninth causes of action lack merit. Accordingly, their motion for summary judgment or summary adjudication is DENIED. In light of this conclusion, it is unnecessary to rule on the written objections to evidence Defendants submitted with their reply; these objections are preserved. (See Code Civ. Proc., § 437c, subd. (q).)