Case Number: BC518709 Hearing Date: May 25, 2018 Dept: 51

Plaintiff Melinda Naud sues Wayne M. Rogers for damages and restitution based on allegations that Rogers failed to pay child support under written and verbal agreements.

The operative fourth amended complaint alleges as follows: Plaintiff gave birth to Luigi Calabrese in December 1985 and claims defendant is the father. Seeking to keep Luigi’s paternity a secret, the parties entered into a written agreement in May 1993 (Written Agreement) whereby defendant would make various payments as child support. In July 1997, in consideration for plaintiff giving up her right to petition a court to amend the Written Agreement, the parties entered into a verbal agreement (Verbal Agreement) whereby defendant would, among other things, bequeath a home to Luigi and “leave something of significant value” to plaintiff upon defendant’s death. The Verbal Agreement was amended in October 2006, but approximately a week later defendant states that his attorney sent plaintiff a letter denying the existence of the Verbal Agreement.

On August 16, 2013, plaintiff filed a complaint, and on April 17, 2015, the operative fourth amended complaint for (1) breach of written contract, (2) breach of oral contract, (3) breach of the covenant of good faith and fair dealing, (4) fraud (deceit), (5) fraud (concealment), (6) fraud (false promise), (7) declaratory relief, (8) rescission, and (9) restitution.

On September 15, 2017, defendant filed this opposed motion for summary judgment or adjudication. (The Court will use the term “defendant” herein for clarity though the formal identity of the defendant has changed; following Wayne M. Rogers’ death in 2015, William M Rogers, IV became the defendant as personal representative of the decedent.)

No opposition appears in the record. On November 7, 2017, as part of their amended declaration in support of their motion to be relieved as counsel, plaintiff’s former counsel stated that plaintiff repeatedly failed to maintain regular communication, rendering counsel unable to proceed with opposing this motion. On December 4, 2017, the Court granted the motion to be relieved as counsel. On February 9, 2018, over the objection of defendant, the Court continued the hearing on this motion from February 14, 2018, to today’s date to provide plaintiff one last chance to hire new counsel within 60 days if she intended to do so. The Court informed plaintiff that, given the history of the case and the fact that it is approaching five years from the filing of the original complaint, no further continuances of this motion would be granted. No appearance by new counsel appears in the record.

Plaintiff thus appears to be self-represented. Self-represented litigants are held to the same standards that apply to licensed attorneys. Harding v. Collazo (1986) 177 Cal.App.3d 1044, 1056; Lombardi v. Citizens Nat’l Trust & Sav. Bank (1955) 137 Cal.App.2d 206, 208-209 (stating that self-represented litigants are “restricted to the same rules of evidence and procedure as is required of those qualified to practice law before our courts.”)

The Court considered the moving papers and rules as follows.

Request for Judicial Notice

Defendant’s request for judicial notice of documents filed in plaintiff’s and Luigi’s bankruptcy cases is GRANTED. Evid. Code § 452(d).

Summary Judgment or Adjudication Standard

The function of a motion for summary judgment or adjudication is to allow a determination as to whether an opposing party cannot show evidentiary support for a pleading or claim and to enable an order of summary dismissal without the need for trial. Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 843. In analyzing such motions, courts must apply a three-step analysis: “(1) identify the issues framed by the pleadings; (2) determine whether the moving party has negated the opponent’s claims; and (3) determine whether the opposition has demonstrated the existence of a triable, material factual issue.” Hinesley v. Oakshade Town Center (2005) 135 Cal.App.4th 289, 294.

Parties opposing motions for summary judgment cannot rely upon “assertions that are ‘conclusionary, argumentative or based on conjecture and speculation,’” but instead 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 ….’” Roberts v. Assurance Co. of America (2008) 163 Cal.App.4th 1398, 1404. “[O]pposing evidence that is merely equivocal will not suffice to raise a triable fact issue.” Stewart v. Preston Pipeline Inc. (2005) 134 Cal.App.4th 1565, 1589. Opposing declarations must include evidentiary facts and more than ultimate facts repeating allegations, or conclusions. Snider v. Snider (1962) 200 Cal.App.2d 741, 751.

“A defendant moving for summary judgment must show that one or more elements of the plaintiff’s cause of action cannot be established or show there is a complete defense to the plaintiff’s cause of action. [Citations.] It is not until the defendant meets this burden that the burden of production shifts to the plaintiff to show that a triable issue of one or more material facts exists as to the defense. [Citations.]” Doe v. Good Samaritan Hospital, 2018 WL 2297128 (Cal. Ct. App. May 4, 2018). Accordingly, because, as here, the motion is unopposed, summary judgment or adjudication will be granted so long as defendant meets its initial burden.

Issue No. 1: Breach of Written Agreement

Defendant argues that he fully performed his obligations under the Written Agreement and that plaintiff’s first cause of action accordingly fails.

The FAC alleges that defendant specifically breached the Written Agreement by failing to pay for Luigi’s education and maintain a life insurance policy for plaintiff’s benefit.

Under the terms of the Written Agreement, defendant was to make monthly payments until Luigi turned 18 or graduated high school, whichever came later (but in no event were monthly payments required after Luigi turned 19.) AOE, Exh. 1 (Written Agreement) ¶ 4. Plaintiff does not appear to allege that these payments were never made; rather, the FAC focuses on payments under the Written Agreement for Luigi’s undergraduate and graduate education. FAC ¶ 31.

The Written Agreement provides that defendant would pay $12,500 per year “for four (4) years of undergraduate education leading to a degree. . . . [S]aid sum shall be used to fund in whole or in part Luigi’s undergraduate education at any accredited college or university provided that Luigi is a full-time student . . . . The four school years must be consecutive years unless Luigi becomes ill and cannot attend school for four consecutive years.” Written Agreement ¶ 5. The Written Agreement similarly provided for another $12,500 per year for two years of graduate school so long as it commenced within a year of graduation. Ibid.

Defendant notes that Luigi was ill in early 2008 and missed the Spring 2008 semester. Otherwise, defendant proffers a copy of Luigi’s transcript showing that he enrolled at Santa Monica College in late 2005. AOE, Exh. 4. Luigi transferred to UCLA in 2010 and completed his undergraduate studies in September 2012. Defendant asserts that Luigi never attended or applied for graduate school.

Defendant argues that a “full-time student” means a student who takes at least 12 units in a given academic term, citing a number of regulations that accord with this definition. See, e.g., 5 CCR § 56202 (“full-time student” requires minimum of 12 units); 5 CCR § 30003 (same); 12 CCR § 433 (same); 22 CCR § 97700.23 (same). Under that definition, Luigi was only a “full-time student” in the Fall 2005 and Spring 2007 semesters, and defendant asserts that he paid $12,500 for Luigi’s college education for the 2005-2006 and 2006-2007 school years. The Court agrees with defendant’s interpretation of “full-time student” (and plaintiff has not argued for any contrary definition.) Accordingly, defendant satisfied the Written Agreement with respect to Luigi’s education.

Regarding the life insurance policy, the Written Agreement states that “[a]s long as he is obligated to pay the child support set forth in this agreement, [defendant] shall provide declining term life insurance with [plaintiff] as the irrevocable beneficiary equal to the total of the total of the child support set forth in this agreement (actual and contingent) . . . .” Written Agreement ¶ 6. Defendant offers exhibits document a life insurance policy from defendant with plaintiff as the beneficiary. AOE, Exhs. 7-9. Although the beneficiary was changed to defendant’s wife as of June 26, 2008, by 2008 defendant no longer had any obligation to pay Luigi’s child support, even assuming that the college tuition payments were part of such child support. AOE, Exh. 9 (letter confirming beneficiary change.) Furthermore, although the FAC alleges that the minimum on the policy was required to be $1 million and the actual policy appears to only have been for $500,000, no damages could have resulted from the discrepancy. FAC ¶ 9(j); AOE, Exh. 7.

Defendant therefore satisfied the obligations plaintiff specifically alleges were violated, and plaintiff does not identify any (nor does the Court observe any) other alleged breaches of the Written Agreement.

The motion is GRANTED.

Issue No. 2: Judicial Estoppel

Because this issue only goes toward whether judicial estoppel bars plaintiff’s first cause of action, the motion is DENIED as MOOT.

Issue Nos. 3, 5, 7, 9, 11, 13: Lack of Standing Because of Bankruptcy

Defendant argues that plaintiff’s first six causes of action fail because plaintiff declared bankruptcy in 2007 and therefore lacks standing. (Because the motion has already been granted on the first cause of action, the Court does not further address it.)

In Haley v. Dow Lewis Motors, Inc. (1999) 72 Cal.App.4th 497, 503-504, the Court of Appeal described how causes of action are treated when a debtor files for bankruptcy:

The filing of a petition in bankruptcy commences the case and creates a bankruptcy estate. [Citation.] The bankruptcy estate includes all of the debtor’s legal and equitable interests in property as of the commencement of the case. [Citation.] The scope of section 541 is broad and “property” includes causes of action. [Citation.] “It is of course indisputable that any causes of action which accrue to a debtor who has filed for relief under the Bankruptcy Act before the filing of the bankruptcy petition become the property of the bankruptcy estate and may thereafter be prosecuted only by the trustee or a duly appointed representative of the estate. [Citations.]” [Citation.]

When a debtor files a chapter 7 petition, two estates are created, a bankruptcy estate and a post-petition estate belonging to the debtor. [Citation.] Bankruptcy law defines the property of the bankruptcy estate as only that property that existed when the petition was filed. [Citation.] Pursuant to the “fresh start” policy for debtors under chapter 7, a debtor may transfer to the post-petition estate any property deemed exempt from the chapter 7 estate, post-petition earnings, and any property acquired after filing (other than that governed by the exceptions of 11 U.S.C. § 541(a)(5)). [Citation.] Where events that give rise to a cause of action occur following the filing of the chapter 7 petition, that cause of action is not property of the bankruptcy estate. [Citation.]

Here, plaintiff (as well as Luigi) filed for chapter 7 bankruptcy in 2009. Defendant argues that plaintiff’s second through sixth causes of action accordingly fail if they accrued prior to 2009 and were not listed as her assets.

The second through sixth causes of action allege that plaintiff breached the Verbal Agreement. (They also allege that plaintiff breached the Written Agreement. To the extent they do, they are disregarded given that there is no triable, material issue of fact relating to a breach of the Written Agreement.) Defendant proffers a 2006 letter, addressed to plaintiff, in which defendant’s attorney states that the parties “have not entered into any further or additional agreements beyond that embodied in the written agreement of 1993.” AOE, Exh. 5. Upon receipt of this letter, plaintiff’s second, third, fourth, and sixth causes accrued, as the letter put plaintiff on notice that defendant would not deliver anything promised by the Verbal Agreement. (Plaintiff’s fifth cause of action for fraud (concealment) relies on a misrepresentation plaintiff alleges she discovered in 2012. FAC ¶ 67. Accordingly, this cause of action could not have accrued prior to plaintiff’s bankruptcy.) These causes of action should therefore have been listed as her property, and the failure to do so suggest that plaintiff may lack standing.

Even assuming the second, third, fourth, and sixth causes of action fail because they should have been listed, however, defendant fails to establish or address whether any cause of action Luigi would have had at the time he filed for bankruptcy was listed as an asset. Although Luigi is not a party to this action, the parties agree that he assigned all of his rights under the Written Agreement to plaintiff. FAC ¶ 42; SS ¶ 62. As a result, plaintiff still may have been entitled to bring these causes of action as an assignee of Luigi’s third-party beneficiary rights. Defendant does not demonstrate whether Luigi listed any causes of action as an asset when he entered bankruptcy. Therefore, contrary to defendant’s argument, the evidence does not establish that Luigi “did not own any claim against [defendant] that he could assign to plaintiff.” MOT 16:18-19.

In any event, setting aside Luigi’s potential causes of action plaintiff may be entitled to bring, plaintiff’s lack of standing would not necessarily be fatal to her case, as she would be entitled to request that the bankruptcy trustee be substituted in on those causes of action. See Cloud v. Northrop Grumman Corp. (1998) 67 Cal.App.4th 995, 1001-1005 (noting that if a plaintiff lacked standing due to a failure to list a cause of action in bankruptcy, a trial court lacks discretion not to allow a bankruptcy trustee to be substituted in.)

The motion is DENIED on this basis.

The remaining issues track the remaining causes of action.

Issue No. 4 (Second COA): Breach of Verbal Agreement

The Court agrees that defendant’s second cause of action for breach of the Verbal Agreement is barred by the statute of limitations. As discussed above, this cause of action accrued no later than 2006 when defendant’s attorney notified her that plaintiff denied the existence of the Verbal Agreement. AOE, Exh. 5. This would have put her on notice that plaintiff would not perform on the Verbal Agreement. The statute of limitations on a breach of an oral contract is two years. Civ. Code § 339. Plaintiff filed suit in 2013, approximately seven years after the 2006 letter.

Moreover, defendant correctly observes that because the Verbal Agreement obligated plaintiff to bequeath a home to Luigi, the Verbal Agreement was subject to the Statute of Frauds. Civ. Code § 1624(a) (“The following contracts are invalid, unless they, or some note or memorandum thereof, are in writing and subscribed by the party to be charged or by the party’s agent: [¶] . . . [¶] (5) An agreement that by its terms is not to be performed during the lifetime of the promisor.”); see also Halloran v. Greene (1931) 114 Cal.App. 685, 688 (“There is no merit in the appellant’s contention that the deceased violated her agreement to will property to him. It is conceded that no written agreement was ever made by the deceased to devise or bequeath property to the appellant. His claim rests entirely upon an alleged oral agreement to do so. This oral agreement is in conflict with the statute of frauds and void, if indeed it was ever made.”)

Summary judgment on this issue is GRANTED.

Issue No. 6 (Third COA): Breach of Covenant of Good Faith and Fair Dealing

“[T]he implied covenant of good faith and fair dealing is limited to assuring compliance with the express terms of the contract, and cannot be extended to create obligations not contemplated by the contract. [Citation.]” Ragland v. U.S. Bank Nat. Assn. (2012) 209 Cal.App.4th 182, 206 (emphasis in original.)

Here, defendant argues that this cause of action simply reiterates claims made in the two causes of action for breaches of the Written Agreement and Verbal Agreement. Defendant also argues that to the extent plaintiff alleges that the Written Agreement’s requirement that Luigi be a “full-time student” to receive college funds is a “hyper-technical” interpretation of what the parties agreed to, it is nevertheless an express written term. Defendant is correct. The FAC essentially realleges that plaintiff breached the Written Agreement and Verbal Agreement, and in any event offers no evidence to oppose summary judgment.

The motion is GRANTED.

Issue No. 8 (Fourth COA): Fraud (Deceit)

Defendant argues that this cause of action is time-barred. The statute of limitations on a cause of action based on fraud is three years. CCP § 338(d). As noted above, this cause of action accrued no later than 2006 when plaintiff’s attorney informed defendant that plaintiff denied the existence of the Verbal Agreement. Therefore, plaintiff had until 2009 to bring this cause of action.

To the extent this cause of action is based on allegations that plaintiff breached the Written Agreement, the cause of action fails given that there is no triable, material issue of fact relating to a breach of the Written Agreement.

The motion is GRANTED.

Issue No. 10 (Fifth COA): Fraud (Concealment)

This cause of action is unlike the others based on fraud in that the FAC alleges that plaintiff became aware of the concealment only in 2012, within the applicable statute of limitations.

The FAC alleges that defendant fraudulently understated his annual cash flow, which he represented in the Written Agreement to be approximately $300,000. Written Agreement ¶ 12 (“[Defendant] represents and warrants to [plaintiff] that his cash flow (income from all sources, including non-taxable income) on a current and annual basis is approximately $300,000 a year.”)

Defendant includes a declaration from his accountant, who states that in the calendar year preceding the signing of the Written Agreement, defendant’s cash inflow was $391,899.27 and that his total net cash flow was ($60,846.42.) Lubinski Decl. ¶ 11. Assuming the relevant benchmark for the “cash flow” statement is the larger cash inflow amount, the difference between “approximately $300,000” and the accountant’s amount does not create a triable, material issue of fact in the context of this agreement. Assuming on the other hand that the relevant benchmark is “net cash flow,” no fraud could reasonably be found, as plaintiff would only be harmed if defendant understated his financial resources. Plaintiff offers no evidence to rebut this claim.

The motion is GRANTED.

Issue No. 12 (Sixth COA): Fraud (False Promise)

Summary judgment on this issue is GRANTED for the same reasons stated above regarding plaintiff’s fourth cause of action for fraud (deceit).

Issue No. 13 (Seventh COA): Declaratory Relief

The Written Agreement provides that in the event defendant fails to pay the promised amounts, plaintiff is entitled to a stipulated judgment of paternity retroactive to the date of the failure to pay. Written Agreement ¶ 7. This cause of action, however, is premised on a breach of the Written Agreement, which defendant demonstrates did not occur.

The motion is GRANTED.

Issue No. 14 (Eighth COA): Rescission

A contract may be rescinded if consent was given by mistaken, fraud, or other wrongful conduct. Civ. Code § 1689(b)(1).

The FAC does not state which ground plaintiff seeks rescission of either agreement on. The Court is satisfied that defendant meets his initial burden establishing that none of the possible grounds for rescission exist. Plaintiff in turn fails to demonstrate the existence of a triable, material issue of fact regarding this cause of action.

The motion is GRANTED.

Issue No. 15 (Ninth COA): Restitution

Whether styled as unjust enrichment or restitution, to be entitled to restitution, a plaintiff must demonstrate (1) receipt of a benefit and (2) unjust retention of the benefit at the expense of another. Lectrodryer v. SeoulBank (2000) 77 Cal.App.4th 723, 726. The FAC states no receipt of a benefit by defendant or why the retention of anything defendant possesses would be unjust.

The motion is GRANTED.

Conclusion

Summary judgment is GRANTED. If defendant has not already done so, it is ORDERED to submit a proposed order and judgment of dismissal within 10 days. The Court may impose a monetary sanction for failing to do so. Defendant to give notice.