Case Number: BC511792    Hearing Date: July 25, 2014    Dept: 58

JUDGE ROLF M. TREU
DEPARTMENT 58
________________________________________
Hearing Date: Friday, July 25, 2014
Calendar No: 8
Case Name: Navarro v. FCI Lender Services Inc., et al.
Case No.: BC511792
Motion: (1) Motion for Summary Adjudication
(2) Motion to Enter Default Judgment
Moving Party: (1) Defendants Strategic Acquisitions, Inc.; Pro Value Properties, Inc.; and Peter Baer
(2) Plaintiff Ruben Navarro
Responding Party: (1) Plaintiff Ruben Navarro
(2) Defendants Strategic Acquisitions, Inc.; Pro Value Properties, Inc.; BDR, Inc.; and Peter Baer
Notice: OK

Tentative Ruling: (1) Motion for summary adjudication is continued to 8/14/14 to permit Plaintiff to conduct discovery.

(2) Motion to enter default judgment is denied.
________________________________________

Background –
On 6/11/13, Plaintiff Ruben Navarro filed this action against Defendants FCI Lender Services, Inc.; Strategic Acquisitions, Inc.; Pro Value Properties, Inc.; Alex Juarez; Siringoringo Law Firm; and William Patterson arising out of the non-judicial foreclosure sale of real property. The Complaint asserted causes of action for (1) declaratory relief, (2) quiet title, (3) civil conspiracy, (4) civil RICO, (5) set aside illegal trustee sale, (6) negligence per se, (7) breach of the implied covenant of good faith and fair dealing, (8) violation of Bus. & Prof. Code § 17200, (9) wrongful foreclosure, (10) slander of title, (11) fraud by concealment, and (12) punitive damages.

On 10/4/13, the Court sustained demurrers filed by Strategic Acquisitions, Pro Value, and FCI to the Complaint with leave to amend. On 11/5/13, Plaintiff filed a First Amended Complaint which added BDR, Inc., Peter Baer, Stephen Siringoringo, Federal Housing Bureau, Shannon Richee, and Kirk Beard as defendants. The FAC asserts causes of action for (1) fraud and intentional deceit, (2) fraud by false promise, (3) fraud by concealment, (4) constructive fraud, (5) breach of fiduciary duty, (6) breach of contract, (7) breach of implied covenant of good faith and fair dealing, (8) conversion, (9) replevin, (10) violation of Civil Code § 2945 et seq., (11) violation of Bus. & Prof. Code § 17200 et seq., and (12) negligence and negligence per se. On 1/6/14, Plaintiff voluntarily dismissed Shannon Richee without prejudice.

On 1/28/14, the Court overruled demurrers by Strategic Acquisitions, Pro Value, Baer, and BDR (collectively “Baer Defendants”) and Juarez. On 3/6/14, default was entered against Patterson; on 4/28/14, defaults were entered against Federal Housing Bureau and Kirk Beard. On 5/8/14, the Court overruled the demurrer by the Siringoringo Law Firm and Stephen Siringoringo (collectively “Siringoringo Defendants”).

Trial is set for 8/25/14; FSC for 8/14/14.

Motion for Summary Adjudication –
The Baer Defendants (FAC ¶¶ 11-14) are alleged to have acquired the subject property at a trustee sale (id. ¶ 38). The Baer Defendants were co-conspirators whereby Patterson referred to the Baer Defendants as the “new investor” in communicating with Plaintiff. Id. ¶ 39. Plaintiff alleges that Baer paid for the defense of Patterson concerning criminal charges arising out of Patterson’s conduct with respect to efforts to obtain loan modifications, and that Baer and Patterson had a history of business dealings concerning the foreclosure of homes. Id. ¶¶ 40-41; see also id. ¶ 5.

Strategic Acquisitions, Pro Value, and Baer (collectively “Baer Moving Parties”) move for summary adjudication of the 3rd COA for fraud by concealment arguing that they have no conspiracy liability with other defendants (see, e.g., Arei II Cases (2013) 216 Cal.App.4th 1004, 1021-22) for fraud by concealment (see, e.g., Blickman Turkus, LP v. MF Downtown Sunnyvale, LLC (2008) 162 Cal.App.4th 858, 868).

1. Evidentiary Objections
Plaintiff objects to portions of the declaration of Peter Baer. In violation of CRC 3.1354(c), no proposed Order was lodged. The Court declines to rule on the objections.

The Baer Moving Parties object to portions of Plaintiff’s deposition testimony. The objections are overruled.

2. Declaration of Peter Baer
The Baer Moving Parties’ motion is supported solely by the declaration of Peter Baer who attests to the following facts. Strategic is in the business of purchasing properties at foreclosure sales (Baer Decl. ¶ 3); and Strategic was the successful bidder of the subject property at the foreclosure sale on 3/21/12 (id. ¶ 7). The Baer Moving Parties have never done any business or had any business relationship with other defendants (id. ¶ 10), have never paid money to or received money from other defendants (id. ¶ 11), and had no knowledge of the other defendants or Navarro’s relationship to them prior to the foreclosure sale (id. ¶¶ 9, 12-13).

In opposition, Plaintiff argues that Baer’s declaration is conclusory. See Mao’s Kitchen, Inc. v. Mundy (2012) 209 Cal.App.4th 132, 153 n.7 (stating that declarations denying that they engaged in conspiracy were insufficient to satisfy the initial burden of proof). However, the declaration of Peter Baer does not simply deny that the Baer Moving Parties’ engaged in a conspiracy: it asserts facts that the Baer Moving Parties did not have any relationship or knowledge of any other defendants prior to the foreclosure sale. This is sufficient to carry the initial burden to establish that the Baer Moving Parties did not engage in a conspiracy with other defendants.

3. Opposition Evidence
Plaintiff argues that he has raised triable issues of fact as to the relationship between the Baer Moving Parties and other defendants. Plaintiff submits that Patterson told him that various investors would purchase the property and become Plaintiff’s mortgage company. Pl.’s Depo. p. 100:9-13 [Li Decl. Ex. A]. Plaintiff submits that an attorney representing the Baer Moving Parties after the property was sold at the foreclosure sale shared the same address with Federal Housing Bureau (Li Decl. ¶¶ 5-6, Exs. C-D).

However, none of this evidence disputes the facts asserted in Baer’s declaration. Notably, Plaintiff testified that when Baer contacted Plaintiff after the foreclosure sale, Baer’s proposal to Plaintiff was very different from what Patterson had described would happen. Pl.’s Depo. p. 102:2-12 [Li Decl. Ex. A]. Indeed, Patterson himself testified that he had no relationship with the Baer Moving Parties. Patterson Depo. p. 83:1-10 [Li Decl. Ex. H]. To the extent Plaintiff submits that Patterson and Strategic communicated concerning the property (Li Decl. Ex. P), this occurred after the foreclosure sale and Patterson himself testified that he obtained the phone number for Strategic from Plaintiff (Patterson Depo. p. 84:5-7 [Li Decl. Ex. H]) which suggests no relationship prior to the foreclosure sale. Lastly, that an attorney representing the Baer Moving Parties shared the same “virtual office address” with Federal Housing Bureau (Li Decl. ¶¶ 4-6, Exs. B-D) does not establish any relationship between Baer Moving Parties and Federal Housing Bureau.

No evidence is submitted to support any business relationship or communications between the Baer Moving Parties and any other defendant prior to the foreclosure sale. Plaintiff’s assertion of a conspiracy is conjecture and speculation, which is insufficient to avoid summary adjudication (Sanchez v. Swinerton & Walberg Co. (1996) 47 Cal.App.4th 1461, 1465-66).

4. Continuance
Plaintiff requests a continuance to conduct discovery concerning phone records between the Baer Defendants and other defendants (see Li Decl. ¶¶ 14-20, Exs. K-O), arguing that these phone records may show communications among the parties prior to the foreclosure sale. The Court finds good cause to exercise its discretion to grant a continuance. See Rodriguez v. Oto (2013) 212 Cal.App.4th 1020, 1038. Plaintiff submits evidence explaining why the phone records were not previously produced in discovery due to what appears to be a confusion concerning the scope of previous discovery (see Li Decl. ¶¶ 12-13, Exs. I-J), and Plaintiff’s prompt attempts to acquire this discovery (id. ¶¶ 14, 18).

5. Ruling
Therefore, the Court will continue the hearing on the motion for summary adjudication to 8/14/14. If Plaintiff is unable to present any evidence of communications between the Baer Defendants with any other defendant prior to the foreclosure sale, the Court will grant the motion for summary adjudication.

Request for Default Judgment –
Plaintiff requests default judgment against Patterson, Federal Housing Bureau, and Beard (collectively “Defaulted Parties”). Plaintiff requests general damages of $105,500 against the Defaulted Parties, and special damages of $100,000 each against Federal Housing Bureau and Beard and of $416,500 against Patterson.

Plaintiff’s claim for general damages includes money paid to Patterson, the fair market value of Plaintiff’s personal and professional property, and loss of income (Default Mot’n p. 10:3-26), of which all defendants are alleged to be jointly liable (see, e.g., FAC ¶ 85). However, the Baer Defendants submit that Plaintiff is judicially estopped (see, e.g., Swahn Group, Inc. v. Segal (2010) 183 Cal.App.4th 831, 841-42) from claiming loss of property and loss of income due to Plaintiff’s bankruptcy discharge (RJN Ex. 1) in a bankruptcy action in which Plaintiff did not disclose such assets (Tipping Decl. Ex. A; Ex. B [Pl.’s Depo. p. 54:3-55:3].

Additionally, Plaintiff’s declaration fails to submit sufficient documentary evidence to support his claim for general damages: as to the check paid to Patterson (Navarro Decl. ¶ 12) or evidence of four monthly cash payments of $500 (id. ¶ 13); personal belongings of approximately $77,000 (id. ¶ 30); and his motorcycle repair business (id. ¶¶ 5, 31).

These defenses are not independent ones not involving the Defaulted Parties, and therefore, the Court declines to enter several judgments. See Mirabile v. Smith (1953) 119 Cal.App.2d 685, 688-89.