Case Number: 16A01106 Hearing Date: May 01, 2018 Dept: 94

Defendant IVCI, LLC’s Amended Motion for Summary Judgment or, in the Alternative, Summary Adjudication is DENIED.

On January 21, 2016, Plaintiff Technology Recruiting Solutions, LLC, filed this against Defendant IVCI, LLC (“Defendant”). On August 30, 2017, a First Amended Complaint (“FAC”) was filed, where Plaintiff modified its name to BRAV Executive Recruiting and Consulting LLC dba Technology Recruiting Solutions, LLC (“Plaintiff”). The FAC asserts causes of action for (1) open book account and (2) breach of contract.

On October 24, 2017, the Court denied Defendant’s motion for summary judgment (“First Motion for Summary Judgement”). However, in its January 23, 2018 Minute Order, this Court permitted Defendant to “re-file its Motion for Summary Judgment no later than February 9, 2018.”

On February 9, 2018, Defendant filed a Motion for Summary Judgment or, in the Alternative, Summary Adjudication. On February 13, 2018, Defendant filed an Amended Motion for Summary Judgment or, in the Alternative, Summary Adjudication (“Amended Motion”). The Court considers the Amended Motion instead of the February 9, 2018 Motion for Summary Judgment. On March 20, 2018, Plaintiff filed its opposition (though the paper was erroneously titled as a “Reply to Motion for Summary Judgment”). On March 29, 2018, Defendant filed a reply.

Legal Standard

In analyzing motions for summary judgment, 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.) “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 . . . .” (CCP § 437c(c).) Generally, “the party moving for summary judgment bears an initial burden of production to make a prima facie showing of the nonexistence of any triable issue of material fact; if he carries his burden of production, he causes a shift, and the opposing party is then subjected to a burden of production of his own to make a prima facie showing of the existence of a triable issue of material fact.” (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 850.)

“[M]oving defendant now has two means by which to shift the burden of proof under subdivision (o)(2) of section 437c to the plaintiff to produce evidence creating a triable issue of fact. The defendant may rely upon factually insufficient discovery responses by the plaintiff to show that the plaintiff cannot establish an essential element of the cause of action sued upon. [Citation.] Alternatively, the defendant may utilize the tried and true technique of negating (‘disproving’) an essential element of the plaintiff’s cause of action.” (Brantley v. Pisaro (1996) 42 Cal.App.4th 1591, 1598.)

“‘In considering the evidence submitted by the parties, the trial court does not ‘weigh the plaintiff’s evidence or inferences against the defendants’ as though it were sitting as the trier of fact.’ [Citation.] However, ‘it must nevertheless determine what any evidence or inference could show or imply to a reasonable trier of fact . . . . In so doing, it does not decide on any finding of its own, but simply decides what finding such a trier of fact could make for itself.’” (Miller v. Fortune Commercial Corporaton (2017) 15 Cal.App.5th 214, 221.)

“To determine whether the parties have met their respective burdens, the court considers ‘all of the evidence set forth in the supporting and opposition papers, except that to which objections have been made and sustained by the court, and all uncontradicted inferences reasonably deducible from the evidence.’” (Nieto v. Blue Shield of California Life & Health Ins. Co. (2010) 181 Cal.App.4th 60, 71.) As a general rule, in reviewing the evidence presented on summary judgment, the moving party’s evidence is strictly construed and the opposing party’s evidence is liberally construed. (See, e.g., Binder v. Aetna Life Insurance Company (1999) 75 Cal.App.4th 832; Brantley, supra, 42 Cal.App.4th 1591.) The court resolves doubts or ambiguities in plaintiff’s favor. (Lackner v. North (2006) 135 Cal.App.4th 1188, 1196.)

“If a party is otherwise entitled to summary judgment pursuant to this section, summary judgment shall not be denied on grounds of credibility or for want of cross-examination of witnesses furnishing affidavits or declarations in support of the summary judgment, except that summary judgment may be denied in the discretion of the court if the only proof of a material fact offered in support of the summary judgment is an affidavit or declaration made by an individual who was the sole witness to that fact; or if a material fact is an individual’s state of mind, or lack thereof, and that fact is sought to be established solely by the individual’s affirmation thereof.” (CCP § 437c(e).)

A motion for summary adjudication shall proceed in all procedural respects as a motion for summary judgment. (Id. § 437c(f)(2).)

Request for Judicial Notice

“Judicial notice may not be taken of any matter unless authorized or required by law.” (Evid. Code § 450.) Evid. Code §§ 451 and 452 list matters that are subject to judicial notice. Documents subject to judicial notice must be properly authenticated. (Evid. Code § 1400.) “Authentication of a writing means (a) the introduction of evidence sufficient to sustain a finding that it is the writing that the proponent of the evidence claims it is or (b) the establishment of such facts by any other means provided by law.” (Id.)

Defendant requests judicial notice of Exhibits “A” (“Certificate of No Record, Limited Liability Company” from the California Secretary of State’s office), “B” (“Certificate of Fact of Non-Filing” from the Los Angeles County Registrar-Recorder’s Office), and “C” (a webpage from the Los Angeles County Registrar-Recorder’s Office). Defendant’s request for judicial notice is GRANTED pursuant to Evid. Code § 452(d). (See also Evans v. California Trailer Court, Inc. (1994) 28 Cal.App.4th 540, 549 [the Court may take judicial notice of recorded documents].)

Evidentiary Objections

“In granting or denying a motion for summary judgment or summary adjudication, the court need rule only on those objections to evidence that it deems material to its disposition of the motion.” (CCP § 437c(q).) Accordingly, the Court will rule only on the objections to evidence that are material to the disposition of this Motion. Defendant has objected to Plaintiff’s evidence as presented in their Motion. The Court’s ruling on Defendant’s objections is as follows:

Objection Nos. 1-2, 4, 6, 8 OVERULLED

Objection Nos. 3, 5, 7 SUSTAINED

Discussion

Plaintiff alleges it entered a contract with Defendant to provide employee placement services. Plaintiff further alleges that it fulfilled its contractual obligations and located a qualified employee for Defendant, but that Defendant failed to pay it for its service.

A. Relevant Statutes

Bus. & Prof. Code § 17918 states:

“No person transacting business under a fictitious business name contrary to the provisions of this chapter, or his assignee, may maintain any action upon or on account of any contract made, or transaction had, in the fictitious business name in any court of this state until the fictitious business name statement has been executed, filed, and published as required by this chapter.”

Bus. & Prof. Code § 17910.5 states:

“(a) No person shall adopt any fictitious business name which includes ‘Corporation,’ ‘Corp.,’ ‘Incorporated,’ or ‘Inc.’ unless that person is a corporation organized pursuant to the laws of this state or some other jurisdiction.

(b) No person shall adopt any fictitious business name that includes ‘Limited Liability Company’ or ‘LLC’ or ‘LC’ unless that person is a limited liability company organized pursuant to the laws of this state or some other jurisdiction. A person is not prohibited from using the complete words ‘Limited’ or ‘Company’ or their abbreviations in the person’s business name as long as that use does not imply that the person is a limited liability company.

(c) A county clerk shall not accept a fictitious business name statement which would be in violation of this section.”

Bus. & Prof. Code § 17900 states that its purpose is “to protect those dealing with individuals or partnerships doing business under fictitious names, and it is not intended to confer any right or advantage on individuals or firms that fail to comply with the law. The filing of a fictitious business name certificate is designed to make available to the public the identities of persons doing business under the fictitious name.”

B. Legal Capacity

Defendant contends that Plaintiff lacks legal capacity to bring the instant action because its fictitious name, Technology Recruiting Company, is not an LLC, yet the FAC asserts that Plaintiff was doing business as “Technology Recruiting Company, LLC.” (Amended Motion pp. 9-10.) Defendant cites to Templeton Action Committee v. County of San Luis Obispo (2014) 228 Cal.App.4th 427, 432 for the proposition that Plaintiff’s failure to comply with Bus. & Prof. Code § 17918 necessarily bars it from maintaining the instant action and summary judgment should be granted. (Amended Motion p. 10.) In Templeton, supra, 228 Cal.App.4th at 432, the Court of Appeal held:

“Whatever may be the law in other jurisdictions, in California the penalty for failure to comply with Business and Professions Code section 17900 is stated in Business and Professions Code section 17918. That section provides the penalty for failure to comply is a bar from maintaining an action on contracts made in the fictitious business name until the statement is filed. (Ibid.) That is the sole penalty for failure to comply.”

In its October 24, 2017 Minute Order, the Court held that the failure to file a proper fictitious business name statement pursuant to Bus. & Prof. Code § 17900 et seq. “‘is merely a matter in abatement, until the statute is complied with.’” (See Kadota Fig Ass’n of Producers v. Case-Swayne Co. (1946) 73 Cal.App.2d 796, 804-805.)

In its Amended Motion, Defendant cites to Exhibits “B” and “C” (Los Angeles County Clerk’s records) to show that there has been no fictitious business name statement filed as “Technology Recruiting Solutions, LLC.” (Amended Motion p. 10, citing to RJN Exhs. B, C.) Defendant also argues that it is impossible to file a fictitious business name statement with “Limited Liability Company,” “LLC,” or “LC” pursuant of Bus. & Prof. Code § 17910.5(b). (Id.) Defendant cites to a declaration from Plaintiff’s counsel, who admitted that Plaintiff had attempted to file a fictitious business name statement with the “LLC” designation with the County Clerk’s Office, but was rejected by the Clerk’s Office. (Id. pp. 11-12, citing to Wong Decl. ¶ 16, Exh. 5.) Because it is impossible for Plaintiff to file a fictitious business name statement with the County Clerk’s Office as “Technology Recruiting Solutions, LLC” (with the “LLC” designation), the Plaintiff as “Technology Recruiting Solutions, LLC” has no legal capacity to bring the instant action. (Id. pp. 4, 11-12.) Therefore, Defendant argues that Court should grant the Amended Motion pursuant to Opp, supra. (Id. p. 12.)

The Court finds that the two cases, Templeton, supra and Opp, supra, Defendant cites in support of its Amended Motion to be distinguishable from the instant matter.

In Templeton, supra, the trial court sustained defendant County of San Luis Obispo’s and non-party and real party in interest Templeton Properties’ demurrer to plaintiff Templeton Action Committee’s complaint because the plaintiff failed to serve the summons within 90 days pursuant to Gov. Code § 66499.37. (Templeton, supra, 228 Cal.App.4th at 431-432.) On appeal, the plaintiff argues that Bus. & Prof. Code § 17900 et seq. applies to Gov. Code § 66499.37 because Templeton Properties failed to file a fictitious business name statement. (Id. at 431.) The Court of Appeal rejected the plaintiff’s argument and found that plaintiff must comply with Gov. Code § 66499.37 regardless if Templeton Properties had complied with Bus. & Prof. Code § 17900 et seq. (Id. at 432.) Templeton, supra, is inapplicable here because Gov. Code § 66499.37 is not an issue in this Amended Motion.

In Opp, supra, plaintiffs William Opp dba Mountain Connection and Mountain Connection, Inc. filed an action against defendant St. Paul Fire & Marine Insurance Company. (Opp, supra, 154 Cal.App.4th at 72.) Subsequently, Mountain Connection, Inc. dropped out of the case, leaving only William Opp dba Mountain Connection (“William Opp”) as the only plaintiff. (Id. at 73.) The trial court granted the defendant’s motion for summary judgment because Mountain Connection, Inc. was the party to the contract on which the action was based and not William Opp. (Id.) The Court of Appeal affirmed the trial court’s ruling and held that:

“[T]here is no evidence that could establish appellant’s first proposition, that appellant [(William Opp)] individually was merely doing business as ‘Mountain Connection, Inc.’ and was, therefore, the actual contracting party.” (Id. at 76.)

“The only subcontractor named in the subcontract is MCI [(Mountain Connection, Inc.)], and the contract was signed by appellant as president of MCI.” (Id.)

The Court of Appeal also affirmed the trial court’s ruling that Mountain Connection, Inc. cannot substantially comply with Bus. & Prof. Code § 7031 as a “‘duly licensed as a contractor in this state prior to the performance of the act or contract.’” (Id. at 79.) This point, however, is irrelevant here as Defendant does not raise Bus. & Prof. Code § 7031 as an issue.

It is important to first note here that Plaintiff filed its FAC as “BRAV Executive Recruiting and Consulting LLC dba Technology Recruiting Solutions, LLC.” Thus, at issue before the Court is not whether “Technology Recruiting Solutions” or “Technology Recruiting Solutions, LLC” has satisfied Bus. & Prof. Code § 17918; but whether BRAV Executive Recruiting and Consulting LLC has satisfied Section 17918 in doing business in its fictitious business name and whether BRAV was a party to the contract.

“The interpretation of a written instrument, even though it involves what might properly be called questions of fact is essentially a judicial function to be exercised according to the generally accepted canons of interpretation so that the purposes of the instrument may be given effect. Extrinsic evidence is admissible to interpret the instrument, but not to give it a meaning to which it is not reasonably susceptible, and it is the instrument itself that must be given effect. It is therefore solely a judicial function to interpret a written instrument unless the interpretation turns upon the credibility of extrinsic evidence.” (De Guere v. Universal City Studios (1997) 56 Cal.App.4th 482, 501.) “‘Whether a contract provision is clear and unambiguous is a question of law, not fact.’ [Citation.] A contractual term does not become ambiguous simply because the parties disagree about its meaning.” (Southern Pacific Transportation Co. v. Santa Fe Pacific Pipelines, Inc. (1999) 74 Cal.App.4th 1232, 1241.) Accordingly, the Court exercises its judicial function to interpret the contact to resolve the issues presented in this Motion.

The Court notes that at the top left corner of the contract attached (Exh. 1) to the FAC shows that the contracting party was “Technology Recruiting Solutions BRAV Executive Recruiting LLC Company.” In its Objection No. 1 in its Evidentiary Objections, Defendant argues that “BRAV Executive Recruiting LLC Company” is a different entity than “BRAV Executive Recruiting and Consulting LLC.” (Reply, Evidentiary Objections, Obj. No. 1.) Defendant further argues that neither BRAV Executive Recruiting LLC Company nor Technology Recruiting Solutions is a party to the contract, and, therefore, Plaintiff (as “BRAV Executive Recruiting and Consulting LLC”) is not a party to the contract. (Id.) The Court disagrees that “Technology Recruiting Solutions” is not a party to the contract, and, therefore, Plaintiff (as “BRAV Executive Recruiting and Consulting LLC”) is not a party to the contract.

Plaintiff (as “BRAV Executive Recruiting and Consulting LLC”) was a party to the contract through Technology Recruiting Solutions as its fictitious business name. This interpretation is supported by the fictitious business name statement submitted by Plaintiff in its opposition, which shows that BRAV Executive Recruiting and Consulting LLC was doing business under its fictitious business name, “Technology Recruiting Solutions” (without the LLC). (Oppo., Bretts Decl., Exhs. 2-3.)

The Court also notes that the first sentence of the contract states in pertinent part as follows: “Technology Recruiting Solutions, a California LLC company, located in Woodland Hills, CA 91364, enters into this Placement Services Agreement (‘Agreement’) with IVC[I], LLC, a Corporation,” where Technology Recruiting Solutions and IVCI, LLC were written in bold. (Id., Exh. 2 p. 1.) The emboldened name of Technology Recruiting Solutions suggests that “Technology Recruiting Solutions”—not “Technology Recruiting Solutions, LLC”—that was entering into a contract with IVCI, LLC (Defendant). This reading without the “LLC” attached to “Technology Recruiting Solutions” name is supported by the reference in the upper left corner of each page stating the party to the contract as “Technology Recruiting Solutions” and not “Technology Recruiting Solutions, LLC.” Because “Technology Recruiting Solutions” is a fictitious name of Plaintiff (as “BRAV Executive Recruiting and Consulting LLC”), Plaintiff was a party to the contract.

The Court notes that “a California LLC company” is referenced after “Technology Recruiting Solutions” and “a Corporation” is referenced after “IVC[I], LLC” in the first paragraph of the contract. The Court reads “a California LLC company” and “a Corporation” as designations of the respective entity and not part of the names. Moreover, “[u]se of a fictitious business name does not create a separate legal entity.” (Pinkerton’s, Inc. v. Sup. Ct. (1996) 49 Cal. App. 4th 1342, 1348.) Similarly, here, the use of “a California LLC company” after “Technology Recruiting Solutions” was not in reference to “Technology Recruiting Solutions” as an independent limited liability company, but in reference to Plaintiff, which was actually an LLC, who was doing business as “Technology Recruiting Solutions.”

The Court notes that on the last page of the contract, “Technology Recruiting Solutions LLC” and not “Technology Recruiting Solutions” is the name of party above the signature of René Betts (“Betts”). The Court reads the two names (“Technology Recruiting Solutions” and “Technology Recruiting Solutions LLC”) as being used interchangeably to refer to the same entity for the purpose of the contract. The Court does not read the name “Technology Recruiting Solutions LLC” to the exclusion of the name “Technology Recruiting Solutions” for purpose of the contract. Such reading would negate the validity, meaning, and language of the contract as “Technology Recruiting Solutions” is referenced throughout the contract. Further, Defendant cites to no case law to support reading the name “Technology Recruiting Solutions LLC” to the exclusion of the name “Technology Recruiting Solutions.”

Significantly, the Court also notes Betts is the Presidents of Plaintiff (as “BRAV Executive Recruiting and Consulting LLC”) and the person who registered “Technology Recruiting Solutions” as the fictitious name of Plaintiff (Oppo., Betts Decl., Exh. 2)—the same person who signed the contract on behalf of “Technology Recruiting Solutions” and “Technology Recruiting Solutions LLC.”

Based on the evidence and reasoning stated above stated above, the Court finds that the facts here are distinguished from Opp, supra, for two reasons. First, Plaintiff (as “BRAV Executive Recruiting and Consulting LLC”) was a party to the contract, and the FAC has named BRAV Executive Recruiting and Consulting LLC as the Plaintiff in this action. Second, Plaintiff has submitted evidence to show that BRAV Executive Recruiting and Consulting LLC has a fictitious business name and has been doing business as Technology Recruiting Solutions.

“The object of Business and Professions Code section 17918 is simply to ensure that those who do business with persons operating under a fictitious name will know the true identities of ‘the individuals with whom they are dealing or to whom they are giving credit or becoming bound.’” (Hydrotech Systems, Ltd. v. Oasis Waterpark (1991) 52 Cal.3d 988, 1001.) Based on the Court’s reading of the contract above, the parties bound to the contract here are “BRAV Executive Recruiting and Consulting LLC” (Plaintiff) and “IVCI, LLC” (Defendant). Thus, Plaintiff has the legal capacity to bring the instant action against Defendant.

For the reasons stated herein, the Court finds that Defendant has failed to meet its burden to demonstrate that there are no triable issues of material fact that Plaintiff violated Bus. & Prof. Code § 17910.5 and the violation is incurable. Accordingly, the Amended Motion for Summary Judgment or, in the Alternative, Summary Adjudication is DENIED.

The Court notes, however, that Plaintiff is suing Defendant under the incorrect fictitious business of “Technology Recruiting Solutions, a limited liability company.” Bus. & Prof. Code § 17910.5(b) prohibits fictitious business name from having the “LLC” designation in its name. Nevertheless, because Plaintiff is a real party to the contract and this action, the Court hereby exercises its discretion and grants Plaintiff leave to amend only to remove the “a limited liability company” from the fictitious business name of “Technology Recruiting Solutions, a limited liability company” as used in the FAC. Plaintiff is not to amend any other parts of the FAC under this Order. Plaintiff to file is second amended complaint with the instructed amendment with ten (10) days from the date of this Order.

Moving party to give notice.