Filed 5/13/20 Vonclave, LLC v. Griffin Estate Investors, LP CA4/2

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FOURTH APPELLATE DISTRICT

DIVISION TWO

VONCLAVE, LLC,

Plaintiff,

v.

GRIFFIN ESTATE INVESTORS, LP et al.,

Defendants.

_________________________________

GRIFFIN ESTATE INVESTORS, LP,

Plaintiff and Appellant;

v.

KEVIN BLESSING et al.,

Defendants and Respondents.

E070201

(Super.Ct.Nos. PSC1603600 & PSC1606198)

OPINION

APPEAL from the Superior Court of Riverside County. John W. Vineyard, Judge. Affirmed.

Jackson Tidus, Michael L. Tidus, Kathryn M. Casey and Charles M. Clark for Plaintiff and Appellant.

Slovak Baron Empey Murphy & Pinkney, Shawn M. Murphy and Wendy S. Dowse for Defendants and Respondents.

Griffin Investors, LP (Griffin) brought a commercial unlawful detainer case against Vonclave, LLC (Limited); Vonclave, Inc. (Incorporated); Kevin Blessing (Blessing); and Clayton Baldwin (Baldwin). The trial court granted summary judgment in favor of Incorporated, Blessing, and Baldwin.

Griffin raises three issues on appeal. First, Griffin contends there is a triable issue of material fact concerning whether the lease was assigned. Second, Griffin asserts the trial court lacked the authority to enter summary judgment. Third, Griffin contends the trial court erred by deeming its motion for relief from the judgment (Code Civ. Proc., § 473, subd. (b)) to be a motion for reconsideration (§ 1008) and by denying the motion. We affirm the judgment.

FACTUAL AND PROCEDURAL HISTORY

A. COMPLAINT

The facts in this subsection are taken from Griffin’s complaint. The property at issue is located in La Quinta. The property consists of two parcels. The smaller of the two parcels is at-issue in this case. The smaller parcel measures “approximately 6.5 acres and contains a residence and compound consisting of a main house, four casitas, 2 guest houses, stables, and a ranch” (the premises).

On June 4, 2013, Griffin Ranch Investors, LP (Ranch) supposedly leased the premises to Limited for a term of five years commencing on June 4, 2013. The lease reflects that the agreed upon use of the premises was as a “[h]igh-end rental facility for special events and occasions. First class use only.” Blessing supposedly signed the lease on behalf of Limited.

In regard to assignments and sublets, the lease provides, “Lessee shall not voluntarily or by operation of law assign, transfer, mortgage, or encumber (collectively, ‘assign or assignment’) or sublet all or any part of Lessee’s interest in this Lease or in the Premises without Lessor’s prior written consent.” The lease continues, “An assignment or subletting without consent shall, at Lessor’s option, be a Default curable after notice per Paragraph 13.1(c), or a noncurable Breach without the necessity of any notice and grace period. If Lessor elects to treat such unapproved assignment or subletting as a noncurable Breach, Lessor may either: (i) terminate this Lease, or (ii) upon 30 day written notice, increase the monthly Base Rent to 110% of the Base Rent then in effect.”

On June 4, 2013, Limited did not exist as a legal entity. Blessing and Baldwin concealed the fact that Limited was not a legal entity. In May 2015, Blessing and Baldwin created Limited as a legal entity. “[Limited’s] members, Defendant Blessing, [and] Defendant Baldwin . . . corresponded that they would have to inform their lender that [Limited] was a newly created entity that would be assigned the interest under the Lease.”

Griffin, which is a successor of Ranch, “discover[ed] the improper and unapproved assignment [on] October 24, 2016. [¶] Soon after discovery, [Griffin] exercised its rights in Paragraph 12.1, quoted above, and declared the assignment a non-curable breach of the Lease.” On November 3, 2016, Griffin served defendants with a notice of termination. “On December 3, 2016, the period stated in the Notice of Termination expired at the end of the day, and Defendants . . . failed to comply with the requirements of the Notice of Termination by that date and still remain in possession of the Premises.”

Griffin sought (1) damages for each day defendants remained in possession of the premises at a rate of approximately $1,500 per day; (2) attorneys’ fees; and (3) immediate possession of the premises.

B. MOTION FOR SUMMARY ADJUDICATION

Limited, Incorporated, Blessing, and Baldwin (collectively, defendants) moved for summary adjudication. Defendants asserted, “It is ‘hornbook law’ that a limited liability company can enforce preformation ‘contracts made in its behalf, as long as the [LLC] “has adopted the contract or otherwise succeeded to it.” ’ [Citation.] That is what happened here. [Limited] was formed in May 2015. Once [Limited] ‘came into existence, it could enforce any preorganization contract made in its behalf . . . if it adopted or ratified it.’ [Citation.] After [Limited] was formed, it adopted and ratified a preformation lease made in its behalf . . . by, among other things, exercising a purchase option in the Lease and then bringing an action for specific performance and other relief when Mark Majerovic, [Griffin], [Ranch], and MDM Investment Group LLC . . . reneged on the deal. ‘[O]ne means of adopting a preincorporation contract is the corporation’s institution of an action on it.’ ” (Boldface & italics omitted.)

Defendants asserted, “As a matter of law, there was no assignment of the Lease because there is no signed writing purporting to transfer [Limited’s] interest in the Lease to anyone. Nor does it make any sense to argue that [Limited] somehow assigned its interest in the Lease to itself.” Defendants asserted Blessing did not sign the lease in his individual capacity, so he could not have been the original lessee. Defendants requested the trial court dismiss the “UD cause of action.”

In defendants’ Separate Statement of Undisputed Material Facts, they asserted: (1) the lease for the premises was entered into on June 4, 2013, by Limited; (2) Limited came into existence on May 21, 2015; and (3) on June 28, 2016, Limited gave notice of its exercise of the purchase option that was set forth in the 2013 lease.

C. OPPOSITION

Griffin opposed defendants’ motion for summary adjudication/judgment. Griffin wrote, “Defendants argue that, as a matter of law, [Griffin’s] unlawful detainer action should be dismissed because there was no assignment. The undisputed documentary evidence and sworn testimony proves there was an assignment of the Lease in May 2015, so at the very least there is a disputed issue of fact that precludes summary judgment. [Citation.] An assignment can be made orally.” (Underscore omitted.)

Griffin continued, “Defendants admit under oath that a new entity was created in May 2015 and the lease was transferred from the original lessee to [Limited]. [Citation.] . . . Finally, detailed above, [defendants] argue[] the ‘promoter doctrine’ . . . but [for] that doctrine to apply the Lease would have to be transferred from Blessing to [Limited] when it was created two years after the Lease was executed.” Griffin asserted, “When a promoter purports to create a contract in the name of the entity not yet formed, and signs it on its behalf, he creates a contract in which the promoter is the contracting party. [Citations.] It is not the contract of the entity at the time of execution because it does not exist at that time. [Citation.] Should the entity subsequently be formed, the contract becomes the contract of that entity if it expressly or impliedly ratifies or adopts it as its own.”

In Griffin’s Separate Statement, it made the following assertions as to the three facts set forth ante from defendants’ Separate Statement: (1) when the lease for the premises was entered into on June 4, 2013, defendants’ intended lessee was Incorporated, not Limited; (2) Limited was a non-existent entity until it came into existence on May 21, 2015; and (3) it was undisputed that on June 28, 2016, Limited gave notice of its exercise of the purchase option that was set forth in the 2013 lease.

D. REPLY

Defendants replied to Griffin’s opposition. Defendants asserted, “It is undisputed that [Limited] is specifically identified as the Lessee in the Lease, and was formed in May 2015. Once [Limited] ‘came into existence, it could enforce any preorganization contract made in its behalf . . . if it adopted or ratified it.’ ”

E. HEARING

The trial court issued a tentative ruling granting defendants’ motion. At the beginning of the hearing on defendants’ motion, the following exchange occurred:

“[Griffin’s attorney]: Your Honor, it is undisputed, as we start, that when the lease was executed in 2013, [Limited] was not created.

“The Court: Agreed.

“[Griffin’s attorney]: So they could not have entered into that lease.

“The Court: Agreed.”

Griffin argued, “So to say that there is no disputed fact around whether the [lease] was entered into for the benefit of [Limited] or whether there was a transfer or whether Mr. Blessing acted as the lessee for two years, at the very least it’s a disputed issue that should be decided at trial and not here, Your Honor.”

Defendants responded, “There is no assignment as a matter of law.” Griffin argued, “[A]t the very least it creates a disputed fact as to who was possessing the property for those two years. If it was not [Blessing] possessing that property for two years as an agent of [Limited], which he says it was not, then that [promoter] doctrine cannot apply.”

The trial court took the matter under submission. The trial court made its tentative ruling its final ruling, thus granting the motion. The trial court entered judgment in favor of Incorporated, Blessing, and Baldwin.

DISCUSSION

A. TRIABLE ISSUE

Griffin contends the trial court erred by granting summary judgment because there is a triable issue of material fact concerning “whether the lease was assigned or transferred.”

Our review of a grant of summary judgment “ ‘is governed by a fundamental principle of appellate procedure, namely, that “ ‘[a] judgment or order of the lower court is presumed correct,’” and thus, “ ‘error must be affirmatively shown.’ ” [Citation.] Under this principle, the [appellant] bear[s] the burden of establishing error on appeal, even though [the respondents] had the burden of proving [their] right to summary judgment before the trial court.’ ” (Centex Homes v. St. Paul Fire & Marine Ins. Co. (2018) 19 Cal.App.5th 789, 796.)

“ ‘We review an order denying a motion for summary judgment de novo. [Citation.] Summary judgment is properly granted when the papers show there is no triable issue of material fact, and the moving party is entitled to judgment as a matter of law.’ ” (State Farm General Ins. Co. v. Frake (2011) 197 Cal.App.4th 568, 577.) “ ‘The complaint measures the materiality of the facts tendered in a defendant’s challenge to the plaintiff’s cause of action.’ ” (Carsen v. Koivumaki (2014) 227 Cal.App.4th 879, 888.)

In Griffin’s complaint, it alleged defendants breached the lease by transferring the lease to Limited. The parties’ separate statements reflect that they agreed upon the following material facts: (1) the lease for the premises was entered into on June 4, 2013, and the lease identified Limited as lessee; (2) Limited did not exist until May 21, 2015; and (3) on June 28, 2016, Limited gave notice of its exercise of the purchase option that was set forth in the 2013 lease addendum.

The parties’ separate statements reflect that they agree on the material facts of the case. Everyone agrees that Limited did not exist until May 2015. Therefore, no one is disputing the fact that Limited did not personally hold the lease from June 2013 to May 2015 because it did not exist to personally hold the lease. As a result, the only question relevant to the issue alleged in the complaint is one based upon undisputed facts: Whether, when a company adopts a preformation contract, a transfer occurs. The issue presented in the case is a legal issue based upon undisputed facts. (See Wilkinson v. Norcal Mutual Ins. Co. (1979) 98 Cal.App.3d 307, 318 [“What appellant is really contesting is the legal conclusion arrived at by the court as a result of the application of legal principles to those undisputed facts”].)

On appeal, Griffin asserts that there is a disputed factual issue concerning whether the promoter doctrine applies because there is evidence that Blessing and Baldwin were unaware that Limited had not been formed when Blessing executed the lease in 2013.

In its complaint, Griffin alleged that defendants breached the lease by transferring the lease to Limited. If a transfer to Limited occurred, then it happened when Limited adopted the lease. The facts surrounding Limited’s adoption of the lease are undisputed. Whether Blessing and Baldwin intended to enter into the lease on behalf of Limited or Incorporated is not relevant when everyone agrees that (1) the lease identifies Limited as the lessee, and (2) Limited did not exist in 2013. Whether Blessing and Baldwin meant to name Incorporated as the lessee does not alter the issue of whether, when Limited adopted the lease in 2015, a transfer occurred. Therefore, a factual dispute about what entity Blessing and Baldwin intended to name as lessee in 2013 does not demonstrate that the trial court erred because that dispute does not pertain to a material fact.

Next, Griffin asserts, “[A]t the very least, there is a triable issue of fact [as to] whether [Incorporated] originally assumed the Lease. If it did, this initial assumption was an assignment as [Incorporated] was not the named Lessee.” In the complaint, Griffin alleged that defendants breached the lease by transferring it to Limited in 2015. Therefore, the issue of whether an assignment may have occurred in 2013 when Incorporated allegedly assumed the lease is not relevant to the allegations in the complaint. Because a possible assignment to Incorporated in 2013 is not relevant to the alleged assignment to Limited in 2015, Griffin has not established an error related to a triable issue of material fact. (Carsen v. Koivumaki, supra, 227 Cal.App.4th at p. 888 [“ ‘The complaint measures the materiality of the facts’ ”].)

In sum, no one is disputing the fact that Limited did not personally hold the lease from June 2013 to May 2015. The identity of who was holding the lease from June 2013 to May 2015 makes no meaningful difference in the case. The meaningful question in the case is whether, when Limited adopted the lease in 2015, that adoption created a transfer—and that is a legal question based upon undisputed facts.

On appeal, Griffin fails to answer that legal question. Instead, Griffin asserts the trial court erred because there is a triable issue of fact. Because Griffin focuses on a factual issue, when the material facts are undisputed, and fails to offer meaningful legal analysis on the legal issue at the heart of the case, we conclude the trial court did not err. (See Centex Homes v. St. Paul Fire & Marine Ins. Co., supra, 19 Cal.App.5th at p. 796 [“ ‘error must be affirmatively shown’ ”].)

B. GRANTING SUMMARY JUDGMENT

1. PROCEDURAL HISTORY

In Griffin’s complaint, it alleged defendants transferred the lease to Limited in 2015 without Griffin’s consent. Upon discovering the transfer, Griffin “declared the assignment a non-curable breach of the Lease.” Griffin served defendants with a notice of termination of tenancy. In its complaint, Griffin alleged that defendants “failed to comply with the Notice of Termination and refuse to surrender possession of the Premises to [Griffin].”

Defendants moved for summary adjudication. In the motion, defendants reasoned that a transfer of the lease did not occur because the lease was a preformation lease, and, after an entity is formed and adopts its preformation contracts, then it can “ ‘enforce preincorporation contracts made in its behalf.’ ”

The trial court granted defendants’ motion. Later, defendants moved for entry of several judgment. Defendants asserted, “All issues between Plaintiff Griffin . . . and Defendants . . . have been resolved in Defendants’ favor, by way of this Court’s order summarily adjudicating [Griffin’s] unlawful detainer (UD) cause of action.”

Griffin opposed the motion for several judgment. Griffin asserted, among other things, that the trial court adjudicated the issue of whether an assignment occurred but did not adjudicate whether a transfer of the lease occurred. On January 24, 2018, the trial court granted the motion for several judgment. On July 19, 2018, the trial court issued a nunc pro tunc order correcting “the ruling on [defendants’] Motion for Summary Adjudication . . . to indicate that summary judgment was granted as to the Unlawful Detainer cause of action.”

2. ANALYSIS

Griffin contends the trial court lacked jurisdiction to enter summary judgment because defendants moved for summary adjudication of the issue of whether an assignment occurred and a court “has no power to adjudicate” issues beyond those specifically raised in the moving papers, i.e., a court cannot grant summary judgment when the moving party sought summary adjudication.

We infer that Griffin is asserting the trial court acted in excess of its jurisdiction. “An excess of jurisdiction is typically described as the case ‘ “where, though the court has jurisdiction over the subject matter and the parties in the fundamental sense, it has no ‘jurisdiction’ (or power) to act except in a particular manner, or to give certain kinds of relief, or to act without the occurrence of certain procedural prerequisites.” ’ ” (Thompson Pacific Construction, Inc. v. City of Sunnyvale (2007) 155 Cal.App.4th 525, 537.)

In Griffin’s analysis, it does not address the separate motion that was made for several judgment (§ 578). Given that two motions were made—one for summary adjudication and one for several judgment—this is not a situation in which Griffin lacked notice or an opportunity to be heard regarding the entry of judgment. Griffin’s argument is based upon leaping over the several judgment proceedings, so that one looks only at (1) the grant of summary adjudication, and (2) the nunc pro tunc correction creating a grant of summary judgment. Because Griffin’s argument does not address the fact that a motion for several judgment was made, opposed, and ultimately granted, Griffin has not demonstrated that the trial court erred, or if the trial court erred that Griffin was prejudiced. (See Regents of University of California v. Superior Court (2018) 4 Cal.5th 607, 618 [when reviewing a grant of summary judgment, ‘[w]e review the entire record”]; see also Stearns v. Aguirre (1857) 7 Cal. 443, 445 [nunc pro tunc correction can be made “if the entire record shows the misprision”]; see also Soule v. General Motors Corp. (1994) 8 Cal.4th 548, 573 [“a judgment [may] not be reversed unless error caused actual prejudice in light of the whole record”].)

C. MOTION FOR RECONSIDERATION

1. PROCEDURAL HISTORY

On September 5, 2017, the trial court issued its ruling granting defendants’ motion for summary adjudication. On December 22, 2017, Griffin filed a motion to set aside the court’s ruling. (§ 473, subd. (b).) In the motion, Griffin asserted it had discovered new evidence reflecting Merv Griffin Equestrian Estate, LLC (Equestrian) held the lease prior to Limited being formed. Griffin asserted it was Equestrian that transferred the lease to Limited in 2015. Griffin alleged the evidence was discovered during a December 14, 2017, deposition of Limited’s expert.

Defendants opposed the motion. Defendants asserted Griffin had evidence of Equestrian’s involvement “since September 2016,” so the evidence was not newly discovered. Defendants contended evidence of Equestrian’s involvement had been produced in September 2016 by Limited’s lender, in particular a spreadsheet of Equestrian’s net operating income “was attached as Exhibit 5 to Mr. Smith’s deposition,” and then in October 2016 “Mitchell Brodie produced the same ‘new’ spreadsheet of [Equestrian’s] net operating income, along with [Equestrian’s] tax returns, on a flash drive.” Defendants asserted that Griffin’s “[m]otion is in reality an untimely and improper motion for reconsideration.”

The trial court issued a tentative ruling reflecting Griffin’s motion was a motion for reconsideration (§ 1008). The court explained that (1) the motion could not be based upon facts known to the party when the original ruling was made, and (2) the moving party had to explain (a) its failure to obtain the evidence in a timely manner, and (b) why the evidence could not have been obtained in a timely manner if due diligence had been exercised. The trial court found Griffin did not give a satisfactory explanation of its failure to obtain the evidence prior to the hearing on the summary judgment motion. The trial court also found the motion for reconsideration was untimely. The trial court made its tentative ruling its final ruling.

2. ANALYSIS

a. Identifying the Motion

Griffin contends the trial court erred by deeming its motion for relief (§ 473, subd. (b)) to be a motion for reconsideration (§ 1008).

The substance of a motion is more important than the motion’s label. (Civ. Code, § 3528; see also Brown v. Wells Fargo Bank, NA (2012) 204 Cal.App.4th 1353, 1356.) If it is “reasonably clear” that the substance of a party’s motion differs from the label on the motion, then a court may recharacterize the motion based upon the substance of the motion. (Luz v. Lopes (1960) 55 Cal.2d 54, 59-60 [discussing construing notices of appeal]; see also Hudson v. Superior Court (2017) 7 Cal.App.5th 999, 1011 [“a trial court may disregard the caption of a motion and instead treat it in accordance with the relief it requests”].)

Section 473, subdivision (b), provides, “The court may, upon any terms as may be just, relieve a party or his or her legal representative from a judgment, dismissal, order, or other proceeding taken against him or her through his or her mistake, inadvertence, surprise, or excusable neglect.” The “specific purposes of section 473(b)’s provision for relief based on attorney fault is to ‘relieve the innocent client of the burden of the attorney’s fault, to impose the burden on the erring attorney, and to avoid precipitating more litigation in the form of malpractice suits.’ ” (Evan Zohar Construction & Remodeling, Inc. v. Bellaire Townhouses, LLC (2015) 61 Cal.4th 830, 839.)

Section 1008, subdivision (a), provides that, within 10 days of an order, a party may “based upon new or different facts, circumstances, or law, make application to the same judge or court that made the order, to reconsider the matter and modify, amend, or revoke the prior order.” “Section 1008’s purpose is ‘ “to conserve judicial resources by constraining litigants who would endlessly bring the same motions over and over[.]” ’ ” (Evan Zohar Construction & Remodeling, Inc. v. Bellaire Townhouses, LLC, supra, 61 Cal.4th at p. 839.)

In Griffin’s motion, it asserted, “The Court should, respectfully, set aside the MSA ruling. As discussed above, new evidence has been discovered that shows that the Court’s overarching factual finding supporting its granting of the MSA is in fact incorrect; the ruling on the MSA should be set aside accordingly.” Griffin concluded its argument: “As a result of the above new evidence, the previous MSA ruling order [sic] must be set aside because there is a disputed issue of fact as to possession that precludes summary adjudication.”

In Griffin’s motion, it asserted the order should be set aside due to new evidence because the new evidence demonstrated the existence of a triable issue of material fact. That argument falls squarely within the provisions of section 1008, which concern a trial court reconsidering its ruling in light of new evidence. (§ 1008, subd. (a).) Griffin did not focus its motion argument on attorney error, which is the basis of a section 473, subdivision (b), motion. Accordingly, the trial court did not err in deeming Griffin’s motion to be a motion for reconsideration. (See A.N. v. County of Los Angeles (2009) 171 Cal.App.4th 1058, 1064 [it is the substance of a motion that matters, “not its label”].)

b. Denial of the Motion

Griffin contends the trial court erred by refusing to consider its new evidence. Griffin asserts the new evidence demonstrates the existence of a triable issue of material fact “as to whether [Limited] ever took possession of the [premises] and ratified the Lease.”

A motion for reconsideration must be brought “within 10 days after service upon the party of written notice of entry of the order.” (§ 1008, subd. (a).) The trial court clerk mailed the trial court’s ruling on the motion for summary adjudication to the parties in September 2017. The clerk sent the notice for Griffin to an address in California. (See § 1013, subd. (a) [notice by mail].) Griffin’s motion requesting reconsideration was filed on December 22, 2017. Because Griffin’s motion was filed months after Griffin received notice of the trial court’s ruling, the motion was untimely. Because Griffin’s motion was untimely, the trial court did not err by not considering Griffin’s new evidence. (See Advanced Building Maintenance v. State Comp. Ins. Fund (1996) 49 Cal.App.4th 1388, 1392 [the trial court properly denied an untimely motion for reconsideration].) , , ,

DISPOSITION

The judgment is affirmed. Respondents are awarded their costs on appeal. (Cal. Rules of Court, rule 8.278(a)(1).)

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

MILLER

Acting P. J.

We concur:

CODRINGTON

J

MENETREZ

J