Case Number: BC660899 Hearing Date: November 21, 2018 Dept: 24

Plaintiffs’ Motion for Summary Adjudication is GRANTED.

Background:

On May 10, 2017, Plaintiffs Sang B. Noh and In Y. Noh commenced this collections action against Defendant David Chong. The operative first amended complaint (“FAC”) asserts two causes of action for breach of contract and breach of promissory note, three common counts for money had and received, money lent and account stated. On November 13, 2017, through counsel, Defendant filed an answer to the FAC. On September 13, 2018, the Court in department 82, granted Plaintiffs’ a write of attachment as to Chong. Trial is set for March 12, 2019. Plaintiffs presently seek summary adjudication of the second cause of action for breach of promissory note.

As alleged in the FAC, on March 31, 2014, Plaintiffs and Defendant entered into a written agreement entitled Asset Purchase Agreement whereby a company named Freehug Apparel, Inc. dba Wax Jean or Wax Jeans agreed to sell all of its business assets and a company named Blue Dot U.S.A. Inc. agreed to purchase the same. Plaintiffs and Defendant guaranteed the performance of each company. The parties also entered into an Addendum and First Amendment to Asset Purchase Agreement (collectively, “Contract”). (FAC, ¶ 10.) Under the Contract, Plaintiffs and Defendant agreed that Freehug and Defendant would repay $750,000 in three installment payments of $250,000, with the first payment due on or before December 31, 2014 and the remaining two payments due on or before December 31, 2015 and December 31, 2016. (Id., ¶ 14.) Defendant also agreed to and did execute and deliver to Plaintiffs a promissory note (“Note”) and security agreement to evidence and secure the obligation. (Id., ¶¶ 11, 18.) The Note contained the same payment terms as the Contract. (Id., ¶18.) Defendant defaulted and breached the terms of the Note by failing to pay the amount due under the Note despite repeated demands for payment. (Id., ¶ 19.) There remains an outstanding balance of $750,000 plus interest at the maximum legal rate. (Id.) Plaintiffs have fully performed. (Id.) The Note contains an attorney’s fees clause. (Id., ¶ 20.)

Analysis

Legal Standard

A plaintiff is entitled to summary adjudication if he or she establishes there is no defense to that claim. (CCP § 437c (f)(1).) “A plaintiff . . . has met his or her burden of showing that there is no defense to a cause of action if that party has proved each element of the cause of action entitling the party to judgment on that cause of action.” (CCP § 437c (p)(1); see Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 850 (the party moving for summary judgment bears an initial burden to demonstrate the absence of any triable issue of material fact on the elements of the claims it asserts or opposes).) “Thus, if a plaintiff who would bear the burden of proof by a preponderance of evidence at trial moves for summary judgment, he must present evidence that would require a reasonable trier of fact to find any underlying material fact more likely than not—otherwise, he would not be entitled to judgment as a matter of law, but would have to present his evidence to a trier of fact.” (Id. at 851 (original italics).) Once the moving party has satisfied the initial burden of proof, the burden “shifts to the opposing party to show, by responsive separate statement and admissible evidence that triable issues of fact exist.” (Health Net, Inc. v. RLI Ins. Co. (2012) 206 Cal.App.4th 232, 250; CCP § 437c (p)(1).) Any doubt concerning the propriety of granting the motion should be resolved in favor of the party opposing the motion. (Wright v. Fireman’s Fund Ins. Companies (1992) 11 Cal.App.4th 998, 1011.)

Merits

“A cause of action for nonpayment on a promissory note is one for breach of contract.” (Poseidon Development, Inc. v. Woodland Lane Estates, LLC (2007) 152 Cal.App.4th 1106, 1112.) Therefore, elements for a breach of a promissory note are (1) a contract, (2) the plaintiff’s performance of the contract or excuse for nonperformance, (3) the defendant’s breach and (4) the resulting harm to the plaintiff. (Reichert v. Gen. Ins. Co. of Am. (1968) 68 Cal. 2d 822, 830; Stockton Mortgage, Inc. v. Tope (2014) 233 Cal.App.4th 437, 453.) “A promissory note is presumed to have been given for a sufficient consideration … and in an action thereon, the introduction of the note in evidence establishes a prima facie right to recover according to its terms.” (Saks v. Charity Mission Baptist Church (2001) 90 Cal.App.4th 1116, 1133.)

The Court finds that Plaintiffs have met their initial burden. Plaintiffs’ evidence establishes that Defendant executed the Note, which identifies Plaintiffs as the “Lender”, wherein Defendant promised to repay Plaintiffs $750,000. (UF Nos. 8, 9, 13.) The terms of the Note required Defendant to make three payments of $25,000 to Plaintiffs no later than December 31, 2016. (UF Nos. 8, 13.) Plaintiffs gave sufficient consideration for the Note and are entitled to recover under the terms of the Note. (UF No. 8; See Saks, supra, 90 Cal.App.4th at 1133.) Defendant admits that he is required to repay $750,000 under the Note. (UF No. 13.) Defendant has failed to repay any portion of the amount due under the Note. (UF No. 14.) Defendant admits that his obligation to repay Plaintiffs under the Note was not excused and there is no basis for him not to repay the debt. (UF Nos. 15-19.) Plaintiffs have been damaged as a result of Defendant’s breach in the amount of $750,000, not including pre-judgment interest, attorneys’ fees and cost which they are entitled to recover under the Note. (UF No. 12.) This evidence establishes the essential elements of a breach of promissory note claim.

Defendant has not filed an opposition. Therefore, he has failed to meet his burden of raising a triable issue of material fact as to the second cause of action. Accordingly, the motion for summary adjudication of the second cause of action is GRANTED.

Moving party is ordered to give notice.