WELLS FARGO BANK, N.A. v. HUNG PHAM
Case No.: 1-14-CV-267677

As an initial matter the Court notes that Plaintiff’s Separate Statement does not comply with Rule of Court 3.1350(d), stating in pertinent part that “[T]he statement must state in numerical sequence the undisputed material facts in the first column followed by the evidence that establishes those undisputed facts in that same column.” Emphasis added.

The pleadings limit the issues presented for summary judgment, and a motion for summary judgment or adjudication cannot be granted or denied on issues not raised by the pleadings. See Nieto v. Blue Shield of Calif. Life & Health Ins. (2010) 181 Cal App 4th 60, 73 (“the pleadings determine the scope of relevant issues on a summary judgment motion.”). The moving party bears the initial burden of production to make a prima facie showing that there are no triable issues of material fact. Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 850.

Pursuant to CCP §437c(f)(1) a party may move for summary adjudication only of “one or more causes of action within an action, one or more affirmative defenses, one or more claims for damages, or one or more issues of duty . . . A motion for summary adjudication shall be granted only if it completely disposes of a cause of action, an affirmative defense, a claim for damages, or an issue of duty.” See also McClasky v. California State Auto. Ass’n (2010) 189 Cal App 4th 947, 975 (“If a cause of action is not shown to be barred in its entirety, no order for summary judgment—or adjudication—can be entered.”) Summary adjudication of general “issues” or of facts is not permitted. See Raghavan v. The Boeing Company (2005) 133 Cal App 4th 1120, 1136.

The moving party’s declarations and evidence will be strictly construed in determining whether they negate or disprove an essential element of a plaintiff’s claim “in order to resolve any evidentiary doubts or ambiguities in plaintiff’s (or opposing party’s) favor.” Johnson v. American Standard, Inc. (2008) 43 Cal 4th 56, 64, parentheses added. While the same standards of admissibility govern both, the opposition declarations are liberally construed while the moving party’s evidence is strictly scrutinized. Saelzler v. Advanced Group 400 (2001) 25 Cal 4th 763, 768.

Where a plaintiff seeks summary judgment or adjudication, the burden is to produce admissible evidence on each element of a “cause of action” entitling him or her to judgment. CCP §437c(p)(1); See Hunter v. Pacific Mechanical Corp. (1995) 37 Cal App 4th 1282, 1287, disapproved on other grounds in Aguilar. This means that plaintiffs who bear the burden of proof at trial by a preponderance of evidence must produce evidence that would require a reasonable finder 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.” Aguilar, supra at 851; LLP Mortgage v. Bizar (2005) 126 Cal App 4th 773, 776 (burden is on plaintiff to persuade court there is no triable issue of material fact). Only at that point does the burden shifts to defendant (or cross-defendant) “to show that a triable issue of one or more material facts exists as to that cause of action.” CCP §437c(p)(1).

Plaintiff’s motion is DENIED for failure to meet the initial burden. Neither of the two identical “Issues” proposed for adjudication by Plaintiff (see Notice of Motion at 2:9-14) wholly dispose of Plaintiff’s 2nd cause of action for judicial foreclosure or its 4th cause of action for declaratory relief. Plaintiff’s Complaint does not allege, and its moving papers do not argue (let alone establish through admissible evidence) that the medical marijuana dispensary purportedly operated by one of Defendant’s tenants violates any state law or any regulation or ordinance of the City of San Jose. Therefore Plaintiff has failed to show that Defendant has violated Section 4.8(d) of the applicable Deed of Trust (Plaintiff’s Exhibit 2), and has failed to show that Defendant is in non-monetary default. This burden to establish default via illegality rests completely on Plaintiff as the moving party. Unless and until Plaintiff’s burden is met Defendant has no evidentiary burden, contrary to Plaintiff’s suggestion in its Reply.

The mere allegation, on information and belief, that one of Defendant’s tenants operates a medical marijuana dispensary does not establish a violation of state law. California’s Medical Marijuana Program, Health & Safety Code §11362.7 et seq., declares that qualified patients, persons with valid identification cards, and the designated primary caregivers of such persons, who associate within the State of California in order collectively or cooperatively to cultivate marijuana for medical purposes, shall not solely on the basis of that fact be subject to state criminal sanctions under Health & Safety Code, § 11357, 11358, 11359, 11360, 11366, 11366.5, or 11570. Health & Safety Code, § 11362.775. See City of Riverside v. Inland Empire Patients Health & Wellness Center, Inc. (2013) 56 Cal 4th 729.

Plaintiff’s motion implies that federal authorities have indicated that they will take legal action against the specific subject property based on the business operations of Defendant’s tenant, citing Plaintiff’s Exhibit 4. However, Plaintiff’s Exhibit 4 is simply a response to an inquiry initiated by Plaintiff (which has not been provided to the Court) stating the federal DEA’s general position as of approximately April 14, 2014 that operation of a medical marijuana operation is in violation of federal law and selectively mentioning certain federal court decisions. Exhibit 4 cannot be reasonably interpreted as suggesting that any federal action against the specific subject property was likely even in April 2014. The Court notes that while the situation is in flux several federal courts have recently questioned federal law enforcement actions directed at medical marijuana operations in states where such operations are legal under state law and are in compliance with local law.

The Court on its own motion pursuant to Evid. Code §452(h) takes judicial notice of the fact that the federal budget passed and signed in December 2014 forbids the federal Department of Justice and its various subordinate entities (including the DEA), from spending their budget funds in actions against medical marijuana operations in states, such as California, where such operations are legal. See www.latimes.com/nation/la-na-medical-pot-20141216-story.html. This calls into question the likelihood of any federal forfeiture action directed at the subject property where there is no showing that any operations on the property violate state law. Accordingly, assuming for purposes of argument that Plaintiff’s purported fear of a federal forfeiture action against the subject property specifically was genuine at the time this action was filed (and not simply a pretext) there is now apparently no reasonable basis for believing such an action is likely where no violation of state law has been shown.