2013-00139161-CU-CL

Wells Fargo Bank National Association vs. Mark Weiner

Nature of Proceeding: Motion for Summary Judgment and/or Adjudication

Filed By: Schauerman, Anne M.

Plaintiff Wells Fargo NA’s Motion for Summary Judgment, or in the Alternative for
Summary Adjudication of Issues is DENIED.

Defendants’ Request for Judicial Notice is GRANTED.

The Court rules on defendants’ evidentiary objections as follows: objections no. 11 is
SUSTAINED, the remainder are OVERRULED.

Pleadings

Plaintiff’s Verified Complaint alleges a single cause of action against Defendants Mary
Weiner and Nancy Weiner for Breach of Personal Guaranty given by defendants to
induce Wells Fargo to granted a business line of credit to borrower Village Concepts,
Inc., in August 1996. Defendants’ Verified Answer alleges the affirmative defense of
Civil Code § 2815.

Material Facts

Wells Fargo identifies 18 material facts in support of this motion. Of those material
facts identified by moving party, the defendants dispute 10.

Defendants do not dispute that on or about August 17, 1996, Wells Fargo granted a
business line of credit (“Line of Credit”) to VILLAGE CONCEPTS, which VILLAGE
CONCEPTS agreed in writing to repay (UMF 1). The original credit limit of the Line of
Credit was $50,000. The credit limit increased from time to time until it reached the
limit of $100,000 in September 2001 (UMF 2). Pursuant to the terms of the Line of
Credit, Wells Fargo extended credit to VILLAGE CONCEPTS (UMF 3).

Defendants dispute Material Fact 4 that VILLAGE CONCEPTS is in default under the
Line of Credit, in that VILLAGE CONCEPTS has failed to make the monthly payments
due. Wells Fargo has accelerated payment of the full balance due on the Line of
Credit, and VILLAGE CONCEPTS has failed to repay that amount.

As of June 2, 2014, the total amount owing on the Line of Credit, under the present
account number XXXX-XXXX-XXXX-3629, exclusive of attorneys’ fees and costs is as
follows: the principal sum of $101,654.33 (UMF 5).

Defendants dispute Material Fact 6, that to induce Wells Fargo to extend credit to
VILLAGE CONCEPTS under the Line of Credit, MARK WEINER and NANCY WEINER
agreed in writing to pay Wells Fargo the amount equal to funds advanced by Wells
Fargo to VILLAGE CONCEPTS under said agreements up to the principal sum of
$101,654.33.

MARK WEINER understood that he was the personal guarantor for the Line of Credit
(UMF 7).

Defendants dispute Material Fact 8 that Wells Fargo has made demand on MARK
WEINER and NANCY WEINER for payment of the Line of Credit but MARK WEINER
and NANCY WEINER have not repaid the amounts presently owing under the Line of
Credit as agreed.

Defendants dispute Material Fact 9, that MARK WEINER acknowledges that nothing in
the Verified Complaint is inaccurate.

Defendants dispute Material Facts 10 through 14 that in the pre-litigation collection
process MARK WEINER never mentioned any claimed revocation of his personal
guaranty; that in pre-litigation communication with Wells Fargo counsel MARK
WEINER never mentioned any claimed revocation of his personal guaranty; that
MARK WEINER never claimed any guaranty revocation until after his Demurrer to
Verified Complaint was overruled, and that the claimed revocation did not set forth
anything identifying such as an account number. The claimed revocation was not
received by Wells Fargo until October 2013.

There was no consideration for the claimed revocation. (UMF 15).

Defendants dispute Material Fact 16, that there was no effective revocation of the
guaranty.

Although the documents provide that Wells Fargo is entitled to interest, costs, and
attorney’s fees, Wells Fargo is only seeking default judgment in the principal balance
owed on the Line of Credit in the amount of $101,654.33 (UMF 17).

Defendants dispute Material Fact 18 that Wells Fargo is entitled to judgment against
Defendants on the Line of Credit in the amount of $101,654.33.

Applicable law

Moving party relies upon its material facts being undisputed, citing C.C.P., sec. 437c
(o)(1) for the proposition that “A plaintiff or cross-complainant 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. Once the plaintiff or cross-complainant has met that burden, the burden shifts
to the defendant or cross-defendant to show that a triable issue of one or more
material facts exists as to that cause of action or a defense thereto. The defendant or
cross-defendant may not rely upon the mere allegations or denials of its pleadings to
show that a triable issue of material fact exists but, instead, shall set forth the specific
facts showing that a triable issue of material fact exists as to that cause of action or a
defense thereto.” No analysis of the elements for a cause of action for breach of guaranty (or any
affirmative defense thereto) is provided by moving party in its memorandum of points
and authorities.

In opposition, defendants assert that the Weiners have revoked their continuing
guarantees and cannot be held liable for any subsequent extensions of credit as a
matter of law and there remain disputed issues of material fact for determination at the
time of trial.

Defendants’ Verified Answer alleges the affirmative defense of Civil Code § 2815,
which provides that “A continuing guaranty may be revoked at any time by the
guarantor, in respect to future transactions, unless there is a continuing consideration
as to such transactions which he does not renounce.”

Defendants provide admissible evidence that the continuing guarantees were revoked
on August 4, 2008, when their letter of revocation was mailed to Wells Fargo at two
different addresses. They assert that they are not responsible for any additional debt
incurred by the borrower after that date.

In reply, plaintiff contends for the first time that the defendants waived their right to
revoke the guarantee, citing to the language of the guaranty which reads: “I accept
your offer of a Wells Fargo Business Line . . . by signing below, the signer(s) agrees
on behalf of the company named above to the terms and conditions of the Customer
Agreement . . . and in their individual capacities jointly and severally
unconditionally guarantee and promise to pay upon demand all indebtedness of
the company named above at any time owing under the business line of
credit.” (Pltff’s Exh. 1, p. 1, emphasis by plaintiff.)

The court in Pearl v. General Motors Acceptance Corp. (1993) 13 Cal. App. 4th 1023,
1030 concluded the rights afforded guarantors by section 2815 may be waived and
such waiver is not in contravention of any public policy.

As in Pearl, the language which moving party contends constitutes a waiver of the right
to revoke in section 2815, makes no express mention of that section and does not
specifically state that the guarantors cannot revoke the continuing guaranty at any time
as to future advances made by Wells Fargo to the borrower.

Pearl, supra, required that “in light of the important rights granted guarantors by
section 2815, we conclude any waiver language must be clear, so that a guarantor
knows upon execution of the document that he or she will not have any right to revoke
the guaranty as to any future advances and, thus, that the guarantor may essentially
have no control over his or her ultimate responsibility for the debtor’s borrowings.” Id.
at 1032.

The Court cannot find, as a matter of law, that the language in the guaranty constitutes
a waiver.

As disputed issues of material fact remain for determination by the finder of fact at trial,
the motion is denied.

The prevailing party is directed to prepare a formal order complying with C.C.P. §437c