SUPERIOR COURT OF CALIFORNIA

COUNTY OF LOS ANGELES – NORTHEAST DISTRICT

DEPARTMENT 3

EVERFRESH FOOD SERVICES, LLC , et al.;

 

Plaintiffs,

 

 

vs.

 

 

ROSEMEAD HWANG, LLC , et al.,

 

Defendants.

Case No.: 19GDCV00264
   
Hearing Date: December 13, 2021
   
Time: 8:30 a.m.
   
[TENTATIVE] ORDER RE:

DEFENDANT’S MOTION FOR SUMMARY JUDGMENT OR, IN THE ALTENRATIVE, FOR SUMMARY ADJUDICATION;

PLAINTIFF CHAO HSIN CHUAN AND SU CHEN YEH’S MOTION FOR SUMMARY JUDGMENT AND FOR SUMMARY ADJUDICATION OF PLAINTIFFS’ CAUSES OF ACTION FOR BREACH OF LEASE, FRAUD, NEGLIGENT MISREPRESENTATION, CONVERSION, BREACH OF THE IMPLIED COVENANT OF GOOD FAITH AND FAIR DEALING, AND UNFAIR BUSINESS PRACTICE; AND DEFENDANT’S AFFIRMATIVE DEFENSES

MOVING PARTY:                Defendant Rosemead Hwang, LLC

RESPONDING PARTIES:    Plaintiffs Chao Hsin Chuan and Su Chen Yeh

(1)  Defendant’s Motion for Summary Judgment or, in the Alternative, for Summary Adjudication

The court considered the moving papers, opposition, and reply papers filed in connection with this motion.

MOVING PARTIES:             Plaintiffs Chao Hsin Chuan and Su Chen Yeh

RESPONDING PARTY:       Defendant Rosemead Hwang, LLC

(2)  Plaintiff Chao Hsin Chuan and Su Chen Yeh’s Motion for Summary Judgment and for Summary Adjudication of Plaintiffs’ Causes of Action for Breach of Lease, Fraud, Negligent Misrepresentation, Conversion, Breach of the Implied Covenant of Good Faith and Fair Dealing, and Unfair Business Practice; and Defendant’s Affirmative Defenses

The court considered the moving papers, opposition, and reply papers filed in connection with this motion.

BACKGROUND

            Plaintiffs Everfresh Food Services, LLC (“Everfresh”), Chao Hsin Chuan (“Chuan”), and Su Chen Yeh (“Yeh”) filed this action against Defendant Rosemead Hwang, LLC (“Rosemead Hwang”) on March 6, 2019. The operative First Amended Complaint (“FAC”) was filed on January 6, 2020, and asserts causes of action for (1) breach of lease, (2) fraud, (3) negligent misrepresentation, (4) conversion, (5) breach of the implied covenant of good faith and fair dealing, and (6) Business and Professions Code section 17200.

            On October 15, 2021, all causes of action by Everfresh were dismissed without prejudice.

            Rosemead Hwang now moves for summary judgment or, in the alternative, summary adjudication of each of the causes of action of the FAC.

            At the same time, Chuan and Yeh (jointly, “Plaintiffs”) move for summary judgment or, in the alternative, summary adjudication of each of the causes of action of the FAC, in addition to summary adjudication of various affirmative defenses asserted by Rosemead Hwang.

EVIDENCE

            The court grants Plaintiffs’ request for judicial notice as to Exhibit 14 and Exhibit 25. The court denies Plaintiffs’ request for judicial notice as to Exhibit 15.

            Due to the voluminous evidentiary objections submitted by the parties, the court invokes subdivision (q) of Code of Civil Procedure section 437c and rules only on those objections that the court deems material to the disposition of the motions.

LEGAL STANDARD

“[A] 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.” (Code Civ. Proc., § 437c, subd. (c).) 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.) If the moving party carries this burden, the burden shifts to the opposing party to make a prima facie showing that a triable issue of material fact exists. (Ibid.) Courts “liberally construe the evidence in support of the party opposing summary judgment and resolve doubts concerning the evidence in favor of that party.” (Dore v. Arnold Worldwide, Inc. (2006) 39 Cal.4th 384, 389.)

DISCUSSION

  1. Allegations of the FAC

Plaintiffs operated a restaurant named The Sakura on the premises located at 8150 Garvey Avenue, #105 and #106, Rosemead, California 91770 (the “Premises”) from June 1, 2013 through July 31, 2018. (FAC, ¶ 8.) Rosemead Hwang is the landlord of the Premises. (FAC, ¶ 9.) On or about May 21, 2013, Plaintiffs executed a lease and addendum with Rosemead Hwang for the Premises. (FAC, ¶ 10, Ex. A.) The relevant terms include: (1) a term of five years and two months, commencing June 1, 2013 and ending July 31, 2018, (2) base rent of $3,100 per month, (3) tenant’s common area operating expenses is $1,900 for 5 years, (4) the tenant had two five-year lease options, (5) base rent would not increase in the first five years of the term, but upon exercise of the options, base rent would increase annually by the Consumer Price Index (CPI) increase in Los Angeles County, and (6) the tenant would receive 2 months of free rent from the closing escrow date. (FAC, ¶ 11.)

During the lease term, Rosemead Hwang improperly charged and received payment for common area expenses, including a monthly CAM share and an annual reconciliation. (FAC, ¶ 14.)

On or about April 12, 2018 and April 17, 2018, Plaintiffs requested the ability to exercise the first of the two five-year lease options. (FAC, ¶¶ 15-16.) On or about April 25, 2018, Plaintiffs were told that Rosemead Hwang would not renew the lease unless the new rent amount was at “market price”. (FAC, ¶ 17.) On or about April 28, 2018, Plaintiffs asked Nelson Lee, Rosemead Hwang’s real estate broker, to obtain renewal terms or to provide justification for Rosemead Hwang’s refusal to abide by the lease terms. (FAC, ¶ 18.) On or about May 7, 2018, Mr. Lee informed Plaintiffs that Rosemead Hwang was claiming that it could not verify the legitimacy of the lease agreement. (FAC, ¶ 19.) On or about May 30, 2018, Plaintiffs were informed that Rosemead Hwang was demanding $3 per square foot, which was in excess of the amount allowed under the lease. (FAC, ¶ 20.) On or about July 31, 2018, upon expiration of the lease, Plaintiffs were forced to close The Sakura. (FAC, ¶ 21.)

  1. Damages

Rosemead Hwang contends that the entire action has no merit because Plaintiffs cannot demonstrate damages as an element of any of their causes of action.

It is undisputed that Everfresh’s sole business is The Sakura. (Rosemead Hwang’s Undisputed Material Fact (“UMF”) 9.) It is further undisputed that Everfresh is not a party to the lease agreement for the Premises. (UMF 11.)

Rosemead Hwang asserts that the only party claiming any damages in this action is Everfresh. (UMF 93.) In support, Rosemead Hwang submits the testimony of Chuan, who testified at his deposition on June 30, 2020 that (a) he was not claiming any individual damages in this case, (b) that Yeh, his wife, was also not claiming any individual damages in this case, and (c) that the only claim for damages is by Everfresh for the loss of value of the restaurant. (Kneafsey Decl., ¶ 15, Ex. 13 (Chuan Depo.), pp. 106:21-107:9; see also Kneafsey Decl., ¶ 17, Ex. 15 (Yeh Depo.[1]), p. 15:17-21 [Yeh testifying that she personally did not lose any money as a result of The Sakura closing].) It is undisputed that neither Chuan nor Yeh were ever paid a salary by Everfresh (UMF 89, 91.)

Here, the court notes that Plaintiffs have raised objections to the evidence cited by Rosemead Hwang. However, the objections are not substantive. Instead, Plaintiffs object to Rosemead Hwang submitting the evidence (the deposition transcripts) despite a confidentiality designation and an existing protective order. (See Plaintiffs’ Evid. Obj. 4, 6, 8, and 10.) The court overrules these objections as they do not render the evidence inadmissible.

            Plaintiffs dispute that they are not claiming any personal damages, arguing that they are seeking the value of the restaurant as well as the common area maintenance charges paid from 2013 to 2018 in excess of $1,900 per month. In support, Plaintiffs submit their responses to Rosemead Hwang’s special interrogatories that so state. (Chuan Decl., ¶ 26, Ex. S; Yeh Decl., ¶ 16, Ex. T.) However, the court notes that the responses were verified on April 3, 2020 (by Yeh) and April 4, 2020 (by Chuan). Chuan’s deposition took place after these responses were verified and served, on June 30, 2020. Notwithstanding that “[a]dmissions against interest have high credibility value” and that, generally, “a party cannot rely on contradictions in his own testimony to create a triable issue of fact,” the court finds that Plaintiffs have failed to identify evidence substantiating their claim. (Thompson v. Williams (1989) 211 Cal.App.3d 566, 573.) The only evidence identified in Plaintiffs’ responsive separate statement are the interrogatory responses.[2] (See Response to UMF 90, 92-93.) This does not satisfy Plaintiffs’ burden to show that a triable issue of fact exists as to damages.

In any event, as noted by Rosemead Hwang in reply, there is no evidence that the items of damage identified by Plaintiffs in their interrogatory responses were suffered by Plaintiffs in their personal capacities. It is undisputed that The Sakura is owned by Everfresh, and so any damages would flow to Everfresh, not Plaintiffs. Moreover, the payments for the common area maintenance charges (as well as rent) came out of The Sakura’s bank account. (Kneafsey Decl., ¶¶ 8, 11, Exs. 6, 9; see also Kneafsey Decl., ¶ 16, Ex. 14 (Kou Depo.), pp.25:15-27:14 [testimony that checks to Rosemead Hwang were signed for Everfresh].) Plaintiffs’ remaining arguments about other damages are similarly unavailing. First, the fact that The Sakura could have made money in the future does not tend to explain how Plaintiffs were damaged. Second, as Rosemead Hwang points out in reply, Chuan purchased The Sakura with a $100,000 check drawn on the bank account of a different entity, Everfresh Seafood. (Kneafsey Decl., ¶ 15, Ex. 13 (Chuan Depo.), p. 124:7-19.) Third, the assertion that Plaintiffs had the right to rent the Premises at a below market rate and therefore there was a monetary value in the lease option is not supported by evidence. As noted by Rosemead Hwang, Plaintiffs could not assign or sublease the lease without Rosemead Hwang’s consent, and any rent payable on any such sublease belonged to Rosemead Hwang. (Kneafsey Decl., ¶ 3, Ex. 2, § 12.1(a), 12.3(a).)

  Based on the evidence presented, the court finds that Rosemead Hwang has met its burden of showing that all of Plaintiffs’ causes of action are without merit because the damages element of all causes of action cannot be established. The court further finds that Plaintiffs have failed to meet their burden of showing that a triable issue of one or more material facts exists. Because the court finds that Rosemead Hwang is entitled to summary judgment as to the entirety of the FAC, the court need not and does not consider Rosemead Hwang’s remaining arguments in favor of summary judgment/adjudication. For the same reason, the court finds that Plaintiffs’ motion for summary judgment/adjudication is mooted by the granting of Rosemead Hwang’s motion for summary judgment.

CONCLUSION

Based on the foregoing, the court grants Rosemead Hwang’s motion for summary judgment in its entirety. The court denies Plaintiffs’ motion for summary judgment/adjudication as moot.

The court orders Rosemead Hwang to file and serve a proposed judgment within 10 days of the date of this order.

Rosemead Hwang is ordered to give notice of this ruling.

IT IS SO ORDERED.

DATED:  December 13, 2021

_____________________________

Colin Leis

Judge of the Superior Court

[1] Yeh’s deposition was taken on December 11, 2020.

[2] The court overrules Rosemead Hwang’s objection to the interrogatory responses (Objection 27).