Motion for Summary Judgment (Judge Maureen A. Folan)

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Case Name: ??? City of Morgan Hill v. Kimberly Porzio, et al.

Case No.:??????? 2014-1-CV-265762

Currently before the Court is defendants James Doyle (?Doyle?) and Duquette Properties? (collectively, the ?Duquette Defendants?) motion for summary judgment or, in the alternative, summary adjudication of the second, third, and eleventh causes of action in the second amended complaint (?SAC?) of plaintiff City of Morgan Hill (the ?City?).

  1. Factual and Procedural Background

??????????? This is an action arising from the foreclosure of real property owned by defendant Kim Porzio (?Porzio?). On December 31, 2014, the City filed the operative SAC, asserting eleven causes of action against defendants Astrid Angela Giblin (?Giblin?), Provident Funding Associates, LP (?Provident?), Seaside Trustee, Inc. (?Seaside?), Loanstar Home Loans, LLC, Porzio, and the Duquette Defendants for: (1) declaratory relief; (2) wrongful foreclosure; (3) quiet title; (4) breach of contract; (5) fraudulent concealment; (6) intentional interference with contractual relationship; (7) breach of Civil Code sections 2925j and 2924b; (8) restitution; (9) common count for money had and received; (10) negligence; and (11) breach of covenant. The second, third, and eleventh causes of action are alleged against the Duquette Defendants.

As relevant here, the SAC alleges the following: The City operates the Below Market Rate (?BMR?) program, which the offers residents with low and moderate incomes the opportunity to purchase a home in the City at prices far below fair market value. (SAC, ? 14.) In April 2004, Porzio entered the BMR program and executed an agreement (the ?Restriction Agreement?) with the City setting forth the terms and restrictions of her purchase, ownership and disposition of property located at 15145 Bellini Way, Morgan Hill, CA, 95037 (the ?Property?). (SAC, ? 20.) On July 1, 2004, Porzio completed her purchase of the Property, financing the purchase via a $147,619 note secured by a first deed of trust and a $6,500 note secured by a second deed of trust. (SAC, ? 22.) That same day, the Restriction Agreement, deeds of trust, and grant deed to the Property were recorded. (SAC, ? 22.) In addition, the City recorded a request for notice of any default and sale under the first deed of trust. (SAC, ? 22.)

Under the terms of the Restriction Agreement, the owner may not further encumber, refinance or otherwise hypothecate the property in excess of 95% of the purchase price and the owner shall notify the City in writing of the name and address of the lender, and the proposed terms of the further encumbrancing, refinancing or hypothecation of the Property. (SAC, Ex. 1, ? 5.) Any encumbrancing, refinancing or hypothecation of the Property in violation of this section of the Restriction Agreement shall be deemed a prohibited transfer and may result in a declaration of default voiding the transfer. (SAC, ? 26, Ex. 1, ? 4.) In addition, the Restriction Agreement provided that a prohibited transfer triggered the City?s right to purchase the Property. SAC, ? 29, Ex. 1, ? 10.)

Between 2007 and 2008, Porzio refinanced the Property for more than 95% of the purchase price on four different occasions without notifying the City. (SAC, ?? 32-33.) In July 2009, Porzio refinanced again with a loan from Provident (the ?Provident Loan?) in the amount of $328,000, more than double the original purchase price, without notifying the City. (SAC, ? 35.)

Porzio subsequently defaulted on the Provident Loan. (SAC, ? 39.) Seaside substituted in as trustee of the Provident deed of trust and recorded a notice of default and, eventually, a notice of trustee?s sale. (SAC, ? 42.) The City never received either notice. (SAC, ? 42.) On February 14, 2014, Seaside sold the Property to the Duquette Defendants for $440,000, approximately $100,000 more than the unpaid debt. (SAC, ? 43.) At that time, the Duquette Defendants had actual, constructive and inquiry notice of the terms and restrictions contained in the Restriction Agreement. (SAC, ? 132.) Several months later, the Duquette Defendants resold the Property to Giblin for approximately $550,000. (SAC, ? 47.)

On March 4, 2016, the Duquette Defendants filed the instant motion for summary judgment or, in the alternative, summary adjudication. The City filed its opposition on May 5, 2016. On May 12, 2016, the Duquette Defendants filed their reply.

  1. Summary of Evidence Submitted

In support of their motion, the Duquette Defendants submit several recorded documents concerning the Property and a prior order in the action.

In opposition to the motion, Plaintiff provides the following: several City ordinances and meeting minutes; the declarations of its attorney, the BMR program administrator, and the Municipal Services Assistant for the City; Porzio?s deposition; David Michael Duquette?s deposition; Doyle?s deposition; the deposition of Provident?s person most qualified; Porzio?s BMR application; recorded documents concerning the Property; correspondence between the City and Porzio; BMR calculation worksheets concerning the Property; Provident?s preliminary title report, lender instructions, loan commitment log and title insurance policy; bankruptcy court records; and a notice of prohibited transfer.

III. Requests for Judicial Notice

The Duquette Defendants ask the Court to take judicial notice of several recorded real property documents and a prior order in the case. The request is GRANTED. (See Evid. Code, ? 452, subd. (d) [stating that a court may take judicial notice of court records; Fontenot v. Wells Fargo Bank, N.A. (2011) 198 Cal.App.4th 256, 264-265 [finding that courts may take judicial notice of the existence and recordation of real property records when the authenticity of the documents is not challenged], disapproved on other grounds in Yvanova v. New Century Mortg. Corp. (2016) 62 Cal.4th 919.)

Plaintiff asks the Court to take judicial notice of several City ordinances, reports, and meeting minutes, recorded documents concerning the Property, and bankruptcy court records. The request is GRANTED. (See Evid. Code, ? 452, subd. (d); Fontenot, supra, 198 Cal.App.4th at pp. 264-265; Trinity Park, L.P. v. City of Sunnyvale (2011) 193 Cal.App.4th 1014, 1027 [stating that a court may take judicial notice of local ordinances, official resolutions, reports, and other official acts of a public entity], disapproved on other grounds in Sterling Park, L.P. v. City of Palo Alto (2013) 57 Cal.4th 1193.)

  1. Evidentiary Objections

Plaintiff interposes several objections to the evidence submitted in support of the motion. The objections are not material to the disposition of this motion, and therefore, no ruling is required. (See Code Civ. Proc., ? 437c, subd. (q) [stating that ?[i]n granting or denying a motion for summary judgment or summary adjudication the court need rule only on those objections to evidence it deems material to its disposition of the motion?].)

  1. Discussion

The Duquette Defendants move for summary judgment or, in the alternative, summary adjudication of the second, third and eleventh causes of action for wrongful foreclosure, quiet title, and breach of covenant on the ground that the action has no merit. (See Code Civ. Proc., ? 437c, subds. (a)(1), (f)(1).)

  1. Defective Separate Statement

??????????? Preliminarily, Plaintiff asserts that the instant motion should be denied due to the defects in the Duquette Defendants? separate statement of undisputed material facts. Specifically, Plaintiff contends that the separate statement violates California Rules of Court rule 3.1350(d)(1) because it does not separately identify each cause of action that is the subject of the motion and each supporting material fact claimed to be without dispute with respect to those causes of action.

California Rules of Court rule 3.1350(d) provides: ?(1) The Separate Statement of Undisputed Material Facts in support of a motion must separately identify: (A) Each cause of action, claim for damages, issue of duty, or affirmative defense that is the subject of the motion; and (B) Each supporting material fact claimed to be without dispute with respect to the cause of action, claim for damages, issue of duty, or affirmative defense that is the subject of the motion.?

Here, the Duquette Defendants? separate statement does not separately identify the separate causes of action that are the subject of the motion or the undisputed material facts with respect to these causes of action. Instead, the separate statement merely lists a set of facts apparently applicable to each cause of action. As such, the separate statement violates the California Rules of Court.

Nevertheless, while the Court has the discretion to deny a motion for summary judgment for failure to comply with California Rule of Court rule 3.1350, it is not required to do so where the separate statement identifies facts critical to the ruling and does not impair the opposing party?s ability to marshal evidence to show that material facts are in dispute. (See Truong v. Glasser (2009) 181 Cal.App.4th 102, 118.) Here, Plaintiff does not contest that the Duquette Defendants? separate statement adequately identifies the facts in support of their motion and fails to explain how the violation of rule 3.1350 impaired its ability to oppose the motion. Accordingly, the Court will not deny the motion on this basis.

  1. Second Cause of Action for Wrongful Foreclosure

??????????? The second cause of action is for wrongful foreclosure. ?[T]he elements of an equitable cause of action to set aside a foreclosure sale are: (1) the trustee or mortgagee caused an illegal, fraudulent, or willfully oppressive sale of real property pursuant to a power of sale in a mortgage or deed of trust; (2) the party attacking the sale (usually but not always the trustor or mortgagor) was prejudiced or harmed; and (3) in cases where the trustor or mortgagor challenges the sale, the trustor or mortgagor tendered the amount of the secured indebtedness or was excused from tendering.? ?(Lona v. Citibank, N.A. (2011) 202 Cal.App.4th 89, 104.) ?Courts have the power to vacate a foreclosure sale where the trustee did not have the power to foreclose or the deed of trust was void. ?(Id. at pp. 104-105.)

??????????? The Duquette Defendants claim that the second cause of action fails because: (1) they are not proper defendants; (2) Plaintiff is immunized from damages under Civil Code section 1466; and (3) they received title to the Property free and clear of the Restriction Agreement.

  1. Proper Defendants

The Duquette Defendants first assert that they are not proper defendants in this action because they were the purchasers of the Property at the foreclosure sale. This argument lacks merit. ?When a party seeks to set aside and vacate a trustee?s sale in a foreclosure proceeding, there can be no doubt that the parties to the sale transaction are indispensable parties.? (Washington Mutual Bank v. Blechman (2007) 157 Cal.App.4th 662, 668; see also Moeller v. Lien (1994) 25 Cal.App.4th 822, 833 [indicating that a foreclosure sale may be property set aside against a buyer unless the buyer is a bona fide purchaser for value].)

Next, they contend that they are not proper defendants because they are bona fide purchasers for value and are entitled to a conclusive presumption that the foreclosure sale was legal. ?The purchaser at a foreclosure sale takes title by a trustee?s deed. If the trustee?s deed recites that all statutory notice requirements and procedures required by law for the conduct of the foreclosure have been satisfied, a rebuttable presumption arises that the sale has been conducted regularly and properly; this presumption is conclusive as to a bona fide purchaser.? (Moeller, supra, 25 Cal.App.4th at p. 831.) ?The elements of bona fide purchase are payment of value, in good faith, and without actual or constructive notice of another?s rights.? (Melendrez v. D & I Investment, Inc. (2005) 127 Cal.App.4th 1238, 1251.) Whether a buyer is a bona fide purchaser for value is a question of fact. (Id. at p. 1254.)

Though the Duquette Defendants contend that they are bona fide purchasers for value, they submit no evidence in support of this assertion. (See Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 854 [stating that ?[s]ummary judgment law in this state, however, continues to require a defendant moving for summary judgment to present evidence, and not simply point out that the plaintiff does not possess, and cannot reasonably obtain, needed evidence?].) As such, they fail to meet their initial burden of demonstrating that they are bona fide purchasers for value and entitled to the conclusive presumption that the sale was conducted regularly and properly.

In addition, the SAC alleges that the Provident loan and deed of trust was void. (SAC, ? 38.) ?Under California law, a bona fide purchaser for value takes title free and clear of an improperly reconveyed deed of trust, so long as the reconveyance is voidable and not void.? (Schiavon v. Arnaudo Brothers (2000) 84 Cal.App.4th 374, 376; see also Trout v. Taylor (1934) 220 Cal. 652, 656 [stating that a void instrument cannot be made the foundation of a good title even under the equitable doctrine of bona fide purchase]; Glaski v. Bank of America, National Association (2013) 218 Cal.App.4th 1079, 1101 [stating that the equitable remedy of setting aside the foreclosure sale available if the sale is void].) Here, the Duquette Defendants do not introduce any evidence rebutting the allegation that the Provident loan and deed of trust was void. As such, even if they demonstrated that they were bona fide purchasers for value, they would not be entitled to summary adjudication of this cause of action.

  1. Civil Code Section 1466

The Duquette Defendants claim that Civil Code section 1466 immunizes them from any damages with respect to this cause of action.

Civil Code section 1466 provides that ?[n]o one, merely by reason of having acquired an estate subject to a covenant running with the land, is liable for a breach of the covenant before he acquired the estate, or after he has parted with it or ceased to enjoy its benefits.? The purpose of the section is one of fairness to a party who acquires property. (Mountain Home Properties v. Pine Mountain Lake Assn. (1982) 135 Cal.App.3d 959, 971.) ?Since such a party has no connection with the property until he comes into possession, the Legislature has provided that the party should not be liable for the debts of its predecessors in interest.? (Ibid.)

While the Duquette Defendants are correct that Civil Code section 1644 immunizes them from the imposition of damages for Porzio?s conduct, the second cause of action also seeks an equitable remedy, namely, setting aside the sale. (SAC, Prayer, ? 1.) Since a finding that Plaintiff is not entitled to damages under Civil Code section 1644 would not completely dispose of this cause of action, summary adjudication may not be granted on this basis. (See Code Civ. Proc., ? 437c, subd. (f)(1) [stating that ?[a] motion for summary adjudication shall be granted only if it completely disposes of a cause of action??].)

  1. Title Free and Clear of Restriction Agreement

The Duquette Defendants assert that the express language of paragraph 16 of the Restriction Agreement mandates that the purchases of the Property through a trustee?s sale receives the title free and clear of the provisions of the agreement.

?Under California law, contracts are to be interpreted to give effect to the mutual intention of the parties at the time of contracting. [S]uch intent is to be inferred, if possible, solely from the written provisions of the contract, read in their ordinary and popular sense, unless it appears the parties used the terms in some special sense. [T]he meaning of a contract must be derived from reading the whole of the contract, with individual provisions interpreted together, in order to give effect to all provisions and to avoid rendering some meaningless.? (Maples v. SolarWinds, Inc. (N.D. Cal. 2014) 50 F.Supp.3d 1221, 1228.) If the contract is susceptible of more than one reasonable interpretation, a court must consider extrinsic evidence offered by the parties to prove the thier mutual intention. (Fremont Indem. Co. v. Fremont General Corp. (2007) 148 Cal.App.4th 97, 114.)

Here, Paragraph 16 of the Restriction Agreement states that ?[t]his agreement is subordinate to any deed of trust or mortgage on the premises made by or held by an institutional lender or investor? and ?[a]ny party ? receiving title to the Premises through a trustee?s sale ? shall receive title free and clear of the provisions of this Agreement.? (SAC, Ex. A.) Accordingly, the paragraph appears to support the Duquette Defendants? argument that they received title free and clear of the terms of the Restriction Agreement.

In opposition, Plaintiff asserts that this interpretation of paragraph 16 is inconsistent with the other provisions of the Restriction Agreement and the operation of the BMR Program. In this respect, they rely on paragraph 4, which provides that any unauthorized refinancing, encumbrancing, or other hypothecation is void. (SAC, Ex. A, ? 4.) Plaintiff persuasively argues that interpreting paragraph16 as permitting the subordination of the Restriction Agreement after a foreclosure sale, even when the underlying transfer was void, would render paragraph 4 meaningless. (See Maples, supra, 50 F.Supp.3d at p. 1228 [stating that a court should avoid interpreting a contract in a manner which would render some of its provisions meaningless].) Instead, Plaintiff contends that the only reasonable interpretation of the subordination provision in the context of the Restriction Agreement as a whole is that it is applicable to non-judicial foreclosure sales of City-approved loans.

In support of this interpretation, the City also introduces evidence that the BMR Program consistently required separate subordination agreements for any refinances or new encumbrances. In this respect, it submits the declaration of Julius Nyanda, the BMR Program Administrator, who states that ?[p]aragraph 16 relates to subordination and only applies to approved purchase money loans, and not Prohibited Transfers? and any refinance loan in which a lender wanted the City to subordinate the Restriction Agreement requires a separate subordination agreement. (Nyanda Decl., ?? 25-27.) The City further presents evidence that the practice became so common that the City Council passed a resolution specifically authorizing the BMR Program to approve subordination requests. (Plaintiff?s Request for Judicial Notice, Ex. 22.) Given that it would be unnecessary to require an additional subordination agreement if paragraph 16 of the Restriction Agreement automatically subordinated any refinance or new encumbrance, this evidence suggests that the subordination provision in paragraph 16 was intended to apply solely to the original purchase money mortgages and not unapproved transfers.

In sum, since the City submits evidence indicating that paragraph 16 relates solely to the subordination of City-approved loans, it establishes a triable issue of material fact as to whether the Duquette Defendants purchased the Property free and clear of the Restriction Agreement. Accordingly, the second cause of action is not subject to summary adjudication on this basis.

  1. Third Cause of Action for Quiet Title

??????????? The third cause of action is for quiet title. ?A quiet title action seeks to declare the rights of the parties in realty…. The object of the action is to finally settle and determine, as between the parties, all conflicting claims to the property in controversy, and to decree to each such interest or estate therein as he may be entitled to. A description of the parties? legal interests in real property is all that can be expected of a judgment in an action to quiet title.? (Chao Fu, Inc. v. Wen Ching Chen (2012) 206 Cal.App.4th 48, 58-59, internal citations omitted.)

The Duquette Defendants claim that the third cause of action fails because: (1) the City has no legal interest in the Property and, to the extent the City asserts that it has an equitable interest in the Property, that interest is insufficient to support a cause of action for quiet title; (2) the action is moot because the Property was sold to Giblin; (3) the City never posted the money to purchase the Property; and (4) Plaintiff brings no causes of action for specific performance or rescission.

  1. Legal and/or Equitable Interest in the Property

The Duquette Defendants argue that a cause of action for quiet title fails as a matter of law because the SAC alleges that Plaintiff is only an equitable owner of the Property and therefore cannot maintain a quiet title action against the legal owner. (See

Liberty National Enterprises, L.P. v. Chicago Title Insurance Company (2013) 217 Cal.App.4th 62, 81 [stating that ?the general rule is that the holder of equitable title cannot maintain a quiet title action against the holder of legal title?].) This argument lacks merit because the SAC alleges Plaintiff lost legal title to the Property due to Provident and Porzio?s fraudulent scheme. (SAC, ? 91.) ?[W]hen legal title has been acquired through fraud,? available remedies ?include quieting title in the defrauded equitable title holder?s name and making the legal title holder the constructive trustee of the property for the benefit of the defrauded equitable title holder.? (Liberty National Enterprises, L.P., supra, 217 Cal.App.4th at p. 81, internal citations omitted.) Accordingly, the Duquette Defendants fail to demonstrate that Plaintiff cannot quiet title on this basis.

  1. Mootness of Action

The Duquette Defendants assert that the action is moot because they sold the Property to Giblin and, therefore, no longer have any interest in the Property. ?The pivotal question in determining if a case is moot is ? whether the court can grant the plaintiff any effectual relief. If events have made such relief impracticable, the controversy has become overripe and is therefore moot.? (Fairview Valley Fire, Inc. v. California Department of Forestry (2015) 233 Cal.App.4th 1262, 1272, internal citations omitted.) Here, the Duquette Defendants do not demonstrate that the sale of the Property to Giblin renders the requested relief, a judgment describing the parties? legal interests in real property, impracticable. (Chao Fu, Inc., supra, 206 Cal.App.4th at p. 58 [stating that the object of a quiet title action is a judgment describing the parties? legal interests in the real property].) As such, the Duquette Defendants are not entitled to summary adjudication of the third cause of action on this basis.

  1. Failure to Tender Purchase Price

The Duquette Defendants argue that the third cause of action fails because Plaintiff never tendered the money necessary to purchase the Property. (Shimpones v. Stickney (1934) 219 Cal. 637, 649 [stating that a mortgagor cannot quiet title against the mortgagee without payment of the debt securing the property].) This argument lacks merit because they fail to address Plaintiff?s allegations that the debt was void, which is an exception to the tender rule. (See Lona, supra, 202 Cal.App.4th at p. 115 [stating that the defendant must show that any alleged exception to the tender requirement does not apply in order to prevail on summary judgment]; SAC, ? 38 [stating that the Provident loan and deed of trust was void].) Accordingly, summary adjudication is not warranted on this basis.

  1. Absence of Other Causes of Action

The Duquette Defendants contend that the third cause of action for quiet title fails because Plaintiff does not allege a cause of action for rescission or specific performance. They, however, provide no legal authority for the proposition that a plaintiff must allege causes of action for rescission or specific performance to quiet title in the Property. (See Mem. Ps & As., p. 14:4-6; Quantum Cooking Concepts, Inc. v. LV Associates, Inc. (2011) 197 Cal.App.4th 927, 934 [stating that court ?has no obligation to comb the record and the law for factual or legal support that a party has failed to identify or provide?].) As such, the Duquette Defendants fail to meet their initial burden of showing that one or more elements of this cause of action cannot be established or that there is a complete defense to that cause of action. (See Aguilar, supra, 25 Cal.4th at p. 849.) Accordingly, the third cause of action is not subject to summary adjudication on this basis.

  1. Eleventh Cause of Action for Breach of Covenant

The eleventh cause of action is for breach of the covenants contained in the Restriction Agreement. The Duquette Defendants argue that the eleventh cause of action fails because: (1) the sale of the Property at foreclosure extinguished the restraints imposed by the Restriction Agreement; (2) they are not liable for Porzio?s wrongful acts under Civil Code section 1466; (3) they took title to the Property free and clear of the restraints imposed under the Restriction Agreement,; (4) the Restriction Agreement is not a valid restrictive covenant; and (5) Plaintiff is not entitled to damages.

  1. Effect of Foreclosure Sale

The Duquette Defendants claim that the sale of the Property at foreclosure extinguished the Restriction Agreement.

?California follows the ?first in time, first in right? system of lien priorities. ([Civ. Code], ? 2987.) With respect to real property, a conveyance recorded first generally has priority over any later-recorded conveyance. (? 1214.) A properly recorded conveyance of real property also serves as constructive notice of its contents to all subsequent purchases and encumbrances. (? 1213.) A ?conveyance? within the meaning of sections 1213 and 1214 includes ?every instrument in writing by which any estate or interest in real property is created, aliened, mortgaged, or incumbered, or by which the title to any real property may be affected, except wills.? (? 1215.)? (Thaler v. Household Finance Corp. (2000) 80 Cal.App.4th 1093, 1099.) ?A trustee?s deed conveys the absolute legal title to the purchaser, as against all claims subordinate to the deed of trust, but subject to all prior rights, interests, and titles.? (R-Ranch Markets #2, Inc. v. Old Stone Bank (1993) 16 Cal.App.4th 1323, 1327.) As such, ?[w]hen property is sold under a trust deed, the purchasers acquire title free and clear of all encumbrances subsequent to the deed of trust.? (Id. at p. 1328; see also Miscione v. Barton Development Co. (1997) 52 Cal.App.4th 1320, 1326 [stating that foreclosure of a senior encumbrance terminates subordinate liens].)

Here, it is undisputed that the Restriction Agreement was recorded in 2004, and the Provident deed of trust was not recorded until 2009. (Plaintiff?s Request for Judicial Notice, Exs. 14, 40.) Therefore, since the Restriction Agreement was not recorded subsequent to the Provident deed of trust, the Duquette Defendants did not acquire title to the Property free and clear of the agreement under the recording statutes. (See R-Ranch Markets #2, Inc., supra, 16 Cal.App.4th at p. 1327.)

In addition, as previously discussed in connection with the second cause of action, there is a triable issue of material fact as to whether the Restriction Agreement?s subordination clause applies to the Provident deed of trust. As such, there is also a triable issue of a material fact as to whether the Restriction Agreement is junior in priority to the Provident deed of trust. (See Roskamp Manley Associates, Inc. v. Davin Development & Investment Corp. (1986) 184 Cal.App.3d 513, 517 [stating that an ?[a] beneficiary of a deed of trust can agree that his lien is to be junior in priority to the lien of another deed of trust created and recorded subsequently?].)

In light of the foregoing, the third cause of action is not subject to summary adjudication on this basis.

  1. Civil Code Section 1466

The Duquette Defendants contend that Civil Code section 1466 immunizes them from any liability for breach of the Restriction Agreement. This argument lacks merit because Civil Code section 1466 only immunizes them from liability ?for a breach of the covenant before [they] acquired the estate, or after [they have] parted with it or ceased to enjoy its benefits.? (See Civ. Code, ? 1466.) Here, the SAC seeks to impose liability for breach of the covenant ?[w]hile Defendants Doyle and Duquette Properties owned the Property?.? (SAC, ? 133.) Given that the eleventh cause of action is expressly limited to the Duquette Defendants? conduct while they owned the Property, Civil Code section 1466 is inapplicable.

  1. Invalid Restrictive Covenant

The Duquette Defendants assert that the Restriction Agreement does not constitute a valid covenant that runs with the land. They, however, do not cite any evidence or legal authority in support of this contention. (See Mem. Ps & As., p. 16:14-23; Quantum Cooking Concepts, Inc., supra, 197 Cal.App.4th at p. 934.) As such, they fail to meet their initial burden on this issue. (See Aguilar, supra, 25 Cal.4th at p. 854; McCaffrey v. Preston (1984) 154 Cal.App.3d 422, 436 [stating that whether a covenant runs with the land or is enforceable as an equitable servitude is a question of fact].)

  1. Damages

The Duquette Defendants contend that Plaintiff is not entitled to any damages in connection with this cause of action because breaches of a covenant are generally limited to injunctive relief. This argument is not well-taken because the Duquette Defendants provide no legal authority in support of their position. (See Mem. Ps & As., pp. 16:24-26, 17:1-2; Quantum Cooking Concepts, Inc., supra, 197 Cal.App.4th at p. 934.) As such, they fail to meet their initial burden on this issue. (See Aguilar, supra, 25 Cal.4th at p. 854.)

  1. Conclusion

In light of the foregoing, the motion for summary judgment or, in the alternative, adjudication of the second, third, and eleventh causes of action is DENIED.