Case No. 78276, Curtis v. Certain Underwriters, 5/24/2013
Defendant’s Motion for Protective Order is granted.
As an initial matter, this Court does not deem the present motion one for reconsideration pursuant to Code of Civil Procedure §1008. At the hearing on April 5, 2013, this Court stated: “And I suggest if you get into these and start to encounter those type of problems that you are suggesting you might have that would be the appropriate time to get a protective order.” Thus, a future motion for protective order was contemplated by this Court.
The Court finds the requests are overly broad. However, in fashioning a remedy, appearances are required at the hearing to determine an appropriate geographical or other basis for sampling. A final order will issue after oral argument.
If discovery disputes continue, the parties may wish to consider the appointment of a discovery referee pursuant to Code of Civil Procedure §639.
Any argument is limited to five minutes. California Rule of Court 3.1308, Local Rule 4.05.3.
Unless the court orders otherwise, the court does not provide court reporters for civil law and motion hearings and case management conferences at the court's expense. Any litigant who wants a record of a law and motion matter or a case management conference must arrange for the presence of a court reporter at his or her expense. Local Rule 10.00.3B.
EXECUTIVE ORDER NO. 135: INTERIM CHANGE TO LOCAL RULE 4.05.3
Local Rule 4.05.3 A. is hereby changed to read “Tentative Rulings will be available by 10:00 a.m. of the court day before each regularly scheduled law and motion calendar and posted on the Court’s website (www.nevadacountycourts.com) not later than 2:00 p.m. of the court day before the scheduled hearing.”
This change will become effective on April 1, 2013 and will be reflected in the next regular revision of the Local Rules of this Court.
Case No. 75175, Pendola v. Pan Pacific, 5/24/2013 at 11:00 a.m. Judge Thomas Anderson
This tentative ruling is issued by Judge Thomas Anderson. If oral argument is requested, such oral argument shall be heard on Friday, May 24, 2013, at 11:00 a.m., in Department VI. Court Call is permitted.
Standard of Review
The function of a motion for summary judgment or adjudication is to allow a determination as to whether an opposing party cannot show evidentiary support for a pleading or claim and to enable an order of summary dismissal without the need for trial. Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 843. In analyzing motions for summary judgment, courts must apply a three-step analysis: (1) identify the issues framed by the pleadings to be addressed; (2) determine whether moving party showed facts justifying a judgment in movant's favor; and (3) determine whether the opposing
party demonstrated the existence of a triable, material issue of fact. Sun v. City of Oakland (2008) 166 Cal.App.4th 1177, 1182-83; McGarry v. Sax (2008) 158 Cal.App.4th 983, 994; Hinesley v. Oakshade Town Center (2005) 135 Cal. App. 4th 289, 294.
Requests for Judicial Notice
Defendants’ Request for Judicial Notice of the Prudential Investment Portfolios 9 Form N-CSR, SEC filing is granted. Aquila, Inc. v. Superior Court (20017) 148 Cal.App.4th 556, 575.
Plaintiff’s Request for Judicial Notice of the four documents set forth in the filing dated May 3, 2013, is granted.
Objections to Evidence
Plaintiff’s Objections to the Declaration of Scott Golenbock are sustained as to 1, 2, 3 (hearsay; deposition testimony is contradictory); 4, 5, 6 (hearsay).
Defendant’s Objections to Plaintiff’s Evidence in Opposition to defendants’ Motion for Summary Judgment are sustained as to 15 (lack of authentication); 28 (lack of personal knowledge). The remaining objections are overruled.
Introduction
Plaintiff submitted two banker’s boxes of documents to this Court in opposition to the motion. The Court denied Defendants’ request to strike the voluminous pleadings and the Court spent an additional week wading through the documents and facts presented.
While this mass of documents may have been “a deliberate effort at obfuscation intended to overwhelm the trial judge” (Nazir v. United Airlines, Inc. (2009) 178 Cal.App.4th 243, 284, the ultimate facts of this case, in fact, are relatively simple.
Plaintiff Pendola Trust and non-party Western Properties Trust formed Western/Pine Creek LP in 1999. Plaintiff was the limited partner and Western Properties was the general partner. An Agreement of Limited Partnership was executed.
Western then merged into Pan Pacific Retail Properties, Inc. The Agreement of Limited Partnership was amended to clarify, among other items, that Pendola’s interest would be convertible into shares of Pan Pacific’s stock and Pendola was allocated $3.792 million of debt.
In 2006, Pan Pacific merged with various other Defendant entities, including Defendant Kimco. Plaintiff had several options upon this merger. Ultimately, an agreement (called the Conversion Agreement and is also referenced as the Third Amendment to the Agreement of Limited Partnership) was reached where, in very basic terms, Kimco would do some creative financing, Plaintiff would sign a guaranty, and Plaintiff’s interest could be converted into a new retail center. The conversion had to occur by October 2007. If the conversion did not occur by that date, then Kimco could elect to buy out Plaintiff’s interest at $70 per unit (and because Plaintiff owned over 54,000 units, plaintiff’s interest was valued at over $3.8 million). Plaintiff elected to convert its interest into a retail center called Red Rock Plaza.
On January 11, 2007, Plaintiff’s counsel was advised that certain covenants in the loan agreement prevented the Partnership from acquiring the Red Rock Plaza property and the current lender under the loan would not consent. Pendola asked the General Partner to request that the lender waive the loan covenants, but the lender again refused.
So, the parties then discussed other properties to which Plaintiff could convert its interest. On April 27, 2007, Plaintiff sent a new notice of election to convert which sought to convert Plaintiff’s interest to a different retail center called the Angels Towne Center. However, because of a variety of problems (mostly relating to the value of that center), Plaintiff canceled the conversion of its interest into Angels Towne Center.
Plaintiff thereafter (in March 2008) requested that Plaintiff be bought out of the Pine Creek at $70 per unit. Defendants refused. Plaintiff then filed the present action contending, primarily, that Defendants engaged in fraudulent conduct for the purpose of “avoiding and preventing the consummation of the Pendola’s conversion provision and its rights under the Agreement… and attempting to divest Pendola of its interest at a price lower than required by the Conversion provisions of the Agreement.” [¶21 of the Second Amended Complaint.]
Analysis
Breach of Contract
Paragraph 44 of the Second Amended Complaint alleges that Defendants “breached the terms and conditions of Paragraphs 8.4 and 8.5 of the Third Amendment to Agreement of Limited Partnership”, and failed to approve the Conversion Deliverables to enter into escrow arrangements.
Civil Code §1638 provides, “The Language of a contract is to govern its interpretation, if the language is clear and explicit, and does not involve an absurdity.”
Paragraph 8.4(g)(iii) of the Third Amendment to Agreement of Limited Partnership provides, in pertinent part, “The Converting Group shall be solely responsible to obtain and deliver all Conversion Deliverables and to satisfy all Conversion Conditions, including, as applicable, negotiating all Conversion Property Purchase Documents, obtaining all consents, … at the Converting Group’s sole cost and expense.” [Emphasis added.]
Article 1 defines “Conversion Conditions” as including “(iii) evidence of all consents, permits, licenses, approvals or authorizations from governmental authorities or other third parties (including lenders) which are necessary to consummate the series of transactions arising out of the exercise of a Conversion Right.” [Emphasis added.]
The “Converting Group” is defined in paragraph 8.4(a) as “The Limited Partners that submit a valid Conversion Notice shall be referred to as the “Converting Group.”
In the present case, it is undisputed that Plaintiff Pendola Family Trust Partnership submitted a valid Conversion Notice. Thus, Plaintiff is the “Converting Group.” As the “Converting Group,” Pendola was solely responsible for delivering the Conversion Conditions, which specifically include lender consents, as provided in Paragraph 8.4(g)(iii).
It is clear from the Third Amendment that the Plaintiff alone had the responsibility of obtaining lender approvals. Plaintiff has failed to demonstrate that it delivered that Conversion Condition. Without fulfilling that condition precedent, Defendant(s) were not required to perform the next step, i.e., enter into an escrow arrangement. Thus, the cause of action fails as a matter of law.
Fraud Causes of Action
The second, third, fourth causes of action are all claims for fraud. By these causes of action, Plaintiff contends that defendants made oral and written false and fraudulent representations that induced Plaintiff to enter into the Agreement. [See ¶53 of the Second Amended Complaint.]
In order to prevail on a cause of action for fraud, Plaintiff must demonstrate: 1) a misrepresentation, 2) knowledge of falsity, 3) intent to defraud, i.e., to induce reliance, 4) justifiable reliance, and 5) resulting damages. See Civil Code § 1710(4); Hunter v. Up-Right, Inc. (1994) 6 Cal.4th 1174, 1184.
Plaintiff contends that “Kimco and defendants had exclusive knowledge of the loan documents, were in a fiduciary relationship with Pendola, and concealed and misrepresented the facts.” [Opposition at 18:12-13.]
Plaintiff failed to demonstrate any misrepresentations or concealment. The undisputed material facts provide that the original partnership agreement in effect when the mortgage loan was issued authorized the partnership to borrow money without limitation and without Pendola’s consent; Pendola was seeking to have approximately $3.7 million in debt on the property for tax purposes; when the loan was issued, Pendola was allowed to post a $3.7 million guaranty as an accommodation; Pendola executed the guaranty; Pendola’s counsel (Richards) reviewed the guaranty; the guaranty referenced the underlying loan documents; and, neither Pendola nor his agents requested or reviewed the underlying loan documents. See Defendants’ Undisputed Material Facts 20, 41-43, 47, 49, 51, 52, 54-56, and 58.
None of Plaintiff’s “Additional Undisputed Facts” demonstrate that the documents were concealed or misrepresented or that any of the named Defendants intended to defraud Plaintiff. Moreover, the mere facts that Plaintiff and his agents failed to review the underlying loan documents demonstrates that no justifiable reliance can be found under the facts of this case.
Breach of Fiduciary Duty
Plaintiff also contends that Defendants breached their fiduciary duty to Plaintiff by making fraudulent promises and intentional misrepresentations.
Under Delaware law, the fiduciary duties of loyalty and care owed by a general partner to a limited partner can be limited. See 6 Del. Code §§ 17-1101(d). Here, Paragraph 6.4(b) of the Third Amendment to Agreement of Limited Partnership provides, “The Limited Partners expressly acknowledge that the General Partner is acting on behalf of the Partnership, and the General Partner’s shareholders or interest holders, as applicable, collectively, and that the General Partner is under no obligation to consider the separate interests of the Limited Partners…” Thus, the clear and unambiguous language of the agreement provides that the General Partner was not required to protect Plaintiff’s interests.
Furthermore, the plain language of the Agreement demonstrates that it was an “Arm’s Length Agreement” and was “the product of negotiations between the partiers hereto represented by counsel.” ¶ 12.2. Thus, it appears that no fiduciary duty existed between the general partner and the limited partner during this negotiation.
Moreover, even if such fiduciary duty did exist, Plaintiff has failed to demonstrate any fraudulent promises or intentional misrepresentations, as set forth above.
Conclusion
For the foregoing reasons, Defendants’ motion for summary judgment is granted.
Defendants’ attorney is to submit a formal order that sets out verbatim the tentative ruling herein and complies with California Rule of Court 3.1312 and is thereafter to prepare, file and serve notice of order.
This is the Court’s tentative ruling. In order to argue at the hearing, you must notify the parties and thereafter notify the court’s law and motion secretary at (530) 265-1273 by 4:00 p.m. the court day before the hearing. If you do not so notify the parties and court, the tentative ruling shall become the final ruling. Any argument is limited to five minutes. California Rule of Court 3.1308, Local Rule 4.05.3.
Unless the court orders otherwise, the court does not provide court reporters for civil law and motion hearings and case management conferences at the court's expense. Any litigant who wants a record of a law and motion matter or a case management conference must arrange for the presence of a court reporter at his or her expense. Local Rule 10.00.3B.
EXECUTIVE ORDER NO. 135: INTERIM CHANGE TO LOCAL RULE 4.05.3
Local Rule 4.05.3 A. is hereby changed to read “Tentative Rulings will be available by 10:00 a.m. of the court day before each regularly scheduled law and motion calendar and posted on the Court’s website (www.nevadacountycourts.com) not later than 2:00 p.m. of the court day before the scheduled hearing.”
This change will become effective on April 1, 2013 and will be reflected in the next regular revision of the Local Rules of this Court.
Case No. 79127, Citibank v. Wright, 5/24/2013
Plaintiff’s unopposed Motion to Deem Admissions Admitted is granted.
The Requests for Admissions served on Defendant on February 5, 2013, are hereby deemed admitted.
Plaintiff is awarded sanctions in the amount of $362.50.
Plaintiff’s attorney is to submit a formal order that sets out verbatim the tentative ruling herein and complies with California Rule of Court 3.1312 and is thereafter to prepare, file and serve notice of order.
This is the Court’s tentative ruling. In order to argue at the hearing, you must notify the parties and thereafter notify the court’s law and motion secretary at (530) 265-1273 by 4:00 p.m. the court day before the hearing. If you do not so notify the parties and court, the tentative ruling shall become the final ruling. Any argument is limited to five minutes. California Rule of Court 3.1308, Local Rule 4.05.3.
Unless the court orders otherwise, the court does not provide court reporters for civil law and motion hearings and case management conferences at the court's expense. Any litigant who wants a record of a law and motion matter or a case management conference must arrange for the presence of a court reporter at his or her expense. Local Rule 10.00.3B.
EXECUTIVE ORDER NO. 135: INTERIM CHANGE TO LOCAL RULE 4.05.3
Local Rule 4.05.3 A. is hereby changed to read “Tentative Rulings will be available by 10:00 a.m. of the court day before each regularly scheduled law and motion calendar and posted on the Court’s website (www.nevadacountycourts.com) not later than 2:00 p.m. of the court day before the scheduled hearing.”
This change will become effective on April 1, 2013 and will be reflected in the next regular revision of the Local Rules of this Court.
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