CENTERPOINT PROPERTIES TRUST VS VOGUEBAY, LLC

B.) On July 2, 2019, the parties executed a Second Lease Amendment extending the Lease to September 30, 2024 with a graduated rent schedule. (Id at ¶ 9.) On June 14, 2022, Plaintiff CenterPoint Properties Trust (“Plaintiff”) purchased the Subject Property from York. (Id at ¶11.) Starting in November 2023, Voguebay and Meadows (collectively “Defendants”) breached the Lease by failing to make all monthly rental payments. Voguebay vacated the Subject Property after Plaintiff filed an unlawful detainer action (“UD Action”) against it. (Id at ¶ 14.)

On April 25, 2025, Plaintiff filed its Complaint. It asserts two causes of action for: (1) Breach of Contract against Voguebay; and (2) Breach of Contract against Meadows. On July 9, 2025, default was entered against Voguebay.

Meadows now moves for summary judgment. Meadows argues that the breach of contract claims are barred under the doctrine of collateral estoppel based on the judgment in UD Action against Plaintiff in favor of Voguebay. Meadows argues that the UD Court found that there was insufficient evidence of the Lease and Lease assignment. Meadows argues that collateral estoppel can be asserted by a nonparty to the prior action and can be based on a failure of proof. Meadows argues that collateral estoppel applies even if different relief is sought.

Plaintiff argues that the claims are not barred by collateral estoppel because Meadows has not established that he was in privity with Voguebay, and Meadows and Voguebay are jointly and severely liable. Plaintiff argues that only possession was actually litigated in the UD Action, which is distinct from the issues raised in the present action. Plaintiff argues that the evidence produced by Meadows is not based on personal knowledge.

In his Reply, Meadows argues that the present lawsuit is based on the same purported lease and lease assignment as the UD Action. Meadows argues that Plaintiff misconstrues the holding in DKN Holdings LLC v. Faerber (2015) 61 Cal. 4th 813 which does not prohibit collateral estoppel where the defendants are joint obligors. Meadows argues that a non-party to the prior lawsuit may assert collateral estoppel and privity is not required. Meadows argues that collateral estoppel applies to unlawful detainer cases where the issues were actually litigated. Meadows argues that Plaintiff sought damages as well as possession during the UD Action.

ANALYSIS:

Request for Judicial Notice:

Meadows requests judicial notice of several documents filed in the UD Action, including the Complaint, Ruling on Submitted Matter, Judgment, Motion to Vacate, Opposition to Motion to Vacate and Order Denying Motion to Vacate. These documents may be judicially noticed pursuant to Evid. Code §452(d), which permits judicial notice of court records. However, “although the existence of a document may be judicially noticeable, the truth of statements contained in the document and its proper interpretation are not subject to judicial notice if those matters are reasonably disputable.” (Fremont Indemnity Co. v. Fremont General Corp. (2007) 148 Cal. App. 4th 97, 113.) The Court OVERRULES Plaintiff’s objections to these documents.

Plaintiff requests judicial notice of the Complaint, Meadow’s Answer and Voguebay’s default in the present action. The Court GRANTS this request.

Plaintiff’s Objections:

OVERRULED.

Standards on Summary Judgment:

Any party may move for summary judgment in any action or proceeding if it is contended that the action has no merit or that there is no defense to the action or proceeding. (CCP § 437c(a).) A motion for summary judgment should be granted if no triable issue exists as to any material fact and the moving party is entitled to a judgment as a matter of law. (Kahn v. East Side Union High School Dist. (2003) 31 Cal. 4th 990, 1002-1003.) “The moving party bears the burden of production to make a prima facie showing of the nonexistence of any triable issue of material fact.” (Aguilar v.

Atlantic Richfield Co. (2001) 25 Cal. 4th 826, 850.) Once this burden has been met, the burden shifts to the opposing party to make a prima facie showing of the existence of a triable issue of material fact. (Ibid.) The moving party’s evidence must be strictly construed, while the opposing party’s evidence must be liberally construed. (Binder v. Aetna Life Ins. Co. (1999) 75 Cal.App.4th 832, 838.) “Any doubts as to the propriety of granting the motion are resolved in favor of the party opposing the motion.” (American Airline v.

Sheppard, Mullin, Richter & Hampton (2002) 96 Cal. App. 4th 1017, 1048.)

Breach of Contract:

“A cause of action for breach of contract requires pleading of a contract, plaintiff’s performance or excuse for failure to perform, defendant’s breach and damage to plaintiff resulting therefrom.” (Spinks v. Equity Residential Briarwood Apartments (2009) 171 Cal. App. 4th 1004, 1031.) A surety or guarantor is one who promises to answer for the debt, default, or miscarriage of another, or hypothecates property as security therefor. Guaranties are construed according to general contract rules. (River Bank America v.

Diller (1995) 38 Cal. App. 4th 1400, 1415.) The lender is required to plead and prove the following elements: (1) the guarantor guaranteed payment of a third-party's indebtedness; (2) the third party defaulted on its loans to the lender; (3) the lender notified the guarantor of the default and demanded payment; and (4) the guarantor did not make payment to the lender. (Walsh v. West Valley Mission Community College Dist. (1998) 66 Cal. App. 4th 1532, 1546-1547.)

Plaintiff alleges that on October 17, 2013, Voguebay entered into a Lease with York. (Comp., ¶7, Ex. A.) On July 2, 2019, York and Voguebay executed the Second Amendment to Lease which extended the Lease through September 30, 2024. (Id at ¶9, Ex. C.) At the same time, Meadows executed a written Guaranty of Lease (“Guaranty”). (Id.) The Guaranty provides that the Guarantor “unconditionally guarantees, without deduction by reason of setoff, defense or counterclaim, to Landlord and its successors and assigns the full and punctual payment, performance and observance by Tenant, of all amounts, terms, covenants and conditions in the Lease contained on Tenant’s part to be paid, performed and observed.” (Id at ¶ 10.)

Plaintiff alleges that Defendants breached their obligations under the Lease and Guaranty by failing to make rental payments beginning November 2023. (Id at ¶ 13.) There appears to be no dispute that Meadows signed the Guaranty. (See Decl. of Lynn, Ex. B.)

Meadows argues that Plaintiff’s claims against him are barred under the doctrine of collateral estoppel. “The doctrine of res judicata precludes parties or their privies from relitigating a cause of action that has been finally determined by a court of competent jurisdiction.” (Bernhard v. Bank of America Nat'l Trust & Sav. Association (1942) 19 Cal. 2d 807, 810.) The doctrine of res judicata has two aspects: the first is referred to as claim preclusion, which operates as a bar to the maintenance of a second suit between the same parties on the same cause of action, and the second as collateral estoppel, or issue preclusion, which applies in a second suit based on a different cause of action where a prior judgment in a prior suit operates as a conclusive adjudication was to such issues as were actually litigated and determined. (Ibid.) “Collateral estoppel precludes relitigation of issues argued and decided in prior proceedings.” (Lucido v.

Superior Court (1990) 51 Cal. 3d 335, 341.) “Collateral estoppel means simply that when an issue of ultimate fact has once been determined by a valid and final judgment, that issue cannot again be litigated between the same parties in any future lawsuit.” (Lucas v. County of Los Angeles (1996) 47 Cal. App. 4th 277, 286.) There are five threshold issues for the application of collateral estoppel: (1) the issue sought to be precluded must be identical to that decided in a former proceeding; (2) the issue must have been actually litigated in the former proceeding; (3) it must have been necessarily decided in the former proceeding; (4) the decision in the former proceeding must be final and on the merits; and (5) the party against whom preclusion is sought must be the same as, or in privity with, the party to the former proceeding. (Lucido, supra, 51 Cal. 3d at 341.)

The party asserting the preclusion has the burden of establishing each of these elements. (Ibid.)

“An issue is actually litigated "[w]hen [it] is properly raised, by the pleadings or otherwise, and is submitted for determination, and is determined...A determination may be based on a failure of...proof.” (People v. Sims (1982) 32 Cal. 3d 468, 484, emphasis in original, superseded by statute on other grounds as noted in Gikas v. Zolin (1993) 6 Cal.4th 841, 851.) The failure to provide sufficient evidence in the earlier proceeding does not entitle the party to produce new evidence where the issue was actually litigated. (People v.

DeMontoya (2017) 85 Cal. App. 5th 1159, 1181-1182.) Court should examine the record from the prior proceeding, including the pleadings, evidence, jury instructions and findings or verdicts, to determine whether an issue was actually litigated. (Hernandez v. City of Pomona (2009) 46 Cal. 4th 501, 511-512.) Merely pleading an affirmative defense without objection does not necessarily establish an adequate opportunity to litigate a defense, particularly in unlawful detainer proceeding, which are often summary in nature. (Vella v.

Hudgins (1977) 20 Cal. 3d 251, 258.)

On October 7, 2024, Plaintiff filed a Complaint for Unlawful Detainer against Voguebay and KLC Companies in CenterPoint Properties Trust v. Voguebay LLC, et al., Case No. UD240162. (Deft. Ex. 1.) The UD Action sought possession of the Subject Property and damages totaling $137,679.88. (Id at ¶ 2.) The allegations were based on the same Lease, First Amendment to Lease and Second Amendment to Lease. (Id at ¶5.) On December 9, 2024, the Court a Ruling on Matter Submitted, wherein the Court found that “Plaintiff failed to show by a preponderance of evidence that there was a landlord-tenant relationship between Plaintiff and [Voguebay] for which a claim for unlawful detainer can be made.” (Deft.

Ex. 2.) This was due to the fact that the witness testimony as to the assignment of the Lease to Plaintiff was unreliable since the witness was not the custodian of records and was not employed by Plaintiff at the time of the alleged assignment. (Id.) Because the Court found that Plaintiff failed to establish by a preponderance of the evidence that there was an assignment of the Lease creating a landlord-tenant relationship between Plaintiff and Voguebay, the Court found for Voguebay and Plaintiff took nothing. (Id.)

Judgment was entered on December 26, 2024. (Deft. Ex. C.) Although there are no transcripts of the UD Action, based on the Ruling, it appears that the Court received evidence and heard testimony regarding the issue of Plaintiff’s assumption of the Lease and its amendments, took the matter under submission and made findings of facts. As such, the issue was actually litigated and Plaintiff’s evidence found to be insufficient.

Plaintiff’s claims against Meadows in the present action are based on its purchase of the Subject Property from York on June 14, 2022 and assumption of the Lease and Guaranty. (Comp., ¶11.) Plaintiff alleges that it is the successor-in-interest to York as to the Guaranty. (Id at ¶27.) Thus, the UD Court’s determination that there was insufficient evidence of the assignment of the Lease precludes Plaintiff from re-litigating the issue in the proceedings against Meadows based on the same alleged assignment.

Without an assignment of the Lease and landlord-tenant relationship between Plaintiff and Voguebay, it is not clear how Plaintiff can establish that it can enforce the Guaranty. Therefore, because the failure to prove the assignment in the UD Action precludes Plaintiff’s breach of contract claims against Meadows. Plaintiff has not made any arguments that the claims against Meadows are viable without the assignment of Lease.

Plaintiff argues that its claims against Meadow are not precluded because Meadow and Voguebay are joint obligors under the Lease and jointly and severely liable for the damages. In DKN Holdings LLC v. Faerber (2015) 61 Cal. 4th 813, the California Supreme Court held that Parties who are jointly and severally liable on a contract may be sued in separate actions and a judgment in the first action does not preclude claims based on the same wrongdoing, as long as the suits are against different parties. (Id at 819-820, emphasis in original.)

Parties to a joint and several contract are bound jointly, so that they are liable for the entire obligation, and severally, so that each may be sued separately for the entire loss in the same or separate actions. (Id at 820.) Res judicata in its primary aspect of claim preclusion does not bar separate actions against joint obligors because it bars only repeated claims for the same relief between the same parties. (Id at 823, emphasis in the original.)

However, issue preclusion, or collateral estoppel, may bind a party to the resolution of an issue actually litigated in the first action and bar re-litigation of the issue in a subsequent action against a joint obligor of a party in the first action. (Id at 827.) Issue preclusion can be asserted by one who was not a party to the first action against a party to that action who had a full and fair opportunity to litigate the issue in the first case but lost. (Id at 826-827.) Moreover, contrary to Plaintiff’s contention, collateral estoppel can be raised by one who was not in privity with a party in the first suit. (Id at 825.) Thus, Meadows may assert the issue preclusion without establishing privity with Voguebay.

Plaintiff argues that the breach of contract claim is not barred by collateral estoppel because the issues addressed in the UD Action, namely possession of the Subject Property are different from those raised in the present case. “In unlawful detainer proceedings, ordinarily the only triable issue is the right to possession of the disputed premises, along with incidental damages resulting from the unlawful detention.” (Martin-Bragg v. Moore (2013) 219 Cal. App. 4th 367, 385.) The cognizable claims in an unlawful detainer proceeding are those “bearing directly on the immediate right of possession.” (Hong Sang Market, Inc. v. Peng (2018) 20 Cal. App. 5th 474, 490- 491.) “Cross-complaints and affirmative defenses are permissible only to the extent that they would, if meritorious, preclude a court from removing a tenant from the premises.” (Id at 491.)

“[A]n unlawful detainer judgment has limited [preclusive] force because it typically follows a summary proceeding focused only on deciding a party's right to immediate possession of property.” (Struiksma v. Ocwen Loan Servicing, LLC (2021) 66 Cal. App. 5th 546, 554.) Claim preclusion does not bar a subsequent claim if the claim could not have been raised or litigated in the earlier action. (Hong Sang Market, supra, 20 Cal. App. 5th at 491.) Although the res judicata effect of an unlawful detainer action is narrow, it is not nonexistent and applies to all issues fully tried in the proceeding. (Gombiner v.

Swartz (2008) 167 Cal. App. 4th 1365, 1371.) If court makes findings regarding the terms of the rental agreement and amount of rent due, such issues have been actually litigated and the collateral estoppel applies to the findings in any subsequent action to recover the rental obligation. (Cinnamon Square Shopping Center v. Meadowlark Enterprises (1994) 24 Cal. App. 4th 1837, 1843.)

Here, the Court in the UD Action litigated the issue of the assignment of the Lease and determined that there was no landlord-tenant relationship between Plaintiff and Voguebay. While the UD Complaint contained a prayer for damages (see Deft. Ex. 1), the Court entered judgment for Voguebay with Plaintiff to take nothing. Since these issues were litigated and final judgment was entered, claims for damages based on the same assignment are precluded. The Court GRANTS Defendant Meadow’s Motion for Summary Judgment.