New Wilston Associates II, LLC v. Viridescent Realty Trust, Inc.

[Defense Fact 5.] The parties signed an Amended and Restated Loan Agreement (“ARLA”), which replaced and restated the original loan’s terms. [Defense Facts 6-7.] The interest rate in the ARLA was lowered to 11% annually. [Defense Fact 7.] Defendant claims that the ARLA also included a usury savings clause. [Defense Fact 8.]

On June 7, 2024, after the ARLA loan matured, the parties signed the First Amendment to the Amended and Restated Loan Agreement and Other Loan Documents (“First Amendment”). [Defense Fact 10.] It reinstated the original 12.5% interest rate. [Defense Fact 12.] At the same time as the First Amendment, John B. Deans signed and executed a Guaranty Agreement. [Defense Fact 9.] Defendant argues that the First Amendment did not change the Usury Savings Clause in the ARLA. [Defense Fact 12.] Additionally, Defendant claims that it includes a broad general release of all Plaintiff’s known and unknown claims, which eliminates any potential usury liability for payments under the ARLA. [Defense Fact 13.]

In early 2025, Plaintiff began failing to make the monthly payments as required under the terms of the Loan. [Defense Fact 16.] Following the payment defaults, Defendant started proceedings to foreclose on the Loan. [Defense Fact 18.] On May 21, 2025, Defendant recorded a Notice of Default and Election to Sell Under Deed of Trust. [Defense Fact 21 and Plaintiff’s Response Thereto.]

The foreclosure sale occurred around December 23, 2025. [Defense Fact 18.] The defendant purchased the property with a credit bid of $3 million. [Defense Fact 21 and Plaintiff’s Response Thereto.]

On February 23, 2026, Defendant filed its motion for summary judgment and argued that Plaintiff cannot prove damages because its own allegations show that, even after reallocating all allegedly usurious interest payments to principal and applying the treble interest remedy available under Civil Code section 1916-3(a), Plaintiff still owed approximately $4.28 million at the time of foreclosure. Defendant contended that since the Property was acquired through a $3 million credit bid at the foreclosure sale, Plaintiff suffered no recoverable injury and all causes of action fail as a matter of law.

Plaintiff opposes the summary-judgment motion. Plaintiff contends that the motion improperly concentrates on only one theory of damages and fails to address all causes of action and forms of relief alleged in the Complaint. Additionally, Plaintiff argues that there are still issues to be tried regarding the amount lawfully owed, the validity and effect of the usury savings clause, and whether Defendant’s recording of the Notice of Default was malicious.

Legal Standards.

Summary judgment is warranted where there are no triable issues of material fact, and the moving party is entitled to judgment as a matter of law. [Code Civ. Proc. § 437c(c); see Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 843.] Courts follow a three-step process when reviewing a motion for summary judgment: (1) identify the issues outlined by the pleadings; (2) evaluate whether the moving party has disproved the opponent’s claims; and (3) assess if the

opposition has shown there is a triable factual issue. [Hinesley v. Oakshade Town Center (2005) 135 Cal.App.4th 289, 294.]

In a motion for summary judgment, the initial burden always rests on the moving party to make a prima facie showing that no material factual issues are in dispute. [Choochagi v. Barracuda Networks, Inc. (2020) 60 Cal.App.5th 444, 453.] When a defendant files for summary judgment, they satisfy their initial burden if they prove that at least one element of the cause of action cannot be established or that a complete defense exists. [Code Civ. Proc. § 437c(p)(2).] Failure to meet this burden results in denial of the motion, ending the inquiry. [Id.]

To meet the burden of proving that a cause of action cannot be established, a defendant must demonstrate that the plaintiff does not possess, and cannot reasonably obtain, the needed evidence. [Aguilar, 25 Cal.4th at 854.] This supporting evidence may include affidavits, declarations, admissions, depositions, answers to interrogatories, and matters subject to judicial notice. [Aguilar, 25 Cal.4th at 855.]

Even if the moving defendant meets their burden, the opposing plaintiff can still defeat a summary judgment motion by presenting evidence that raises a triable issue of fact. [Aguilar, 25 Cal. 4th at 849-850.] The plaintiff cannot rely solely on allegations or denials in its pleadings; instead, it must present specific facts indicating the existence of a triable issue of material fact concerning the cause of action. [Code Civ. Proc. § 437c(p)(2).] If the plaintiff fails to do so, summary judgment should be granted.

The court must liberally construe the evidence presented by the party opposing summary judgment, resolving all doubts and making all reasonable inferences in favor of that party [Aguilar, 25 Cal.4th at 844-845]. When reviewing such a motion, the court must consider what inferences a factfinder could reasonably draw that favor the opposing party. [Binder v. Aetna Life Ins. Co. (1999) 75 Cal.App.4th 832, 839.] The main role of the court is to identify issues, not to decide them; only clear and indisputable inferences can lead to a legal resolution. [Ibid.] If evidence conflicts, factual disputes must be resolved during trial. [Ibid.] Furthermore, the trial court cannot weigh evidence as a factfinder would to determine credibility, nor can it grant summary judgment based on credibility assessments. [Id. at 840.]

Discussion.

1. Defendant’s RJN.

Defendant’s request to judicially notice the Complaint, Plaintiff’s Notice of Motion for Preliminary Injunction, and Plaintiff’s Reply in support of Motion for Preliminary Injunction is GRANTED. [Evid. Code §§ 452(d), 453.]

2. Summary Judgment.

Defendant has not met its initial burden to show that each cause of action and theory of recovery alleged in the Complaint fails as a matter of law.

Regarding the First Cause of Action for Declaratory Relief, Defendant argues that the lack of recoverable monetary damages defeats the claim but does not prove that no actual controversy exists over the legality of the loan, the lawful amount owed under the parties’ agreements, the impact of the usury savings clause, or the parties’ respective rights and obligations from the loan transaction. Therefore, Defendant has not shown that this cause of action fails as a matter of law.

Regarding the Second Cause of Action for Treble Recovery of Usurious Interest Payments under Civil Code section 1916-3(a), Defendant contends that any alleged usurious interest must be first credited against the principal, and no recovery is possible unless payments exceed the principal debt. However, Defendant relies on Plaintiff’s allegations regarding the remaining amount owed and does not definitively establish the lawful amount owed after applying Plaintiff’s usury theories. Even if Defendant’s argument might ultimately be valid, the Court chooses not to resolve that issue now because Defendant has not demonstrated entitlement to judgment on the entire Complaint.

Regarding the Third Cause of Action for Violation of Business and Professions Code section 17200, Defendant claims that Plaintiff cannot prove damages or restitution because Plaintiff never repaid the principal borrowed. However, Defendant does not show that all forms of equitable relief available under the UCL are dismissed based on Plaintiff’s theory, nor does it dismiss all factual bases of the claim. Therefore, Defendant has not met its initial burden for this cause of action.

Regarding the Fifth Cause of Action for Accounting, although Defendant argues in the Reply papers that the claim is moot because there are no circumstances under which Defendant could owe money to Plaintiff, that argument is not adequately developed to explain why or specifically how Defendant could not owe money to Plaintiff. Furthermore, Defendant was required to meet its burden in its motion and supporting papers, not just in the Reply.

Regarding the Sixth Cause of Action for Common Count-Money Had and Received— Defendant argues that Plaintiff did not suffer any recoverable loss because the amount allegedly owed was more than the foreclosure credit bid. However, Defendant does not separately analyze the elements of the claim or demonstrate as a matter of law that Defendant did not receive or keep money that Plaintiff claims was collected through an allegedly usurious loan. Therefore, Defendant has not clearly denied this claim.

For any or all of the reasons above, the motion is DENIED because Defendant fails to meet its initial summary-judgment burden of showing that no triable factual issues exist and that it is entitled to judgment on all, rather than some, causes of action as a matter of law. The Court expresses no opinion at this stage regarding the ultimate merits of Plaintiff’s usury claims or whether Plaintiff will be able to establish recoverable damages at trial.

Conclusion.

Defendant’s motion is DENIED, and its RJN is GRANTED. Plaintiff shall prepare the Proposed Order consistent with this Tentative Ruling.

NOTE RE TENTATIVE RULING

This tentative ruling becomes the court’s order, and no hearing shall be held unless one of the parties contests it by following Rule 3.1308 of the California Rules of Court and Monterey County Local Rule 7.9. Those parties wishing to present an oral argument must notify all other parties and the Court no later than 4:00 p.m. on the court day before the hearing; otherwise, NO ORAL ARGUMENT WILL BE PERMITTED, AND THE TENTATIVE RULING WILL BECOME THE ORDER OF THE COURT AND THE HEARING VACATED. You must notify the court by email or by calling the Calendar Department at 831-647-5800, extension 3040, before 4:00 p.m. on the court day before the hearing.

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