WELLS FARGO BANK, N.A. VS. STEVEN J. KAUFMAN, ET AL

Plaintiff’s motion for summary judgment or, in the alternative, for summary adjudication is DENIED. Allegations in Plaintiff’s First Amended Complaint Plaintiff Wells Fargo Bank, NA alleges that in August 2017, Plaintiff's predecessor-in-interest, Mid-Peninsula Bank, a part of Greater Bay Bank, NA, made a loan (the “Loan’’) to Cornerstone Properties II S, LLC, predecessor-in-interest to CPSA -Airport Industrial Park, LLC (the “Borrower’) The Loan was documented in a Business Loan Agreement (the “Loan Agreement”) and evidenced by a Promissory Note dated August 29, 2016 (the “Note”). The Note was originally from Cornerstone Properties II 8, LLC, and was assumed by the Borrower, for the principal sum of $7.4 million. (First Amended Complaint (“FAC”), 495, 6 and Exhs. 1, 2.) The Note is secured by a Leasehold Deed of Trust, Assignment of Rents, Security Agreement and Fixture Filing, executed September 8, 2006 by Cormerstone Properties IT S, LLC, as amended by a Modification of Deed of Trust dated August 29, 2016 and an Assumption Agreement dated August 1, 2017. Ud.,]7 and Exhs. 3-5.) The Loan was guaranteed by Defendant Steven J. Kaufman (“Kaufman”) and Steven Kaufman as trustee of his trust (the “Trust”). Defendant Eleanor Kaufman has been appointed successor trustee of the Trust. (/d., 98.) Under the two guarantees (the “Kaufman Guaranty” and the “Trust Guaranty’), Kaufman and the Trust guaranteed performance of all of the Borrower’s obligations, including the obligations under the Note. Ud., J11, 12 and Exhs. 9 and 10.) The Borrower has defaulted on the Loan. The outstanding principal owed as of March 15, 2024 was $5,938,863.80 and accrued interest as of that time was $165,774.73. (Ud., 499, 10.) CV0002303 The First Cause of Action alleges breach of the Kaufman Guaranty and the Trust Guaranty. The Second and Third Causes of Action assert common counts, specifically, money lent and money paid, laid out and expended. Standard The purpose of a motion for summary judgment “is to provide courts with a mechanism to cut through the parties’ pleadings in order to determine whether, despite their allegations, trial is in fact necessary to resolve their dispute.” (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4" 826, 843.) “Code of Civil Procedure section 437c, subdivision (c), requires the trial judge to grant summary judgment if all the evidence submitted, and ‘all inferences reasonably deducible from the evidence’ and uncontradicted by other inferences or evidence, show that there is no triable issue as to any material fact and that the moving party is entitled to judgment as a matter of law.” (Adler v. Manor Healthcare Corp. (1992) 7 Cal. App. 4" 1110, 1119 [citation omitted].) “On a motion for summary judgment, the initial burden is always on the moving party to make a prima facie showing that there are no triable issues of material fact.” (Scalfv. D. B. Log Homes, Inc. (2005) 128 Cal.App.4" 1510, 1519.) The burden on a plaintiff moving for summary judgment is defined by Code of Civil Procedure § 437c(p)(1); the plaintiff must “prove[] each element of the cause of action entitling the party to judgment on that cause of action.” (Code Civ. Proc. § 437c(p)(1); Paramount Petroleum Corp. v. Superior Court (2014) 227 Cal.App.4TM 226, 241.) “When deciding whether to grant summary judgment, the court must consider all of the evidence set forth in the papers (except evidence to which the court has sustained an objection), as well as all reasonable inferences that may be drawn from that evidence, in the light most favorable to the party opposing summary judgment.” (Avivi v. Centro Medico Urgente Medical Center (2008) 159 Cal.App.4TM at 467; Code of Civ. Proc. §437c.) 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.4 832, 838.) Any evidentiary doubts are resolved in favor of the opposing party. (City of Santa Cruz v. Pacific Gas & Elec. Co. (2000) 82 Cal. App.4" 1167, 1176.) Evidentiary Objections Defendants’ evidentiary objections to the Declaration of Kristen Sandberg fail to comply with California Rule of Court 3.1354(b), which requires objections to be “numbered consecutively”. In addition, many of these objections group together a number of statements by Ms. Sandberg and assert objections to that group of statements rather than setting forth a specific statement and a specific objection to that statement. Where a specific statement is underlined, the Court assumes the objection is focused on that underlined statement consistent with footnote 1 of Defendants’ objections. The Court rules on the objections as follows. The objections to Paragraphs 6, 9, 10, 12-23, 25 and 26, and Exhibits 1-10, are overruled. The objection to Paragraph 5 is sustained as to “I am informed of any problems or issues pertaining to loan accounts” (personal knowledge/ Page 2 of 6 CV0002303 foundation). The objection to Paragraph 7 is sustained as to “The records and documents discussed herein are records and documents . . . provided to Wells Fargo .. . on behalf of Borrower, Kaufman, and the Kaufman Trust” (personal knowledge/foundation). The objection to Paragraph 8 is sustained as to “and has always been” (personal knowledge/foundation). The objection to Paragraph 11 is sustained as to “the operators promptly report any problem with the system” (personal knowledge/ foundation). The objection to Paragraph 24 is sustained (improper legal conclusion). The objection to Paragraph 27 is sustained as to “as the Kaufman Guaranty provides” (improper legal conclusion). The objection to Paragraph 28 is sustained (improper legal conclusion). The objection to Paragraph 29 is sustained as to “as the Kaufman Trust Guaranty provides” (improper legal conclusion). The objection to Paragraph 30 is sustained (improper legal conclusion). Defendants’ objections to Paragraphs 5, 7, 8 11, 24 and 27-30 are overruled to the extent not expressly sustained above. Defendants object to the loan documents, guarantees, and notices (Paragraphs 12-22 and Exhs. 1- 10) but they do not dispute they executed any of these documents or that the documents attached to Ms. Sandberg’s declaration are accurate copies of these documents. Plaintiffs objections to paragraphs 6, 7, 9-11, 18 and 23 assert that Ms. Sandberg’s statements in her declaration are inconsistent with her deposition testimony. These specific objections are overruled to the extent they request the statements be stricken in their entirety. The Court instead considers the impact of any inconsistency on Plaintiff's ability to meet its burden in the context of its summary judgment motion. (See Harris v. Thomas Dee Engineering Co., Inc. (2021) 68 Cal. App.5" 594, 604; Alvis v. County of Ventura (2009) 178 Cal.App.4" 536, 548- 549.) Evidentiary Record The following facts submitted by Plaintiff are undisputed. Plaintiff, through its predecessor, made a loan to the Borrower, which is subject to the Loan Agreement and evidenced by the Note, in the principal sum of $7.4 million. (Undisputed Material Fact “UMF”) 1, 2.) The Loan Agreement provides that “Borrower will: . . . Prior to disbursement of any Loan proceeds, furnish executed guaranties of the Loans in favor of Lender, executed by” Kaufman and the Kaufman Trust. (UMF 3.) On or around August 1, 2017, in compliance with its obligations under the Loan Agreement, Borrower delivered to Plaintiff the Kaufman Guaranty and the Trust Guaranty. (UMF 4, 5.) As of November 27, 2024, Plaintiff had not received any notice from or claim by Kaufman or the Trust to the effect that Plaintiff has failed to perform any of its obligations under the guarantees. (UMF 7, 8.) The Note provides that, “Borrower’s final payment will be due on September 1, 2023, and will be for all principal and all accrued interest not yet paid.” Borrower failed to pay the Indebtedness, as that term is defined in the Loan Agreement, on or around September 1, 2023. On or around September 5, 2023, Plaintiff delivered a Notice of Default to Borrower, Alon Adani (“Adani’’), and Kaufman, advising that Borrower’s “failure to repay the Loan by the Maturity Date constitutes a default under the Loan Agreement.” (UMF 10.) By letter dated February 6, 2024, Plaintiff sent a notice to Kaufman advising him, both individually and as trustee of Trust that Borrower’s failure to repay the Loan by September 1, 2023, gave rise to Kaufman’s and the Trust’s obligations to perform under the Kaufman Guaranty and Trust Page 3 of 6 CV0002303 Guaranty, respectively, and that if Borrower remained in default, Plaintiff would bring a claim to enforce the Kaufman Guaranty and Trust Guaranty. (UMF 11.) The Kaufman Guaranty and Trust Guaranty each provide that “For good and valuable consideration, Guarantor absolutely and unconditionally guarantees full and punctual payment and satisfaction of the Indebtedness of Borrower to Lender, and the performance and discharge of all Borrower’s obligations under the Note and Related Documents.” Neither Kaufman nor the Trust has paid any amounts pursuant to their respective guarantees. (UMF 12, 13.) Defendants dispute Plaintiff's two “facts” regarding damages, UMF 16 and 17, which state that Kaufman’s and the Trust’s defaults under their guarantees have caused Plaintiff $6,367,168.29 in damages, which represents the outstandirig principal balance of the Loan ($5,938,863.80), accrued interest ($344,305.08), and allowed costs ($83,999.41). Defendants argue that the only evidence supported to support these facts is the declaration of Ms. Sandberg, but Ms. Sandberg testified in her deposition at pages 88-117 that she does not have knowledge regarding the calculation of Plaintiff's damages. Ms. Sandberg was produced as Plaintiffs person most qualified with respect to a number of topics, including “[t]he financial basis for which Wells Fargo claims money damages in this action....” (Declaration of Kevin P. Dwight (“Dwight Decl.”), Exh. 1 at Topic 5.) In her deposition in April 2025, Ms. Sandberg discussed a “note recap” that she brought with her to her deposition that identified outstanding principal and interest due. The recap was marked as Exhibit 7 in her deposition. Ms. Sandberg testified that she requested the recap from Plaintiff's loan center, which prepared it for her. She did not know specifically how the recap was prepared, who input the information used in the recap, or the process used to input the information. Ms. Sandberg testified that she believed certain figures represented default interest and the interest rate but stated she would need to verify. She did not know what certain codes, fees, amounts, or dates on the recap represented, or how certain interest payments were applied or adjusted. Ms. Sandberg also testified that she had to discuss with the loan center an issue with interest that needed to be adjusted, and that she has to rely on the loan center to fix the entries and trust that the system was set up correctly. (Dwight Decl., Exh. 2.) This evidence (pages 88- 117 of Ms. Sandberg’s deposition transcript) is submitted in connection with Defendants’ Additional Undisputed Material Facts (“AUMF”) 1-9.)

Discussion

Plaintiff moves for summary judgment or summary adjudication with respect to all four of its causes of action against Defendants. First and Second Causes of Action/Breach of the Guarantee In order for a plaintiff to prevail on a summary judgment or summary adjudication motion on a breach of contract claim, the plaintiff must establish its entitlement to judgment as a matter of law as to all elements of the claim, including damages. (See Paramount Petroleum Corp. v. Superior Court (2014) 227 Cal.App.4"" 226, 241; see also Department of Indus. Relations v. UI Video Stores, Inc. (1997) 55 Cal. App. 4th 1084, 1097 [“Because issues of the calculation of Page 4 of 6 CV0002303 damages apparently remain to be determined, it is not appropriate to grant summary judgment for Appellant’’].) Defendants argue that Plaintiff has failed to present adequate evidence of its damages because the only evidence it submits to support its damages number is Ms. Sandberg’s declaration, which they contend is insufficient in light of her deposition testimony. In its Reply, Plaintiff argues that its evidence of damages is not Ms. Sandberg’s deposition testimony or the “note recap” she discussed in her deposition, but rather Ms. Sandberg’s declaration which provides a separate and independent basis to establish damages. Plaintiff argues that Ms. Sandberg was entitled to rely on records in Plaintiff’s system showing the amounts due in making her statement as to the amount of damages Plaintiff has suffered. Ms. Sandberg was asked about her November 2024 declaration at her deposition: Q. Is it your understanding that the note recap is the source of the principal and interest calculations that at least as of November 25th, 2024, were included in your declaration? A. My loan center would have pulled it off their system of record, which I believe is AFS for this loan. That would have been driven off AFS. They have their own process for pulling the numbers. (Dwight Decl., Exh. 2 at p. 88:16-23.) Ms. Sandberg testified that the note recap would have been used to identify outstanding principal and accrued interest. (/d. at p. 88:6-12.) Thus, Ms. Sandberg’s declaration appears to be based at least in part on the note recap which she brought with her to the deposition, and about which she conceded she lacked information or understanding with respect to certain damage figures. Plaintiff does not provide a declaration from anyone in the loan center or elsewhere in its organization to support the numbers, nor does it provide any backup documentation, which is problematic for Plaintiff as Ms. Sandberg testified she noticed issues with the interest numbers but apparently did not confirm that they had been remedied. Given this testimony, it is not enough for Plaintiff to merely rely on its business records to show amounts due. At the very least, Defendants have raised a triable issue of material fact as to whether the numbers submitted by Plaintiff are accurate and whether Plaintiff actually suffered the damages it claims. The motion is denied as to the First and Second Causes of Action. (See Paramount, 227 Cal.App.4" at p. 243.) Third and Fourth Causes of Action/Common Counts “The only essential allegations of a common count are ‘(1) the statement of indebtedness in a certain sum, (2) the consideration, i.e., goods sold, work done, etc., and (3) nonpayment.’” (Farmers Ins. Exchange v. Zerin (1997) 53 Cal.App.4" 445, 460 [citation omitted].) For the reasons discussed above, Plaintiff has not established the first element. Plaintiff's motion is therefore denied as to these causes of action as well. Defendants’ Other Arguments Page 5 of 6 CV0002303 Because the Court denies Plaintiff’s motion on the grounds discussed above, it need not address Defendants’ additional arguments that Plaintiff acted with unclean hands or that triable issues of fact exist with respect to Defendants’ affirmative defenses and cross-claims against the Borrower and Adoni. All parties must comply with Marin County Superior Court Local Rules, Rule 2.10(B) to contest the tentative decision. Parties who request oral argument are required to appear in person or remotely by ZOOM. Regardless of whether a party requests oral argument in accordance with Rule 2.10(B), the prevailing party shall prepare an order consistent with the announced ruling as required by Marin County Superior Court Local Rules, Rule 2.11. The Zoom appearance information for February, 2026 is as follows: hitips://marin-courts-ca-gov. zogmeov. conv i/ 1605267272 2pwd=IO8Ch POT 2inhC 4yallnzoblz2dkKaw.! Meeting ID: 160 526 7272 Passcode: 026935 If you are unable to join by video, you may join by telephone by calling (669) 254-5252 and using the above-provided passcode. Zoom appearance information may also be found on the Court’s website: https:/Avww.marin.courts.ca.gov