Abdo v. Five Boys Investments, Inc.

In determining a motion for summary judgment, the court is “required to view the evidence and the reasonable inferences therefrom in the light most favorable to the party opposing the summary judgment motion; doubts as to whether there are any triable issues must be resolved in favor of the opposing party; and equally conflicting evidence or inferences require denial of a summary judgment motion.” (Essex Ins. Co. v. Heck (2010) 186 Cal.App.4th 1513, 1522.) Declarations provided in opposition to motions for summary judgment or summary adjudication are liberally construed while the moving party’s evidence is strictly construed. (Saelzler v. Advanced Group 400 (2001) 25 Cal.4th 763, 768.)

The JJ Properties Defendants contend that Plaintiff’s action against them is barred based on the Settlement Agreement entered in the in the action filed by Plaintiff in 2023 against Five Boys Investments, Inc., McGee, Santa Ana, and others (the “Five Boys Action”). The JJ Properties Defendants assert that the Settlement Agreement releases all Defendants in the JJ Properties Action from all claims therein, that those being released include Five Boys, McGee, Santa Ana, that JJ Properties is an express assign of Five Boys, and that based on the common ownership interest between JJ Properties and Five Boys, JJ Properties is an affiliated company of Five Boys.

Plaintiff contends that JJ Properties cannot enforce the Settlement Agreement because it was not a party to the Settlement Agreement, and that JJ Properties is not a third party beneficiary of the Settlement Agreement.

“A settlement agreement is a contract, and the legal principles which apply to contracts generally apply to settlement contracts. [Citation.]” (Weddington Productions, Inc. v. Flick (1998) 60 Cal.App.4th 793, 810-811.) The JJ Properties Defendants therefore have “the burden of establishing each contractual element— parties who are capable of entering into contract, their mutual consent, a lawful object, and sufficient cause or consideration. [citations]—in support of their motion.”

(Steward v. Preston Pipeline Inc. (2005) 134 Cal.App.4th 1565, 1585-1586.) A general release can be completely enforceable and act as a complete bar to all claims (known or unknown at the time of the release). (San Diego Hospice v. County of San Diego (1995) 31 Cal.App.4th 1048, 1053.)

“When a contract is reduced to writing, the intention of the parties is to be ascertained from the writing alone, if possible; . . . .” (Civil Code § 1639.) “Under California law, contracts are interpreted by an objective standard; the words of the contract control, not one party’s subjective intentions. (Brant v. California Dairies, Inc. (1935) 4 Cal.2d 128, 133.)” (Global Packaging v. Superior Court (2011) 196 Cal.App.4th 1623, 1234.) “An interpretation which gives effect is preferred to one which makes void.” (Civil Code § 3541.) “Subject to the other rules of interpretation, the language of a contract governs its interpretation if the language is clear and explicit and does not involve an absurdity. (Civ.Code, §§ 1638, 1639.)

The whole contract must be considered together in order to ‘give effect to every part, if reasonably practicable, each clause helping to interpret the other.’ (§ 1641.)” (Supervalu, Inc. v. Wexford Underwriting Managers, Inc. (2009) 175 Cal.App.4th 64, 72.) If it may be done without violating the parties’ intent, we must interpret the contract in such a way as to make it “lawful, operative, definite, reasonable, and capable of being carried into effect.” (Civil Code § 1643.) “The words of a contract are to be understood in their ordinary and popular sense, rather than according to their strict legal meaning; . . . .” (Civil Code § 1644.)

Here, it is undisputed that Plaintiff entered into a Settlement Agreement with Five Boys, McGee, and Santa Ana. (Plaintiff’s Separate Statement of Material Facts (“PSS”), 9.) The Settlement Agreement was executed in parts in December 2023 and January 2024, and it itself demonstrates each element of the contract as it identifies the parties, facially evidences mutual consent, has the lawful object of resolving litigation, and contains mutual promises and consideration. (See Ex. F to Declaration of James McGee (“McGee Decl.”), Settlement Agreement.)

The Settlement Agreement

settled Plaintiff’s Complaint against Five Boys, First Team Real Estate, Paul Bontempo, James McGee (Doe #1), Osvaldo Santa Ana (Doe #2), and Isaias Tercero Garcia (aka Isaias Crisosto Tercero) (Doe #3), filed in case number, 30-2023-01342111-CU-CO-CJC, concerning a contract for sale of residential property located at 228 20th St. Huntington Beach, CA (the “Huntington Beach Property”) and the alleged discovery after close of escrow of construction problems at the Huntington Beach Property that were not disclosed and could not be easily remedied. (Ex. F to McGee Decl., Settlement Agreement, at pp. 1-2, ¶¶ 1-3(A)-(D).)

The Settlement Agreement contains a Mutual Release which states, in part: “Complainant [Plaintiff, Wael Abdo], on behalf of himself and his heirs, hereby releases and forever discharges all Defendants, and their parents, subsidiaries, franchisors, franchisees, affiliated companies, and each of their former and present agents, directors, officers, shareholders, employees, attorneys, and insurers, as well as their heirs and assigns (collectively "Releasees"), from any and all claims of any nature whatsoever, whether known or unknown and whether before a court or an arbitrator, which include but are not limited to, any and all claims between Complainant and Releasees in regards to Case: 30-2023- 01342111-CU-CO-CJC and any other statutory or nonstatutory tort or contractual claim; any claim of a violation of any federal, state, municipal, or local statute, ordinance, or regulation pertaining to the cause of the action (the "Claims"); that Complainant has and may hereafter have against Releasees because of any alleged fault, violations, breach, acts or omissions whatsoever from the beginning of time to the date of the execution of this Agreement.” (Ex. F to McGee Decl., Settlement Agreement, at p. 7, § B.)

In addition, the Settlement Agreement contains a Section 1542 Waiver which states, “By signing this Agreement, the Parties acknowledges that they have read and fully comprehend Section 1542 of the California Civil Code, which reads as follows: "A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the

time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor." The Parties waive all rights under California Civil Code Section 1542.” (Ex. F to McGee Decl., Settlement Agreement, at p. 8.)

Initially, the JJ Properties Action asserts causes of action for declaratory relief, cancellation of written instrument and rescission of October Escrow Instructions, November Note and its Deeds of Trust, slander of title, quiet title, fraud, injunctive relief, violation of Business & Professions Code section 17200, and accounting based on allegations of violations, breaches, and/or wrongful acts by the JJ Properties Defendants relating to, and in connection with, Plaintiff’s purchase of the Huntington Beach Property in 2022 and a carryback purchase money loan, that predate the execution of the Settlement Agreement, i.e., December 2023 and January 2024. (Ex. K to Declaration of John Schroeder, FAC, ¶¶ 7, 10-16, 18-28, 32.)

Plaintiff does not dispute that McGee and Santa Ana are parties to the Settlement Agreement in the Five Boys Action. In turn, any release contained therein applies to them and they may enforce the release provision in the Settlement Agreement.

As to JJ Properties, it is undisputed that in purchasing the Huntington Beach Property, Plaintiff obtained a conventional loan for most of the purchase cost with a carryback loan of $575,000 secured by the Huntington Beach Property. (PSS, 3.) It is also undisputed that on November 11, 2022, Five Boys assigned the note to JJ Properties. (PSS, 4.) Plaintiff does not unequivocally dispute these facts and the recitation of facts in response to these facts does not address the fact being asserted. As to PSS 4, while Plaintiff states that he did not sign any contract or orally agree to assign any note for $575,000 from Five Boys to JJ Properties, he does not argue or show that any such assignment required his consent.

These undisputed facts support that JJ Properties is an assign of Five Boys, and as an assign is expressly listed as a party to which the release applies, JJ Properties may enforce a release provision in the

Settlement Agreement, despite the fact that it is not signatory to the Settlement Agreement.

As to the additional argument that JJ Properties is an “affiliated company” of Five Boys, JJ Properties cites to no authority and does not discuss the meaning or definition of “affiliated company” within the context of the Settlement Agreement, as well as cites to no authority supporting that an “affiliated company” may be established solely by common ownership. This being said, there is authority which has looked to dictionary definitions of an “affiliate” or “affiliated company” noting that it includes the notion of shared ownership or control. (Toothman v.

Redwood Toxicology Laboratory, Inc. (2026) 120 Cal.App.5th 412, 422.) It is undisputed that McGee and Santa Ana have been the sole Members and Managers of JJ Properties, and that McGee has been a shareholder and sole Officer of Five Boys. (PSS, 17-18.) This evidence of shared control tends to support that JJ Properties is an “affiliated company” of Five Boys, such that it may raise the defense of the release in the Settlement Agreement.

The opposition raises arguments not raised by the moving papers, and that do not directly address the arguments raised. In opposition, Plaintiff argues that JJ Properties is not a third party beneficiary of the Settlement, but the motion does not argue that JJ Properties is a third-party beneficiary. While the reply argues that they may enforce the release because it is also a third-party beneficiary, the workup does not address this argument given the determinations above that JJ Properties is an “assign” and “affiliated company,” and thus, may enforce the release.

Additionally, the JJ Properties Defendants contend that Defendants complied with the Settlement Agreement by making the required corrections and by obtaining approval from the City of Huntington Beach.

Plaintiff contends that they dispute that Defendants have performed their obligations and duties under the Settlement Agreement, and asserts that there are genuine issues of material facts with respect to the

alleged breaches under the Settlement Agreement as Five Boys itself breached the Settlement Agreement by failing to repair and rebuild the numerous violations cited by the City of Huntington Beach which was a condition precedent to Plaintiff’s obligations under the Settlement Agreement.

A breach of a settlement agreement terminates the agreement, including the releases. (Butler America, LLC v. Aviation Assurance Co., LLC (2020) 55 Cal.App.5th 136, 142.)

Here, the Settlement Agreement provides, in relevant part: “Within sixty (60) days of the expiration of the Tenancy Period, Defendants will repair and/or rebuild those previous violations cited by city inspectors, as listed in Exhibit A hereto, such that those violations will pass all reasonable building inspections and other construction-related mandates required at the Huntington Beach Property by the City of Huntington Beach, as applicable. Other than the foregoing, Defendants are not required to fix or remedy any other construction related mandates or violations required at the Huntington Beach Property.

Such repair and/or rebuilding of the Huntington Beach Property by Defendants shall constitute a condition precedent to Defendants' obligations as set forth in this Agreement.” (Ex. F to McGee Decl., Settlement Agreement, at p. 3, §A(4).) Exhibit A attached to the Settlement Agreement sets forth the “City Violations to be Repaired” as “1. The internal stairwell.

2. The six (6) foot exterior wall.

3. The final signoff on the roof.” (Id. at p. 11.)

The JJ Properties Defendants assert as a material fact that “Defendants complied with the Settlement Agreement by making the required corrections and obtaining approval from the City of Huntington Beach.” (JJ Properties Defendants Separate Statement of Material Facts, 13, Declaration of James McGee, ¶ 9, Ex. G.) More specifically, McGee states that McGee personally observed Isaias Garcia, a California licensed general contractor, and his crew make each of the repairs required by the Settlement Agreement, and that they received signoffs by the City of Huntington Beach

for those repairs in June 2024, which are attached as Exhibit G. (Ibid.) If the Court sustains the objection to Exhibit G, as recommended above, and does not consider the “signoffs” attached as Exhibit G, McGee’s declaration appears sufficient to establish that JJ Properties received signoffs by the City of Huntington Beach for the repairs required by the Settlement Agreement.

Plaintiff does not state whether this fact is “disputed” or “undisputed” nor does Plaintiff state the nature of any dispute as required by California Rules of Court, rule 3.1350(f). To the extent that Plaintiff asserts that the Five Boys or the JJ Properties Defendants breached the Settlement Agreement by failing to repair and/or rebuild the previous violations cited by city inspectors as listed in Exhibit A, Plaintiff fails to present any facts or evidence to support that Defendants did not repair and/or rebuild those specific previous violations as listed in Exhibit A to the Settlement Agreement such that these violations would pass all reasonable building inspections and other construction-related mandates required at the Huntington Beach Property by the City of Huntington Beach.

The Settlement Agreement does not provide for repairs and/or rebuild of any and all violations, but specified three violations concerning the internal stairwell, the six (6) foot exterior wall, and the roof. Instead of addressing the specific violations listed in Exhibit A to the Settlement Agreement, Plaintiff argues that there were many violations of various building and safety codes due the illegal conversion, that Five Boys failed to obtain approval for a permit it applied for, and that the City of Huntington Beach denied a permit based on the fact that the “scope of work on permit does not reflect work done,” citing to Exhibits A through C to Plaintiff’s declaration, and Plaintiff does not establish that any of these violations, or denied or lack of permits, relate to or concern the specific work listed in Exhibit A to the Settlement Agreement, i.e., internal stairwell, the six (6) foot exterior wall, or the roof and/or repair and/or rebuilds done after January 2024, when the Settlement Agreement was fully executed. (Declaration of Wael N.

Abdo, ¶¶ 11-16, Exs. A-C.) As such, Plaintiff fails to create a triable issue of fact as to whether the Settlement Agreement was

breached. A plaintiff must set forth specific facts showing that a triable issue of material fact exists as to a cause of action or a defense thereto. (Code Civ. Proc. § 437c(p)(2).) To defeat summary judgment, a plaintiff must show specific facts. (Roman v. BRE Properties, Inc. (2015) 237 Cal.App.4th 1040, 1054.) “ ‘An issue of fact can only be created by a conflict of evidence. It is not created by “speculation, conjecture, imagination, or guess work.” [Citation.] Further, an issue of fact is not raised by “cryptic, broadly phrased, and conclusory assertions” [citation], or mere possibilities [citation.] “Thus, while the court in determining a motion for summary judgment does not ‘try’ the case, the court is bound to consider the competency of the evidence presented.” [Citation.]’ [Citation.]” (Brown v.

Ransweiler (2009) 171 Cal.App.4th 516, 525-526.) To defeat summary judgment, a plaintiff cannot rely on assertions that are “ ‘conclusionary, argumentative, or based on conjecture and speculation,’ but rather [are] required to ‘make an independent showing by a proper declaration or by reference to a deposition or another discovery product that there is sufficient proof of the matters alleged to raise a triable question of fact . . . . .’ [Citation.]” (Roberts v. Assurance Co. of America (2008) 163 Cal.App.4th 1398, 1404.)

Based on the foregoing, the JJ Properties Defendants meet their burden to show that they may enforce the release in the Settlement Agreement and that the obligation to make certain specified repairs and/or rebuilds under the Settlement Agreement has been satisfied such that the release in the Settlement Agreement is bars the JJ Properties Action. Plaintiff fails to create a triable issue of material fact as to the applicability of the release.

The court has not considered the JJ Properties Defendants’ response to plaintiff’s separate statement of material facts (ROA #515) as there is no provision in CCP 437c for a reply separate statement. (Nazir v. United Airlines, Inc. (2009) 178 Cal.App.4th 243, 252.)

The court will SUSTAIN Plaintiff’s evidentiary objections 1 and 13 (as to Exhibit G). The court

OVERRULES Plaintiff’s evidentiary objections 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13 (as to the statement in the declaration), 15, 17, 18, and 19. The court declines to rule on objection Nos. 14 and 16, as the evidentiary matters are not material to the determination of the motion. (ROA # 500)

The court will OVERRULE all of the JJ Properties Defendants’ evidentiary objections. (ROA # 513)

The court GRANTS both parties’ requests for judicial notice. (ROA #452, #506)

The court rejects Plaintiff’s argument that the JJ Properties Defendants have failed to provide any documentary evidence that Plaintiff cannot prove any of his eight causes of action in the First Amended Complaint (“FAC”), and that the Motion does not address any of the causes of action. A defendant moving for summary judgment or summary adjudication has met his or her burden of showing that a cause of action has no merit if he or she shows one or more elements of the cause of action cannot be established, or that there is a complete defense to that cause of action. (Code Civ.

Proc. § 437c(p)(2).) Once the defendant has met that burden, the burden shifts to the plaintiff to show that a triable issue of one or more material facts exists as to that cause of action or a defense. (Ibid.) Here, the JJ Properties Defendants argue that the JJ Properties Action is barred based on a prior Settlement Agreement, and therefore argue that there is a complete defense as to all eight causes of action.

The court also rejects Plaintiff’s argument that the notice of motion is defective because it is devoid of any reference to the FAC’s causes of action and claims for damages, affirmative defenses, or issues of duty as required by California Rules of Court, rule 3.1350(b), and thus, that the Motion is not properly before the Court and must be denied. That rule of court applies to a motion for summary adjudication. Here, the JJ Properties Defendants have moved only for summary judgment, and do not alternatively move for summary

adjudication. Thus, the motion for summary judgment is properly brought.

The court also rejects Plaintiff’s argument that this motion for summary judgment is an invalid motion for reconsideration, as this is the fourth time that the motion has been filed in an attempt to enforce the Settlement Agreement, and that this motion fails to comply with the requirements of Code of Civil Procedure section 1008(a).

“When an application for an order has been made to a judge, or to a court, and refused in whole or in part, or granted, or granted conditionally, or on terms, any party affected by the order may, within 10 days after service upon the party of written notice of entry of the order and based upon new or different facts, circumstances, or law, make application to the same judge or court that the made the order, to reconsider the matter and modify, amend, or revoke the prior order.” (Code Civ. Proc. § 1008(a).)

This is not a motion to enforce the Settlement Agreement, and this is the first motion for summary judgment filed in this case. The Court has not previously considered the issue of whether a release in the Settlement Agreement in Plaintiff’s action filed in 2023 against Five Boys Investments, Inc. (“Five Boys”), Defendants McGee and Santa Ana, and others (“Five Boys Action”) bars the instant action Plaintiff in 2024 against the JJ Properties Defendants. Therefore, Plaintiff’s argument that the instant motion for summary judgment is a motion for reconsideration of a prior motion to enforce Settlement Agreement is unpersuasive and lacks merit.

Plaintiff’s separate statement does not comply with California Rules of Court, rule 3.1350(f). The court has not replied on this procedural failure in reaching its decision on the merits of the motion.

102 Afakori v. Balfour DEMURRER TO COMPLAINT – OVERRULED Beatty Construction Plaintiff Afakori Inc. dba AAF Steel Structural LLC 2025-01511251 (“Plaintiff”) sued Defendant Balfour Beatty Construction, LLC (“Defendant”) for breach of a construction subcontract. (ROA #2) Defendant demurs to the complaint on the grounds that (1) Plaintiff lacks standing to assert the causes of action alleged and (2) judicial estoppel bars the causes of action.

In 2024, Plaintiff filed Chapter 11 bankruptcy. Defendant contends the claims asserted in this case were never identified as assets in the BK matter and were never abandoned by the BK trustee, meaning the BK trustee is the proper plaintiff in this case.

“ ‘As a general matter, upon the filing of a petition for bankruptcy, “all legal or equitable interests of the debtor in property” become the property of the bankruptcy estate and will be distributed to the debtor’s creditors. [Citation].’ ” (M & M Foods, Inc. v. Pacific American Fish Co., Inc. (2011) 196 Cal.App.4th 554, 561.) “ ‘In the context of bankruptcy proceedings, it is well understood that “a trustee, as the representative of the bankruptcy estate, is the real party in interest, and is the only party with standing to prosecute causes of action belonging to the estate once the bankruptcy petition has been filed.” [Citation].’ ” (Id. at p. 562.)

“ ‘An outstanding legal claim that is abandoned by the trustee reverts back to the original debtor-plaintiff.’ ” (Id. at p. 563.) “But property not formally scheduled in the bankruptcy proceeding is not abandoned at the close of the bankruptcy proceeding, even if the trustee was aware of the existence of the property.” (Ibid.) “Although there are ‘no bright-line rules for how much itemization and specificity is required,’ [the debtor] was required to be as particular as is reasonable under the circumstances.” (Id. at p. 564.)

In M & M Foods, M & M’s asset disclosure referenced M & M’s personal property as including “interest in collections obtained on outstanding accounts receivable from former business activities.” The court held that M & M had no standing to assert its causes of action for