McCready vs. Basso

As a preliminary matter, the Court rules as follows on Plaintiffs’ Evidentiary Objections (ROA #2219):

• Basso Declaration (ROA #2093): o Objections #2-3 are OVERRULED. The Court also notes that Plaintiffs submitted these same pages as part of Plaintiffs’ more complete versions of the exhibits. o Objections #1, 7-12, 15-32 are SUSTAINED to the extent the declaration seeks to use testimony to prove the contents of a writing. (Evid. Code, § 1523, subd. (a).)

Additional evidentiary rulings are discussed herein.

Here, the Basso Defendants seek summary judgment against both Plaintiffs Richard Johnston and William McCready. The two relevant investments at issue here for Johnston are his Aero Vault and Amlap TIC investments; and the one relevant investment at issue here for McCready is his Amlap TIC Investment. (ROA #2085, Mot. P&A at p. 4.)

As with the Basso Defendants’ moving papers in the related Barrons case, the Basso Defendants’ moving papers here repeatedly and incorrectly contend that “the subject disclosure packet contents’” contain “identical language found in the subject PPMs as dispositive in the Stella [v. Asset Management Consultants, Inc. (2017) 8 Cal.App.5th 181] and WA Southwest [2, LLC v. First American (2015) 240 Cal.App.4th 148] cases.” (ROA #2058, Mot. P&A at p. 3; see also id. at pp. 4, 8, 10, 15-16.) Also as with the Basso Defendants’ moving papers in Barrons, the Basso Defendants here misquote the Private Placement Memoranda (“PPMs”) of the relevant investments as including the “negotiated to include” language that was critical to the Stella court’s holding (id. at p. 11; see also ROA #2237, SSUMF, ¶ 31), even though such language does not actually appear in the PPMs for the Aero Vault or Amlap TIC Investments (ROA #2095, Exh. 2 at p. 6 of PDF, Exh. 2A at p. 27 of PDF).

When called out on this misquoting by Plaintiffs’ opposition papers, the Basso Defendants’ reply brief in this case at least acknowledges the misquoting. (ROA #2235, Reply, p. 3.) However, the Basso Defendants brushed it off by contending that “[t]hese minor citation corrections do not affect the substance of the Motion.” (Id.)

But the differences in the investment materials’ language are not “minor.” For all the reasons the Court explained in its ruling in the related Barrons case, the Basso Defendants are wrong about the significance of the omissions of the “negotiated to include” language and other language in the instant TIC investment materials. The Court again ADMONISHES counsel for the Basso Defendants for misrepresenting to this Court that the relevant language considered in Stella (and WA Southwest) is the “same” as or “identical” to the relevant language in this case.

The Court acknowledges that the Basso Defendants here also included, within their separate statement and proffered evidence, the PPM for another investment Plaintiff McCready participated in—i.e., the Fiesta limited partnership (“LP”) investment. (See SSUMF at ¶ 12, citing ROA #2091 at Exh. 3 [McCready Depo. Tx. Vol. I, Part II] at 32:5-34:16, and citing ROA #2093 [Basso Decl.] at ¶ 5.) The Fiesta LP investment PPM does contain the “negotiated to include” language considered by the Stella court. (ROA #2095, Exh. 3 at p. 29 of PDF.) However, the Basso Defendants’ moving and reply papers do not explain why this language is relevant when the only investment at issue here is McCready’s Amlap TIC investment.

In their SSUMF, the Basso Defendants merely allege that “McCready also confirmed that for the LP Investments, he received similar PPM for his 2007 investment, including Fiesta, and the material contents of each of these four, listed as ‘Overland’, ‘Fiesta’, ‘Packard’ and ‘Textron’, all had the same disclosures. Allen L. Basso confirms this fact.” (SSUMF, ¶ 12.) In support, the Basso Defendants cite only the following evidence:

• McCready’s Deposition Transcript, Volume I, Part II at 32:5-34:16: The Court has reviewed this testimony, and viewed in the light most favorable to McCready, he confirms only that “Fiesta Venture is something [he] participated in.” (Id. at 34:10-11.)

• Allen L. Basso’s Declaration at Exhibit 3: This exhibit contains the Fiesta LP investment PPM.

• Allen L. Basso’s Declaration at ¶ 15: Basso attests as follows: “McCready also confirmed that for the LP Investments, he received similar PPM for his 2007 investment, including Fiesta, and the material contents of each of these four, listed as ‘Overland’, ‘Fiesta’, ‘Packard’ and ‘Textron’, all had the same disclosures. A true and correct copy of the Fiesta LLP Private Placement Memorandum is attached as Exhibit ‘3’. The exact same material disclosures in the Fiesta PPM were contained in the Overland, Packard and Textron LLP investments.”

None of this evidence explains why McCready’s receipt of the PPMs for the Fiesta or other LP investments is relevant or relates to McCready’s Amlap TIC investment.

Ultimately, it is not the court’s function to “act as counsel for [a party] and furnish a legal argument” for that party. (Niko v. Foreman (2006) 144 Cal.App.4th 344, 368 [rejecting party’s arguments made “without supporting legal or factual analysis”]; see also Craddock v. Kmart Corp. (2001) 89 Cal.App.4th 1300, 1307 [refusing to consider argument “so poorly articulated” where party does not develop stated proposition or cite authority for the proposition]; Sprague v. Equifax, Inc. (1985) 166 Cal.App.3d 1012,

1050 [court is entitled to “the assistance of counsel”].) Moreover, “only those facts set forth in the separate statement are relevant when determining whether summary judgment should be granted.” (Roger H. Proulx & Co. v. Crest-Liners (2002) 98 Cal.App.4th 182, 198; see also United Community Church v. Garcin (1991) 231 Cal.App.3d 327, 336, internal quotes omitted, emphases original [“all material facts must be set forth in the separate statement. This is the Golden Rule of Summary Adjudication: if it is not set forth in the separate statement, it does not exist. Both the court and the opposing party are entitled to have all the facts upon which the moving party bases its motion plainly set forth in the separate statement”].)

The Court also notes that Plaintiffs objected to Exhibit 3 of the Basso Declaration on the grounds of hearsay, irrelevance, and Evidence Code section 452. (ROA #2219 [Pls. Evid. Objs.], #4.) Plaintiff further objected to ¶ 15 of the Basso Declaration on the grounds of hearsay, Evidence Code section 1523 (testimony used to prove the contents of a writing), irrelevance, and Evidence Code section 452, among other grounds. (Pls. Evid. Objs. #14.)

The Court SUSTAINS Plaintiffs’ evidentiary objections #4 and #14 on the grounds of relevance. (Evid. Code, §§ 210, 350.) The Court also SUSTAINS Plaintiffs’ evidentiary objection #14 to the extent the declaration seeks to use testimony to prove the contents of a writing. (Evid. Code, § 1523, subd. (a).)

However, even if the Court were to overrule these objections and admit Basso’s declaration at Exhibit 3 and ¶ 15, the Court finds that the Basso Defendants have failed to satisfy their initial burden of proof as well as their ultimate burden of persuasion that they are entitled to summary judgment as a matter of law based upon the arguments and evidence submitted in their moving papers.

Plaintiffs to give notice of this ruling.