Hudson Insurance Company v. USA Auto Dealer, Inc., a California Corporation et al.

SUPERIOR COURT, STATE OF CALIFORNIA COUNTY OF SANTA CLARA Department 10 Honorable Jeffrey B. El-Hajj Blanca Than, Courtroom Clerk 191 North First Street, San Jose, CA 95113

DATE: August 27, 2026 TIME: 9:00 A.M. / 9:01 A.M. To contest the ruling, call (408) 808-6856 before 4:00 P.M. Make sure to let the other side know before 4:00 P.M. that you plan to contest the ruling. (Cal. Rules of Court, rule 3.1308(a)(1); Local Rule 8.D.)

**Please specify the issue to be contested when calling the Court and counsel**

Line 4 24CV454281 Alvaro Pedroza v. Ford Continued motion to compel further responses to requests for Motor Company et al. production. A joint statement indicates defendant “remains within the Parties’ agreed-upon timeframe for completing the production.” The motion is DENIED AS MOOT. The court will prepare the order.

Line 5 25CV456837 Shaniquea Aldrich-Meeks Defendant Travelers Indemnity Company of Connecticut’s v. Johnson Construction (Travelers) demurrer to plaintiff Shaniquea Aldrich-Meeks’s Company et al. complaint. Notice is proper and no timely opposition was filed. Plaintiff filed an untimely opposition on August 20, 2026, which the court has not considered. Travelers’ demurrer contends the complaint does not state facts sufficient to constitute a cause of action against Travelers. (Code Civ. Proc., § 430.10, subd. (e).)

The complaint consists of a single paragraph of text, in which plaintiff alleges the driver of a construction truck reversed into plaintiff’s vehicle. Travelers is not mentioned in the body of the complaint, and the complaint does not identify any causes of action. The complaint does not state a cause of action against Travelers. The demurrer is sustained. Because this is the first pleading challenge in this case to be heard by the court, the court will grant leave to amend. The court does not grant leave to add new causes of action or new parties. (Zakk v.

Diesel (2019) 33 Cal.App.5th 431, 456.) Any amended pleading must be filed and served no later than September 28, 2026. The court will prepare the order.

Line 6 25CV460803 Hudson Insurance Click LINE 6 or scroll down for ruling. Company v. USA Auto Dealer, Inc., a California Corporation et al.

Calendar Line 6 Case Name: Hudson Insurance Company v. USA Auto Dealer, Inc. et al. Case No.: 25CV460803

This is a limited civil action for breach of written contract brought by plaintiff Hudson Insurance Company (Hudson) against defendants USA Auto Dealer, Inc. and Adel Atiyeh Abdo (Defendants).

The original and still operative complaint was filed in March 2025. It alleges a single cause of action for breach of written contract. A copy of the contract is attached to the complaint as exhibit A. Defendants filed a joint answer to the complaint in May 2025. A short cause trial is set for November 9, 2026.

At issue is a motion for summary judgment brought by Hudson and opposed by Defendants. Hudson did not submit a timely reply.

GENERAL STANDARD FOR SUMMARY JUDGMENT

The pleadings limit the issues presented for summary judgment or summary adjudication. Such a motion may not be granted or denied based on issues not raised by the pleadings. (Laabs v. City of Victorville (2008) 163 Cal.App.4th 1242, 1258 (Laabs); Nieto v. Blue Shield of Calif. Life & Health Ins. (2010) 181 Cal.App.4th 60, 73 (Nieto).) The moving party bears the initial burden of production to make a prima facie showing that there are no triable issues of material fact. (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 850 (Aguilar).)

A motion for summary judgment or adjudication shall be granted only if it completely disposes of an entire cause of action, an affirmative defense, a claim for damages, or an “issue of duty.” (Code Civ. Proc., § 437c, subd. (f)(1); McCaskey v. California State Auto. Ass’n (2010) 189 Cal.App.4th 947, 975 (McCaskey); Palm Spring Villas II Homeowners Association, Inc. v. Parth (2016) 248 Cal.App.4th 268, 288.)

Where a plaintiff has moved for summary judgment, it has the burden of showing there is no defense to a cause of action. (Code Civ. Proc., § 437c, subd. (a).) That burden can be met if the plaintiff has established each element of the cause of action, entitling it to judgment on that cause of action. It is not part of a plaintiff’s initial burden to disprove affirmative defenses or cross-complaints asserted by a defendant. (Oldcastle Precast, Inc. v. Lumbermens Mutual Casualty Co. (2009) 170 Cal.App.4th 554, 564-565 If the plaintiff meets this burden, the burden shifts to the defendant to show that a triable issue of one or more material facts exists as to that cause of action or a defense thereto. (Code Civ.

Proc., § 437c, subd. (p)(1); Professional Collection Consultants v. Lauron (2017) 8 Cal.App.5th 958, 965.) “There is a triable issue of material fact if, and only if, the evidence would allow a reasonable finder of fact to find the underlying fact in favor of the party opposing the motion in accordance with the applicable standard of proof.” (Aguilar, supra, 25 Cal.4th at p. 850.)

While the same standards of admissibility govern both sides’ supporting evidence, the opposition evidence is liberally construed while the moving party’s evidence is strictly construed. (Saelzler v. Advanced Group 400 (2001) 25 Cal.4th 763, 768.) The evidence must be liberally construed in support of the opposing party, resolving any doubts in favor of that party. (Yanowitz v. L'Oreal USA, Inc. (2005) 36 Cal.4th 1028, 1037 (Yanowitz).)

A reply shall be served and filed not less than 11 days before the hearing and “shall not include any new evidentiary matter, additional material facts, or separate statement submitted with the reply and not presented in the moving papers or opposing papers.” (Code Civ. Proc., § 437c, subd. (b)(4); Jay v. Mahaffey (2013) 218 Cal.App.4th 1522, 1537-38; Nazir v. United Airlines, Inc. (2009) 178 Cal.App.4th 243, 252 (Nazir).)

DISCUSSION

Hudson moves for summary judgment of the sole cause of action “on the ground that there is no defense to the complaint and no triable issue as to any material facts with respect thereto.” (Notice of Motion at p. 2:7-8.)

“To prevail on a cause of action for breach of contract, the plaintiff must prove (1) the contract, (2) the plaintiff’s performance of the contract or excuse for nonperformance, (3) the defendant’s breach, and (4) the resulting damage to the plaintiff.” (Richman v. Hartley (2014) 224 Cal.App.4th 1182, 1186 (Richman).) As a general matter, it is “solely a judicial function to interpret a written instrument unless the interpretation turns on the credibility of extrinsic evidence.” (Consolidated Theatres, Inc. v. Theatrical Stage Employees Union (1968) 69 Cal.2d 713, 724 Sierra Vista Regional Medical Center v. Bonta (2003) 107 Cal.App.4th 237, 245.) The complaint alleges that Hudson “has performed all conditions and promises required by them in accordance with the terms and conditions of the Agreement.” (Complaint, ¶ 10.)

The contract attached to the complaint as exhibit A is a one-page contract titled “Indemnity Agreement.” The agreement is signed by defendant Abdo as both president of defendant USA Auto Dealer, Inc. and as an individual indemnitor. The contract is not signed by Hudson. The beginning of the agreement states that “those who sign below” will be referred to as the Indemnitors and that Hudson will be referred to as the Surety. The Agreement states that in exchange for the Surety issuing a bond (a copy of which is attached to the complaint as exhibit B), the indemnitors among other things agree to “promptly pay on behalf of the Surety, and if the Surety makes a prior payment, to promptly reimburse the Surety for all incurred loss and expense of whatever kind including, but not limited to, investigation costs, interest, court costs, and attorneys’ fees (hereafter, the ‘Loss’) stemming from the Surety either furnishing the Bond or enforcing this Agreement.” (Complaint, Ex.

A, “Promises and Agreements,” ¶ 2.) The complaint alleges that contract term was breached. The complaint alleges Hudson is owed $25,223.91 for claims against the bond that it paid. (See complaint, ¶¶ 5-11.)

The contract also states that the Indemnitors agree to “regard the Loss as proven when the surety provides either originals or photocopies or either claim drafts or payment records kept in the ordinary course of business, including computer printouts as verified by affidavit.” (Complaint, Ex. A, “Promises and Agreements,” ¶ 4.).

Indemnity agreements are strictly construed. (Crawford v. Weather Shield Mfg., Inc. (2008) 44 Cal.4th 541, 552.) Indemnity agreements are “construed under the same rules as govern the interpretation of other contracts.” “Effect is to be given to the parties’ mutual intent ([Civ. Code,] § 1636), as ascertained from the contract's language if it is clear and explicit ([Civ. Code,] § 1638).” “Unless the parties have indicated a special meaning, the contract’s words are to be understood in their ordinary and popular sense. ([Civ. Code,] § 1644.)”

(Crawford, at p. 552; see also Heppler v. J.M. Peters Co. (1999) 73 Cal.App.4th 1265, 1278 [“Indemnity provisions are to be strictly construed against the indemnitee.”].)

The summary judgment motion is supported by a declaration from Jeff Mortimer, a Claims Specialist with Hudson. He declares he has supervision and control over Hudson’s books and accounts receivable. He states that after the parties entered into the agreement and Hudson issued the surety bond, Hudson “received claims/civil actions under the Bond, and after an investigation of the claims, [Hudson] did in fact pay the claim on the Bond: $10,000.00 loss and $15,223.91 to [Hudson’s] counsel for fees incurred, totaling $25,223,91.

To date, Defendants have failed to indemnify [Hudson] the principal balance of $25,223.91, with unpaid interest at the rate of 10% per annum from August 23, 2023.” (Mortimer Decl. at ¶ 5.) He declares that “[d]emand for payment has been made but Defendants have refused to pay”; that Hudson “preformed all conditions required of it pursuant to the terms of the Agreement and Bond”; and that “according to [Hudson’s] records, Defendants did not object to the terms of the Agreement or Bond.” (Id at ¶¶ 7 and 13.)

He also states that Hudson seeks “reasonable attorneys’ fees in the sum of $5,044.00, which represents 20% of the principal balance owed.” (Id. at ¶ 15.)

Mortimer declares that three documents are attached to his declaration as exhibits A-C. (See Mortimer Decl. at ¶¶ 3, 4 & 9.) Exhibit A is described as another copy of the contract. Exhibit B is described as another copy of the bond. Exhibit C is described as a copy of a “pay log report” showing Hudson’s record of transactions with Defendants. But there are no exhibits attached to the declaration on file with the court. The Mortimer declaration and the exhibits attached to the complaint (copies of the contract and the bond) are nonetheless sufficient to meet Hudson’s initial burden to establish the existence and breach of the Indemnity Agreement.

When the burden shifts to Defendants, they argue that a triable issue of material fact remains because a condition precedent in the contract has not been satisfied.

“A conditional obligation is one in which ‘the rights or duties of any party thereto depend upon the occurrence of an uncertain event.’” (JMR Construction Corp. v. Environmental Assessment and Remediation Management, Inc. (2015) 243 Cal.App.4th 571, 593 (JMR Construction), citing Civ. Code, § 1434.) “[P]arties may expressly agree that a right or duty is conditional upon the occurrence or nonoccurrence of an act or event.” (Ibid., citations omitted.) “[A] condition precedent is either an act of a party that must be performed or an uncertain event that must happen before the contractual right accrues or the contractual duty arises.” (Ibid., citations omitted; see also Civ.

Code, § 1436.) Whether a condition precedent exists generally depends on the intent of the parties as determined from the words used in the contract. (Id. at pp. 593-594.) Conditions precedent are disfavored by the law and are to be strictly construed against the party seeking to avail itself of one. (Id. at p. 594.) A term of an agreement should not be construed as a condition precedent unless it is evident from clear, unambiguous language in the contract. (Ibid.) “A party’s failure to perform a condition precedent will preclude an action for breach of contract.” (Alki Partners, LP v.

DB Fund Services, LLC (2016) 4 Cal.App.5th 574, 592.)

“In pleading the performance of conditions precedent in a contract, it is not necessary to state the facts showing such performance, but it may be stated generally that the party duly performed all the conditions on his part, and if such allegation be controverted, the party 14 pleading must establish, on the trial, the facts showing such performance.” (Code Civ. Proc., § 457; Gordon Bldg. Corp. v. Gibraltar Sav. & Loan Ass’n (1966) 247 Cal.App.2d 1, 6.)

Defendants contend that paragraph 4 of the Agreement, stating that defendants agree to regard “Loss” as proven “when the surety provides either originals or photocopies or either claim drafts or payment records kept in the ordinary course of business, including computer printouts as verified by affidavit,” is a condition precedent to their responsibility to pay the amount claimed as a “Loss.” (See opposition at pp. 5:18-6:4.)

This argument is supported by a declaration from Muhammad Akawi, CEO of defendant USA Auto Dealer, Inc. (referred to as “Dealer” in the declaration). Akawi does not dispute that the parties entered into the Agreement. (Akawi decl. at ¶ 3.) But he declares, “At no time between April 14, 2021 and the filing of this lawsuit did Dealer receive from Hudson any demand for reimbursement of any amount Hudson claims to have paid in furnishing the Bond. At no time prior to the filing of this lawsuit did Dealer receive from Hudson any claim drafts or payment records, whether originals or photocopies, concerning any payment on the Bond or concerning any of the losses or expenses Hudson now claims. I have reviewed Dealer’s records of correspondence received from Hudson and have located no such documents.” (Id., ¶¶ 14-15.)

Defendants frame the question of whether there is a condition precedent as an issue that must be resolved by the finder of fact. But because it presents an issue of contract interpretation, it is a question of law for the court. Though conditions precedent are disfavored, indemnity agreements in the non-insurance context must be strictly construed against the indemnitee (here Hudson). And the court must liberally construe the evidence in favor of the party opposing summary judgment. The court finds that Defendants’ obligation in paragraph 2 of the Agreement “[t]o promptly pay” or reimburse Hudson for any “Loss” that stems “from the “Surety” and to accept a “Loss” as proven is reasonably conditioned on the Surety (Hudson) providing Defendants with documentation: “either originals or photocopies or either claim drafts or payment records kept in the ordinary course of business, including computer printouts as verified by affidavit,” establishing the “Loss” as set forth in paragraph 4 of the Agreement.

The Akawi declaration conflicts with the Mortimer declaration on the question of whether Defendants (or at least USA Auto Dealer, Inc.) were sent any demand for payment or received any documentation establishing a “Loss” under the contract. A triable issue of material fact therefore remains about whether Hudson can show that it fully performed under the contract. Where declarations or testimony conflict on material facts, the court cannot weigh the evidence in ruling on a motion for summary judgment. (Reid v. Google, Inc. (2010) 50 Cal.4th 512, 540.) “Typically in summary judgment litigation, equally conflicting evidence requires a trial to resolve the dispute.” (Kids’ Universe v. In2Labs (2002) 95 Cal.App.4th 870, 881.)

Hudson’s motion for summary judgment is denied. The court does reach Defendants’ other arguments against summary judgment.

CONCLUSION

Plaintiff Hudson’s motion for summary judgment is denied. 15

The court will prepare the order.

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