Evan Auld-Susott, et al. v. Daniel Susott

Background.

The parties have engaged in multiple litigation and appellate cases filed in this Court between 2010 and 2014. [Complaint at ¶ 9.] After a successful mediation, they resolved their disputes on August 1, 2016, and signed a Settlement Contract. [Id. at ¶ 10.] The contract specifies that Defendant shall not sell, transfer, convey, hypothecate, gift, encumber, or neglect to maintain reasonable repairs on the Property. [Id. at ¶ 12.] Additionally, Defendant must avoid actions that could result in an additional default on any obligation, recorded or unrecorded by a lien holder. [Ibid.] As long as Defendant complies with these obligations to allegedly protect Plaintiffs’ lien interests in the Property, Plaintiffs are required under the Settlement Contract to pay Defendant $30,000 annually. [Id. at ¶ 19.]

On September 21, 2023, Plaintiffs filed their Complaint against Defendant for Breach of Contract and Declaratory Relief. Plaintiffs allege that Defendant breached the Settlement Contract because he defaulted “on his secured financial obligations, including a first deed of trust to Bank of Hawaii, and a second deed of trust owed to Harold Erdman.” [Complaint at ¶¶ 13, 21- 23.] As a consequence, Plaintiffs’ obligation to make the annual payments to Defendant was “thus suspended and/or excused until such time [Defendant] cured the defaults.” [Id. at ¶ 21.]

In his Answer to Plaintiffs’ Complaint, filed on January 26, 2024, Defendant asserted as his Second Affirmative Defense that his alleged “conduct or omissions have been irrelevant or insignificant,” and, therefore, do not constitute a material breach of the Settlement Contract. [Answer, filed 1/26/24, at 4:20-5:4.] This is because Plaintiffs have “mistakenly believed that they had valid judgment liens on the [Property] when they did not.” [Id.] Hence, Defendant allegedly neither adversely affected Plaintiffs nor violated the Settlement Agreement. [Ibid.]

In the First Cause of Action for Breach of Contract, Defendant alleges in his Cross- Complaint that Plaintiffs violated the Settlement Contract by failing to make payments to him. [Cross-Complaint, filed 1/26/24, at ¶¶ 7-19.] Like his Answer, Defendant alleges that his alleged breach of the Settlement Contract “has not been material.” [Id. at ¶ 14.]

Legal Standard.

Summary judgment or adjudication 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, subds. (c), (f); see Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 843.] Further, a “motion for summary adjudication shall be granted only if it completely disposes of a cause of action, an affirmative defense, a claim for damages, or an issue of duty.” [Code Civ. Proc. § 437c, subd. (f)(1).]

Courts follow a three-step process when reviewing a motion for summary judgment or adjudication: (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.]

A motion for summary adjudication proceeds “in all procedural respects as a motion for summary judgment.” [Code Civ. Proc. § 437c, subd. (f)(2).] 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 or adjudication, 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, subd. (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.] Merely pointing out the lack of evidence is not enough. [Gaggero v. Yura (2003) 108 Cal.App.4th 884, 891.] 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 its burden, the opposing plaintiff can still defeat a summary judgment or summary adjudication 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, subd. (p)(2); Choochagi, 60 Cal.App.5th at 453.] If the plaintiff fails to do so, summary judgment or summary adjudication should be granted. [See Avivi v. Centro Medico Urgente Medical Center (2008) 159 Cal.App.4th 463, 467.]

The court must liberally construe the evidence presented by the party opposing summary judgment or adjudication, 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.]

Defendant’s RJN.

Defendant’s request for the Court to take judicial notice of the documents attached as Exhibits 1 through 6 to his RJN is GRANTED. The Court will take judicial notice of each document’s existence in the records of the Hawaii court or government agency. [Evid. Code § 452, subds. (c) and (d).] However, the Court declines Defendant’s request to judicially notice the truth of matters asserted in those documents. [Mangini, 7 Cal.4th at 1063-1064; Sosinsky, 6 Cal.App.4th at 1564-1569.]

Plaintiffs’ Evidentiary Objections.

Plaintiffs lodged 31 objections to the declaration of defense counsel Wayson Wong. The only objections that were material to resolving Defendant’s summary-adjudication motion are Nos. 8 and 9. [Code Civ. Proc. § 437c, subd. (q) (in a summary-adjudication motion, the court only needs to rule on evidentiary objections that are material to its decision).] Those objections are OVERRULED on the grounds asserted. In part, Mr. Wong’s attestations at paragraphs 10 and 12 of his declaration are factual statements based on his personal knowledge, rather than his expert or legal opinion.

Discussion.

1. Defendant’s Separate Statement.

Although they seek summary adjudication of the Complaint, the Second Affirmative Defense, and the First Cause of Action in their Cross-Complaint, Defendants’ moving separate statement fails to comply with California Rules of Court rule 3.1350 (“Rule 3.1350”). Subdivision (b) states that if summary adjudication is sought, the specific cause of action or affirmative defense “must be stated specifically in the notice of motion and be repeated, verbatim, in the separate statement of undisputed material facts.” Additionally, subdivision (d) requires that the moving separate statement clearly specify each cause of action or affirmative defense, along with the supporting material fact claimed to be undisputed for that cause of action or affirmative defense.

Here, Defendant’s separate statement improperly combines the at-issue affirmative defense and causes of action, violating Rule 3.1350, which requires him to separately identify the material facts supporting each cause of action and affirmative defense. However, it appears that all the undisputed material facts listed in Defendant’s separate statement are relevant to each ground for summary adjudication. Although the separate statement is procedurally flawed— giving the Court discretion to deny the summary-adjudication motion without prejudice or to continue the hearing for Defendant to fix the issue—the Court will decide on the merits. [See Parkview Villas Assn., Inc. v. State Farm Fire and Casualty Co. (2005) 133 Cal.App.4th 1197, 1210.]

2. Merits of Defendant’s Motion.

Defendant argues he is entitled to summary adjudication because the undisputed facts show that Plaintiffs do not have any valid judgment liens on the Property. He supports this claim with evidence showing that the liens are based on court orders and judgments filed in 2013. [Defendant’s Separate Statement of Undisputed Material Facts (“Defense Facts”) 3-5 and 8-9; RJN Exhs. 1 and 3.] The judgments were neither registered on the Property’s Certificate of Title nor renewed. [Defense Facts 6-7 and 10-11.] Consequently, Defendant asserts that, as a matter of law, there can be no valid liens against the property because Plaintiffs failed to meet certain requirements under sections 636-3 and 501-151 of the Hawaii Revised Statutes. Additionally, Plaintiffs’ failure to renew the judgments prevents enforcement more than 10 years later, as provided in section 657-5.

In their opposition, Plaintiffs object to Defendant’s request to judicially notice the truth of the matters asserted in the documents accompanying his RJN. As previously stated above, the Court agrees with Plaintiffs and declines Defendant’s invitation to do so.

Contrary to Defendant’s arguments, the Court finds that Defendant failed to meet his initial burden of showing that no trial is necessary to determine whether Plaintiffs have a judgment lien on the Property. Based on Defendant’s evidence, the Court cannot determine, as a matter of law, whether Plaintiffs do not have a judgment lien on the Property. As a result, the motion is DENIED.

First, the absence of an entry in the Property’s Certificate of Title does not conclusively indicate that Plaintiffs did not register the judgments. [RJN Exh. 5.] Similarly, Defendant’s reliance on the Hawaii case docket does not definitively prove that Plaintiffs did not renew the judgments. [RJN Exh. 4.] While the Court took judicial notice of the Certificate of Title and the Hawaii case docket, Defendants failed to demonstrate that no factual issues exist regarding whether other documents show that Plaintiffs registered or renewed their judgments.

In fact, Defendant does not even claim that the Certificate of Title and the Hawaii case docket are definitive proof that Plaintiffs do not have valid judgment liens on the Property. At most, Defendant asserts that his counsel did not find any filings from Plaintiffs in the Certificate of Title or Hawaii case docket indicating they registered or renewed the judgments.

Second, the Hawaii summary judgment rulings show that Defendant did not meet his burden to prove that Plaintiffs lack proof of judgment liens on the Property. In paragraph 11 of his declaration, Mr. Wong, defense counsel, states that the Hawaii trial court granted Plaintiffs’ motion for summary judgment and denied Defendant’s motion as to such judgment liens, confirming their validity. Defendant has also appealed these summary judgment decisions to the Hawaii appellate court, and the appeal is still pending. [Wong Decl. at ¶ 12.] Therefore, whether Plaintiffs have valid judgment liens on the Property remains a disputed fact, given Defendant’s admission that the Hawaii Court has found the judgment liens to be valid.

Third, to the extent Defendant believes that no factual determinations are necessary because this Court can make a legal determination that is contrary to the Hawaii court, this Court cannot do so. Defendant’s failure to support its motion with any records from the Hawaii case’s summary-judgment motion makes it impossible for this Court to understand how the Hawaii court reached its decision. Instead, Defendant only attaches his Appellate Opening Brief in his Reply, which does not contain a complete record of the underlying Hawaii trial court briefs, and Plaintiffs did not have an opportunity to respond because Defendant did not produce these documents.

In fact, the Hawaii trial court’s order states that it granted Plaintiffs’ summaryjudgment motion because it was “convinced by the arguments and authorities set forth in Dkt. Nos. 394 and 427, including Ex. 5 to Dkt. 394. Neither the authenticity nor admissibility of Exhibit 5 were challenged and an email from counsel claiming it was procured by misrepresentation–in the absence of any declaration from Daniel C. Susott–does not create a genuine issue of fact to defeat the Evan/John MPSJ.” [Exh. B to Defendant’s Reply at Appendix C.]

Because Defendant did not include any of the filings that the Hawaii trial court relied upon to grant Plaintiffs’ motion, it is unclear what evidence or law was presented that led the Hawaii trial court to make its decision. Therefore, even if this Court could legally reach a different conclusion than the Hawaii trial court, Defendant has not provided sufficient evidence to justify that. Instead, Defendant merely urges the Court to base its decision on his chosen Hawaii law and evidence.

Conclusion.

Defendant’s summary-adjudication motion is DENIED. To the extent they seek a stay of this action until the Hawaii appellate action is completed with a final decision made as to the validity of the judgment liens, Plaintiffs should file a motion.

Further, Defendant’s RJN is GRANTED. The Court OVERRULES Plaintiffs’ Evidentiary Objection Nos. 8 and 9, and it need not consider the remaining objections as they are not material to resolving the motion. [Code Civ. Proc. § 437c, subd. (q).]

Plaintiffs shall prepare the Proposed Order consistent with this Tentative Ruling.

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