GOLDEN STATE LUMBER, INC., A CALIFORNIA CORPORATION VS. GEOFFREY A HAWORTH, ET AL

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Defendant was served with notice of Plaintiff’s motion and all supporting papers but has not filed any opposition.

LEGAL STANDARD

“A party may move for summary adjudication as to one or more causes of action within an action” if the party contends that the cause of action has no merit. (Code Civ. Proc., § 437c, subd. (f)(1).)

A plaintiff moving for summary judgment or summary adjudication has the initial burden of proving each element of the cause of action entitling it to judgment on that cause of action. (Code Civ. Proc., § 437c, subd. (p)(1); Paramount Petroleum Corp. v. Superior Court (2014) 227 Cal.App.4th 226, 241.) Once the plaintiff carries that burden, the burden shifts to the opposing party to show that a triable issue of material fact exists as to at least one element of the cause of action or as to each element of a defense. (Ibid.; Consumer Cause v. SmileCare (2001) 91 Cal.App.4th 454, 467.)

Because summary judgment deprives an adverse party of the right to trial, any doubts are resolved in favor of the party opposing the motion. (Huynh v. Ingersoll-Rand (1993) 16 Cal.App.4th 825, 830; See’s Candy Shops, Inc. v. Superior Court (2012) 210 Cal.App.4th 889, 900.) Thus, “[t]he moving party’s affidavits are to be strictly construed, and ... all conflicts in the affidavits are to be resolved in favor of the opposing party and all reasonable inferences are to be drawn in favor of that party as well.” (Hufft v. Horowitz (1992) 4 Cal.App.4th 8, 20.)

ANALYSIS

Breach of Contract — Fourth Cause of Action

To establish breach of contract, a plaintiff must show: (1) the existence of a valid contract; (2) plaintiff’s performance or excuse for nonperformance; (3) defendant’s breach; and (4) resulting damage to plaintiff. (Reichert v. General Ins. Co. (1968) 68 Cal.2d 822, 830.)

Plaintiff’s separate statement of undisputed material facts, summarized above, establishes the elements of breach of contract. Specifically, the evidence establishes the following:

• Defendant Geoffrey A. Haworth executed Golden State’s Credit Application/Agreement, which included a personal guaranty. (UMF No. 1.) • Golden State sent monthly statements and invoices to Defendant for materials purchased on credit. (UMF Nos. 2, 3.) • As of December 31, 2023, the outstanding balance totaled $7,295.14, consisting of $6,090.89 in principal and $1,204.25 in finance charges. (UMF No. 4.) • Finance charges continue to accrue at the contractual rate of 1.5% per month. (UMF No. 5.) • Despite demand, Defendant has failed to pay the outstanding balance. (UMF Nos. 6, 10, 13.)

Defendant has not opposed Plaintiff’s motion. However, Plaintiff affirmatively addresses Defendant’s apparent contention that a payment made on August 31, 2023, in the amount of $10,635.98 should have been

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applied to the invoices at issue in this litigation, rather than to an earlier outstanding invoice for that exact amount. (See Coopersmith Decl., Ex. 3, Letter from Geoffrey A. Haworth; Wicks Decl., ¶¶ 6-8.)

Civil Code section 1479 governs how payments are applied when a debtor owes multiple obligations to the same creditor. The statute establishes a hierarchy for application of payments. First, if the debtor manifests an intention at the time of performance that payment be applied to a particular obligation, the payment must be so applied. (Civ. Code, § 1479.) Second, if the debtor makes no such application, the creditor, within a reasonable time after performance, may apply the payment toward any obligation owed by the debtor that was due at the time of performance. (Ibid.) Third, if neither party makes an application within the prescribed time, the statute’s default order applies, including application to obligations in order of maturity. (Ibid.)

Here, Plaintiff presents evidence that Defendant did not specify which invoice the $10,635.98 payment should be applied to. (Wicks Decl., ¶ 6.) Plaintiff applied the payment to the oldest outstanding invoice, consistent with company policy and because the oldest outstanding invoice was for that exact amount. (Ibid.) The total principal balance of the later invoices at issue in this litigation, $6,090.89, is significantly less than the $10,635.98 payment made by Defendant, further undermining any suggestion that the payment should have been applied to those invoices.

Plaintiff has made a prima facie showing establishing the breach of contract claim. Plaintiff has shown that Defendant did not specify that the $10,635.98 payment should be applied to the invoices at issue in this litigation, and that Plaintiff applied the payment to the oldest outstanding invoice in the same amount, consistent with Civil Code section 1479, Golden State’s policy, the financing agreement between the parties, and the surrounding circumstances. Defendant has not filed any opposition establishing a triable issue of material fact on that issue or any other relevant issue.

Accordingly, Plaintiff’s motion for summary adjudication is GRANTED as to the breach of contract claim, the fourth cause of action.

Common counts — open book account and account stated

A book account is “a detailed statement which constitutes the principal record of one or more transactions between a debtor and a creditor arising out of a contract or some fiduciary relation, and shows the debits and credits in connection therewith.” (Professional Collection Consultants v. Lauron (2017) 8 Cal.App.5th 958, 969.) The creditor must keep these records in the regular course of business and “in a reasonably permanent form,” such as a book or card file. (Code Civ. Proc., § 337a.) “A book account is ‘open’ where a balance remains due on the account.” (Lauron, supra, 8 Cal.App.5th at p. 969.)

“An account stated is ‘an agreement, based on prior transactions between the parties, that the items of an account are true and that the balance struck is due and owing.’” (Lauron, supra, 8 Cal.App.5th at p. 968.) When an account stated is assented to, either expressly or impliedly, it becomes a new contract. Accordingly, an action on an account stated is not based on the parties’ original transactions, but on the new contract under which the parties have agreed to the balance due. (Ibid.; see also Professional Collection Consultants v. Lujan (2018) 23 Cal.App.5th 685, 690-691, as modified May 25, 2018.)

To establish a claim for open book account, Plaintiff must prove: (1) Plaintiff and Defendant had a financial transaction; (2) Plaintiff kept an account of the debits and credits involved in the transaction; (3) Defendant

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owes Plaintiff money on the account; and (4) the amount of money Defendant owes Plaintiff. (CACI No. 372; see also Interstate Group Administrators, Inc. v. Cravens, Dargan & Co. (1985) 174 Cal.App.3d 700, 708.)

“The only essential allegations of this 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.4th 445, 460.)

“The essential elements of an account stated are: (1) previous transactions between the parties establishing the relationship of debtor and creditor; (2) an agreement between the parties, express or implied, on the amount due from the debtor to the creditor; and (3) a promise by the debtor, express or implied, to pay the amount due.” (Zinn v. Fred R. Bright Co. (1969) 271 Cal.App.2d 597, 600.)

Here, based on the same evidence establishing breach of contract, Plaintiff has satisfied the elements of the common counts for open book account and account stated. Defendant has not filed any opposition and therefore has failed to raise any triable issue of material fact.

Accordingly, Plaintiff’s motion for summary adjudication is GRANTED as to the open book account claim, the first cause of action, and the account stated claim, the third cause of action.

CONCLUSION

Plaintiff’s motion for summary adjudication is GRANTED as to the first, third, and fourth causes of action.

If the tentative ruling is uncontested, it shall become the order of the Court. Thereafter, counsel for the prevailing party shall prepare a written order consistent with this ruling for the Court’s signature, pursuant to California Rules of Court, rule 3.1312, and provide notice of the ruling to all appearing parties as required by law. The Court further directs the parties’ attention to revised Local Rule 3.403(b)(iv) (eff. Jan. 1, 2024) regarding the form of proposed orders.