HENRY AGUILA V. FIRST AMERICAN TITLE INS. CO., ET AL.

Case Number

23CV00204

Case Type

Hearing Date / Time

Mon, 04/14/2025 - 10:00

Nature of Proceedings

Pico Rivera First Mortgage Investors, LP, and Mortgage Co. of Santa Barbara, Inc.’s Motion for Summary Judgment

Tentative Ruling

Henry Aguila v. First American Title Ins. Co., et al.

Case No.  23CV00204 

Hearing Date:      April 14, 2025                                             

HEARING:              Pico Rivera First Mortgage Investors, LP, and Mortgage Co. of Santa Barbara, Inc.’s Motion for Summary Judgment

           

ATTORNEYS:        Ronald D. Tym of The Tym Firm for plaintiff Henry Aguila Sean R. Burnett / Ashley Dorris Egerer / Daniel P. Park of Snyder Burnett Egerer, LLP for defendant First American Title Insurance Company

                                    Eric A. Woosley of Law Office of Eric A. Woosley for defendants Pico Rivera Mortgage Investors, LP and Mortgage Co. of Santa Barbara, Inc.             

                       

TENTATIVE RULING:  The motion of Pico Rivera First Mortgage Investors, LP, and Mortgage Co. of Santa Barbara, Inc.  for summary judgment is denied.

Background: On January 18, 2023, plaintiff Henry Aguila (Aguila) filed a complaint, in pro per, against defendants First American Title Insurance Company (First American), Pico Rivera First Mortgage Investors, LP (Pico Rivera), Mortgage Co. of Santa Barbara (MCSB)—alleged to be a general partner in Pico Rivera, and Andrew Fuller (Fuller), alleging causes of action for (1) breach of contract, (2) breach of contract/third party beneficiary, (3) breach of the covenant of good faith and fair dealing, (4) inducing breach of contract, (5) intentional infliction of emotional distress, and (6) negligence.

After a motion to have Aguila declared a vexatious litigant, for a pre-filing order, and to post security of $35,000, was filed by defendants MCSB, Pico Rivera, and Fuller, attorney Ronald D. Tym substituted into the action on Aguila’s behalf. Because Aguila was now represented by counsel, the court denied the request for an order requiring Aguila to post security before proceeding with the action, but granted the motion finding Aguila to be a vexatious litigant (Code Civ. Proc., § 391, subd. (b)) and to require a prefiling order (Code Civ. Proc., § 391.7).

Aguila filed his First Amended Complaint (FAC) on July 31, 2023. The FAC named the same parties as defendants, and alleged causes of action for (1) breach of contract (against Pico Rivera and MCSB), (2) breach of the covenant of good faith and fair dealing (against Pico Rivera and MCSB), (3) breach of obligation to report payments on judgment (against Pico Rivera and MCSB), and (4) intentional interference with contractual relations (against First American).

The FAC’s first cause of action for breach of contract alleged that on July 16, 2015, Thee Aguila, Inc. (TAI) borrowed $5,700,000 from Pico Rivera, secured by property located at 8825 Washington Blvd. in Pico Rivera, CA. Plaintiff Aguila was, at that time, the sole shareholder of TAI. He entered into a personal guarantee of all of TAI’s obligations to Pico Rivera, including the loan. First American issued a lender’s policy of title insurance, insuring the priority of the Deed of Trust. Aguila believes that the policy was in an amount not to exceed the outstanding amount of the loan. Its purpose was to protect Pico Rivera against losses up to the outstanding amount of the loan, arising from the failure of Pico Rivera to be able to get fully repaid on the Loan due to encumbrances other than Excluded Encumbrances under the policy. First American’s obligation was directly connected to the status of the Loan, and the amount which was outstanding.

TAI defaulted on the Loan, and Pico Rivera conducted a trustee’s sale of the property on December 6, 2017, under which it took title to the property as a result of a credit bid of $5,105,000. Prior to the credit bid, $6,116,346.01 was due and owing on the loan. Following the trustee’s sale, no more than $1,011,346.01 remained due and owing on the Loan.

Aguila alleged that he was fraudulently induced by Pico Rivera to enter into a Settlement Agreement in November 2020, in which he agreed to a stipulated judgment against him (Case No. 18CV04958) in the amount of $3,867,113.84, to settle his obligations under the Guarantee. However, that amount was far in excess of the amount actually due under the Guarantee, since Pico Rivera intentionally failed to credit its $5,105,000 credit bid against the amount due and owing under the loan. On information and belief, Aguila alleges that on December 28, 2021, Pico Rivera received $1,100,000 from First American under the Lender’s Policy of Title Insurance, but failed to credit this amount received towards the Loan, against the amount Aguila allegedly owed pursuant to the Guarantee and the stipulated judgment. Its failure to credit the amounts received towards the amount due under the Guarantee is a breach of the Guarantee Agreement, and an attempt to double dip by attempting to be paid twice for the same loan.

After Pico Rivera and MCSB demurred to the causes of action alleged against them, the Court sustained the demurrer to the breach of contract cause of action, with leave to amend solely on the ground that the cause of action failed to allege the contractual provision within the Guarantee Agreement alleged to have been breached (the cause of action had also been challenged on a number of other bases, but the Court found none of them meritorious). It overruled the demurrer to the second cause of action for breach of the implied covenant of good faith and fair dealing. Finally, it sustained the demurrer to the third cause of action for failure to properly report credits toward the judgment, without leave to amend, on the ground that the procedure set forth in Code of Civil Procedure section 724.050 constitutes the exclusive method for a judgment debtor to obtain an order for entry of satisfaction of judgment, including obtaining offsets to the amount owed under the judgment. That procedure could only be accomplished within the action which gave rise to the judgment against him, i.e., Case No. 18CV04958.

Aguila filed his Second Amended Complaint (SAC) on February 22, 2024. Rather than amending the cause of action for breach of contract, for which leave to amend had been granted, Aguila eliminated any breach of contract cause of action from the SAC, and replaced it with a cause of action for violation of Civil Code section 2822, which provides, in relevant part:

(a) The acceptance, by a creditor, of anything in partial satisfaction of an obligation, reduces the obligation of a surety thereof, in the same measure as that of the principal, but does not otherwise affect it. However, if the surety is liable upon only a portion of an obligation and the principal provides partial satisfaction of the obligation, the principal may designate the portion of the obligation that is to be satisfied.

The cause of action sought damages for emotional distress, [physical ailment, loss of qualify of life, and medical expenses, in an amount of at least $5,000,000, arising from Pico Rivera’s failure to properly credit the credit bid and the amount received from First American. (SAC, ¶ 20) Additionally, Aguila amended the cause of action for breach of the implied covenant of good faith and fair dealing—for which no leave to amend had been granted, by eliminating all reference to a breach of an express provision of the Guarantee, and adding three new paragraphs.

Following the filing of the SAC, Case No. 23CV00204 was ordered related to Case No. 18CV04958 (the case in which the Stipulated Judgment was entered), and Case No. 23CV00204 was transferred to Dept. 5.

Pico Rivera and MCSB’s motion to strike from the SAC the cause of action for violation of Section 2822 and the newly added paragraphs was granted in part after hearing on May 20, 2024. The order was limited to the striking of the heading identifying the first cause of action as being for violation of Civil Code section 2822, and paragraphs 20 and 22, and with respect to striking ¶ 28 from the second cause of action.

After hearing on August 19, 2024, the demurrer by First American to the third cause of action in the SAC was sustained, with leave to amend on or before September 9, 2024. In doing so, the Court noted that both parties had relied upon factual information that was beyond the scope of that which could permissibly be considered on demurrer. It found, however, that the facts alleged in the SAC were insufficient to state a cause of action for intentional interference with contractual relations. The conduct alleged to constitute such intentional interference was simply that First American had “encouraged” Pico Rivera to keep attempting to recover money from Aguila, that had been paid to Pico Rivera by First American in settling the claim made under the policy of title insurance, and that such language was insufficient to constitute “an intentional act designed to induce a breach or disruption of the contractual relationship,” as is required for the cause of action.

Aguila filed his Third Amended Complaint (TAC) on September 9, 2024, alleging causes of action for (1) breach of the covenant of good faith and fair dealing, alleged against Pico Rivera and MCSB, and (2) intentional interference with contractual relations, alleged against First American. The TAC reflected the matters which had been stricken by the court, with respect to the preliminary allegations and the cause of action for breach of the implied covenant. With respect to the cause of action for intentional interference with contractual relations, whereas the SAC had alleged in ¶ 30 that First American had, “when paying the $1,100,000 to PRFMI, encouraged PRFMI to breach PRFMI’s obligations to Aguila under the guarantee Agreement by encouraging PRFMI to continue to seek to collect against Aguila pursuant to the Guarantee Agreement, even with respect to the $1,100,000 that First American was paying and that should be credited to Aguila’s obligations,” the TAC in its corresponding ¶ 30 instead alleged that First American, “when paying the $1,100,000 to PRFMI described in Paragraph 18 hereof, conditioned such payment on: (a) PRFMI not disclosing such payment to Aguila, (b) PRFMI not crediting such payment towards Aguila’s liability under the Guaranty Agreement, and (C) PRFMI continuing to seek that $1,100,000 from Aguila under the Guarantee Agreement.” A new ¶ 32 was added, which alleged that the failure by PRFMI to credit that amount toward Aguila’s liability under the Guarantee Agreement, and its continuing efforts to collect that amount form Aguila, breached PRFMI’s obligations under the Guarantee Agreement. An amended final paragraph simply omitted the words “harmed by First American’s actions” (SAC, ¶ 32), followed by a recitation of his alleged damages, with the words “harmed by First American’s actions interfering with the contractual relations between PRFMI and Aguila.” (TAC, ¶ 33.)

Following the filing of the TAC, Pico Rivera and MCSB answered the TAC on October 17, 2024, with a general denial and asserting 11 affirmative defenses.

On October 18, 2024, First American filed a demurrer to the cause of action for intentional interference with contractual relations. On January 6, 2025, the demurrer was overruled.

Pico Rivera and MCSB now move for summary judgment, arguing: (1) The parties’ contractual obligations under the Guarantee Agreement were merged into and extinguished by the Stipulated Judgment; (2) Even if the parties’ contractual obligations under the Guarantee Agreement were not merged into and extinguished by the Stipulated Judgment, Aguila released all claims against Pico Rivera and MCSB when he executed the Settlement Agreement; and (3) Aguila’s exclusive remedy for the wrong he alleges is Code of Civil Procedure section 724.050. As noted above, the sole remaining cause of action against Pico Rivera and MCSB is breach of the implied covenant of good faith and fair dealing.  

Aguila opposes the motion for summary judgment.

ANALYSIS:  

            Evidentiary Objections

“In granting or denying a motion for summary judgment or summary adjudication, the court need rule only on those objections to evidence that it deems material to its disposition of the motion. Objections to evidence that are not ruled on for purposes of the motion shall be preserved for appellate review.” (Code Civ. Proc., § 437c, subd. (q).)

“ ‘The same rules of evidence that apply at trial also apply to the declarations submitted in support of and in opposition to motions for summary judgment. Declarations must show the declarant’s personal knowledge and competency to testify, state facts and not just conclusions, and not include inadmissible hearsay or opinion.’ ” [Citation.] “ ‘The declarations in support of a motion for summary judgment should be strictly construed, while the opposing declarations should be liberally construed. [Citation.] This does not mean that courts may relax the rules of evidence in determining the admissibility of an opposing declaration. Only admissible evidence is liberally construed in deciding whether there is a triable issue.’ ” [Citation.]” (Fernandez v. Alexander (2019) 31 Cal.App.5th 770, 779.)

Aguila submitted a declaration in support of his opposition to the motion for summary judgment. That declaration consists of 8 paragraphs and states:

“I, Henry Aguila, hereby declare as follows:

            “1. I am over the age of 18 years. I make the statements herein from my personal knowledge. If called upon to do so, I could and would competently testify to the same.

            “2. On or about July 16, 2015, Thee Aguila, Inc. (‘TAI’) borrowed $5,700,000 from [Pico Rivera] and secured such loan with a deed of trust on commercial property located at 8825 Washington Blvd., Pico Rivera, CA 90660 (the ‘Property’).

            “3. At the time of the loan, I entered into a Guaranty Agreement with respect to the loan. Attached hereto as Exhibit A is a true and correct copy of the Guaranty Agreement.

            “4. At the time that [Pico Rivera] made the loan to TAI, First American Title Insurance Company issued a lender’s policy of title insurance. TAI paid the cost of such policy.

            “5. Attached hereto as Exhibit B is a true and correct copy of an email I received from Andrew Fuller, then CEO of Mortgage Co. of Santa Barbara (the general partner of [Pico Rivera], on or about January 14, 2022, admitting that [Pico Rivera] had received $1,100,000 from First American Title under the lender’s policy.

            “6. I have received no credit from [Pico Rivera] for any portion of the $1.1 million received by [Pico Rivera] from First American Title.

            “7. At the Trustee’s sale of the Property, [Pico Rivera] made a successful credit bid of $5,105,000.

            “8. I have received no credit from [Pico Rivera] for its credit bid of $5,105,000 for the Property.”

Pico Rivera and MCSB object to paragraphs 4 and 5 based on hearsay and relevancy. They object to paragraphs 6 through 8 as irrelevant.

The statements by Aguila are based on personal knowledge and are admissible. The objections are overruled.

            Standard on Summary Judgment

A defendant’s motion for summary judgment asks the court to determine that the entire action has no merit, and to terminate the action without the necessity of a trial. (Code Civ. Proc., § 437c, subd. (a).) The procedure enables the court to look behind the pleadings to determine whether the party against whom the motion is directed has evidence to back up the claims. The court must determine from the evidence presented that there is no triable issue as to any material fact, and that the moving party is entitled to judgment as a matter of law. (Code Civ. Proc., § 437c, subd. (c).)

“[F]rom commencement to conclusion, the party moving for summary judgment bears the burden of persuasion that there is no triable issue of material fact and that he is entitled to judgment as a matter of law.” (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 850.) There is no obligation on the opposing party to establish anything by affidavit unless and until the moving party has by affidavit stated facts establishing every element necessary to sustain an adjudication in his favor. (Consumer Cause, Inc. v. Smilecare (2001) 91 Cal.App.4th 454, 468.) “[W]e liberally construe plaintiff’s evidentiary submissions and strictly scrutinize defendant’s own evidence, in order to resolve any evidentiary doubts or ambiguities in plaintiff’s favor.” (Johnson v. American Standard, Inc. (2008) 43 Cal.4th 56, 64.)

“A defendant … has met his or her burden of showing that a cause of action has no merit if the party has shown that one or more elements of the cause of action, even if not separately pleaded, cannot be established, or that there is a complete defense to the cause of action. Once the defendant … has met that burden, the burden shifts to the plaintiff or cross-complainant to show that a triable issue of one or more material facts exists as to the cause of action or a defense thereto.” (Code Civ. Proc., § 437c, subd. (p)(2).)

In resolving the motion, the court may not weigh the evidence. (Binder v. Aetna Life Ins. Co. (1999) 75 Cal.App.4th 832, 840.) Rather, the role of the trial court in resolving a summary judgment motion is to determine whether issues of fact exist, not to decide the merits of the issues. (Molko v. Holy Spirit Assn. (1988) 46 Cal.3d 1092, 1107.) A triable issue of material fact exists only if the evidence would allow a reasonable trier of fact to find the underlying fact in favor of the party opposing the motion in accordance with the applicable standard of proof. (Aguilar v. Atlantic Richfield, supra, 25 Cal.4th at p. 850.) Any doubts as to the propriety of granting the motion should be resolved in favor of the party opposing the motion. (Molko v. Holy Spirit Assn., supra at p. 1107.)

            Separate Statement

“The point of the separate statement is not to craft a narrative, but to be a concise list of the material facts and the evidence that supports them.  “ ‘The separate statement serves two important functions in a summary judgment proceeding: It notifies the parties which material facts are at issue, and it provides a convenient and expeditious vehicle permitting the trial court to hone in on the truly disputed facts.’ ” [Citation.]” (Beltran v. Hard Rock Hotel Licensing, Inc. (2023) 97 Cal.App.5th 865, 875.) “The moving party must include only material statements of fact, not incidental and background facts.” (Id. at p. 876.)

“ ‘Include only those facts which are truly material to the claims or defenses involved because the separate statement effectively concedes the materiality of whatever facts are included. Thus, if a triable issue is raised as to any of the facts in your separate statement, the motion must be denied!’ [Citation.]” (Nazir v. United Airlines, Inc. (2009) 178 Cal.App.4th 243, 252; (Nazir).)

Pico Rivera and MCSB set forth nine material facts in the separate statement. Those facts are:

1. On October 18, 2018, [Pico Rivera] filed suit against Plaintiff, Henry Aguila, for breach of the Guaranty 9referred to in the TAC as the ‘Guarantee Agreement’) that he executed on July 16, 2016. (Pico Rivera First Mortgage Investors, LP v. Henry Aguila, Santa Barbara Superior Court, Case No. 18CV04958, assigned to this Court, and hereafter ‘Case No. 19CV04958.’)”

2. “Henry Aguila[‘s] operative Cross-Complaint against [Pico Rivera] in Case No. 18CV04958 when that case settled was settled was the Second Amended Cross-Complaint, filed on March 17, 2020.”

3. “On February 21, 2020, a settlement of [Pico Rivera’s] Complaint and Henry Aguila’s Cross-Complaint against [Pico Rivera] was put on the record in Case No. 18CV04958.”

4. “On November 16, 2020, Henry Aguila executed a formal Settlement Agreement and Mutual Release (‘Settlement Agreement’) in Case No. 18CV04958.”

5. “Henry Aguila did not pay anything he agreed to pay under the Settlement Agreement.”

6. “On December 4, 2020, a Stipulated Judgment was entered against Henry Aguila in Case No. 18CV04958 in the amount of $3,867,113.84.”

7. “On September 26, 2022, Henry Aquila filed a Motion to Vacate the Stipulated Judgment in Case No. 18CV04958.”

8. “On November 28, 2022, the Court denied Henry Aguila’s Motion to Vacate.”

9. “On May 29, 2024, the Court of Appeal affirmed this Court’s denial of Henry Aguila’s Motion to Vacate.”

By way of his separate statement in opposition, Aguila disputes only fact No. 5, asserting that: “Amounts received by [Pico Rivera] from First American ($1.1 million) and the credit bid ($5,105,000) were paid.” Aguila provided evidence that this fact is legitimately disputed.

Aguila also adds two additional facts that he contends are material:

1. “On or after December 28, 2021, [Pico Rivera] received $1,100,000 from First American Title Insurance Company.”

2. “The amount received from First American has not been credited against the amount owed by Henry Aguila under the Guaranty Agreement or stipulated judgment.”

In response to the separate statement in opposition, Pico Rivera and MCSB filed their separate statement in reply, addressing disputed fact No. 5 and Aguila’s two additional facts. By way of the reply, Pico Rivera and MCSB do not dispute that Aguila is correct, rather, they argue that fact No. 5 (which they included in the original separate statement) is “irrelevant,” and “has nothing to do with the basis of Defendants’ motion.”   Pursuant to the authority above, because they included it in their separate statement of material facts, Pico Rivera and MCSB have conceded the materiality of the proffered fact.

The same situation occurred in Insalaco v. Hope Lutheran Church of West Contra Costa County (2020) 49 Cal.App.5th 506. In that case, among other facts, the moving defendant placed the issue of the amount of rainfall that occurred, on the date of the incident in that case, by including it in its separate statement of undisputed material facts. Later, when the opposing plaintiff disputed that statement of fact, the moving defendant attempted to argue that it was immaterial. In analyzing this argument, the court reiterated the holding in Nazir, and explained: “On appeal, the Church [moving party] contends that “ ‘[e]ven if a dispute exists about the amount of rainfall around the site of the landslide, that dispute is immaterial.’ ” The Church cannot have it both ways.” (Id. at p. 521.) “Because a dispute as to any one of these facts means there was a dispute as to a concededly material fact, the trial court erred in granting summary judgment.” (Id. at p. 522.)

As such, there is a triable issue of material fact that precludes the granting of summary judgment. The motion for summary judgment will be denied.