United States District Court, E.D. California
ORDER ON PLAINTIFF'S MOTION FOR SUMMARY JUDGMENT
OR PARTIAL SUMMARY ADJUDICATION (DOC. NO. 20)
El Corte Ingles, S.A. (“ECI”) filed this action
on February 12, 2019 alleging breach of contract against City
Lights, LLC (“City Lights”) and MarkChris
Investments, LLC (“MarkChris” and with City
Lights, “Defendants”) in connection with a real
estate transaction in Bakersfield, California. MarkChris
alleged affirmative defenses in its Answer to the Complaint
(the “MarkChris Answer”). City Lights did not do
moves for summary judgment on its claim for breach of
contract and on the affirmative defenses set forth in the
MarkChris Answer. For the reasons set forth below, the Court
will grant the motion in part and deny the motion in part, in
addition to striking two of MarkChris's affirmative
set forth sworn statements and documentary evidence in
support of this Motion that show the following:
about December 23, 2016, ECI sold real property located in a
mall in Bakersfield, California to City Lights and MarkChris.
Doc. No. 22 ¶ 2. The acquisition price for the property
included a promissory note (the “Note”) issued by
Defendants to ECI in the principal amount of $208, 823.50.
Id. ¶ 2; Doc. No. 22-1. The Note provides for
interest at 5% per annum and contains the following
provisions regarding late payments:
The undersigned and Lender agree that it is extremely
difficult and impracticable to fix actual damages for failure
to make payments when due; therefore, the undersigned agrees
to pay as liquidated damages a late charge of four percent
(4%) of any installment which does not reach Lender within
five (5) business days after the due date. The late charges
that accrue shall be payable on the next installment due
date. Anything herein to the contrary notwithstanding, if a
late charge is assessed hereunder, such amount shall not
exceed the maximum amount permitted by law. Additionally, the
amount of any interest payment that is not paid on or before
the date which is five (5) business days after the date on
which it becomes due, as set forth above, shall bear interest
from said date until paid at the rate charged from time to
time on the principal owing hereunder.
Doc. No. 22-1.
“Maturity Date” for the Note is defined as the
date on which “[t]he full amount of all interest and
principal then remaining unpaid, and any other amounts then
owing [under the Note], shall be due and payable.” Doc
No. 22-1. The original Maturity Date for the Note was
December 23, 2017, but the Note contained a provision stating
that Defendants could extend the Maturity Date to June 23,
2018 by making a principal paydown of at least $25, 000 on or
before December 23, 2017. Doc. No. 22 ¶ 3; Doc. No.
made a $25, 000 principal payment on December 20, 2017,
thereby extending the Maturity Date to June 23, 2018. Doc.
No. 22 ¶ 4; Doc. No. 22-2. This $25, 000 payment- which
is the only payment of principal that has been made on the
Note-reduced the principal balance of the Note to $183,
823.50. Doc. No. 23 ¶4. At the request of Defendants,
ECI later agreed to extend the Maturity Date for the Note
from June 23, 2018 to December 23, 2018, as confirmed in a
letter from MarkChris to ECI's attorney, Thomas McPeters.
Doc. No. 22 ¶5; Doc. No. 22-3.
made monthly interest payments, as required by the Note, on
the principal balance through October 28, 2018, but have not
made payments on the Note of any kind since October 2018.
Doc. No 22 ¶ 6; Doc. No. 22-4.
calculates that the amount owed on the Note following the
December 23, 2018 Maturity Date was $193, 444.46, including
the principal balance of $183, 823.50, unpaid interest
through December 23, 2018 in the amount of $2, 119.38, and
liquidated damages for late payments (i.e., late fees) in the
amount of $7, 440.17. Doc. No. 22 ¶ 8; Doc. No. 22-5.
Further, ECI contends that interest on that $193, 444.46
balance accrues at a rate of 5% per annum-which, according to
ECI, comes to $26.50 per day-until paid. Doc. No. 22 ¶
8. As such, ECI contends that as of October 1, 2019, the
amount payable on the Note was $200, 890.75. Doc. No. 22
¶ 8; Doc. 22-5.
brings a claim for breach of contract and damages based on
the foregoing allegations. Doc. No. 2 ¶¶ 8-16.
Lights admits in its Answer (the “City Lights
Answer”) that Defendants issued the Note, as described
by ECI, and made a single $25, 000 principal payment on the
Note, extending the Maturity Date to June 23, 2018 and
reducing the principal balance from $208, 823.50 to $183,
823.50. Doc. No. 6 ¶¶ 9-10 & 15; see
also Doc. No. 26 at 2:20-22 (stating that
“Defendant, City Lights, admits the core facts of the
complaint”). City Lights did not allege any affirmative
defenses in its Answer, see Doc. No. 6, and did not
file an opposition to this Motion.
for its part, admits that a principal payment of $25, 000 was
made, which extended the Maturity Date to June 23,
No. 19 ¶ 8. MarkChris also admits that ECI later agreed
to extend the Maturity Date from June 23, 2018 to December
23, 2018 and that MarkChris sent a letter to ECI confirming
that agreement. Id. ¶ 11. Further, MarkChris
admits that “Defendants made monthly interest payments
based on the outstanding principal balance [of the Note]
until 2018, when the interest payments stopped.”
Id. ¶ 12. MarkChris purports to allege eleven
affirmative defenses in its Answer, including uncertainty,
failure to state a claim, excuse, waiver, estoppel, release,
accord and satisfaction, modification of contract, acts or
omissions of third parties, failure to mitigate damages, and
setoff. Doc. No. 19 at 3:5-5:5. Unlike City Lights, MarkChris
filed an Opposition to ECI's Motion for Summary Judgment,
but the Opposition is not supported by sworn statements or
documentary evidence. See Doc. No. 25.
contends that the undisputed facts in this case show, as a
matter of law, that the Defendants breached the terms of the
Note and that ECI is entitled to recover damages equaling the
total amount payable on the Note (in principal, interest and
liquidated damages for late payments) as of December 23, 2018
(the final Maturity Date), plus all interest accruing on that
amount through the date of payment. Doc. No. 21, Part III.B.
Further, ECI asserts that the eleven affirmative defenses set
forth in the MarkChris Answer are unsupported by evidence and
should therefore be “summarily adjudicated and
dismissed.” Id., Part III.C.
to Plaintiff's Motion
filed an Opposition to ECI's Motion. City Lights did not.
MarkChris asserts in its Opposition that the declaration
submitted by ECI's attorney (the “McPeters
Declaration”) is the “sole evidentiary
support” for the Motion and that “[n]o further,
material evidence is given in support of the [Motion], either
by [ECI's attorney] or by anyone else.” Doc. No. 25
at 2:25-3:2. Further, MarkChris argues that the Motion must
be denied as to the affirmative defenses set forth in the
MarkChris Answer because ECI failed “to satisfy its
threshold burden of presenting evidence which negates the
affirmative defenses, or which shows that MarkChris lacks
evidentiary support for [its] affirmative defenses.”
Doc. No. 25 at 3:6-9 & Part II. MarkChris did not file a
declaration or any other form of evidence in connection with
judgment is proper when it is demonstrated “that there
is no genuine issue as to any material fact and that the
moving party is entitled to a judgment as a matter of
law.” Fed.R.Civ.P. 56(c); Adickes v. S.H. Kress
& Co., 398 U.S. 144, 157 (1970); Fortyune v.
American Multi-Cinema, Inc., 364 F.3d 1075, 1080 (9th
Cir.2004). The party seeking summary judgment bears the
initial burden of informing the court of the basis for its
motion and of identifying the portions of the declarations
(if any), pleadings, and discovery that demonstrate an
absence of a genuine issue of material fact. Celotex
Corp. v. Catrett, 477 U.S. 317, 323 (1986);
Soremekun v. Thrifty Payless, Inc., 509 F.3d 978,
984 (9th Cir.2007). A fact is “material” if it
might affect the outcome of the suit under the governing law.
See Anderson v. Liberty Lobby, Inc., 477 U.S. 242,
248-49 (1986); United States v. Kapp, 564 F.3d 1103,
1114 (9th Cir.2009). A dispute is “genuine” as to
a material fact if there is sufficient evidence for a
reasonable jury to return a verdict for the non-moving party.
Anderson, 477 U.S. at 248; Freecycle Sunnyvale
v. Freecycle Network, 626 F.3d 509, 514 (9th Cir.2010).
the moving party will have the burden of proof on an issue at
trial, the movant must affirmatively demonstrate that no
reasonable trier of fact could find other than for the
movant. Soremekun, 509 F.3d at 984. Where the
non-moving party will have the burden of proof on an issue at
trial, the movant may prevail by presenting evidence that
negates an essential element of the non-moving party's
claim or by showing that there is an absence of evidence to
support an essential element of the non-moving party's
claim. See James River Ins. Co. v. Herbert Schenk,
P.C., 523 F.3d 915, 923 (9th Cir.2008);
Soremekun, 509 F.3d at 984. If the moving party
meets that burden, the burden then shifts to the non-moving
party to designate specific facts demonstrating the existence
of genuine issues for trial. Coomes v. Edmonds Sch. Dist.
No. 15, 816 F.3d 1255, 1259 n.2 (9th Cir.2016) (quoting
In re Oracle Corp. Sec. Litig., 627 F.3d 376, 387
(9th Cir.2010)); see also, Matsushita Elec.
Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586
(1986). The opposing party cannot “‘rest upon the
mere allegations or denials of [its] pleading' but must
instead produce evidence that ‘sets forth specific
facts showing that there is a genuine issue for
trial.'” Estate of Tucker v. Interscope
Records, 515 F.3d 1019, 1030 (9th Cir.2008) (citation
and internal alterations omitted). Where, however, a moving
party fails to carry its initial burden, then “the
nonmoving party has no obligation to produce anything, even
if the non-moving party would have the ultimate burden of
persuasion at trial.” Nissan Fire & Marine Ins.
Co. v. Fritz Cos., 210 F.3d 1099, 1102-03 (9th
events, the opposing party's evidence is to be believed,
and all justifiable inferences that may be drawn from the
facts placed before the court must be drawn in favor of the
opposing party. See Anderson, 477 U.S. at 255;
Matsushita, 475 U.S. at 587; Narayan v. EGL,
Inc., 616 F.3d 895, 899 (9th Cir.2010). While a
“justifiable inference” need not be the most
likely or the most persuasive inference, a “justifiable
inference” must still be rational or reasonable.
See Narayan, 616 F.3d at 899. Summary judgment may
not be granted “where divergent ultimate inferences may
reasonably be drawn from the undisputed ...