Schaefer v. Manufacturers Bank

• Decision Date: 01 April 1980
• Citation: 104 Cal.App.3d 70,163 Cal.Rptr. 402
• Parties: Wendell K. SCHAEFER et al., Plaintiffs and Appellants, v. MANUFACTURERS BANK, Defendant and Respondent. Civ. 56411.
• Court: California Court of Appeals Court of Appeals

Page 402

163 Cal.Rptr. 402

104 Cal.App.3d 70

Wendell K. SCHAEFER et al., Plaintiffs and Appellants, v. MANUFACTURERS BANK, Defendant and Respondent.

Civ. 56411.

Court of Appeal, Second District, Division 1, California.

April 1, 1980.

Robert T. Moulton, Los Angeles, for plaintiffs and appellants schaefer

Schwartz, Alschuler & Grossman, Marshall B. Grossman, Robert A. Shlachter, Los Angeles, for defendant and respondent.

WEISZ, Associate Justice. ^*

Plaintiffs Schaefer appeal from a summary judgment in favor of defendant Manufacturers Bank in a case involving many defendants and a somewhat complex factual setting. Hereinafter, the parties will simply be referred to by name.

FACTUAL SETTING

As of April 30, 1973, the Schaefers owned a piece of real property, which they were to sell to the Jacksons for $51,500, $35,000 to be paid through escrow and emanating from a loan to be made by an outside lender on the property itself, plus an additional $16,500 to be paid outside of escrow. At least, this was the contract as seen in the original escrow instructions. By May 7, the parties had signed outside of escrow a side agreement in which the $35,000 was to be credited to the Jacksons' account in the escrow, but the Schaefers were to receive a second trust deed on the subject property in the sum of $43,000, assignment of a $39,000 second trust deed on the so-called August property, and also a trust deed and note for $3,650 on property located on Sherbourne Drive executed by Johnny and Bette Jan Parker. ¹ Bette Jan Parker, a party to the small trust deed, was also the escrow officer handling the Schaefer-Jackson escrow, at Manufacturers Bank.

Later amendments to the escrow instructions accomplished further changes, not necessarily in complete consonance with the May 7 side agreement. By May 24, the day before escrow closed, the instructions specified that $24,500 was paid in cash outside of escrow and appropriate credits and debits were to be made accordingly; and the proceeds of the loan were to be debited to pay real estate broker's commission, pay-off prior loans, and the remaining monies were to be paid, on behalf of the Schaefers, to one Christine Gaines.

The escrow closed on May 25, on which date it appears that the prior trust deed on the August property was foreclosed; thereafter, the property which was the subject of the escrow was also foreclosed, neither sale bringing enough to cover more than the primary encumbrances, costs, etc. ² Thus, the record shows that all the documents (except the deed and the new first deed of trust on the real property being transferred) relating to the various trust deeds were given to the Schaefers outside of escrow;

they proved worthless, except for the Parker note; and thus the Schaefers ended with a loss.

THE ISSUE

Boiled down, then, the situation can be stated in somewhat this fashion: Where the plaintiff has acted totally outside of escrow as to the items which have caused damage, may they succeed in holding the escrow company? Upon the showing here made, the answer has to be in the negative.

CONTENTIONS

A. Discovery

Before we can proceed to examine the contentions of appellant, it is necessary to explicate another confusing situation. The defense motion for summary judgment came on for hearing after filing on November 13th; plaintiff then filed motions to compel further answers to requests for admissions, and to compel productions of documents, both on November 21st. The summary judgment was heard first, but submitted in order that any results of the discovery motions might be considered in connection with the motion for summary judgment. Later, all the motions having been submitted, the discovery motions were denied and the summary judgment motion was granted.

Discovery has an important bearing on summary judgment procedure since it can serve as the basis for making or resisting such a motion (Deyo v. Kilbourne (1978) 84 Cal.App.3d 771, 779, 149 Cal.Rptr. 499; DeSuza v. Andersack (1976) 63 Cal.App.3d 694, 698, 133 Cal.Rptr. 920), a fact clearly recognized by the Legislature when it provided in 1973 that the motion could be supported or opposed by "admissions, answers to interrogatories, depositions" (Code Civ.Proc., § 437c). The orders with respect to discovery may be reviewed on appeal from the final judgment (Crumpton v. Dickstein (1978) 82 Cal.App.3d 166, 169, 146 Cal.Rptr. 840), but may be reversed only where it appears that the trial court abused the discretion vested in it (Pacific Tel. & Tel. Co. v. Superior Court (1970) 2 Cal.3d 161, 171, 84 Cal.Rptr. 718, 465 P.2d 854; Greyhound Corp. v. Superior Court (1961) 56 Cal.2d 355, 378-384, 15 Cal.Rptr. 90, 364 P.2d 266; Adams v. Superior Court (1957) 49 Cal.2d 427, 429, 317 P.2d 983).

The discovery motions were filed at a time when the cause had been on file three and one half years, extensive discovery had been completed, mandatory settlement and trial were coming on in the immediate future, and it appeared that the motions may well have been a dilatory tactic. Although the court below did so on its own motion, counsel did not even seek "a continuance to permit . . . discovery to be had" as provided in the summary judgment statute (Code Civ.Proc., § 437c).

On the motion to produce, no prior demand in writing had been made, and the motion was properly denied without respect to the merits thereof. (People ex rel. Dept. of Transportation v. Superior Court (1976) 60 Cal.App.3d 352, 358, 131 Cal.Rptr. 476.) Even were one to consider the merits, the item sought was notes taken by an attorney of a conversation with an employee of the client, not discoverable due to privilege (D. I. Chadbourne, Inc. v. Superior Court (1964) 60 Cal.2d 723, 736-737, 36 Cal.Rptr. 468, 388 P.2d 700). The showing on the part of Manufacturers Bank as to the privilege was not contradicted, and the ruling was correct. (Romo v. Southern Pac. Transportation Co. (1977) 71 Cal.App.3d 909, 922, 139 Cal.Rptr. 787.)

Turning to the interrogatories and requests for admissions, again no abuse of discretion appears. Indeed, the opposite is true; it is appellants who seek to abuse the process of discovery. They asked in an interrogatory, as a fairly typical example, that defendant Manufacturers Bank "(s)tate the complete name, address and telephone number of the person who prepared Exhibit '1' to plaintiffs' complaint." The answer was, that that defendant had neither personal knowledge or information from other sources, had made reasonable inquiry and the information known was insufficient to permit it to answer. In the motion, appellant sought further answer to the interrogatory, despite the fact that plaintiffs were signatories to the document and had presumptive knowledge of its source; that the document was never deposited in or made a part of the escrow; and there was never any showing that Manufacturers Bank had anything whatever to do with its preparation or access to any such knowledge.

It is one thing for a party, faced with an interrogatory the answer to which is presumably within its knowledge, to deny an answer for lack of information, and quite another in a situation like that here presented. As the cases indicate, the purpose of discovery is to permit access to matter known to, or within the control of, the other party (Scherrer v. Plaza Marina Coml. Corp. (1971) 16 Cal.App.3d 520, 524, 94 Cal.Rptr. 85; Peterson v. City of Vallejo (1968) 259 Cal.App.2d 757, 782, 66 Cal.Rptr. 776; Fairfield v. Superior Court (1966) 246 Cal.App.2d 113, 119, 54 Cal.Rptr. 721); the majority of the interrogatories as to which further answers were sought were clearly not in that category. Thus, an entire series of interrogatories sought information with respect to documents which clearly never passed through or were part of the escrow relating to the property owned by the Schaefers. Under these circumstances, the trial court very properly denied the motions; the material sought was certainly in the control of either the Jacksons, the real estate brokers, the parties to the documents sought, or the former escrow officer of the Manufacturers Bank, all of them parties to the action. Where the information sought is equally or more readily available to the party seeking it than the party from whom it is sought, abuse of discretion cannot be claimed.

B. Summary Judgment

The basic rules as to summary judgment are well-settled, however difficult they may be to apply in any particular instance. The procedure envisioned by the Legislature is relatively clear-cut, and is set forth in section 437c of the Code of Civil Procedure. A party claiming either a perfected cause of action or a clear defense may bring on a motion, supported by (and, of course, later resisted by) affidavits or declarations made on personal knowledge, containing admissible evidence, and must contain an affirmative showing that the person is competent to testify to the facts set forth. From and after 1973, the legislation has very properly added that admissions, answers to interrogatories, depositions, and matters of which judicial notice may be taken can also be utilized. Thus, the range is made broader, and the showing far more complete than heretofore provided.

In examining the matter before the trial court in this case, the only opposition declaration is that of plaintiffs' counsel, who clearly is not a competent affiant with respect to any facts admissible at trial. This declaration is a pastiche of improper matter: legal citations; argumentative assertions as to fact, law, and the legal contentions of the opposite party; statements with respect to prior discovery efforts; even gross characterizations. It was properly ignored in all respects, except to the extent that it adverted to...