Union Bank v. Superior Court, B085357

Decision Date12 January 1995
Docket NumberNo. B085357,B085357
Citation37 Cal.Rptr.2d 653,31 Cal.App.4th 573
CourtCalifornia Court of Appeals Court of Appeals
PartiesUNION BANK, Petitioner, v. Los Angeles County SUPERIOR COURT, Respondent, Charlotte DEMETRY et al., Real Parties in Interest.

Fulbright & Jaworski and Robert M. Dawson, Calvin House, Michael P. McGroarty, Los Angeles, for petitioner.

No appearance for respondent.

William A. Kent, Irvine, for real parties in interest.

TURNER, Presiding Justice.

I. INTRODUCTION

Defendant, Union Bank, seeks a writ of mandate pursuant to Code of Civil Procedure section 437c, 1 subdivision (l ), compelling the respondent court to enter a summary judgment on the first amended complaint against plaintiffs who are 11 individuals, a trust, and an individual retirement account. We conclude that: defendant could rely on plaintiffs' Judicial Council form interrogatory answers as an evidentiary basis for its separate statement; despite a request for such information, the interrogatory answers contained no evidence to support a theory of liability on defendant's part; the interrogatory responses, when relied upon by defendant in its separate statement of undisputed facts, were sufficient to shift the burden of proof to plaintiffs pursuant to section 437c, subdivision (o)(2) to demonstrate there was a triable issue concerning the correctness of their claims; and plaintiffs failed to present sufficient evidence to create a triable issue of material fact. In reaching this determination, we conclude that, together, the 1992 and 1993 amendments to section 437c have overruled the prior decision of this division of Barnes v. Blue Haven Pools (1969) 1 Cal.App.3d 123, 126-128, 81 Cal.Rptr. 444 to the limited extent that the opinion bars a defendant from securing a summary judgment premised upon a plaintiff's factually devoid interrogatory answers. Accordingly, because the summary judgment motion should have been granted, we issue our writ of mandate.

II. SCOPE OF ISSUES RAISED BY THE PLEADINGS

The operative pleading is the 229-page first amended complaint which contains causes of action for: intentional misrepresentation; negligent misrepresentation; fraud based on concealment of facts; fraud premised upon a promise to perform and without the intent to do so; conspiracy to defraud; legal and accounting malpractice; fiduciary duty breach; and for an accounting. There are 40 codefendants. Defendant is named in all of the causes of action except in connection with the legal and accounting malpractice claim. Plaintiffs alleged: plaintiffs were investors and limited partners in NMR Investors Fund I, a limited partnership; on October 15, 1985, defendant lent money to United Medical Leasing Company, Inc., a codefendant; the money was lent in connection with the lease of a medical scanner from United Medical Leasing Company, Inc. to the limited partnership of which, as previously noted, plaintiffs were limited partners; as security for the lease, all of the rights, including the authority to repossess the scanner in the event of a default in rental payments, were assigned to defendant; the limited partnership, NMR Investors Fund I, defaulted in payments to the lessor, United Medical Leasing Company, Inc., which meant defendant could lawfully repossess the scanner; and in June 1991, defendant repossessed the scanner after it was abandoned by the limited partnership. The first amended complaint alleged that plaintiffs, the limited partners, were defrauded by: the general partner, NMR Inc.; the general partner's shareholders; an advertising firm; the partnership's accountants and attorneys; various financial advisors to the partnership; certain medical related entities; the lessor of the scanner, United Medical Leasing Company, Inc.; and defendant, the lender who repossessed the scanner. The first amended complaint alleged that misrepresentations were made in connection with a private placement memorandum which was utilized to solicit plaintiffs as investors. The allegations involving defendant were as follows: "[Defendant], a California financial corporation, doing business in the State of California, located at 225 South Lake Avenue, Pasadena, California 90071 and 445 South Figueroa Street, Los Angeles, California 90071, gave advise [sic ] and opinions to [NMR Inc. the general partner and NMR Investors Fund I, the limited partnership]. Based on currently available information, plaintiffs are informed and believe and thereon allege that Union Bank participated in the acts, practices, conspiracy common course of conduct and transactions hereinafter alleged."

III. SUMMARY JUDGMENT MOTION

Defendant moved for summary judgment. As to the fraud causes of action, the grounds of the motion were that defendant neither made any fraudulent representations nor was it a member of a conspiracy to defraud plaintiffs. In support of its motion, defendant relied on plaintiffs' responses to admissions requests and Judicial Council form interrogatories. (§ 2033.5; see Cal.Judges Benchbook, Civil Proceedings Discovery, (1994) § 13.9, p. 187; Civil Discovery Practice in Cal. (Cont.Ed.Bar 1988) Interrogatories, § 8.36, pp. 472-473.) Defendant propounded seven separate requests for admissions. Defendant proffered two admissions requests which are pertinent to the fraud issues in the present case. In request number 5, defendant requested that plaintiffs admit as follows, "Admit that [defendant] committed no fraud or deceit upon you." In their verified response to admissions request number 5, plaintiffs refused to admit defendant "committed no fraud of deceit...." Further, in request number 6, defendant requested that plaintiffs admit the following: "Admit that [defendant] did not participate in any conspiracy to defraud you." Plaintiffs likewise refused to admit that defendant did not participate in a fraudulent conspiracy.

In connection with the summary judgment motion, defendant also relied on answers to Judicial Council form interrogatory number 17.1. Concurrently with the service of the admissions requests, defendant served Judicial Council form interrogatory number 17.1 which states: "Is your response to each request for admission served with these interrogatories an unqualified admission? If not, for each response that is not an unqualified admission: [p] (a) state the number of the request; [p] (b) state all facts upon which you base your response; [p] (c) state the names, ADDRESSES, and telephone numbers of all PERSONS who have knowledge of those facts; [p] (d) identify all DOCUMENTS and other tangible things that support your response and state the name, ADDRESS, and telephone number of the PERSON who has each DOCUMENT or thing." Because plaintiffs refused to unqualifiedly admit defendant neither defrauded them nor participated in a conspiracy to do so, they were required to provide answers to form interrogatory number 17.1. As to admissions request number 5 concerning whether defendant had committed fraud upon plaintiffs, they responded pursuant to form interrogatory number 17.1(b) that all of the facts supporting their denial were as follows: "Plaintiffs believe that Union Bank knowingly and fraudulently took the assignment of all the assets of NMR Investors Fund I to secure the loan it made with United Medical Leasing Company, Inc. [p] Plaintiffs reserve the right to further respond to this interrogatory." As to admissions request number 6, which asked whether they unqualifiedly admitted defendant was not a member of a fraudulent conspiracy, plaintiffs gave the following answer to interrogatory number 17.1(b): "Plaintiffs believe that [defendant] knowingly and fraudulently took the assignment of all the assets of NMR Investors Fund I to secure the loan it made with United Medical Leasing Company, Inc. [p] Plaintiffs reserve the right to further respond to this interrogatory."

In its separate statement of undisputed facts, defendant cited as evidence plaintiffs' responses to admissions requests numbers 5 and 6. Defendant likewise relied upon the answers to interrogatory number 17.1. Also, defendant attached the response to admissions request number 4 where plaintiffs admitted defendant "took no inappropriate action in connection with its role in the transactions ..." in plaintiffs' investment in NMR Investors Fund I. Defendant further referred to the documents involved in the transactions which led to the repossession of the scanner when the limited partnership defaulted on the loan.

Plaintiffs' response to the separate statement of undisputed facts relied upon several declarations which attached documents relating to the loan. The declarations contained statements by investors: concerning disappearance of monies; relating to the seriousness of the financial losses incurred by the investors in NMR Investors Fund I; a belief that defendant was responsible for the losses; and that there were unanswered questions concerning where the money invested in the limited partnership had gone.

The respondent court denied the summary judgment motion. 2 Defendant filed a petition for writ of mandate as permitted by section 437c, subdivision (l ). We issued an alternative writ of mandate and the cause was orally argued. (Alexander v. Superior Court (1993) 5 Cal.4th 1218, 1222-1223, 23 Cal.Rptr.2d 397, 859 P.2d 96; Ng v. Superior Court (1992) 4 Cal.4th 29, 35, 13 Cal.Rptr.2d 856, 840 P.2d 961; Kowis v. Howard (1992) 3 Cal.4th 888, 893, 12 Cal.Rptr.2d 728, 838 P.2d 250.)

IV. DISCUSSION

Summary judgment is granted when a moving party establishes the right to the entry of judgment as a matter of law. (§ 437c, subd. (c).) We review the trial judge's decision not to grant the summary judgment motion de novo. (Jambazian v. Borden (1994) 25 Cal.App.4th 836, 844, 30 Cal.Rptr.2d 768; Daniels v. DeSimone (1993) 13 Cal.App.4th 600, 607, 16 Cal.Rptr.2d 615; Wilson v. Blue Cross of...

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