Violet Realty v. County of Riverside, E040943 (Cal. App. 5/14/2008)

• Decision Date: 14 May 2008
• Docket Number: E040943.
• Court: California Court of Appeals Court of Appeals
• Parties: VIOLET REALTY, INC., Plaintiff and Appellant, v. COUNTY OF RIVERSIDE et al., Defendants and Respondents.

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VIOLET REALTY, INC., Plaintiff and Appellant, v. COUNTY OF RIVERSIDE et al., Defendants and Respondents.

E040943.

Court of Appeal of California, Fourth Appellate District, Division Two.

May 14, 2008.

NOT TO BE PUBLISHED

APPEAL from the Superior Court of Riverside County, No. RIC396645, Thomas H. Cahraman, Judge. Affirmed.

Robert E. Scott & Associates, Robert E. Scott; Law Office of Michael Creamer, Michael Creamer; and Steve R. Young for Plaintiff and Appellant.

Ealy, Hemphill, Blasdel & Oleson and Diane C. Blasdel for Defendants and Respondents.

OPINION

KING, J.

I. INTRODUCTION

Plaintiff Violet Realty, Inc. (Violet) filed suit against the County of Riverside (the County) and Chicago Title, seeking to set aside a nonjudicial foreclosure sale of Violet's 10-acre property in Romoland. The sale was conducted pursuant to a trust deed securing a note in the principal sum of $500,000, which Violet originally executed in favor of the County in 1990. Chicago Title acted as trustee and conducted the sale. In May 2002, the County took title to the property pursuant to the trustee's deed.

In a prior action filed in 1992, Violet sought to cancel the note and deed of trust on the grounds they were void for lack of consideration. The County filed a cross-complaint against Violet and other parties. In 1994, Violet, the County, and other parties entered into a settlement agreement, which provided, in part, that the note would be modified regarding the amount of monthly payments due. Thereafter, Violet and the County dismissed their complaint and cross-complaint against each other, with prejudice.

In its operative first amended complaint (FAC) in the present action, Violet sought to set aside the foreclosure sale on the grounds the note and trust deed were void for lack of consideration—the same grounds Violet alleged for cancelling the note and trust deed in its 1992 action against the County. Defendants moved for summary judgment on Violet's FAC, on the grounds that Violet's repeated allegation that the note and trust deed were void for lack of consideration was barred by the doctrine of res judicata. The trial court agreed and granted the motion.

After the court issued its ruling granting defendants' motion but before judgment was entered in favor of defendants, Violet filed a motion seeking leave to file a second amended complaint. The trial court denied Violet's motion, and entered judgment in favor of defendants. Violet appeals, claiming defendants' motion for summary judgment was erroneously granted and Violet's motion for leave to file a second amended complaint was erroneously denied.

We affirm. We conclude there are no triable issues of material fact and the FAC is indeed barred by the doctrine of res judicata. Our conclusion is based on the allegations of Violet's current FAC, the allegations of its prior complaint against the County in the 1992 action, and the dismissal of that action, with prejudice. We further conclude that Violet's motion to file a second amended complaint was properly denied.

II. DISCUSSION

We first address Violet's claim that defendants' motion for summary judgment was erroneously granted.

A. Standard of Review on Summary Judgment

A trial court properly grants summary judgment where there are no triable issues of material fact and the moving party is entitled to judgment as a matter of law. (Code Civ. Proc., § 437c, subd. (c).) A moving party defendant is entitled to summary judgment if it establishes a complete defense to the plaintiff's causes of action, or shows that one or more elements of each cause of action cannot be established. The defendant must support its motion with affidavits, declarations, admissions, answers to interrogatories, depositions, and matters of which judicial notice shall or may be taken. (Code Civ. Proc., § 437c, subds. (b) & (o)(2); Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 849.)

The moving party defendant bears the initial burden of production to make a prima facie showing that no triable issue of material fact exists. Once the defendant has met this burden of production, he causes a shift. The burden shifts to the plaintiff to make a prima facie showing that a triable issue of material fact exists. From commencement to conclusion, however, the moving party defendant bears the burden of persuasion that no triable issue of fact exists. (Aguilar v. Atlantic Richfield Co., supra, 25 Cal.4th at pp. 850-851.)

"On appeal, we exercise `an independent assessment of the correctness of the trial court's ruling, applying the same legal standard as the trial court in determining whether there are any genuine issues of material fact or whether the moving party is entitled to judgment as a matter of law.' [Citation.]" (Seo v. All-Makes Overhead Doors (2002) 97 Cal.App.4th 1193, 1201-1202.) For the reasons that follow, we independently conclude there are no triable issues of material fact and defendants are entitled to judgment as a matter of law.

B. The Evidence Submitted on Defendants' Motion

In support of their motion, defendants submitted declarations by the County's outside counsel, Diane C. Blasdel, and Deputy County Counsel Lee Vinocour. Ms. Blasdel and Mr. Vinocour described the history of the litigation between Violet and the County beginning in 1992.

In opposition, Violet submitted a declaration by Alan Hasso, a former officer and director of Violet, discussing the 1990 loan transaction and subsequent litigation between the County and Violet. Violet also submitted a declaration by its attorney, Michael Creamer, authenticating documents related to the foreclosure sale, and a declaration by Thelma Gray, a former employee of the Economic Development Agency (EDA) of the County.

In addition, the parties requested, and the trial court took judicial notice of, numerous court records. These included Violet's and the County's complaint and cross-complaint in the 1992 action, the dismissals, with prejudice, of those pleadings, and Violet's FAC in the current action.

The following summarizes the evidence submitted in support of and in opposition to defendants' motion, and is reflected in the parties' separate statements of disputed and undisputed material facts. As will appear, the pertinent facts are undisputed.

1. The 1990 Loan Transaction

In 1989, Lakeside Chevrolet (Lakeside), an automobile dealer for General Motors, was operating its dealership on Violet's 10-acre property on Trumble Road near Highway 74 and Interstate 215 in Romoland. Lakeside was leasing the property from Violet. In July 1989, a newspaper article appeared in The Press-Enterprise, indicating that Lakeside was interested in relocating its dealership to a new auto mall in the City of Riverside.

In August 1989, representatives of the County's EDA met with Lakeside's owner, Mr. Tibbetts, and proposed to provide Lakeside with a package of incentives if Lakeside would stay at its Romoland location. The proposed incentives included a $500,000 loan to be issued under the federal program entitled "Community Development Block Grant." The loan was to be used to construct new buildings, infrastructure, and other improvements on the Romoland property. A total of $2 million in improvements were to be constructed. The additional $1.5 million in necessary funding was to be obtained from private sources. The entire $ 2 million was to be repaid over a 15-year period from a sales tax rebate program.

Following the August 1989 meeting, Mr. Hasso understood that the $500,000 loan would be made to either Lakeside or Violet, and if it was made to Lakeside it would be secured by personal property and future sales tax rebates. If, on the other hand, the loan was made to Violet, it would be secured by a trust deed on Violet's Romoland property. In that event, Mr. Hasso also understood that Violet would control the disbursement of the $500,000 sum and would assist in processing any necessary applications.

Mr. Vinocour acknowledges, and the parties agree, that the $ 500,000 loan was made to Lakeside, not to Violet, and that Violet never received any part of the $500,000 sum.

A dispute concerning the note and trust deed arose after an escrow was opened between the County and Violet at Lincoln Title in Riverside. Mr. Vinocour states, "The reason there was an escrow with Violet Realty was so that the County could obtain a title policy for the real property for which the County was obtaining a deed of trust against, which was owned by Violet Realty . . . . The note and deed of trust from Violet Realty were to secure the loan being provided by the County to Violet Realty's tenant, Lakeside Chevrolet."

Mr. Hasso had a different understanding of the terms of the escrow. The escrow instructions provided, and Mr. Hasso understood, that the $500,000 in loan proceeds were to be deposited into the escrow in consideration for a $500,000 note secured by a trust deed on the Romoland property. The escrow agent was to deliver to the County a signed note and recorded trust deed in exchange for and upon the condition that the $500,000 sum was deposited into the escrow.

On February 27, 1990, Mr. Hasso executed a note on behalf of Violet in the principal sum of $500,000, together with a trust deed on the Romoland property to secure the note. The instruments were deposited into the escrow at Lincoln Title, and Lincoln Title recorded the trust deed in March 1990. Thereafter, Lincoln Title delivered the note and trust deed to the County, even though the County never deposited any funds into the escrow.

The note provided that installment payments would begin in April 1993, but did not state the amount of installment payments due. Mr. Hasso states that the installment payment term was left "blank" and the note was never completed because "Lincoln Title was going to insert the information on the installment payments by Violet after [the] County funded the $500,000 into [the escrow]." The note did provide,...