Court Opinion

ID: 4766117
Source: CourtListenerOpinion
Date Created: 2021-08-16 21:04:38.893483+00
Date Added: 2024-06-11T08:09:15.819911
License: Public Domain

Filed 8/16/21 Eskenazi v. 310 Culver CA2/7
   NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS

California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions
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IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

                         SECOND APPELLATE DISTRICT

                                      DIVISION SEVEN

JACK ESKENAZI,                                               B302398

         Plaintiff, Cross-defendant                          (Los Angeles County
         and Appellant,                                      Super. Ct. No. BC673069)

         v.

310 CULVER, LLC et al.,

         Defendant, Cross-
         complainant and
         Respondent.

      APPEAL from a judgment of the Superior Court of
Los Angeles County, Ramona G. See, Judge. Affirmed.
      Tatone Law, Michelangelo Tatone and Stephen Ruotsi for
Plaintiff, Cross-defendant and Appellant Jack Eskenazi.
      Delman Vukmanovic, John Vukmanovic and Dana Delman,
for Defendant, Cross-complainant and Respondent 310 Culver,
LLC.
      No appearance by Plaintiff and Respondent Coby Halavais.
                         _______________
       Jack Eskenazi appeals the judgment entered in favor of
310 Culver LLC (Culver) after the court granted summary
judgment for Culver on Eskenazi’s complaint for breach of
contract and related claims and later found for Culver in a bench
trial on Culver’s cross-complaint for breach of contract and
declaratory relief. Eskenazi primarily contends the court’s
finding at trial that he materially breached a settlement
agreement is not supported by law or substantial evidence. He
also challenges the court’s order pursuant to Code of Civil
Procedure section 386.6 requiring him to pay $8,424.80 in
attorney fees to Culver’s counsel, Coby Halavais, who filed an
interpleader action in connection with the settlement funds at
issue. We affirm.
       FACTUAL AND PROCEDURAL BACKGROUND
         1. Prior Litigation
       On January 20, 2015 Culver, through its agents, purchased
at a foreclosure sale real property located in Playa Del Rey for
$578,000. In March 2015 Culver discovered the property was
subject to a cleanup and abatement order issued by the state
water resources control board. Culver sued the seller and the
foreclosure trustee, among others, alleging the cleanup order was
not a matter of public record and had not been disclosed during
the sale. Culver sought rescission of the sale. (Super Ct. L.A.
County, No. YC070575, the rescission action.)
       Eskenazi, through his company, Pemoll LLC, is the
assignee of a promissory note in the original amount of $272,000
secured by a recorded second position deed of trust on the Playa
Del Rey property. Eskenazi and Pemoll filed a lawsuit naming
the seller of the property and Culver, among others, as
defendants and asserting Eskenazi was entitled to payment of

                                2
the balance due on his note from the proceeds of the foreclosure
sale. (Super. Ct. L.A. County, No. BC588525, the Pemoll action.)
      In October 2015 the court deemed Culver’s rescission action
and the Pemoll action related.
         2. The Global Settlement Agreement
      In December 2016 all parties to the related lawsuits
entered into a global settlement to rescind the sale of the
property and return the proceeds of the sale to Culver as
restitution. To obtain Eskenazi’s agreement to the global
settlement, Culver agreed to buy Eskenazi’s position as the
holder of the promissory note secured by a second deed of trust on
the property.
      Pursuant to the settlement agreement, Culver promised to
pay Eskenazi $60,523.51 from its restitution award following
entry of judgment in the rescission action. The agreement
provided $60,523.51 from the award would be held in Culver’s
counsel’s client trust account and “shall be delivered to
Eskenazi’s attorney, Nicholas Tepper of the Tepper Law Firm,
APC . . . within 5 business days of 310 Culver’s receipt of funds
from the Court in the [Rescission] Action. . . . Contemporaneous
therewith, Eskenazi shall deliver an original and notarized
Assignment of [his] Deed of Trust recorded with the Los Angeles
County Recorder on July 28, 2000 as Instrument No. XX-XXXXXXX
along with the original Promissory Note and an allonge thereto
transferring all right, title and interest in and to such Note and
Deed of Trust to 310 Culver, LLC, or its designee or nominee; the
form of which is attached hereto as Exhibit ‘B[.’] 310 Culver shall
be responsible for recording the Assignment of Deed of Trust and
taking any such other action as necessary to perfect the
assignment of interests thereunder. . . . Finally [Eskenazi] shall

                                 3
dismiss its action numbered BC 588525 in its entirety and with
prejudice within 15 days of the Court’s entry of Judgment in the
Rescission Action.”
      In April 2017 the court entered a judgment in the
                                                                 1
rescission action, rescinding the sale and awarding restitution.
Pursuant to the settlement agreement, $60,523.51 of the award
was set aside in Halavais’s client trust account, to be paid to
Eskenazi in exchange for the original promissory note and
notarized assignment of the second deed of trust.
       In June 2017 Halavais informed Eskenazi that Culver was
in receipt of the funds in the rescission action from which it
would pay Eskenazi. After some delay Eskenazi responded,
telling Culver he had lost the promissory note and offering to
provide his sworn declaration attesting to the contents of the note
and his exhaustive search for it. Culver refused and claimed it
had no obligation to pay Eskenazi due to his failure to perform
his side of the bargain. After Eskenazi repeatedly claimed
entitlement to the $60,523.51 despite his inability to perform,
Halavais filed an interpleader action and deposited the disputed
amount with the court.
         3. Eskenazi’s Complaint and Culver’s Cross-complaint
       On August 21, 2017 Eskenazi filed the complaint in the
case at bar alleging causes of action against Culver and Halavais
for breach of contract, breach of the covenant of good faith and
fair dealing, conversion and breach of fiduciary duty. Eskenazi
alleged as to all causes of action that Culver and its counsel had
refused to pay him the $60,523.51 he was owed under the
settlement agreement.

1
      The court’s order after trial erroneously listed the date of
entry of judgment in the rescission action as August 2018.

                                 4
        Culver filed a cross-complaint, alleging causes of action for
breach of contract and declaratory relief. Culver alleged it had
tendered its performance upon receipt of the money in the
rescission action; Eskenazi had failed to, and could not, perform
because he did not have the documents he was required to
provide to Culver; and, accordingly, Culver had no obligation to
make the payment to him under the settlement agreement. It
requested the court order the release of the court-deposited funds
to it in the amount of $60,523.51, plus prejudgment interest.
          4. Culver’s Motions for Summary Judgment
        Culver filed two motions for summary judgment or, in the
alternative, summary adjudication, one directed to Eskenazi’s
complaint, and the other, to its own cross-complaint. In January
2019 the court granted Culver’s motion for summary judgment on
Eskenazi’s complaint, concluding Eskenazi had failed to perform
his obligations under the settlement agreement, had no
entitlement to the settlement money and thus could not prevail
on any of his causes of action. The court denied Culver’s motion
for summary judgment on its cross-complaint, finding Culver had
failed to demonstrate in its motion any resulting damage, an
essential element of a breach of contract claim, and failed to
establish as a matter of law in regard to its declaratory relief
action that it was entitled to retain the settlement funds if
                                                             2
Eskenazi did not provide the original documents promised.

2
      Eskenazi did not include the summary judgment motions
and opposition papers in the record provided on appeal. We
granted Culver’s motion to augment the record to include the
court’s January 9, 2019 minute order and its March 8, 2019 order
relating to the court’s summary judgment findings and orders.
The court’s order after trial indicates the court had also granted

                                  5
         5. The Court Trial on Culver’s Cross-complaint
      The parties waived their right to a jury on the contract
claim in Culver’s cross-complaint; and the matter, along with the
declaratory relief claim, was tried to the court. Prior to trial the
parties stipulated (1) they had entered into a settlement
agreement in which they agreed Culver would pay Eskenazi
$60,523.51 in exchange for the originals of the deed of trust and
promissory note to Culver; (2) Eskenazi lost or misplaced the
original documents and was not able to provide them to Culver;
and (3) Culver performed all of its obligations under the
settlement agreement “except payment of sums that would
become due upon receipt of the subject original documents.”
      After trial in which several witnesses testified, the court
found Eskenazi had breached the settlement agreement by not
providing Culver with the promised documents. The court also
granted Culver’s request for declaratory relief, ruling that, due to
Eskenazi’s nonperformance, Culver had no obligation to pay
Eskenazi any money under the settlement agreement. The court
entered judgment for Culver in the amount of $60,523.51, plus
prejudgment interest in the amount of $12,709.94. The court also
ordered Eskenazi to pay Halavais $8,424.80 in connection with
the interpleader action. The court indicated it would consider
Culver’s requests for attorney fees following a noticed motion.
      Eskenazi filed a timely notice of appeal.
                           DISCUSSION
      Eskenazi does not challenge the trial court’s order granting
Culver and Halavais summary judgment on his complaint.
Rather, limiting his briefing to the court trial on Culver’s cross-

Halavais’s separate motion for summary judgment on Eskenazi’s
complaint.

                                 6
complaint, Eskenazi argues the court erred in finding he
materially breached the agreement by failing to provide Culver
with the original promissory note, thereby excusing Culver’s
obligation to purchase the note for $60,523,51.
       1. Principles of Contract Interpretation and Standard of
           Review
       The fundamental goal of contract interpretation is to give
effect to the mutual intention of the parties as it existed at the
time they entered into the contract. (Hartford Casualty Ins. Co.
v. Swift Distribution, Inc. (2014) 59 Cal.4th 277, 288; Bank of the
West v. Superior Court (1992) 2 Cal.4th 1254, 1264; see Civ. Code,
§ 1636.) That intent is interpreted according to objective, rather
than subjective, criteria. (Brown v. Goldstein (2019)
34 Cal.App.5th 418, 432; Wolf v. Walt Disney Pictures &
Television (2008) 162 Cal.App.4th 1107, 1126.) When the
contract is clear and explicit, the parties’ intent is determined
solely by reference to the language of the agreement. (See Civ.
Code, §§ 1638 [“language of a contract is to govern its
interpretation, if the language is clear and explicit, and does not
involve an absurdity”]; 1639 [“[w]hen a contract is reduced to
writing, the intention of the parties is to be ascertained from the
writing alone, if possible”].) The words are to be understood “in
their ordinary and popular sense” (Civ. Code, § 1644); and the
“whole of [the] contract is to be taken together, so as to give effect
to every part, if reasonably practicable, each clause helping to
interpret the other.” (Civ. Code, § 1641.)
       When no ambiguity is asserted or there is no conflicting
extrinsic evidence concerning the meaning of a purported
ambiguity in the contract, the trial court’s interpretation of a
contract is a legal determination subject to de novo review. (City

                                  7
of Hope National Medical Center v. Genentech, Inc. (2008)
43 Cal.4th 375, 393-394; Garcia v. Truck Ins. Exchange (1984)
36 Cal.3d 426, 439; see Hanna v. Mercedes-Benz USA, LLC (2019)
36 Cal.App.5th 493, 507 [“in the absence of any conflict in
extrinsic evidence presented to clarify an ambiguity,” written
agreements are interpreted de novo].) We review the trier of
fact’s resolution of disputed facts for substantial evidence.
(Crocker National Bank v. City and County of San Francisco
(1989) 49 Cal.3d 881, 888; In re Marriage of Kamgar (2017)
18 Cal.App.5th 136, 144.)
       2. The Trial Court Did Not Err in Finding Eskenazi
          Breached the Settlement Agreement
      To prevail on its cause of action for breach of contract,
Culver was required to demonstrate (1) a contract existed; (2) it
performed or tendered performance, or its performance was
excused; (3) Eskenazi breached; and (4) resulting damage.
(See Oasis West Realty, LLC v. Goldman (2011) 51 Cal.4th 811,
821; Stockton Mortgage, Inc. v. Tope (2014) 233 Cal.App.4th 437,
453; Rutherford Holdings, LLC v. Plaza Del Rey (2014)
223 Cal.App.4th 221, 228.)
      As discussed, Culver and Eskenazi stipulated to the
existence of the agreement, Eskenazi’s inability to provide the
documents promised and Culver’s performance of its obligations
under the agreement except payment of the agreed-upon sum.
The only issue in dispute was whether Eskenazi’s failure to
provide the original note constituted a breach that excused
Culver’s performance.
      Citing well established law that only a material breach will
excuse the innocent contracting party’s performance (see
De Burgh v. De Burgh (1952) 39 Cal.2d 858, 863 [“in contract law

                                8
a material breach excuses further performance by the innocent
party”]; Brown v. Grimes (2011) 192 Cal.App.4th 265, 277 [not
every failure by the plaintiff to perform will excuse a defendant’s
performance; only a failure to perform that constitutes “a
material breach of the contract” may discharge the other party
from its duty to perform]), Eskenazi argues he could have
substantially performed his obligations by providing a sworn
declaration as to the contents of the promissory note. It was
Culver, he argues, that prevented his substantial performance by
failing to accept a sworn declaration in lieu of the promissory
note.
       Although the court did not use the words “material breach”
or “substantial performance,” the court plainly rejected this
argument, concluding the parties had contracted specifically for
the promissory note, not a sworn declaration, and it did not have
the power to rewrite their agreement. Eskenazi asserts the court
erred. The purpose of the contract, he asserts, was to assign to
Culver Eskenazi’s position as second deed of trust holder on the
property. Citing California Uniform Commercial Code
section 3309, subdivision (a), Eskenazi asserts this purpose could
have been accomplished without Culver’s actual possession of the
promissory note, thereby making his failure to provide the
promissory note, at most, a nonmaterial breach.
       California Uniform Commercial Code section 3309,
subdivision (a), does not support Eskenazi’s claim. It provides, “A
person not in possession of an instrument is entitled to enforce
the instrument if (1) the person was in possession of the
instrument and entitled to enforce it when loss of possession
occurred, (2) the loss of possession was not the result of a transfer
by the person or a lawful seizure, and (3) the person cannot

                                  9
reasonably obtain possession of the instrument because the
instrument was destroyed, its whereabouts cannot be
determined, or it is in the wrongful possession of an unknown
person or a person that cannot be found or is not amenable to
service of process.” Eskenazi is not seeking to enforce the note
(nor is Culver a debtor on that note). To the extent Eskenazi
asserts this section of the Commercial Code would permit Culver
to enforce the note in any subsequent action even without
possession of the note, thus making the failure to obtain the
actual note from Eskenazi “immaterial,” Culver was not in
possession of the note when it was lost. Accordingly, its ability to
benefit from this section of the Commercial Code in any
subsequent enforcement action is questionable at best. (See
generally Crystaplex Plastics, Ltd. v. Redevelopment Agency
(2000) 77 Cal.App.4th 990, 998 [section 3309 requires the person
be “in possession of the instrument and entitled to enforce it
when loss of possession occurred”].)
       Eskenazi’s reliance on Debrunner v. Deutsche Bank
National Trust Co. (2012) 204 Cal.App.4th 433, 440 is similarly
misplaced. In Debrunner the plaintiff in an action seeking a
declaratory judgment and injunction to stop an impending
foreclosure argued the defendant bank that owned the deed of
trust could not foreclose because it did not possess or own the
original promissory note. The court of appeal rejected this
argument, holding a foreclosing party in possession of a deed of
trust need not be in possession of the original promissory note in
order to initiate foreclosure; assignment of a deed of trust is valid
even without the actual transfer of the underlying promissory
note. (Id. at p. 440.)

                                 10
       Citing Debrunner, Eskenazi asserts the breach was not
material because Culver could always foreclose on the deed of
trust Eskenazi could provide to it, despite his inability to provide
Culver with the promissory note. However, as discussed, this
action involves neither enforcement of the promissory note nor a
nonjudicial foreclosure, but a breach of the settlement agreement.
Whether or not possession of the deed of trust would be sufficient
for that purpose in any subsequent action Culver might have
against the promisor under the note is irrelevant. Culver
expressly bargained for the promissory note and deed of trust,
presumably factoring into the negotiated price its existence and
the work necessary to enforce it in any subsequent action.
Eskenazi failed to perform his part of the bargain.
       Eskenazi’s substantial performance argument fails for
another reason. “Whether a breach is material is usually left to
the trier of fact ‘to determine from all the facts and circumstances
shown in evidence.’” (Schellinger Brothers v. Cotter (2016)
2 Cal.App.5th 984, 1002; accord, Brown v. Grimes, supra,
192 Cal.App.4th at pp. 277-278 [whether a breach is material
depends on “‘the importance or seriousness thereof and the
probability of the injured party getting substantial
performance’”].) When, as here, “no reporter’s transcript has
been provided and no error is apparent on the face of the existing
appellate record, the judgment must be conclusively presumed
correct as to all evidentiary matters. To put it another way, it is
presumed that the unreported trial testimony would demonstrate
the absence of the error.” (Estate of Fain (1999) 75 Cal.App.4th
973, 992, italics omitted; accord, Hood v. Gonzales (2019)
43 Cal.App.5th 57, 82.) Accordingly, we presume, as we must,
the testimony at trial supports the trial court’s finding Eskenazi’s

                                 11
failure to provide the note was a material breach of the
settlement agreement.
      Finally, Eskenazi’s observation the court erred in
characterizing his payment obligation under the settlement
agreement as a condition precedent to Culver’s performance
                                                         3
rather than as condition concurrent, while legally correct, is
beside the point. The record was undisputed the funds were held
in an escrow (or client trust) account; Culver’s counsel tendered
performance on Culver’s behalf by alerting Eskenazi to receipt of
the funds; Culver was ready, willing and able to perform; and
Eskenazi did not, and could not, perform. Under these
circumstances, the court’s mistaken characterization of
Eskenazi’s obligation as a condition precedent rather than
condition concurrent had no effect on the court’s ruling.

3
       The settlement agreement expressly provided that
Eskenazi’s obligation to provide the original note and Culver’s
obligation to pay the settlement funds were “contemporaneous”
with each other, in other words, mutual concurrent conditions.
(Compare Civ. Code, § 1436 [“[a] condition precedent is one which
is to be performed before some right dependent thereon accrues,
or some act dependent thereon is performed”] with Civ. Code,
§ 1437 [“[c]onditions concurrent are those which are mutually
dependent, and are to be performed at the same time”]; see Rubin
v. Fuchs (1969) 1 Cal.3d 50, 54 [“The rule is that provisions of a
contract will not be construed as conditions precedent in the
absence of language plainly requiring such construction.
[Citations.] Instead, whenever possible the courts will construe
promises in a bilateral contract as mutually dependent and
concurrent”]; Colaco v. Cavotec SA (2018) 25 Cal.App.5th 1172,
1183 [“‘courts shall not construe a term of the contract so as to
establish a condition precedent absent plain and unambiguous
contract language to that effect’”].)

                                12
      3. The Court’s Ruling on Culver’s Declaratory Relief Action
         Provides an Independent Ground for Affirming the
         Judgment
       The court also granted Culver’s request for declaratory
relief, finding Culver was entitled to retain the $60,523.51 (by
then on deposit with the court in the interpleader action), plus
prejudgment interest, the same sum it had awarded in the breach
of contract claim. (See Meyer v. Sprint Spectrum L.P. (2009)
45 Cal.4th 634, 647 [Code of Civil Procedure section 1060,
governing declaratory relief, “does not require a breach of
contract in order to obtain declaratory relief only an ‘actual
controversy.’ Declaratory relief pursuant to this section has
frequently been used as a means of settling controversies
between parties to a contract regarding the nature of their
contractual rights and obligations”].)
       Because Eskenazi could not perform as provided in the
parties’ agreement, the court ruled Culver’s obligation to acquire
the note was excused. In challenging the trial court’s decision,
Eskenazi contends the ruling, even if compelled by the plain
language of the settlement agreement, is nonetheless unfair.
Because the purpose of the contract could have been achieved by
providing Culver with a certified copy of the deed of trust and a
declaration, he insists it is unjust for a court sitting in equity (in
the declaratory relief claim) to deny him funds he had been
promised. His argument, premised on his alleged ability to
substantially perform, fails for the reasons discussed. Simply
stated, equity does not demand a different result. (See Bailard v.
Marden (1951) 36 Cal.2d 703, 708 [“‘[c]ourts of equity have no
power to make new contracts for the parties . . . [nor] can they
reform an instrument according to the terms in which one of the

                                 13
parties understood it, unless it appears that the other party also
                                 4
had the same understanding’”].)
      4. The Court Did Not Abuse Its Discretion in Imposing on
         Eskenazi Costs and Reasonable Attorney Fees in
         Connection with the Interpleader Action
       Code of Civil Procedure section 386.6, subdivision (a),
provides, “A party to an action who follows the procedure set
forth in Section 386 or 386.5 [to file an interpleader action] may
insert in his motion, petition, complaint, or cross-complaint a
request for allowance of his costs and reasonable attorney fees
incurred in such action. In ordering the discharge of such party,
the court may, in its discretion, award such party his costs and
reasonable attorney fees from the amount in dispute which has
been deposited with the court. At the time of the final judgment
in the action the court may make such further provision for
assumption of such costs and attorney fees by one or more of the
adverse claimants as may appear proper.”
       Eskenazi challenges the aspect of the judgment requiring
him to pay Halavais $8,424.80 in costs and reasonable attorney
                                      5
fees for filing the interpleader action. We review for abuse of

4
      Eskenazi’s claim of undue prejudice is difficult to
understand. The rescission of the Playa Del Rey real property
sale did not change his status as the owner of the note and the
holder of a security interest in the property. His right to enforce
the note against the debtor remains.
5
      In its written ruling after trial the court explained, “The
Complaint in interpleader was required to be filed because
Eskenazi pursued what the Court finds is an unmeritiorious
claim. ‘At the time of final judgment in the action the court may
make such further provision for assumption of such costs and
attorney fees by one or more of the adverse claimants as may

                                 14
discretion the court’s decision pursuant to Code of Civil
Procedure section 386.6 to impose on an adverse claimant
reasonable attorney fees incurred in connection with the filing of
an interpleader action. (MDQ, LLC v. Gilbert, Kelly, Crowley &
Jennett LLP (2019) 32 Cal.App.5th 702, 712; Wertheim, LLC v.
Omidvar (2016) 3 Cal.App.5th 921, 925.)
       Having found Eskenazi had no right to the money and that
his claim to it necessitated the interpleader action, the court
concluded it was appropriate for Eskenazi, not Culver, to assume
the costs and fees relating to that action. No abuse of discretion
occurred. (See Wertheim, LLC v. Omidvar, supra, 3 Cal.App.5th
at p. 925 [court did not abuse its discretion in imposing on
adverse claimant fees relating to interpleader; “trial court could
reasonably find it proper that the party that necessitated the
interpleader action pay for it”].)
                           DISPOSITION
       The judgment is affirmed. Culver is to recover its costs on
appeal.

                                     PERLUSS, P. J.
      We concur:

            SEGAL, J.                FEUER, J.

appear proper.’ See [Code of Civ. Proc. Section] 386.6. Thus, the
Court finds Eskenazi and not [Culver] should bear the fees
incurred by 310 Culver through their attorney . . . Halavais in the
amount of $8,424.80.”

                                15