Great American Ins. Co. v. Paul Blanco's Good Car Co. Sacramento ( 2022 )

1 2 3 4 5 6 7 8 UNITED STATES DISTRICT COURT 9 EASTERN DISTRICT OF CALIFORNIA 10 11 GREAT AMERICAN INSURANCE No. 2:21-cv-00057-TLN-DB COMPANY, 12 Plaintiff, 13 ORDER v. 14 PAUL BLANCO’S GOOD CAR 15 COMPANY SACRAMENTO, et al., 16 Defendants. 17 18 This matter is before the Court on Plaintiff Great American Insurance Company’s 19 (“Plaintiff”) Motion for Summary Judgment. (ECF No. 15.) Defendants Paul Blanco’s Good Car 20 Company Sacramento, Paul Blanco’s Good Car Company Bakersfield, Paul Blanco’s Good Car 21 Company Stockton, Paul Blanco’s Good Car Company Fresno, Paul Blanco’s Good Car 22 Company Oakland, Paul Blanco’s Good Car Company Inland Empire, Paul Blanco’s Good Car 23 Company East LA, Paul Blanco’s Good Car Company Reno, Paul Blanco’s Good Car Company 24 Fairfield, Paul Blanco’s Good Car Company Las Vegas, Paul Blanco, and Putu Blanco 25 (collectively, “Defendants”) declined to file an opposition (ECF No. 18), which the Court 26 construes as a non-opposition (ECF No. 19). For the reasons set forth below, the Court GRANTS 27 Plaintiff’s motion. 28 /// 1 I. FACTUAL AND PROCEDURAL BACKGROUND 2 Plaintiff filed the Complaint on January 11, 2021, alleging claims for: (1) breach of 3 contract; (2) equitable and statutory indemnity; (3) injunctive relief; and (4) specific performance. 4 (ECF No. 1.) Plaintiff is a surety company, and Defendants are car dealerships. (Id. at 1–3.) 5 Plaintiff alleges that Defendants breached an Indemnity Agreement between the parties. (Id. at 6 8.) Plaintiff filed the instant motion for summary judgment on October 15, 2022. (ECF No. 15.) 7 The following facts are undisputed unless otherwise noted. Defendants executed an 8 Indemnity Agreement in favor of Plaintiff as a surety. (ECF No. 15-1 at 2.) In consideration of 9 Defendants executing the Indemnity Agreement, Plaintiff agreed to issue seven $50,000 Dealer 10 Surety Bonds (“Bonds”) pursuant to California Vehicle Code § 11710 on behalf of the identified 11 Defendant car dealerships. (Id.) Pursuant to the request of Defendants, and in reliance upon the 12 terms and execution of the Indemnity Agreement, Plaintiff issued the Bonds to the Dealers, 13 respectively, as principal, to permit the Dealers to operate their businesses in compliance with 14 California law. (Id.) Under the Indemnity Agreement, Defendants promised, among other things, 15 to indemnify and hold harmless Plaintiff from and against any and all liability, losses, and/or 16 expenses including but not limited to interest, court costs, and counsel fees that Plaintiff may 17 incur by reason of issuance of the Bonds on behalf of the Dealers, as principal. (Id. at 2–3.) 18 After the issuance of the Bonds, Plaintiff began receiving claims against the Bonds 19 alleging liability of the Plaintiff for alleged wrongful practices by the Dealers. (Id. at 3.) 20 Relating to the Sacramento, Stockton, Fresno and Bakersfield Bonds, Plaintiff has been sued for 21 claims on the Bonds for amounts far more than the $50,000 maximum potential liability of 22 Plaintiff under such Bonds. (Id.) Relating to the Sacramento, Stockton, Fresno and Bakersfield 23 Bonds, Plaintiff has filed interpleader actions. (Id.) As to each of the interpleader actions 24 identified above, Plaintiff has deposited the sum of $50,000 with the respective superior court, net 25 of allowable costs. (Id.) 26 Plaintiff contends it has incurred and continues to incur attorney’s fees, legal expenses, 27 and consultant expenses in connection to this action and the interpleader actions. (Id. at 3–4.) 28 Plaintiff further contends Defendants have refused to provide or pledge any assets to Plaintiff in 1 response to Plaintiff’s demands for collateral, have not resolved Bond claims, and have not paid 2 any sum to Plaintiff. (Id. at 4.) Plaintiffs therefore argue Defendants breached the Indemnity 3 Agreement by refusing to indemnify Plaintiff as required. (Id.) 4 II. STANDARD OF LAW 5 Summary judgment is appropriate when the moving party demonstrates no genuine issue 6 as to any material fact exists and the moving party is entitled to judgment as a matter of law. Fed. 7 R. Civ. P. 56(a); Adickes v. S.H. Kress & Co., 398 U.S. 144, 157 (1970). Under summary 8 judgment practice, the moving party always bears the initial responsibility of informing the 9 district court of the basis of its motion, and identifying those portions of “the pleadings, 10 depositions, answers to interrogatories, and admissions on file together with affidavits, if any,” 11 which it believes demonstrate the absence of a genuine issue of material fact. Celotex Corp. v. 12 Catrett, 477 U.S. 317, 323 (1986). “[W]here the nonmoving party will bear the burden of proof 13 at trial on a dispositive issue, a summary judgment motion may properly be made in reliance 14 solely on the pleadings, depositions, answers to interrogatories, and admissions on file.” Id. at 15 324 (internal quotations omitted). Indeed, summary judgment should be entered against a party 16 who does not make a showing sufficient to establish the existence of an element essential to that 17 party’s case, and on which that party will bear the burden of proof at trial. Id. at 322. 18 If the moving party meets its initial responsibility, the burden then shifts to the opposing 19 party to establish that a genuine issue as to any material fact actually does exist. Matsushita Elec. 20 Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 585–87 (1986); First Nat’l Bank of Ariz. v. Cities 21 Serv. Co., 391 U.S. 253, 288–89 (1968). In attempting to establish the existence of a factual 22 dispute, the opposing party may not rely upon the denials of its pleadings but is required to tender 23 evidence of specific facts in the form of affidavits and/or admissible discovery material in support 24 of its contention that a dispute exists. Fed. R. Civ. P. 56(c). The opposing party must 25 demonstrate that the fact in contention is material, i.e., a fact that might affect the outcome of the 26 suit under the governing law, Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986), and that 27 the dispute is genuine, i.e., the evidence is such that a reasonable jury could return a verdict for 28 the nonmoving party. Id. at 251–52. 1 In resolving the summary judgment motion, the court examines the pleadings, depositions, 2 answers to interrogatories, and admissions on file, together with any applicable affidavits. Fed. 3 R. Civ. P. 56(c); SEC v. Seaboard Corp., 677 F.2d 1301, 1305–06 (9th Cir. 1982). The evidence 4 of the opposing party is to be believed, and all reasonable inferences that may be drawn from the 5 facts pleaded must be drawn in favor of the opposing party. Anderson, 477 U.S. at 255. 6 Nevertheless, inferences are not drawn out of the air, and it is the opposing party’s obligation to 7 produce a factual predicate from which the inference may be drawn. Richards v. Nielsen Freight 8 Lines, 602 F. Supp. 1224, 1244–45 (E.D. Cal. 1985), aff’d, 810 F.2d 898 (9th Cir. 1987). Finally, 9 to demonstrate a genuine issue that necessitates a jury trial, the opposing party “must do more 10 than simply show that there is some metaphysical doubt as to the material facts.” Matsushita 11 Elec. Indus. Co., 475 U.S. at 586. “Where the record taken as a whole could not lead a rational 12 trier of fact to find for the nonmoving party, there is no ‘genuine issue for trial.’” Id. at 587. 13 III. ANALYSIS 14 Plaintiff moves for summary judgment only as to Claim One — breach of contract. (ECF 15 No. 15 at 2.) Plaintiff contends there is no genuine dispute that Defendants breached the 16 Indemnity Agreement. (ECF No. 15-1 at 12.) Plaintiff therefore requests the Court grant 17 summary judgment as to the breach of contract claim in the amount of $254,571.44 (which 18 includes $200,000 of principal and $54,571.44 in attorney’s fees and costs). (Id. at 15–16.) As 19 mentioned, Defendants declined to file an opposition, and the Court thus deems Plaintiff’s motion 20 to be unopposed pursuant to Local Rule 230(c). 21 “[T]he elements of a cause of action for breach of contract are[:] (1) the existence of the 22 contract[;] (2) plaintiff’s performance or excuse for nonperformance[;] (3) defendant’s breach[;] 23 and (4) the resulting damages to the plaintiff.” Oasis W. Realty, LLC v. Goldman, 51 Cal. 4th 24 811, 821 (2011). 25 Plaintiff has provided undisputed evidence that: (1) the parties executed a written 26 indemnification agreement; (2) under the terms of that agreement, Defendants agreed to 27 indemnify Plaintiff against losses, liabilities, costs, damages, attorney’s fees, and expenses arising 28 from Bonds issues; (3) Defendants have not indemnified Plaintiff as required and are thus in 1 | breach of the agreement; and (4) as a result of the breach, Plaintiff has suffered damages in the 2 | principal sum of $200,000 and attorney’s fees and costs in the amount of $54,571.44. (See ECF 3 | No. 15-2.) Further, Plaintiff has submitted evidence of its payments pursuant to the prima facie 4 | evidence clause of the Indemnity Agreement and has established that it acted in good faith to 5 | settle the Bond claims by filing interpleader actions. (/d.; ECF No. 15-1 at 14-16.) 6 Based on Plaintiffs undisputed evidence and Defendants’ non-opposition, the Court finds 7 | Plaintiff has shown that it is entitled to summary judgment for Defendants’ breach of the 8 | Indemnity Agreement and is entitled to a money judgment against Defendants, jointly and 9 | severally, in order to indemnify Plaintiff for the amounts expended under the Dealer Surety 10 | Bonds it issued for the benefit of: (1) Paul Blanco’s Good Car Company Sacramento; (2) Paul 11 | Blanco’s Good Car Company Stockton; (3) Paul Blanco’s Good Car Company Fresno; and (4) 12 | Paul Blanco’s Good Car Company Bakersfield, as follows: (1) $200,000, consisting of $50,000 13 | deposited in connection with interpleader actions for each of the four Bonds; and (2) $54,571.44 14 | inattorney’s fees and costs. 15 IV. CONCLUSION 16 For the foregoing reasons, the Court GRANTS Plaintiff's Motion for Summary Judgment 17 | (ECF No. 15.) Plaintiff is ordered to notify the Court not later than seven (7) days from the 18 | electronic filing date of this Order as to whether it intends to proceed on the remaining claims in 19 || the Complaint or dismiss those claims. If Plaintiff intends to dismiss the remaining claims, the 20 | Court will enter judgment in Plaintiff's favor consistent with this Order and close the case. 21 IT IS SO ORDERED. 22 | DATED: November 9, 2022 23 /) 24 “ \/ fs WM 26 United States District Judge 27 28