East Coast Foods v. KG Law CA2/4 ( 2023 )

Filed 7/27/23 East Coast Foods v. KG Law CA2/4
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS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
not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion
has not been certified for publication or ordered published for purposes of rule 8.1115.
IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA
SECOND APPELLATE DISTRICT
DIVISION FOUR
EAST COAST FOODS, INC. et al, B313056
Plaintiffs and Appellants, (Los Angeles County
Super. Ct. No. 19STCV32858)
v.
KG LAW, APC et al.,
Defendants and Respondents.
APPEAL from an order of the Superior Court of
Los Angeles County, William F. Fahey, Judge. Affirmed.
Rostam Law, Glen H. Mertens, Carlos A. DeLaPaz for
Plaintiff and Appellant.
Nemecek & Cole, Vikram Sohal for Defendants and
Respondents.
East Coast Foods, Inc. (ECF) and Herbert Hudson, ECF’s
president and sole shareholder, brought an action against
respondents KG Law, APC and attorney Vahe Khojayan. The
complaint alleged claims including legal malpractice and
negligent and intentional misrepresentation arising from
respondents' representation of ECF in bankruptcy proceedings.
As relevant here, Hudson contended that respondents
represented to him that they were acting as counsel for him
individually, as well as for ECF, and his reliance on that
representation led to negative outcomes in the bankruptcy. The
court largely sustained respondents’ demurrer, leaving only
Hudson’s claims alleging negligent and intentional
misrepresentation.
The trial court subsequently granted respondents’ motion
for summary judgment, finding that Hudson failed to show a
triable issue of fact as to multiple elements of his
misrepresentation claims. Hudson appealed. On appeal, Hudson
asserts two procedural errors. First, he argues that the trial
court erred in sustaining respondents’ objections to his evidence
without ruling on each objection individually. Second, he
contends that the court abused its discretion by striking the
portion of his opposition brief that exceeded the allowable page
limits, without giving him an opportunity to cure the deficiency.
We find no error in these rulings.
In addition, Hudson contends that he raised triable issues
of fact to support his claims for misrepresentation. Respondents
argue that Hudson offered only his self-serving declaration and
therefore did not produce evidence sufficient to defeat summary
judgment. We agree with respondents. We therefore affirm the
judgment.
2
FACTUAL AND PROCEDURAL HISTORY
I. The Complaint
Hudson is the president and sole shareholder of ECF. ECF
operates four locations of the restaurant chain Roscoe’s House of
Chicken and Waffles in Southern California.1 In 2016, ECF filed
a Chapter 11 bankruptcy petition in federal bankruptcy court
(the bankruptcy action). At the time, ECF was facing a multi-
million dollar judgment entered against it from a lawsuit by a
former employee, as well as several other pending lawsuits.
ECF and Hudson filed a complaint in September 2019
against respondents. The complaint alleged the following causes
of action: (1) legal malpractice (by ECF); (2) negligence (by
Hudson); (3) breach of fiduciary duty (by ECF and Hudson); (4)
intentional misrepresentation (by Hudson); and (5) negligent
misrepresentation (by ECF and Hudson).
As relevant here, the complaint alleged that respondents
represented ECF as counsel from March to September 2016 in
connection with filing the bankruptcy action. The complaint also
alleged that Hudson, as the sole shareholder of ECF, “was of the
belief that he retained [respondents], as his lawyer [sic], to
represent HUDSON individually” in the bankruptcy action.2
Prior to the filing of the bankruptcy petition, Hudson “confirmed
with [respondents] that they would represent his interests in the
[bankruptcy action] along with those of Plaintiff ECF.” The
1 The other three locations are owned by other entities
connected to Hudson.
2 The complaint also alleged that respondents failed to
adequately represent ECF and, to the extent they did represent
Hudson, failed to adequately discharge those duties. Those
allegations are not relevant to the misrepresentation claims at
issue here.
3
complaint further alleged that Hudson “asked [respondents] if
there were any potential or actual conflicts of interest with
[respondents] representing both HUDSON and ECF in the
[bankruptcy action], and [respondents] responded by stating that
there were no actual or potential conflicts that would prevent
their representation of both [Hudson and ECF]. Accordingly,
Plaintiff HUDSON was under the impression that [respondents]
were representing his interest in connection with the [bankruptcy
action] as well as those of ECF.”
In August 2016, Hudson appeared for a debtor
examination, at which respondents “purported to represent both”
Hudson and ECF. Hudson alleged that he answered questions
from creditor’s counsel “under the belief” that respondents were
acting as his lawyers. Hudson also relied on the advice of
respondents when instructed not to answer “many relevant,
proper questions.” According to the complaint, the debtor
examination “did not fare well for Plaintiffs and was then
thereafter used against them in the [bankruptcy action] by
creditors, trustees, and others.” In September 2016, the
appointed bankruptcy examiner filed a “scathing Status Report”
after reviewing ECF’s records. Shortly thereafter, the
bankruptcy court appointed a Chapter 11 trustee, at which point
ECF was no longer the debtor-in-possession. Hudson alleged that
he “later discovered that [respondents] never in fact” represented
him in the bankruptcy action, but rather only represented ECF.
In support of his fourth and fifth causes of action for
intentional and negligent misrepresentation, respectively,
Hudson alleged that respondents misrepresented to him prior to
the filing of the bankruptcy action and during the debtor
examination that they were representing him “as his attorney
4
[sic].” However, respondents “did not in fact represent Plaintiff
HUDSON as his attorney.” Hudson further alleged that
respondents knew their statement was “false when they made it,
or that they made the representation recklessly and without
regard for its truth,” and they intended that Hudson would rely
on the misrepresentation so that Hudson “would continue to
cause Plaintiff ECF to retain [respondents’] services as the
counsel for the debtor-in-possession” in the bankruptcy action.
Hudson also alleged that he “reasonably relied” on these
misrepresentations and continued to retain respondents as
counsel for ECF. In addition, Hudson alleged that he was
harmed “in that the value of his ownership shares in Plaintiff
ECF have [sic] been diminished as a result of [respondents’]
conduct and errors” in the bankruptcy action and in having to
“incur additional expenses in the form of legal fees and other
expenses to correct the individual issues” caused by respondents.
The complaint sought general damages, punitive damages,
attorney fees, and costs.
Respondents demurred to the complaint. In January 2020,
the court sustained the demurrer as to all claims alleged by ECF,
finding that the first cause of action for malpractice was barred
by the Barton doctrine3 and the applicable statute of limitations.
The court also found that the statute of limitations barred ECF’s
third and fifth causes of action, as well as Hudson’s second and
3 Derived from Barton v. Barbour (1881) 104 U.S. 126(Barton) and its progeny, the doctrine “requires, before filing a
lawsuit against officers appointed or approved by the court,
obtaining leave from the bankruptcy court that appointed or
approved them.” (Akhlaghpour v. Orantes (2022) 86 Cal.App.5th
232, 238–239.)
5
third causes of action. The court dismissed these claims with
prejudice, leaving only Hudson’s fourth and fifth causes of action
for intentional and negligent misrepresentation.
II. Summary Judgment
A. Motion
Respondents filed a motion for summary judgment in
December 2020. They argued that Hudson could not prove the
elements of his misrepresentation claims as a matter of law. They
also argued the remaining claims were barred by the Barton
doctrine and the doctrine of unclean hands. They further sought
summary adjudication on the grounds that the fifth cause of
action was time-barred and the prayer for punitive damages was
without merit.
Respondents argued that they had never agreed to
represent Hudson individually and that it would be unreasonable
for Hudson to have believed otherwise. In support of this
argument, they attached numerous exhibits, including the
retainer agreement between KG Law, as the attorney, and ECF,
as the client. Under that agreement, KG Law agreed to provide
legal services to ECF in connection with filing and prosecuting
the bankruptcy action “on behalf of Client.” The agreement was
signed by Hudson, as president of ECF, indicating that he had
read, understood, and agreed to its terms.
They also attached documents from the bankruptcy action,
including the June 2016 order by the bankruptcy court approving
respondents as counsel for ECF in that case. Respondents also
included the transcript from the debtor examination of Hudson,
at which Khojayan appeared on behalf of the debtor, as well as
the examiner’s report. The examiner concluded that ECF’s
procedures “do not conform to reasonable accounting norms, or
6
any semblance of responsible management,” and that “[t]he
limited controls that do exist appear (by intentional design) to
assure Hudson’s personal access to [ECF’s] cash funds while
minimizing accountability for same.”
Respondents also included documents related to their 2016
fee application filed in the bankruptcy matter, seeking payment
for services rendered as bankruptcy counsel for ECF. Notably, a
creditor filed an objection, arguing that respondents had a
“conflict of interest” and were representing both ECF and its
principal, Hudson, in connection with the bankruptcy.
Respondents replied, stating that they never represented “any
party other than debtor” during the bankruptcy action. Hudson
also filed an objection in December 2016, on the basis that
respondents mishandled the bankruptcy action for ECF. Hudson
did not argue at that time that respondents purported to
represent him individually. The bankruptcy court approved
respondents’ application in part, awarding some of the fees
requested.
Respondents also attached discovery responses by Hudson,
which they argued demonstrated the lack of detail in his
misrepresentation claims. For example, when asked to state all
facts supporting his contention that respondents made
intentional misrepresentations, Hudson provided an
interrogatory response stating that Khojayan represented to
Hudson “before the filing of the bankruptcy petition in March
2016, that he would represent HUDSON in the bankruptcy
action. Defendant KHOJAYAN continued to represent to
HUDSON that he was representing HUDSON’s interests in the
underlying bankruptcy matter.” When asked to explain his
contention that respondents intended that Hudson rely on the
7
misrepresentation, Hudson responded that respondents “knew
that Plaintiff HUDSON would cause their services with Plaintiff
ECF to become terminated had he known they were not
representing” Hudson. When asked for facts supporting his
reasonable reliance, Hudson stated simply that he “relied on
Defendants’ representations that they would represent” him in
the bankruptcy action.
Respondents argued that Hudson provided similarly terse
responses during his deposition in this matter. Hudson testified
that he met with Khojayan in person in 2016 to discuss ECF
filing for bankruptcy, and no one else was present during these
meetings. He confirmed that he read the retainer agreement and
signed it in his capacity as ECF president. He also testified that
he never entered into an agreement where respondents agreed to
represent him individually and did not recall respondents filing
any document with the bankruptcy court representing that they
were his attorney.
Hudson testified that during the debtor examination, he
believed respondents were representing him individually as well
as ECF. But when asked if he had any reason to believe he was
appearing at the debtor examination as an individual, rather
than in his capacity as president of ECF, he responded, “I don’t
know what I was there for.” When asked why he believed that
respondents were representing him individually, he responded,
“because that’s what [Khojayan] told me.” When asked when
Khojayan made that representation, Hudson answered, “I can’t
recall, but he told me that.” Hudson also testified that he could
not recall if Khojayan made that statement before or after he
signed the retainer agreement, and could not recall the exact
words used.
8
Hudson later testified that Khojayan made intentional
misrepresentations to him “[w]hen he stated he was representing
me.” But he could not recall when or where such statements
were made. He further testified, “I can’t recall the situation. I
know that he led me to believe he was representing me.” Hudson
explained that Khojayan led him to believe this through “his
actions,” but could provide no further details. He also stated that
there were no other misrepresentations made by respondents.
Regarding his damages claim, Hudson testified that if
Khojayan had told him he needed his own attorney, “none of this
would have happened,” because he would have fired respondents.
As a result, the examiner’s opinion would have changed, and no
bankruptcy trustee would have been appointed. But he
acknowledged that he did not ask the examiner whether his
opinion would have changed. When asked if he believed “that the
examiner’s opinion of you would have changed had you retained a
personal attorney,” Hudson responded, “I don’t know.”
B. Opposition and Reply
Hudson opposed the motion for summary judgment. He
argued that his evidence was sufficient to raise material issues of
fact as to the elements of his misrepresentation claims. He also
contended that there were disputed facts regarding the
affirmative defense of unclean hands and his claim for punitive
damages, that the Barton doctrine was inapplicable, and that his
claim was not time-barred.
In support of his opposition, Hudson submitted an 11-page
declaration. He stated that “It was important for me to retain
counsel for ECF that will also represent my interests as an officer
of ECF. Therefore, during my initial meetings in March 2016,
[respondents] confirmed with me that they would represent my
9
interests in the [bankruptcy action] as an officer of ECF . . . . I
was led to believe that [respondents] would represent me along
with ECF.” He further stated that during these initial meetings,
“I asked [respondents] whether there would be any potential or
actual conflicts of interest with [respondents’] representation of
both ECF and myself,” and respondents stated that there were no
such conflicts. Hudson continued, “In light of these
conversations, I was led to believe that [respondents] were
representing my interests.”
Hudson acknowledged executing the retainer agreement, to
which he was not a party, but stated that “when I executed the
agreement, I was led to believe that I would be represented as an
officer of ECF during any examinations or appearances for which
I was required.” He also declared that he appeared at the debtor
examination along with respondents, “who purported to represent
both I and ECF [sic].”
Hudson also included three exhibits with his declaration, a
notice from the bankruptcy proceedings seeking insider
compensation to Hudson of $15,500 per month, a bankruptcy
order granting ECF’s request to use cash collateral between May
and June 2016, and a bill from Hudson’s subsequent counsel.
Hudson claimed he had to hire new counsel as a result of
respondents’ failure to represent him.
Respondents filed a reply, objecting that Hudson’s
opposition exceeded the 20-page limit under rule 3.1113(g) and
requesting that the court disregard the entire opposition or strike
the final six pages, which included Hudson’s arguments
regarding the Barton doctrine, the affirmative defense of unclean
hands, the statute of limitations, and the right to punitive
damages. Respondents also noted that the opposition contained
10
facts and argument about respondents’ performance in the
bankruptcy, which was irrelevant to the surviving claims for
misrepresentation. Respondents argued that the only evidence
provided by Hudson was his own declaration, which could not
create a triable issue of fact because it was inconsistent with his
prior deposition testimony or discovery responses.
Respondents also submitted a total of 44 objections to
Hudson’s evidence, including 41 objections encompassing almost
every paragraph of Hudson’s declaration, as well as three
objections to the three exhibits attached thereto. Each numbered
objection set forth a paragraph of the Hudson declaration, along
with objections on multiple grounds, including lack of relevance,
lack of foundation, improper expert testimony, speculation,
hearsay, and improper legal conclusion.
C. Hearing and Ruling
At the March 2, 2021 hearing on the motion, the court
started by noting that Hudson had failed to provide courtesy
copies of his opposition papers to the court and also that the
opposition violated the court rules. The court indicated, however,
that it would allow Hudson’s counsel to make an argument.
Hudson’s counsel acknowledged that the opposition brief was
longer than allowed by California Rules of Court, rule 3.11134
and apologized. He explained that at the time he was drafting
the opposition, he thought respondents’ moving papers were also
too long, but then later realized he was incorrect. The court
responded that the respondents’ motion was not oversized and,
moreover, “it’s not that they made a mistake; so you get to do one
too when you know, or should know, that the proper way to get
4 All further references to the rules are to the California
Rules of Court unless otherwise indicated.
11
extra pages is in advance to get court approval, which, of course,
was not done here.” The court then asked respondents’ counsel if
he thought Hudson should “get a do-over.” Respondents’ counsel
stated that he should not, and further that their motion should
prevail on the merits.
Turning to Hudson’s misrepresentation claims, the court
pointed out that Hudson had given “very vague testimony” in his
deposition and answers to discovery responses, and now was
attempting to contradict that evidence with his declaration,
which was insufficient in opposition to summary judgment. The
court allowed Hudson one day to lodge a courtesy copy of his
opposition, stating that once it was received and reviewed, “I’m
likely to strike the oversized pages in your opposition. And I’m
going to carefully look at the evidentiary objections filed with the
reply by the defendant and determine whether or not your client,
by lodging this belated declaration, is running afoul of summary
judgment jurisprudence.” Hudson’s counsel argued that his
declaration was consistent with his deposition testimony, and
that he had also provided exhibits, which established triable
issues of fact as to whether respondents “misled my client into
believing they were representing him.” Hudson’s counsel did not
raise any arguments regarding the court’s statement about
striking the excess pages of his brief, or any procedural objections
to respondents’ objections to the evidence. The court took the
matter under submission.
On March 11, 2021, the court issued a written order ruling
on respondents’ evidentiary objections. The court ruled on each
objection by checking the line indicating whether the objection
was sustained or overruled. The court overruled four objections
to Hudson’s declaration (numbers 3 through 5 and 41, objecting
12
to declaration paragraphs 5 through 7 and 43) and sustained the
remainder. The same day, the court granted summary judgment
in favor of respondents. The court again recognized that Hudson
had filed an oversized opposition brief without seeking the
court’s permission. However, the court concluded that although
“the entire opposition could be disregarded, the Court exercises
its discretion and instead strikes pages 21-26.”
Turning to the substance of Hudson’s misrepresentation
claims, the court found no triable issue of fact as to the elements
of intent to defraud, reasonable reliance, and causation of
damages. For intent to defraud, the court pointed out that
Hudson did not dispute that he never told Khojayan that he
would terminate respondents’ representation of ECF unless they
also agreed to represent Hudson. Moreover, the court found that
Hudson “otherwise has no evidence that [respondents] intended
to defraud him.” Similarly, the court found that Hudson had
provided no “admissible evidence that it was reasonable to rely
on a subjective ‘belief’ that [respondents] represented him in his
personal capacity when the retainer agreement did not so
provide. This is especially so because [Hudson] is the owner and
president of several business entities and has admitted
experience in retaining attorneys.” The court noted that Hudson
did not dispute that he read and signed the retainer agreement
on behalf of ECF, he did not disagree with any of its terms before
he signed it, the agreement specifically identified ECF as the
client, and contained an integration clause.
As to causation, the court found that Hudson offered “only
argument and no admissible evidence.” Hudson did not dispute
the facts presented by respondents that the bankruptcy court
appointed the examiner, who submitted a report that was
13
“extremely critical of ECF’s policies and procedures in general
and of Hudson’s management and control of ECF in particular,”
and concluded that ECF was “wholly incapable of dispensing its
fiduciary obligations in this Chapter 11 case.” Hudson also did
not dispute that the bankruptcy court appointed a trustee after
reviewing the examiner’s report and later commented that “there
were a number of problems with the way Mr. Hudson had run the
business.” The court noted that Hudson had not disputed that
the bankruptcy court found that he had engaged in a fraudulent
transfer of intellectual property from ECF to another entity he
owned, and that he had admitted doing so to put “the value of the
Intellectual Property beyond the reach of people who were trying
to get at it through lawsuits.” Thus, because Hudson failed to
raise any material issues of disputed fact, the court found that
respondents were entitled to judgment as a matter of law.
The court also found that Hudson failed to provide legal
arguments (within the permissible page limit) in opposition to
respondents’ motion regarding the Barton doctrine, unclean
hands, the statute of limitations, and punitive damages, and
therefore granted the motion on those grounds. In addition, the
court considered the substance of the parties’ arguments, and
found that respondents’ points were well-taken.
The court entered judgment in favor of respondents on
March 11, 2021. Hudson timely appealed.5
5 In his notice of appeal, Hudson also checked the box stating
that he was appealing from the judgment of dismissal after an
order sustaining a demurrer. However, he has not addressed any
issues related to the demurrer in his opening brief and did not
file a reply brief on appeal. Hudson has therefore abandoned any
claims of error related to the demurrer and dismissal of ECF’s
14
DISCUSSION
I. Standard of review
“On appeal after a motion for summary judgment has been
granted, we review the record de novo, considering all the
evidence set forth in the moving and opposition papers except
that to which objections have been made and sustained.” (Guz v.
Bechtel National, Inc. (2000) 24 Cal.4th 317, 334.) We interpret
the evidence in the light most favorable to plaintiff as the
nonmoving party, and resolve all doubts about the propriety of
granting the motion in his favor. (Lonicki v. Sutter Health
Central (2008) 43 Cal.4th 201, 206.)
A defendant moving for summary judgment must make a
prima facie showing that there are no triable issues of fact in
order to meet its initial burden of production. (Aguilar v. Atlantic
Richfield Co. (2001) 25 Cal.4th 826, 861 (Aguilar); see also Code
Civ. Proc. § 437c, subd. (c).) Once the defendant has met that
burden, the burden shifts to the plaintiff to make a prima facie
showing that a triable issue of material fact exists. (Aguilar,
supra, 25 Cal.4th at p. 850.) The opposing party must make that
showing with admissible evidence. (§ 437c, subd. (d); Bozzi v.
Nordstrom, Inc. (2010) 186 Cal.App.4th 755, 761 [“Only
admissible evidence is liberally construed in deciding whether
there is a triable issue.”]; accord, Esparza v. Safeway, Inc. (2019)
36 Cal.App.5th 42, 57; Jambazian v. Borden (1994) 25
Cal.App.4th 836, 846.)
and Hudson’s claims other than those for intentional and
negligent misrepresentation. (See Reyes v. Kosha (1998) 65
Cal.App.4th 451, 466 [“Issues not raised in an appellant's brief
are deemed waived or abandoned.”].)
15
“We review the trial court’s evidentiary rulings made in
connection with a summary judgment motion for abuse of
discretion.” (Mitchell v. United National Ins. Co. (2005) 127
Cal.App.4th 457, 467.) As the party challenging the trial court’s
evidentiary rulings, the plaintiff has the burden to establish such
an abuse, which we will find only if the trial court’s order exceeds
the bounds of reason. (DiCola v. White Bros. Performance
Products, Inc. (2008) 158 Cal.App.4th 666, 679.)
II. Analysis
Hudson raises two procedural claims of error, arguing that
the trial court abused its discretion by failing to rule on
individual evidentiary objections and by striking the excess pages
of his opposing brief. Hudson also argues that he raised triable
issues of fact in support of his misrepresentation claims. We find
no error and agree with the trial court’s conclusion that
respondents were entitled to judgment as a matter of law.
A. The Trial Court Did Not Err By Sustaining
Respondents’ Objections.
Hudson contends that respondents’ objections to his
evidence were procedurally improper because they submitted
“groups” of objections rather than setting forth “each objection”
individually. As a result, he argues that the trial court erred by
“issuing broad-strokes rulings that groups of objections were
sustained without individually ruling on each objection.” We
disagree.
Hudson cites rule 3.1354(b), requiring that “[e]ach written
objection must be numbered consecutively,” and rule 3.1354(c),
requiring that the objecting party submit a proposed order that
includes “places for the court to indicate whether it has sustained
or overruled each objection.” He argues that respondents
16
violated this rule by submitting “groups” rather than individual
objections, and the trial court erred by sustaining the objections
in groups rather than individually.
This contention lacks merit. It appears that Hudson is
suggesting that respondents were required to set forth each
ground as a separately numbered objection, rather than, as
respondents did, identifying a paragraph of objectionable
material and then listing multiple grounds for objection to that
material. But Hudson has not cited to any authority supporting
such a requirement. Indeed, in the example formats set forth in
rule 3.1354, two grounds are listed under a single number as
bases for a single objection. (See rule 3.1354(b) [each written
objection must “[s]tate the grounds for each objection to that
statement or material”].) Similarly, the format for the proposed
order set forth in the rule contains lines for the court to mark
whether the objection is sustained or overruled (see rule
3.1354(c)). This format is identical to the order format submitted
by respondents and used by the trial court here. Thus, Hudson
has failed to demonstrate any abuse of discretion.
Moreover, the trial court ruled on each individual objection
raised by respondents. Thus, this case is factually
distinguishable from those cited by Hudson. For example, in
Nazir v. United Airlines, Inc. (2009) 178 Cal.App.4th 243, 254
(Nazir), the defendant included 764 objections to the plaintiff’s
evidence. The trial court overruled one objection and sustained
the remainder in a single line of its summary judgment ruling.
(Ibid.) The appellate court found a “manifest” abuse of discretion,
as “there is no way that the trial court could properly have
sustained 763 objections ‘guided and controlled by fixed legal
principles.’” (Id. at p. 255-256, quoting Fasuyi v. Permatex (2008)
17
167 Cal.App.4th 681, 695.) The court noted multiple issues with
the sustained objections, including that some failed to assert any
basis for the objection, some were to the plaintiff’s brief rather
than the evidence, and many were frivolous. (Nazir, supra, 178
Cal.App.4th at p. 256; see also Greenspan v. LADT, LLC (2010)
191 Cal.App.4th 486, 522 (Greenspan) [rejecting trial court’s
“cryptic” order on objections that “No. 28 is overruled; all others
are sustained”].)
In any event, even if the manner in which the trial court
ruled was error, our de novo review of the objections would reach
the same result. (See Reid v. Google, Inc. (2010) 50 Cal.4th 512,
535 [conducting de novo review of objections on appeal].) Hudson
does not challenge the merits of any of respondents’ objections.
Tellingly, he has not responded to respondents’ argument, raised
below and in the responding brief on appeal, that his declaration
was replete with statements offering improper expert testimony,
speculation, and legal conclusion, such as his statement that
respondents “should not have accepted Plaintiff ECF’s Chapter
11 case as they were not qualified nor competent to handle a
complex case.” Accordingly, we find no error in the trial court’s
order sustaining respondents’ objections.
B. The Trial Court Did Not Err in Striking
Portions of Plaintiffs’ Brief.
Hudson also asserts that the trial court abused its
discretion in striking the final six pages of his opposing brief. He
concedes that his brief exceeded the 20-page limit in violation of
rule 3.1113. He also acknowledges that a court “has discretion to
disregard non-conforming papers,” but argues that the court
“must do so only as a last resort.” As such, Hudson asserts that
the trial court should have given him the opportunity to refile a
18
conforming brief, and that its failure to do so was an abuse of
discretion. We are not persuaded.
Rule 3.1113(g) provides that a memorandum exceeding the
allowable page limit “must be filed and considered in the same
manner as a late-filed paper.” Thus, the court has discretion to
refuse to consider the document in its entirety. (See rule
3.1300(d).) Here, when chastised by the court during the
summary judgment hearing, Hudson’s counsel explained that he
had filed an oversized brief because he (incorrectly) believed that
respondents’ opening brief also exceeded the page limit. Despite
this admittedly willful violation of the court rules, the court
declined to strike the entire opposition brief, instead striking only
the offending final six pages. We find no abuse of discretion in
this decision.
The cases cited by Hudson are inapposite, as they discuss
the issue of a deficient separate statement submitted in
opposition to summary judgment. As these cases explain, the
preferred practice is to provide a party the opportunity to cure
the deficiencies, rather than to immediately grant summary
judgment. (See Collins v. Hertz Corp. (2006) 144 Cal.App.4th 64,
74 [“Without question, trial court has every right ‘to refuse to
proceed with a summary judgment motion in the absence of an
adequate separate statement from the opposing party.’
[Citation.] However, an immediate grant of summary judgment
is, in most instances, too harsh a consequence.”].) Thus, for
example, in Parkview Villas Assn., Inc. v. State Farm Fire &
Casualty Co. (2005) 133 Cal.App.4th 1197, 1210, the Court of
Appeal found that the trial court abused its discretion by
granting summary judgment based on its exclusion of the
19
plaintiff’s partially deficient separate statement, without offering
the plaintiff the opportunity to cure the deficiencies.
Here, in contrast, having stricken a portion of Hudson’s
brief, the court did not immediately grant summary judgment.
Instead, the court considered Hudson’s arguments and evidence
regarding the elements of his misrepresentation claims and
granted summary judgment on that basis. The court did not
abuse its discretion by doing so.
C. Hudson Failed to Raise a Triable Issue of Fact
The trial court found that Hudson failed to present
admissible evidence raising a triable issue of material fact as to
three elements of his intentional and negligent misrepresentation
claims—intent to induce reliance, justifiable reliance, and
damages. Having reviewed the record, we agree.
A claim for intentional misrepresentation requires a
plaintiff to prove the following: (a) a representation about a past
or present material fact that is false; (b) knowledge of falsity; (c)
intent to induce reliance; (d) justifiable reliance on the
misrepresentation; and (e) resulting damage. (Lazar v. Superior
Court (1996) 12 Cal.4th 631, 638; see also Stansfield v. Starkey
(1990) 220 Cal.App.3d 59, 72.) Negligent misrepresentation
contains four of the same elements, but rather than knowledge of
falsity, it requires a showing that the misrepresentation was
made without reasonable grounds for believing it to be true.
(Shamsian v. Atlantic Richfield Co. (2003) 107 Cal.App.4th 967,
983.)
As discussed above, the bulk of Hudson’s evidence
purporting to establish disputed issues of fact came from his
declaration submitted in opposition to summary judgment. The
trial court sustained respondents’ objections to almost all of that
20
declaration. As a result, only three potentially relevant
paragraphs remain. These paragraphs include Hudson’s
description of his initial meeting with respondents, his execution
of the retainer agreement, and his statement that he was “led to
believe” that respondents were representing him as well as ECF.
As to the remaining evidence, Hudson cannot create a
triable issue of fact by submitting a self-serving declaration to
contradict deposition testimony or discovery responses. (See
Visueta v. General Motors Corp. (1991) 234 Cal.App.3d 1609,
1613 [“Admissions or concessions made during the course of
discovery govern and control over contrary declarations lodged at
a hearing on a motion for summary judgment”]; Thompson v.
Williams (1989) 211 Cal.App.3d 566, 573–574 [“a party cannot
rely on contradictions in his own testimony to create a triable
issue of fact”]; see also D'Amico v. Board of Medical Examiners
(1974) 11 Cal.3d 1, 22.) Thus, the court may “give great weight to
admissions made in deposition and disregard contradictory and
self-serving affidavits of the party.” (Benavidez v. San Jose Police
Dept. (1999) 71 Cal.App.4th 853, 860.)
At his deposition, Hudson identified a single
misrepresentation by respondents, when Khojayan “stated he
was representing me.” But Hudson testified that he could not
recall when or where that statement was made, or any specific
details as to the words or actions purportedly used. Hudson’s
written discovery responses are similarly lacking in detail.
Hudson’s declaration submitted in opposition to summary
judgment seeks to add details of this misrepresentation, stating,
for example, that he asked respondents “whether there would be
any potential or actual conflicts of interest” in representing him
individually along with ECF, and respondents replied that there
21
were no conflicts “that would prevent their representation of both
Plaintiffs.” We disregard those statements as contradicting
Hudson’s prior testimony that he did not recall what was said.
Turning to the elements of Hudson’s misrepresentation
claims, Hudson contends that he has raised a triable issue that
respondents intended to induce reliance on their
misrepresentation. In essence, he argues that respondents told
him they would represent him individually in order to keep ECF
as their bankruptcy client. However, as the trial court found,
Hudson did not dispute that he never told respondents that he
would terminate their representation of ECF unless they also
agreed to represent Hudson. Hudson argues that he provided
other evidence from which one could reasonably infer that
respondents “did not want Hudson talking to other bankruptcy
attorneys” and potentially taking ECF’s business elsewhere. But
the only other evidence he provided was the statement in his
declaration that he asked respondents about conflicts of interest
during their initial meeting in March 2016, which we have
disregarded as inconsistent with his prior testimony. As such,
Hudson has not provided any admissible evidence to support his
claim that respondents intended to induce his reliance on their
misrepresentations. (See Tenzer v. Superscope, Inc. (1985) 39
Cal.3d 18, 30 [“‘something more than nonperformance is required
to prove the defendant's intent not to perform his promise’”].)
Hudson also fails to establish a disputed issue of fact
regarding whether he reasonably relied on respondents’
misrepresentations. He does not dispute the material facts
surrounding the retainer agreement; he acknowledges that he
read and understood the agreement, he signed it on behalf of
ECF, and that the retainer designated only ECF as the “client.”
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He does not point to any document in which respondents agreed
to represent him individually, or any record of any filing or
appearance by respondents as his representative. Instead, he
argues that the trial court improperly weighed the evidence by
disregarding his statement that despite the express terms of the
retainer, he was “led to believe” that respondents were
representing him. Hudson’s vague statement that he was “led to
believe” he was individually represented, without more, cannot
establish a triable issue of fact. Moreover, it was undisputed that
Hudson was the owner and head of multiple business entities and
had experience retaining attorneys. Thus, Hudson has not shown
a factual issue as to whether it was reasonable for him to rely on
the purported misrepresentations by respondents that they
would represent him individually.6 Finally, we agree with
respondents and the trial court that Hudson presented no
admissible evidence that respondents’ purported
misrepresentations caused him damages. “Fraudulent
representations which work no damage cannot give rise to an
action at law.” (Williams v. Wraxall (1995) 33 Cal.App.4th 120,
6 We note that Hudson at times contends that respondents
told him they would represent him “individually” and at times “as
an officer of ECF.” Respondents raised this issue below and
Hudson has offered no explanation for the discrepancy. To the
extent that Hudson claims an agreement to some type of legal
representation other than in his individual capacity, he has not
alleged it in his complaint and we therefore need not consider it.
(See Oakland Raiders v. National Football League (2005) 131
Cal.App.4th 621, 648 [“[T]he pleadings set the boundaries of the
issues to be resolved at summary judgment . . . . A ‘plaintiff
cannot bring up new, unpleaded issues in his or her opposing
papers.’”].)
23
132, quoting Nagy v. Nagy (1989) 210 Cal.App.3d 1262, 1268.)
Causation requires proof that the defendant’s conduct was a
“‘substantial factor’” in bringing about harm to the plaintiff.
(Mitchell v. Gonzales (1991) 54 Cal.3d 1041, 1052-1053.) “A
plaintiff cannot recover damages based upon speculation or even
a mere possibility that the wrongful conduct of the defendant
caused the harm.” (Williams v. Wraxall, supra, 33 Cal.App.4th at
p. 133, citing Simmons v. West Covina Medical Clinic (1989) 212
Cal.App.3d 696, 702.)
Here, Hudson did not dispute the chain of events in the
bankruptcy action, including the appointment of the examiner,
the issuance of a “scathing” report finding numerous and severe
accounting and management issues with ECF, and the
subsequent appointment of a trustee. Instead, he argues that in
the absence of respondents’ misrepresentations, he would have
retained his own counsel, who would have prepared him for the
bankruptcy proceedings, and therefore the examiner’s report
might have been more favorable. However, beyond stating that
he believed the bankruptcy outcome would have been better
absent respondents’ misrepresentations, he offers no evidence on
which he based that belief. Hudson admitted he did not know if
the examiner’s opinion would have changed if Hudson had
retained individual counsel. In opposing summary judgment,
Hudson pointed to no other evidence supporting his contention
that he “likely would have avoided significant problems” in the
bankruptcy action. Instead, the undisputed evidence in the
record established that the examiner reviewed ECF’s records and
identified multiple instances of poor management practices, as
well as Hudson’s potentially fraudulent transfer of assets from
ECF to other entities. Hudson’s speculation regarding what
24
might have occurred if he had his own counsel cannot overcome
these undisputed facts as to the requisite causation.
In sum, Hudson has failed to establish a triable issue of
fact as to his intentional and negligent misrepresentation claims.
Respondents were therefore entitled to judgment in their favor as
a matter of law.7
DISPOSITION
The order granting summary judgment is affirmed.
Respondents are entitled to their costs on appeal.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
COLLINS, J.
We concur:
CURREY, P.J.
MORI, J.
7 In light of our decision, we need not reach Hudson’s
arguments that the court erred in granting summary judgment
on alternative grounds regarding the Barton doctrine, the
affirmative defense of unclean hands, and the statute of
limitations.
25