Appellate Materials: EDUARDO PANIAGUA ET AL VS. MILESTONE FINANCIAL, LLC ET AL

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                                1   Sarah Shapero (Bar No. 281748)
     Jessica Adair (Bar No. 348364)
 2   SHAPERO LAW FIRM
                                                                                 ELECTRONICALLY
 3   100 Pine St., Ste. 530
     San Francisco, CA 94111                                                         FILED
                                                                                 Superior Court of California,
 4   Telephone: (415) 273-8892                                                    County of San Francisco
     Attorney for Plaintiff,                                                            08/16/2023
 5   EDUARDO PANIAGUA                                                             Clerk of the Court
                                                                                    BY: RONNIE OTERO
 6                                                                                             Deputy Clerk


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                       SUPERIOR COURT OF THE STATE OF CALIFORNIA
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                              FOR THE COUNTY OF SAN FRANCISCO
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      Eduardo Paniagua, an individual, Plaintiff,           Case No.: CGC-18-571279
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      vs.                                                   PLAINTIFF’S OPPOSITION TO
11                                                          DEFENDANTS’ MOTION IN LIMINE
12    Milestone Financial, LLC, a California                NO. 1: TO EXCLUDE TRIAL COURT
      corporation, Bear Bruin Ventures, Inc. a              ORDER AND COURT OF APPEAL
13    California Corporation, William R. Stuart, an         OPINION RE MOTION TO COMPEL
      individual, Carolyn Stuart, an individual,            ARBITRATION
14    Zoe Hamilton, an individual, and DOES
      1-100, inclusive, Defendants                          Date: August 21, 2023
15                                                          Time: 9:30 a.m.
16                                                          Dept.: 206

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            Plaintiff, Eduardo Paniagua (hereinafter “Plaintiff”), hereby submits the following
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     opposition to Defendants’ Motion in Limine No. 1:
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                                     PLAINTIFF’S OPPOSITION TO MOTION IN LIMINE NO. 1
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        I.         INTRODUCTION
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        In its motion to exclude the trial and appeals court Orders regarding arbitration, Defendants
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     seriously misconstrue “admissibility” with “weight.” Defendants only cite to Evidence Code
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     sections 210 and 350 to exclude this evidence, but those provisions discuss relevancy, which is an
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     extremely liberal standard to begin with. Notwithstanding the extremely liberal standard, such
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     evidence is highly relevant in this case and embrace an ultimate issue: whether the loan was for
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     consumer purposes. Defendants now try to argue that further factual investigation revealed
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     Plaintiff lied and the loan was not for consumer purposes. The trial rejected that argument at the
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     summary judgment stage and all parties will vehemently dispute and discuss this issue at trial—
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     so the record is not as conclusive as Defendants make it out to be.
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        For the foregoing reasons, this Court should deny MIL No. 1 and admit the highly relevant
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     trial and appeals court Orders regarding arbitration. Whether the bench finds this evidence
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     convincing is an entirely different standard from admissibility, and Defendants improperly move
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     to exclude on that basis.
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        II.        REVELANT FACTUAL AND PROCEDURAL BACKGROUND
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        Plaintiff Eduardo Paniagua and his wife, Elena Asturias, have been married for nearly thirty
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     years, and for the entirety of that time the single-family home located at 1228 Funston Avenue,
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     San Francisco, California (the “Property”), has been in Plaintiff Elena Asturias’s family. In fact,
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     the Property has been in her family for more than fifty years. In 2009, Plaintiffs purchased the
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     home from Ms. Asturias’s elderly mother and cancer-stricken elderly aunt for the purpose of
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     rehabilitating the home and adding value and to subsequently liquidate the value to supply funds
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     for the mother’s retirement and aunt’s cancer treatments. Plaintiff does not dispute that he and his
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     wife never reside at the property. However, Plaintiff maintains that he sought funds to improve
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     the value of his family property and use the excess funds to pay for Ms. Asturias’ aunt’s cancer
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     treatments.
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        Unbeknownst to Plaintiffs, Defendants were engaged in unlawful lending practices as set
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     forth in the Desist and Refrain Order issued against Defendants by the California Bureau of Real
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     Estate. The conduct detailed in the Desist and Refrain Order, for which Defendants were
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                                      PLAINTIFF’S OPPOSITION TO MOTION IN LIMINE NO. 1
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     subsequently disciplined and restrained, includes specific instances occurring on or around June
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     of 2014, just a few months after the March 2014 timeframe when Defendants made fraudulent
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     representations to Plaintiffs.
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         Unaware of Defendants’ illegal actions and unlicensed status, Plaintiffs proceeded to use the
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     funds from the mortgage loan to improve the family home and increase its value in order to
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     supply additional funds to help family members with living and medical expenses. Defendants
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     threatened to foreclose on the home and forced Plaintiffs to accept loan modifications that
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     increased the principal and fees charged by Defendant. The modification agreements also newly
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     inserted a binding arbitration clause.
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         On December 18, 2018, Defendants filed a petition to compel arbitration based on mandatory
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     arbitration clauses in the loan documents. After detailed briefing and oral argument, Defendants’
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     petition to compel arbitration was denied based on the Court’s finding that there was “substantial
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     evidence that at or around the time Plaintiffs entered into the original residential mortgage loan
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     agreement, Defendants Milestone and Hamilton were misrepresenting to the public that they were
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     licensed to act as a real estate broker, real estate salesperson, and/or mortgage loan broker, when
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     in fact they lacked the real estate broker licenses, real estate licenses, and mortgage loan
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     originator endorsements required by statute. This evidence is sufficient to support "a preliminary
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     factual determination that misleading circumstances existed and led to the entry into the
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     agreements, supporting a conclusion the agreements are void.” Despite Defendants’ contention
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     that these motions occurred at the “pleading stage” (MIL No. 1, pg. 12), these motions contained
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     evidence that the trial court directly contemplated.
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         Unsatisfied with that result, Defendants appealed the Court’s ruling and the Appellate Court
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     affirmed the denial in January of 2021, reiterating that: “[T]he circumstances of this case support
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     an inference that defendants deliberately mischaracterized the nature of the loan in the documents
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     it presented for Paniagua’s signature for the purpose of avoiding the applicable regulations.”
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     (Appellate Court Opinion at pp. 19-20). Defendants filed a cross-complaint alleging breaches of
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     contract for the two settlement agreements, contracts which both the Trial Court and Appellate
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                                      PLAINTIFF’S OPPOSITION TO MOTION IN LIMINE NO. 1
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     Court found sufficient evidence to support a preliminary factual finding that Defendants’
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     deliberate misrepresentations rendered the contracts void.
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        As set forth herein, while Defendants attempt to reframe the facts in their favor and advance
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     their argument that the loan was a “commercial loan”, this is the exact issue that the bench will
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     hear at trial and Defendants cannot move to exclude it now based on relevancy.
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        III.    LEGAL ARGUMENT
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        A trial court is vested with wide discretion in deciding relevancy of evidence. (People v.
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     Warner (Cal. App. 4th Dist. 1969), 270 Cal. App. 2d 900, 76 Cal. Rptr. 160, 1969 Cal. App.
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     LEXIS 1606.) Evidence is relevant not only when it tends to prove or disprove the precise facts in
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     issue but when it tends to establish a fact from which the existence or nonexistence of the fact in
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     issue can be directly inferred. People v. Warner (Cal. App. 4th Dist. 1969), 270 Cal. App. 2d 900,
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     76 Cal. Rptr. 160, 1969 Cal. App. LEXIS 1606.
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        In its Motion, Defendants essentially try to bootstrap outstanding factual disputes into a
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     relevancy and admissibility argument. Evidence is relevant when it tends to prove or disprove a
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     specific fact. (Evid. Code section 210 and 350.) The trial and appeals courts orders regarding
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     arbitration specifically held, “the circumstances of this case support an inference that defendants
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     deliberately mischaracterized the nature of the loan in the documents it presented for Paniagua’s
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     signature for the purpose of avoiding the applicable regulations.” This Order succinctly
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     summarizes the majority of Plaintiff’s claims, and the parties will heavily discuss their accuracy
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     at trial. Now, Defendants move to exclude those orders because it “occurred at the pleading
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     stage,” which is extremely misleading as the court considered evidence, and Plaintiff’s allegations
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     have “since been proven false.” (MIL No. 1, pg. 12.) It is curious that Defendants state Plaintiff’s
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     allegations have since been proven false, when the parties are going to trial over these exact
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     allegations on August 21. Therefore, the evidence is highly relevant as it tends to prove the
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     conclusion that Defendants fraudulently originated a consumer loan. The inquiry for admissibility
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     should end there, and the fact-finder then decides whether that evidence holds weight. The
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     credibility of witnesses and the weight to be accorded evidence are matters within the exclusive
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                                      PLAINTIFF’S OPPOSITION TO MOTION IN LIMINE NO. 1
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     province of the trial court. (Pleasant Hill v. First Baptist Church (1969) 1 Cal.App.3d 384, 395
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     [82 Cal.Rptr. 1].)
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 4   V. CONCLUSION
 5      For the foregoing reasons, the Court should deny Defendants’ Motion in Limine to exclude

 6   the trial and appeals court orders regarding arbitration.

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     DATED: August 16, 2023                         Respectfully submitted,
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                                                    SHAPERO LAW FIRM
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                                                    ______________________
11                                                  Sarah Shapero
                                                    Jessica Adair
12                                                  Attorneys for Plaintiff
                                                    EDUARDO PANIAGUA
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                                      PLAINTIFF’S OPPOSITION TO MOTION IN LIMINE NO. 1