Preview
ELECTRONICALLY FILED
superior Court of California,
County of Placer
08/14/2020
SHANNON B. JONES LAW GROUP, INC. By: Laurel Sanders, Deputy Clerk
SHANNON B. JONES (Bar No. 149222)
sbj@sbj-law.com
LINDSEY A. MORGAN (Bar No. 274214)
lam@sbj-law.com
208 W. El Pintado Road
Danville, California 94526
Telephone: (925) 837-2317
Facsimile: (925) 837-4831
Attorneys for Plaintiff
PACIFIC UNION INTERNATIONAL, INC.
IN THE SUPERIOR COURT OF THE STATE OF CALIFORNIA
IN AND FOR THE COUNTY OF PLACER
10
11 PACIFIC UNION INTERNATIONAL, INC., Case No. SCV0042080
12 Plaintiff, PACIFIC UNION INTERNATIONAL,
13 Vv.
INC.’S REPLY BRIEF IN SUPPORT OF
MOTION FOR SUMMARY JUDGMENT
14 ERIK LUDWICK, an individual and
OR, ALTERNATIVELY, SUMMARY
ADJUDICATION OF ISSUES
ee
beneficiary of The Anything Trust Dated
15 October 12, 2007; THE ANYTHING TRUST
Date: August 20, 2020
DATED OCTOBER 12, 2007; PAUL D.
eee
16 BOOTH, in his capacity as trustee of The Time: 9:30 a.m.
Anything Trust Dated October 12, 2007; and Dept: 42
17 DOES 1-50,
ee
Complaint Filed: November 7, 2018
18 Defendants. Trial Date: September 21, 2020
ea
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Plaintiff PACIFIC UNION INTERNATIONAL, INC. (“Pacific Union’’)
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respectfully submits this reply memorandum of points and authorities in support of its Motion for
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Summary Judgment, or alternatively, Summary Adjudication of issues and against the
24
Opposition to Motion for Summary Judgment (“Opposition”) filed by Defendants ERIK
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LUDWICK, an individual and beneficiary of The Anything Trust Dated October 12, 2007; THE
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ANYTHING TRUST DATED OCTOBER 12, 2007 and PAUL D. BOOTH, in his capacity as
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trustee of The Anything Trust Dated October 12, 2007 (collectively, “Defendants’).
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PACIFIC UNION INTERNATIONAL, INC.’S REPLY BRIEF IN SUPPORT OF MOTION FOR SUMMARY
JUDGMENT OR, ALTERNATIVELY, SUMMARY ADJUDICATION OF ISSUES
I. INTRODUCTION
Defendants base their Opposition on an ongoing refusal to acknowledge clear and
well-established law that a successor-in-interest has the ability to enforce contracts entered into
by its predecessor, repeating misplaced arguments about assignment of contracts and the Statute
of Frauds, all of which have been presented to this court and rejected on several previous
occasions. The argument is not supported by law or by common sense, and the Opposition is
missing any actual reference to the alleged facts which supposedly create a disputed triable issue.
The undisputed material facts here are simple. None of the parties dispute that
Defendants entered into a contract with a company Pacific Union bought. Emails exchanged by
10 Erik Ludwick and Madison Hildebrand show that Erik Ludwick and Paul Booth were aware of
11 the fact that the brokerage representing them had been acquired by Pacific Union during the
12 course of the transaction. None of the Defendants objected to that fact during the six (6) week
13 long period of time between learning of the acquisition and the close of escrow on the Property.
14 Those same emails show that Defendants wanted a reduction from the contractual commission
15 amount that his agent was entitled to for selling the Property. When they did not receive the
16 reduction they wanted, Defendants decided to punish Pacific Union and Mr. Hildebrand by
17 unilaterally instructing the title company not to release the commission from the escrow account.
18 Defendants received an acknowledged service from Pacific Union, Pacific Union’s agent, and
19 Pacific Union’s defunct predecessor, and then prevented Pacific Union from obtaining payment
20 for that work. Pacific Union is entitled to an order instructing Terra Coastal Escrow to release
21 the commission under the contract.
22 It is surprising that Defendants claim triable issues of material fact remain to
23 decide in this matter, as that argument is inconsistent with the motion for summary judgment
24 Defendants filed, set for hearing on the same day as this motion, which claims no such issues
25 remain. Defendants do not get to have it both ways. There are no issues of material fact here.
26 Summary judgment should be entered into for Pacific Union.
27 ///
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PACIFIC UNION INTERNATIONAL, INC.’S REPLY BRIEF IN SUPPORT OF MOTION FOR SUMMARY
JUDGMENT OR, ALTERNATIVELY, SUMMARY ADJUDICATION OF ISSUES
IL. LEGAL ARGUMENT
WN A. Pacific Union Acquired All Rights to Enforce The Contract
Pacific Union is mindful that with two simultaneous motions for summary
WD
judgment before it in this matter, the Court has been inundated with repetitive arguments.
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Pacific Union fully briefed arguments regarding Defendants’ standing and Statute of Frauds
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theories in its Opposition to Defendants’ Motion for Summary Judgment (specifically, at pages
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7-11 of its Memorandum of Points and Authorities in Opposition to Defendants’ Motion for
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Summary Judgment). Pacific Union reiterates those arguments here to preserve its rights, as they
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are the only real arguments advanced by Defendants in their Opposition, and apologizes to the
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10 Court for the repetition.
11 Pacific Union has presented evidence that it acquired Partners Trust while the sale
12 underlying this dispute was in process, and became the owner of the contract described in the
13 Complaint. (See Separate Statement of Undisputed Material Fact in support of Pacific Union’s
14 Motion for Summary Judgment or, Alternatively, Summary Adjudication of Issues (““UMF”),
15 4,5.) Accordingly, Plaintiff has all of the rights Partners Trust did in that contract, including the
16 right to enforce it. When Pacific Union acquired Partners Trust, by statute it purchased the rights
17 to enforce the contract entered into by Partners’ Trust. As provided by the Corporations Code:
18 Upon merger pursuant to this chapter the separate existence of the
disappearing corporations ceases and the surviving corporation
19 shall succeed, without other transfer, to all the rights and property
of each of the disappearing corporations and shall be subject to all
20
the debts and liabilities of each in the same manner as if the
21 surviving corporation had itself incurred them.
22 (Corp. Code § 1107(a).)
23 Partners Trust had every ability to transfer its rights to sue for recovery of the
24 commission to Pacific Union, as: “A thing in action, arising out of the violation of a right of
25 property, or out of an obligation, may be transferred by the owner.” (Civ. Code § 954.) Pacific
26 Union acquired all rights under the open listing agreements entered into by Partners Trust, and is
27 entitled to enforce the contract at issue in this action as the holder. (UMF 4 4, 5.) (“Persons
28 3
PACIFIC UNION INTERNATIONAL, INC.’S REPLY BRIEF IN SUPPORT OF MOTION FOR SUMMARY
JUDGMENT OR, ALTERNATIVELY, SUMMARY ADJUDICATION OF ISSUES
entitled to enforce an instrument means (a) the holder of the instrument, (b) a non-holder in
possession of the instrument who has the rights of a holder .. .”. (Com. Code, § 3301.))
Defendants may not want to agree that they owe a commission to Pacific Union,
but they acknowledge that they do owe a commission to Partners Trust. Accordingly, case law is
fS
very clear that Pacific Union is entitled to recover that commission earned by its predecessor.
WN
The right to recover an unpaid commission in real estate has commonly been held to be a right
Dn
that a company may give away. (Schaffier v. Creative Capital Leasing Group, LLC (2008) 166
NN
feo
Cal.App.4th 745, holding a breach of contract action for unpaid commissions on the sale of real
estate is assignable from one business entity to another.) Brokers have long been able to assign
o
10 their rights to commissions. (Richmond Realeteria, Inc. v. Canterbury Estates, Inc. (1965) 234
11 Cal.App.2d 400, 401-402, determining how to apply a complicated commission provision
12 assigned by a real estate broker to a company.) At the end of the day, successor companies have
13 standing to enforce provisions of a contract initially entered into by the company they purchased.
14 This is true even for provisions that are much more personal to the contracting parties than a
15 commission, such as arbitration provisions in employment agreements. (Jenks v. DLA Piper
16 Rudnick Gray Cary US LLP (2015) 243 Cal.App.4th 1, 10.) Pacific Union has demonstrated that
17 there is no issue of material fact on that point — Pacific Union acquired the right from Partners
18 Trust to pursue these claims against Defendants. (UMF ff 4, 5.)
19 Defendants argue that they were not provided with any evidence of the acquisition
20 of Partners Trust by Pacific Union. The declaration of Nicholas Segal submitted in support of
21 this Motion moots that argument. (UMF 9 4, 5.) Of note, Defendants did not ever submit a
22 specific written discovery request seeking the asset purchase agreement under which Pacific
23 Union acquired Partners Trust in the written discovery process. In a May 22, 2019 letter to
24 Defendants’ counsel, however, Pacific Union identified those asset transfer agreement
25 documents as being relevant and potentially responsive, but withheld from production, and
26 requested that Defendants enter into a stipulated protective order before Pacific Union produced
27 a confidential and highly sensitive business contract documents containing trade secret
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PACIFIC UNION INTERNATIONAL, INC.’S REPLY BRIEF IN SUPPORT OF MOTION FOR SUMMARY
JUDGMENT OR, ALTERNATIVELY, SUMMARY ADJUDICATION OF ISSUES
information. (See Declaration of Lindsey A. Morgan in Support of Motion for Summary
Judgment (“Morgan Decl.”), Exh. 1.) Thereafter, Pacific Union drafted a protective order and
sent it to counsel for Defendants on June 25, 2019. Ud. at Exh. 2.) Defendants never responded,
nor did they renew their request for the protected documents. (/d. at | 4.) Accordingly, by their
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own conduct, Defendants effectively ensured that Pacific Union could not provide a copy of the
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confidential asset purchase documents. Defendants may not now use that strategic maneuver to
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pretend that the acquisition agreement does not exist.
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B. The Written Contract Complies With All Statute of Frauds Requirements
SO
Agreements related to real property are subject to the Statute of Frauds, and
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10 Pacific Union agrees that this contract is no exception. (Cal. Civ. Code § 1624; Edens v.
11 Stoddard (1954) 126 Cal.App.2d 56, 59-60, “The statute of frauds [citations omitted] makes void
12 any oral agreement to employ an agent or broker to purchase or sell real estate for
13 compensation.”) Under the Statute of Frauds, an agreement is invalid unless the agreement “or
14 some note or memorandum thereof, [is] in writing and subscribed by the party to be charged or
15 by the party's agent.” (Civ. Code, § 1624, subd. (a); see Sterling v. Taylor (2007) 40 Cal.4th
16 757, 765.)
17 The law cited by Defendants in support of their Opposition stands for the
18 proposition that a contract related to compensation related to real estate must be in writing.
19 There is no dispute that a written contract exists. The contract is the Residential Listing
20 Agreement (the “Contract”) that Trustee, on behalf of the Trust, executed on or about August 29,
21 2016, with Pacific Union’s predecessor, Partners Trust, and its agents, for the sale of real
22 property located at 200 Toyopa Drive, Pacific Palisades, Los Angeles County, California 90272,
23 assessor’s parcel no. 4411-026-001 (the “Property”). (UMF { 1.) The Contract provided that the
24 initial listing price for the Property was Twenty Million Dollars ($20,000,000) and the term of
25 the Contract was from September 1, 2016 through February 28, 2017. (UMF 4 2.) On February
26 23, 2017, the Contract was modified in writing to extend the term to August 31, 2017 and to
27 reduce the listing price to Nineteen Million, Five Hundred Thousand ($19,500,000). (UMF 4 3.)
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PACIFIC UNION INTERNATIONAL, INC.’S REPLY BRIEF IN SUPPORT OF MOTION FOR SUMMARY
JUDGMENT OR, ALTERNATIVELY, SUMMARY ADJUDICATION OF ISSUES
On June 9, 2017, the Contract was modified in writing to reduce the Property’s listing price to
Eighteen Million Eight Hundred and Eighty Thousand Dollars ($18,880,000). (UMF § 3.) On
July 7, 2017, the Contract was again modified in writing to reduce the Property’s listing price to
Sixteen Million Eight Hundred and Eighty Thousand Dollars ($16,880,000). (/d.)
The Contract set Pacific Union’s compensation at six percent (6%) of the
Property’s sales price if Pacific Union procured a buyer who made an offer to purchase accepted
by the Trust. (UMF 4 2.) The Contract also provided Pacific Union would be due a commission
if the Trust entered into a contract with any buyer who was on an exclusion list provided by
Pacific Union. (/d.) The Contract also provides, “Seller hereby irrevocably assigns to Broker
10 the above compensation from Seller’s funds and proceeds in escrow.” (/d.)
11 Accordingly, the issue is not whether the Contract exists, but whether Pacific
12 Union is entitled to enforce it. Defendants appear to insist that only a defunct entity, Partners
13 Trust, may enforce the terms of the Contract. There is no basis for this argument, which is not
14 only wrong, but inequitable and in flagrant violation of public policy. As explained above,
15 Pacific Union acquired all rights to pending transactions entered into by Partners Trust as part of
16 Pacific Union’s acquisition of that company. (UMF 7 4, 5.) The Corporations Code supports
17 Pacific Union’s right to enforce a valid contract entered into by another brokerage Pacific Union
18 purchased. (See Corp. Code § 1107(a). Nor are the insinuations that Pacific Union was a
19 cooperating broker correct. Pacific Union purchased Partners Trust outright. (/d.)
20 Defendants are urging this Court to condone their attempts to avoid payment of a
21 commission owed under a written contract after the work was performed, in an attempt to
22 unjustly enrich themselves at Pacific Union’s expense. (Cal. Civ. Code § 3275.) This is
23 abhorrent. Courts may not set aside the deliberate contracts or obligations of the parties fairly
24 and freely assumed, even when time may show that the obligation was onerous or unprofitable.
25 (Parsons v. Smilie (1893) 97 Cal. 647, 657.) Contracts are to be construed, where possible, to
26 avoid forfeiture, and the burden of establishing the right to a forfeiture is on the one claiming that
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PACIFIC UNION INTERNATIONAL, INC.’S REPLY BRIEF IN SUPPORT OF MOTION FOR SUMMARY
JUDGMENT OR, ALTERNATIVELY, SUMMARY ADJUDICATION OF ISSUES
right. (Horning v. Ladd, 157 Cal.App.2d 806, 810.) Defendants do not carry that burden here,
and their proposed interpretation of the Contract must be rejected by this Court.
C. The Undisputed Material Facts Show Defendants Knew Pacific Union
Represented Both Sides of the Transaction
There is no disputed issue of material fact on the false allegation that Defendants
did not know Mr. Hildebrand and his brokerage represented both sides of the transaction. The
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Contract itself states this. (UMF 4 1, Residential Purchase Agreement, p. 10.) On September 17,
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2017, approximately six weeks before the transaction at issue closed, Erik Ludwick sent an email
CO
to Mr. Hildebrand, which he bec’d Paul Booth on, stating that as Mr. Hildebrand was
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representing both sides of the transaction, Mr. Ludwick wanted him to take a lower commission.
10
(See Exh. 5 to the Declaration of Madison Hildebrand (“Hildebrand Decl.”), submitted with the
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moving papers.) The next day, on September 18, 2017, Mr. Hildebrand stated in a reply email
12
that his brokerage had been acquired by Pacific Union. (Hildebrand Decl., Exh. 6.) Defendants’
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claims that they did not have notice that Mr. Hildebrand represented both sides of the
14
transaction, and that Mr. Hildebrand’s company had not been acquired by Pacific Union, is not
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supported by the factual evidence. (Contrast the Declaration of Erik Ludwick, 4 12, stating he
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had no written notice of the acquisition until November 2017, with Exh. 6 to the Hildebrand
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Decl., showing Hildebrand, Ludwick and Booth discussing the acquisition and the commission
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on September 17, 2017.)
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The fact that Defendants and Mr. Hildebrand attempted to negotiate the
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commission before the close of escrow only goes to show that Defendants agree they owed a
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commission. Moreover, those negotiations took place before Defendants affirmatively breached
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the contract and took steps to ensure that they interfered the contract by instructing Terra Coastal
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Escrow to hold the entire commission in escrow. (UMF 7¥ 10-13.) Negotiations before the
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breach of contract, which never resulted in a final agreement between the parties in writing, do
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not now negate Pacific Union’s right to enforce the Contract as written after Defendants
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breached it.
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PACIFIC UNION INTERNATIONAL, INC.’S REPLY BRIEF IN SUPPORT OF MOTION FOR SUMMARY
JUDGMENT OR, ALTERNATIVELY, SUMMARY ADJUDICATION OF ISSUES
D. Defendants Admit Pacific Union Procured The Buyer
In their moving papers in support of their own Motion for Summary Judgment,
Defendants state that Pacific Union’s predecessor, Partners Trust, procured a purchaser and was
the procuring cause of the transaction. (Defendants’ Memorandum of Points and Authorities in
Support of Motion for Summary Judgment, p. 12:18-19.) They make the same admission in their
Opposition, stating, “it was Partners Trust, not PUI, who produced the purchaser and was, in
fact, ‘the procuring cause of the transaction.’” 399
(Opposition at p. 15:17-18.) Accordingly, as
Pacific Union has provided evidence that it acquired all rights to pursue Partners Trust’s rights
under the Contract, Defendants have admitted that there is no triable issue of material fact on the
10 “procuring cause” issue.
11 Defendants spend pages of their Opposition quoting and reciting Westside Estate
12 Agency, Inc. v. Randall (2016) 6 Cal. App. 5th 317, but any reliance on that case is misplaced.
13 There was no written listing agreement in that matter at all. There is a written contract in this
14 matter and there is absolutely no factual parallel between that case and this one. Similarly, the
15 multiple citations by Defendants to Phillippe v. Shapell Industries (1987) 43 Cal. 3d 1247 do not
16 support Defendants’ argument. Phillippe states that an agreement related to recovery of
17 commission in real estate transactions must be in writing. It says absolutely nothing about the
18 right of a brokerage which purchases another brokerage to enforce a valid contract — likely
19 because that right is obvious and long established in common practice and the Corporations
20 Code. (See Corp. Code § 1107(a).) Finally, the insinuation by Defendants that Partners Trust
21 sought the assistance of Pacific Union as a cooperating broker is wrong and not supported by any
22 evidence or facts in the record. Pacific Union purchased Partners Trust and all of its assets,
23 rights under existing listing agreements, and contracts, including the listing agreement for the
24 Property. (UMF 4 4, 5.) Pacific Union is not, and never was, a subagent of Partners Trust.
25 The undisputed facts are that Mr. Hildebrand marketed the Property for
26 Defendants and procured a willing buyer, that the Property sold for $16,300,000, and that the six
27 percent (6%) commission of $978,000 remains in the escrow account with Terra Coastal Escrow.
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PACIFIC UNION INTERNATIONAL, INC.’S REPLY BRIEF IN SUPPORT OF MOTION FOR SUMMARY
JUDGMENT OR, ALTERNATIVELY, SUMMARY ADJUDICATION OF ISSUES
(UMF 4 1, 2, 8, 9, 12.) Mr. Hildebrand and his new brokerage are entitled to recover the
commission under the Contract. (See Schaffter, supra, 266 Cal.App.4th 745; Richmond
Realeteria, supra, 234 Cal.App.2d at 401-402; Jenks, supra, 243 Cal.App.4th at 10.)
E. Defendants Provide Zero Evidence That They Were Damaged By Any
Conduct of Pacific Union or its Agents
Defendants have formulated a theory that a transaction which did not conclude
would have netted Erik Ludwick more money, and then claim that transaction would have closed
if it had not been for the inadvertent email of Mr. Hildebrand to that first potential buyer. But
there are no facts that show this is the case. Defendants have provided no proof that the close of
the potential transaction with Anthony Antoci was prevented by any conduct of Mr. Hildebrand.
10
The evidence, instead, shows that Mr. Antoci submitted a request for repair, which Defendants
11
did not agree to, and that the contract was thereafter cancelled. (Hildebrand Decl., {§ 8-13.)
12
Defendants made the decision to nullify the Antoci contract and accept the other offer from
13
Behdad Eghbali — not Pacific Union or its agent. (UMF § 8.)
14
F, The Only Evidentiary Issues Were Created By Defendants
15
As briefed above, Defendants hinted that Pacific Union has not provided any
16
evidence that they acquired Partners Trust. That is false. (UMF J 4, 5.) If Defendants desired
17
additional documentation of the deal, they could have entered into a stipulated protective order.
18
Their decision to refuse to take steps to protect confidential trade secret information, and failure
19
to otherwise move to compel those documents, does not create a triable issue of material fact as
20
to the reality of Pacific Union’s acquisition of Partners Trust.
21
Defendants also attempt to rely on the documentary evidence presented by Pacific
22
Union in the Declaration of Madison Hildebrand, while claiming that evidence is not
23
appropriately presented. Defendants may not do both simultaneously. This is particularly true as
24
the only evidence Defendants have provided in support of their own Motion and the opposition
25
to this Motion are self-serving declarations of Erik Ludwick (“Ludwick Decl.”). The
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Declaration of Ludwick submitted in support of the Opposition to Motion for Summary
27
Judgment is riddled with legal conclusions based on no personal knowledge, and also improperly
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PACIFIC UNION INTERNATIONAL, INC.’S REPLY BRIEF IN SUPPORT OF MOTION FOR SUMMARY
JUDGMENT OR, ALTERNATIVELY, SUMMARY ADJUDICATION OF ISSUES
attaches documents that Ludwick has no personal knowledge about. The version of the Ludwick
Declaration served on Plaintiff at 11:06 p.m. on August 6, 2020 is not even signed. The
Ludwick Declaration should be stricken from the record.
Finally, Defendants repetitively attempt to rely on their First Amended Complaint
in the action they filed in Los Angeles as evidence in this matter. A complaint is not evidence,
and a complaint which has not been subject to a pleading challenge (the deadline for Pacific
Union to respond to that pleading has not yet passed) is certainly not evidence. Pacific Union
asks that the Court disregard any references to the Los Angeles complaint, as those references
are not appropriate and in no way constitute evidence in this matter.
10 Til. CONCLUSION
11 Defendants did not make even a cursory attempt to address the specific reasons
12 Pacific Union brief on why summary judgment or summary adjudication should be granted on
13 each of the causes of action against them. Pacific Union has proved the elements of its causes of
14 action. Accordingly, Pacific Union is entitled to summary judgment, or in the alternative,
15 summary adjudication, because the undisputed material facts show that the parties entered into
16 the Contract, that the Property was sold due to the efforts of Pacific Union, and that Defendants
17 have ensured Pacific Union has not received payment for any of the work related to the
18 transaction. Defendants cannot legally defend their position in this matter, as a matter of law.
19 Summary judgment should be granted to Pacific Union.
20
21 Dated: August 4, 2020
SHANNON B. JONES LAW GROUP, INC.
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By
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PACIFIC UNION INTERNATIONAL, INC.’S REPLY BRIEF IN SUPPORT OF MOTION FOR SUMMARY
JUDGMENT OR, ALTERNATIVELY, SUMMARY ADJUDICATION OF ISSUES
Preview
ELECTRONICALLY FILED superior Court of California, County of Placer 08/14/2020 SHANNON B. JONES LAW GROUP, INC. By: Laurel Sanders, Deputy Clerk SHANNON B. JONES (Bar No. 149222) sbj@sbj-law.com LINDSEY A. MORGAN (Bar No. 274214) lam@sbj-law.com 208 W. El Pintado Road Danville, California 94526 Telephone: (925) 837-2317 Facsimile: (925) 837-4831 Attorneys for Plaintiff PACIFIC UNION INTERNATIONAL, INC. IN THE SUPERIOR COURT OF THE STATE OF CALIFORNIA IN AND FOR THE COUNTY OF PLACER 10 11 PACIFIC UNION INTERNATIONAL, INC., Case No. SCV0042080 12 Plaintiff, PACIFIC UNION INTERNATIONAL, 13 Vv. INC.’S REPLY BRIEF IN SUPPORT OF MOTION FOR SUMMARY JUDGMENT 14 ERIK LUDWICK, an individual and OR, ALTERNATIVELY, SUMMARY ADJUDICATION OF ISSUES ee beneficiary of The Anything Trust Dated 15 October 12, 2007; THE ANYTHING TRUST Date: August 20, 2020 DATED OCTOBER 12, 2007; PAUL D. eee 16 BOOTH, in his capacity as trustee of The Time: 9:30 a.m. Anything Trust Dated October 12, 2007; and Dept: 42 17 DOES 1-50, ee Complaint Filed: November 7, 2018 18 Defendants. Trial Date: September 21, 2020 ea 19 20 21 Plaintiff PACIFIC UNION INTERNATIONAL, INC. (“Pacific Union’’) 22 respectfully submits this reply memorandum of points and authorities in support of its Motion for 23 Summary Judgment, or alternatively, Summary Adjudication of issues and against the 24 Opposition to Motion for Summary Judgment (“Opposition”) filed by Defendants ERIK 25 LUDWICK, an individual and beneficiary of The Anything Trust Dated October 12, 2007; THE 26 ANYTHING TRUST DATED OCTOBER 12, 2007 and PAUL D. BOOTH, in his capacity as 27 trustee of The Anything Trust Dated October 12, 2007 (collectively, “Defendants’). 28 PACIFIC UNION INTERNATIONAL, INC.’S REPLY BRIEF IN SUPPORT OF MOTION FOR SUMMARY JUDGMENT OR, ALTERNATIVELY, SUMMARY ADJUDICATION OF ISSUES I. INTRODUCTION Defendants base their Opposition on an ongoing refusal to acknowledge clear and well-established law that a successor-in-interest has the ability to enforce contracts entered into by its predecessor, repeating misplaced arguments about assignment of contracts and the Statute of Frauds, all of which have been presented to this court and rejected on several previous occasions. The argument is not supported by law or by common sense, and the Opposition is missing any actual reference to the alleged facts which supposedly create a disputed triable issue. The undisputed material facts here are simple. None of the parties dispute that Defendants entered into a contract with a company Pacific Union bought. Emails exchanged by 10 Erik Ludwick and Madison Hildebrand show that Erik Ludwick and Paul Booth were aware of 11 the fact that the brokerage representing them had been acquired by Pacific Union during the 12 course of the transaction. None of the Defendants objected to that fact during the six (6) week 13 long period of time between learning of the acquisition and the close of escrow on the Property. 14 Those same emails show that Defendants wanted a reduction from the contractual commission 15 amount that his agent was entitled to for selling the Property. When they did not receive the 16 reduction they wanted, Defendants decided to punish Pacific Union and Mr. Hildebrand by 17 unilaterally instructing the title company not to release the commission from the escrow account. 18 Defendants received an acknowledged service from Pacific Union, Pacific Union’s agent, and 19 Pacific Union’s defunct predecessor, and then prevented Pacific Union from obtaining payment 20 for that work. Pacific Union is entitled to an order instructing Terra Coastal Escrow to release 21 the commission under the contract. 22 It is surprising that Defendants claim triable issues of material fact remain to 23 decide in this matter, as that argument is inconsistent with the motion for summary judgment 24 Defendants filed, set for hearing on the same day as this motion, which claims no such issues 25 remain. Defendants do not get to have it both ways. There are no issues of material fact here. 26 Summary judgment should be entered into for Pacific Union. 27 /// 28 ? PACIFIC UNION INTERNATIONAL, INC.’S REPLY BRIEF IN SUPPORT OF MOTION FOR SUMMARY JUDGMENT OR, ALTERNATIVELY, SUMMARY ADJUDICATION OF ISSUES IL. LEGAL ARGUMENT WN A. Pacific Union Acquired All Rights to Enforce The Contract Pacific Union is mindful that with two simultaneous motions for summary WD judgment before it in this matter, the Court has been inundated with repetitive arguments. & Pacific Union fully briefed arguments regarding Defendants’ standing and Statute of Frauds nA theories in its Opposition to Defendants’ Motion for Summary Judgment (specifically, at pages DH 7-11 of its Memorandum of Points and Authorities in Opposition to Defendants’ Motion for NN Summary Judgment). Pacific Union reiterates those arguments here to preserve its rights, as they Oe are the only real arguments advanced by Defendants in their Opposition, and apologizes to the o 10 Court for the repetition. 11 Pacific Union has presented evidence that it acquired Partners Trust while the sale 12 underlying this dispute was in process, and became the owner of the contract described in the 13 Complaint. (See Separate Statement of Undisputed Material Fact in support of Pacific Union’s 14 Motion for Summary Judgment or, Alternatively, Summary Adjudication of Issues (““UMF”), 15 4,5.) Accordingly, Plaintiff has all of the rights Partners Trust did in that contract, including the 16 right to enforce it. When Pacific Union acquired Partners Trust, by statute it purchased the rights 17 to enforce the contract entered into by Partners’ Trust. As provided by the Corporations Code: 18 Upon merger pursuant to this chapter the separate existence of the disappearing corporations ceases and the surviving corporation 19 shall succeed, without other transfer, to all the rights and property of each of the disappearing corporations and shall be subject to all 20 the debts and liabilities of each in the same manner as if the 21 surviving corporation had itself incurred them. 22 (Corp. Code § 1107(a).) 23 Partners Trust had every ability to transfer its rights to sue for recovery of the 24 commission to Pacific Union, as: “A thing in action, arising out of the violation of a right of 25 property, or out of an obligation, may be transferred by the owner.” (Civ. Code § 954.) Pacific 26 Union acquired all rights under the open listing agreements entered into by Partners Trust, and is 27 entitled to enforce the contract at issue in this action as the holder. (UMF 4 4, 5.) (“Persons 28 3 PACIFIC UNION INTERNATIONAL, INC.’S REPLY BRIEF IN SUPPORT OF MOTION FOR SUMMARY JUDGMENT OR, ALTERNATIVELY, SUMMARY ADJUDICATION OF ISSUES entitled to enforce an instrument means (a) the holder of the instrument, (b) a non-holder in possession of the instrument who has the rights of a holder .. .”. (Com. Code, § 3301.)) Defendants may not want to agree that they owe a commission to Pacific Union, but they acknowledge that they do owe a commission to Partners Trust. Accordingly, case law is fS very clear that Pacific Union is entitled to recover that commission earned by its predecessor. WN The right to recover an unpaid commission in real estate has commonly been held to be a right Dn that a company may give away. (Schaffier v. Creative Capital Leasing Group, LLC (2008) 166 NN feo Cal.App.4th 745, holding a breach of contract action for unpaid commissions on the sale of real estate is assignable from one business entity to another.) Brokers have long been able to assign o 10 their rights to commissions. (Richmond Realeteria, Inc. v. Canterbury Estates, Inc. (1965) 234 11 Cal.App.2d 400, 401-402, determining how to apply a complicated commission provision 12 assigned by a real estate broker to a company.) At the end of the day, successor companies have 13 standing to enforce provisions of a contract initially entered into by the company they purchased. 14 This is true even for provisions that are much more personal to the contracting parties than a 15 commission, such as arbitration provisions in employment agreements. (Jenks v. DLA Piper 16 Rudnick Gray Cary US LLP (2015) 243 Cal.App.4th 1, 10.) Pacific Union has demonstrated that 17 there is no issue of material fact on that point — Pacific Union acquired the right from Partners 18 Trust to pursue these claims against Defendants. (UMF ff 4, 5.) 19 Defendants argue that they were not provided with any evidence of the acquisition 20 of Partners Trust by Pacific Union. The declaration of Nicholas Segal submitted in support of 21 this Motion moots that argument. (UMF 9 4, 5.) Of note, Defendants did not ever submit a 22 specific written discovery request seeking the asset purchase agreement under which Pacific 23 Union acquired Partners Trust in the written discovery process. In a May 22, 2019 letter to 24 Defendants’ counsel, however, Pacific Union identified those asset transfer agreement 25 documents as being relevant and potentially responsive, but withheld from production, and 26 requested that Defendants enter into a stipulated protective order before Pacific Union produced 27 a confidential and highly sensitive business contract documents containing trade secret 28 4 PACIFIC UNION INTERNATIONAL, INC.’S REPLY BRIEF IN SUPPORT OF MOTION FOR SUMMARY JUDGMENT OR, ALTERNATIVELY, SUMMARY ADJUDICATION OF ISSUES information. (See Declaration of Lindsey A. Morgan in Support of Motion for Summary Judgment (“Morgan Decl.”), Exh. 1.) Thereafter, Pacific Union drafted a protective order and sent it to counsel for Defendants on June 25, 2019. Ud. at Exh. 2.) Defendants never responded, nor did they renew their request for the protected documents. (/d. at | 4.) Accordingly, by their fS own conduct, Defendants effectively ensured that Pacific Union could not provide a copy of the wn confidential asset purchase documents. Defendants may not now use that strategic maneuver to DH pretend that the acquisition agreement does not exist. NN B. The Written Contract Complies With All Statute of Frauds Requirements SO Agreements related to real property are subject to the Statute of Frauds, and oO 10 Pacific Union agrees that this contract is no exception. (Cal. Civ. Code § 1624; Edens v. 11 Stoddard (1954) 126 Cal.App.2d 56, 59-60, “The statute of frauds [citations omitted] makes void 12 any oral agreement to employ an agent or broker to purchase or sell real estate for 13 compensation.”) Under the Statute of Frauds, an agreement is invalid unless the agreement “or 14 some note or memorandum thereof, [is] in writing and subscribed by the party to be charged or 15 by the party's agent.” (Civ. Code, § 1624, subd. (a); see Sterling v. Taylor (2007) 40 Cal.4th 16 757, 765.) 17 The law cited by Defendants in support of their Opposition stands for the 18 proposition that a contract related to compensation related to real estate must be in writing. 19 There is no dispute that a written contract exists. The contract is the Residential Listing 20 Agreement (the “Contract”) that Trustee, on behalf of the Trust, executed on or about August 29, 21 2016, with Pacific Union’s predecessor, Partners Trust, and its agents, for the sale of real 22 property located at 200 Toyopa Drive, Pacific Palisades, Los Angeles County, California 90272, 23 assessor’s parcel no. 4411-026-001 (the “Property”). (UMF { 1.) The Contract provided that the 24 initial listing price for the Property was Twenty Million Dollars ($20,000,000) and the term of 25 the Contract was from September 1, 2016 through February 28, 2017. (UMF 4 2.) On February 26 23, 2017, the Contract was modified in writing to extend the term to August 31, 2017 and to 27 reduce the listing price to Nineteen Million, Five Hundred Thousand ($19,500,000). (UMF 4 3.) 28 5 PACIFIC UNION INTERNATIONAL, INC.’S REPLY BRIEF IN SUPPORT OF MOTION FOR SUMMARY JUDGMENT OR, ALTERNATIVELY, SUMMARY ADJUDICATION OF ISSUES On June 9, 2017, the Contract was modified in writing to reduce the Property’s listing price to Eighteen Million Eight Hundred and Eighty Thousand Dollars ($18,880,000). (UMF § 3.) On July 7, 2017, the Contract was again modified in writing to reduce the Property’s listing price to Sixteen Million Eight Hundred and Eighty Thousand Dollars ($16,880,000). (/d.) The Contract set Pacific Union’s compensation at six percent (6%) of the Property’s sales price if Pacific Union procured a buyer who made an offer to purchase accepted by the Trust. (UMF 4 2.) The Contract also provided Pacific Union would be due a commission if the Trust entered into a contract with any buyer who was on an exclusion list provided by Pacific Union. (/d.) The Contract also provides, “Seller hereby irrevocably assigns to Broker 10 the above compensation from Seller’s funds and proceeds in escrow.” (/d.) 11 Accordingly, the issue is not whether the Contract exists, but whether Pacific 12 Union is entitled to enforce it. Defendants appear to insist that only a defunct entity, Partners 13 Trust, may enforce the terms of the Contract. There is no basis for this argument, which is not 14 only wrong, but inequitable and in flagrant violation of public policy. As explained above, 15 Pacific Union acquired all rights to pending transactions entered into by Partners Trust as part of 16 Pacific Union’s acquisition of that company. (UMF 7 4, 5.) The Corporations Code supports 17 Pacific Union’s right to enforce a valid contract entered into by another brokerage Pacific Union 18 purchased. (See Corp. Code § 1107(a). Nor are the insinuations that Pacific Union was a 19 cooperating broker correct. Pacific Union purchased Partners Trust outright. (/d.) 20 Defendants are urging this Court to condone their attempts to avoid payment of a 21 commission owed under a written contract after the work was performed, in an attempt to 22 unjustly enrich themselves at Pacific Union’s expense. (Cal. Civ. Code § 3275.) This is 23 abhorrent. Courts may not set aside the deliberate contracts or obligations of the parties fairly 24 and freely assumed, even when time may show that the obligation was onerous or unprofitable. 25 (Parsons v. Smilie (1893) 97 Cal. 647, 657.) Contracts are to be construed, where possible, to 26 avoid forfeiture, and the burden of establishing the right to a forfeiture is on the one claiming that 27 28 6 PACIFIC UNION INTERNATIONAL, INC.’S REPLY BRIEF IN SUPPORT OF MOTION FOR SUMMARY JUDGMENT OR, ALTERNATIVELY, SUMMARY ADJUDICATION OF ISSUES right. (Horning v. Ladd, 157 Cal.App.2d 806, 810.) Defendants do not carry that burden here, and their proposed interpretation of the Contract must be rejected by this Court. C. The Undisputed Material Facts Show Defendants Knew Pacific Union Represented Both Sides of the Transaction There is no disputed issue of material fact on the false allegation that Defendants did not know Mr. Hildebrand and his brokerage represented both sides of the transaction. The DN Contract itself states this. (UMF 4 1, Residential Purchase Agreement, p. 10.) On September 17, NAN 2017, approximately six weeks before the transaction at issue closed, Erik Ludwick sent an email CO to Mr. Hildebrand, which he bec’d Paul Booth on, stating that as Mr. Hildebrand was oO representing both sides of the transaction, Mr. Ludwick wanted him to take a lower commission. 10 (See Exh. 5 to the Declaration of Madison Hildebrand (“Hildebrand Decl.”), submitted with the 11 moving papers.) The next day, on September 18, 2017, Mr. Hildebrand stated in a reply email 12 that his brokerage had been acquired by Pacific Union. (Hildebrand Decl., Exh. 6.) Defendants’ 13 claims that they did not have notice that Mr. Hildebrand represented both sides of the 14 transaction, and that Mr. Hildebrand’s company had not been acquired by Pacific Union, is not 15 supported by the factual evidence. (Contrast the Declaration of Erik Ludwick, 4 12, stating he 16 had no written notice of the acquisition until November 2017, with Exh. 6 to the Hildebrand 17 Decl., showing Hildebrand, Ludwick and Booth discussing the acquisition and the commission 18 on September 17, 2017.) 19 The fact that Defendants and Mr. Hildebrand attempted to negotiate the 20 commission before the close of escrow only goes to show that Defendants agree they owed a 21 commission. Moreover, those negotiations took place before Defendants affirmatively breached 22 the contract and took steps to ensure that they interfered the contract by instructing Terra Coastal 23 Escrow to hold the entire commission in escrow. (UMF 7¥ 10-13.) Negotiations before the 24 breach of contract, which never resulted in a final agreement between the parties in writing, do 25 not now negate Pacific Union’s right to enforce the Contract as written after Defendants 26 breached it. 27 28 7 PACIFIC UNION INTERNATIONAL, INC.’S REPLY BRIEF IN SUPPORT OF MOTION FOR SUMMARY JUDGMENT OR, ALTERNATIVELY, SUMMARY ADJUDICATION OF ISSUES D. Defendants Admit Pacific Union Procured The Buyer In their moving papers in support of their own Motion for Summary Judgment, Defendants state that Pacific Union’s predecessor, Partners Trust, procured a purchaser and was the procuring cause of the transaction. (Defendants’ Memorandum of Points and Authorities in Support of Motion for Summary Judgment, p. 12:18-19.) They make the same admission in their Opposition, stating, “it was Partners Trust, not PUI, who produced the purchaser and was, in fact, ‘the procuring cause of the transaction.’” 399 (Opposition at p. 15:17-18.) Accordingly, as Pacific Union has provided evidence that it acquired all rights to pursue Partners Trust’s rights under the Contract, Defendants have admitted that there is no triable issue of material fact on the 10 “procuring cause” issue. 11 Defendants spend pages of their Opposition quoting and reciting Westside Estate 12 Agency, Inc. v. Randall (2016) 6 Cal. App. 5th 317, but any reliance on that case is misplaced. 13 There was no written listing agreement in that matter at all. There is a written contract in this 14 matter and there is absolutely no factual parallel between that case and this one. Similarly, the 15 multiple citations by Defendants to Phillippe v. Shapell Industries (1987) 43 Cal. 3d 1247 do not 16 support Defendants’ argument. Phillippe states that an agreement related to recovery of 17 commission in real estate transactions must be in writing. It says absolutely nothing about the 18 right of a brokerage which purchases another brokerage to enforce a valid contract — likely 19 because that right is obvious and long established in common practice and the Corporations 20 Code. (See Corp. Code § 1107(a).) Finally, the insinuation by Defendants that Partners Trust 21 sought the assistance of Pacific Union as a cooperating broker is wrong and not supported by any 22 evidence or facts in the record. Pacific Union purchased Partners Trust and all of its assets, 23 rights under existing listing agreements, and contracts, including the listing agreement for the 24 Property. (UMF 4 4, 5.) Pacific Union is not, and never was, a subagent of Partners Trust. 25 The undisputed facts are that Mr. Hildebrand marketed the Property for 26 Defendants and procured a willing buyer, that the Property sold for $16,300,000, and that the six 27 percent (6%) commission of $978,000 remains in the escrow account with Terra Coastal Escrow. 28 8 PACIFIC UNION INTERNATIONAL, INC.’S REPLY BRIEF IN SUPPORT OF MOTION FOR SUMMARY JUDGMENT OR, ALTERNATIVELY, SUMMARY ADJUDICATION OF ISSUES (UMF 4 1, 2, 8, 9, 12.) Mr. Hildebrand and his new brokerage are entitled to recover the commission under the Contract. (See Schaffter, supra, 266 Cal.App.4th 745; Richmond Realeteria, supra, 234 Cal.App.2d at 401-402; Jenks, supra, 243 Cal.App.4th at 10.) E. Defendants Provide Zero Evidence That They Were Damaged By Any Conduct of Pacific Union or its Agents Defendants have formulated a theory that a transaction which did not conclude would have netted Erik Ludwick more money, and then claim that transaction would have closed if it had not been for the inadvertent email of Mr. Hildebrand to that first potential buyer. But there are no facts that show this is the case. Defendants have provided no proof that the close of the potential transaction with Anthony Antoci was prevented by any conduct of Mr. Hildebrand. 10 The evidence, instead, shows that Mr. Antoci submitted a request for repair, which Defendants 11 did not agree to, and that the contract was thereafter cancelled. (Hildebrand Decl., {§ 8-13.) 12 Defendants made the decision to nullify the Antoci contract and accept the other offer from 13 Behdad Eghbali — not Pacific Union or its agent. (UMF § 8.) 14 F, The Only Evidentiary Issues Were Created By Defendants 15 As briefed above, Defendants hinted that Pacific Union has not provided any 16 evidence that they acquired Partners Trust. That is false. (UMF J 4, 5.) If Defendants desired 17 additional documentation of the deal, they could have entered into a stipulated protective order. 18 Their decision to refuse to take steps to protect confidential trade secret information, and failure 19 to otherwise move to compel those documents, does not create a triable issue of material fact as 20 to the reality of Pacific Union’s acquisition of Partners Trust. 21 Defendants also attempt to rely on the documentary evidence presented by Pacific 22 Union in the Declaration of Madison Hildebrand, while claiming that evidence is not 23 appropriately presented. Defendants may not do both simultaneously. This is particularly true as 24 the only evidence Defendants have provided in support of their own Motion and the opposition 25 to this Motion are self-serving declarations of Erik Ludwick (“Ludwick Decl.”). The 26 Declaration of Ludwick submitted in support of the Opposition to Motion for Summary 27 Judgment is riddled with legal conclusions based on no personal knowledge, and also improperly 28 9 PACIFIC UNION INTERNATIONAL, INC.’S REPLY BRIEF IN SUPPORT OF MOTION FOR SUMMARY JUDGMENT OR, ALTERNATIVELY, SUMMARY ADJUDICATION OF ISSUES attaches documents that Ludwick has no personal knowledge about. The version of the Ludwick Declaration served on Plaintiff at 11:06 p.m. on August 6, 2020 is not even signed. The Ludwick Declaration should be stricken from the record. Finally, Defendants repetitively attempt to rely on their First Amended Complaint in the action they filed in Los Angeles as evidence in this matter. A complaint is not evidence, and a complaint which has not been subject to a pleading challenge (the deadline for Pacific Union to respond to that pleading has not yet passed) is certainly not evidence. Pacific Union asks that the Court disregard any references to the Los Angeles complaint, as those references are not appropriate and in no way constitute evidence in this matter. 10 Til. CONCLUSION 11 Defendants did not make even a cursory attempt to address the specific reasons 12 Pacific Union brief on why summary judgment or summary adjudication should be granted on 13 each of the causes of action against them. Pacific Union has proved the elements of its causes of 14 action. Accordingly, Pacific Union is entitled to summary judgment, or in the alternative, 15 summary adjudication, because the undisputed material facts show that the parties entered into 16 the Contract, that the Property was sold due to the efforts of Pacific Union, and that Defendants 17 have ensured Pacific Union has not received payment for any of the work related to the 18 transaction. Defendants cannot legally defend their position in this matter, as a matter of law. 19 Summary judgment should be granted to Pacific Union. 20 21 Dated: August 4, 2020 SHANNON B. JONES LAW GROUP, INC. 22 23 By 24 25 26 27 28 10 PACIFIC UNION INTERNATIONAL, INC.’S REPLY BRIEF IN SUPPORT OF MOTION FOR SUMMARY JUDGMENT OR, ALTERNATIVELY, SUMMARY ADJUDICATION OF ISSUES