Hong v. Creed Consulting

















Filed 12/28/12
Hong v. Creed Consulting CA4/3





















NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for
publication or ordered published for purposes of rule 8.1115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



FOURTH
APPELLATE DISTRICT



DIVISION
THREE




>

SOOBOK L. HONG, Plaintiff and Respondent, v. CREED CONSULTING INC., Defendant and Appellant.

G046954 (Super. Ct. No. 30-2011-00442847) O P I N I O N

Appeal
from a judgment of the Superior Court of href="http://www.adrservices.org/neutrals/frederick-mandabach.php">Orange
County, Jamoa A. Moberly, Judge. Reversed and remanded.

Albert
Chang for Defendant and Appellant.

Juan
Hong for Plaintiff and Respondent.





Soobok L. Hong hired
Creed Consulting Inc. (Creed) to remodel her house. She then sued Creed seeking to recover the
$85,000 she paid it under the statute that allows a party to recover “all
compensation paid to [an] unlicensed contractor” (Bus. & Prof. Code,
§ 7031, subd. (b)),href="#_ftn1" name="_ftnref1" title="">[1] on the theory Creed failed to carry workers’ compensation
insurance, which resulted in automatic suspension of its contractor’s license
during the time it worked on her house.
Hong successfully moved for summary
adjudication on this claim. After
she dismissed her remaining causes of action and Creed dismissed its
cross-complaint, the trial court entered judgment in Hong’s favor for
$85,000. Creed raises several issues,
one of which has merit: the trial court
erred by taking judicial notice of a printout Hong’s attorney made from the
California Contractors State License Board website to prove Creed did not carry
workers’ compensation insurance.
Accordingly, we reverse the judgment and remand for a trial on that
cause of action.

FACTS
AND PROCEDURE

>The Pleadings

The
operative complaints are Hong’s unverified first amended complaint (complaint)
and Creed’s unverified first amended cross-complaint (cross‑complaint). Hong’s complaint alleged that on August 24, 2010, she entered into a written contract with Creed for home remodeling
work. The written contract, attached to
the complaint as an exhibit, was for work totaling $92,000. Hong alleged she paid Creed $85,000 in
progress payments. Despite alerting
Creed to defects and shoddy workmanship, on December 21, 2010, Creed wrote to Hong the job was finished and demanded she pay the
remaining contract balance of $11,430 immediately.

Hong’s
complaint alleged causes of action for fraud
and breach of contract, and contained two causes of action seeking to
recover the amounts she had paid Creed because it was an unlicensed
contractor. As relevant to the cause of
action on which summary adjudication was granted, the complaint’s third cause
of action, Hong alleged Creed was a corporation engaged in the construction
business and required to have a contractor’s license. Creed’s contractor’s license was exempted
from having workers’ compensation insurance effective June 2, 2010, because it certified it had no employees. Creed had employees working on Hong’s
jobsite. Creed’s failure to carry
workers’ compensation insurance resulted in automatic suspension of its
contractor’s license and, thus, entitled Hong to recover all amounts she had
paid Creed.

Creed’s
unverified cross-complaint alleged causes of action against Hong and her
husband, Juan Hong, for breach of written and oral contract,
common counts, and breach of implied in fact contract. The cross-complaint alleged the Hongs and
Creed entered into the written contract on August 24, 2010,
for remodeling work totaling $92,000, and the Hongs agreed to an additional
$4,430 of work ($96,430 total). The
written contract was attached as an exhibit to Creed’s cross-complaint. Creed alleged it had fully performed all its
obligations under the contract, and the Hongs breached the contract by failing
to pay the balance due of $11,430.

>Motion for Summary
Adjudication

Hong
filed a motion for summary adjudication of her complaint’s third cause of
action alleging violation of sections 7031, 7215, and 7125.2. The combined gist of the causes of action are
that a contractor must maintain workers’ compensation insurance, his
contractor’s license is automatically suspended if he does not, and a person
who utilizes the services of an unlicensed contractor may recover all
compensation paid to the unlicensed contractor.


Hong’s
motion was accompanied by a request for judicial notice of several
documents. Exhibit 1 was the written
contract, which her attorney declared was a true and correct copy of the
contract attached as an exhibit to Creed’s cross‑complaint. Exhibits 2 and 3 were printouts Hong’s
attorney declared were true and correct copies of the California Contractors
State License Board website. Exhibit 2
was a one-page printout dated December 29, 2010, 9:19 a.m., showing licensing information for Creed. Above the words, “Workers’ Compensation,” the
printout states “this license is exempt from having workers compensation
insurance; they certified that they have no employees at this time.” Next to the words, “Workers’ Compensation,”
the printout says, “Effective Date: 06/02/2010,” and “Expire Date:
None.” Exhibit 3 was a four-page
printout dated October 3, 2011, 8:52 a.m., showing licensing information for Creed. On the second page (in the same format as
exhibit 2), above the words, “Workers’ Compensation,” the printout states
“[t]his license has workers compensation insurance with the [State Compensation
Insurance Fund].” Next to the words,
“Workers’ Compensation,” the printout says, “Effective Date: 06/15/2011,” and
“Expire Date: 06/15/2012.” The third page states “Workers’ compensation
History” and says “exempt 03/31/2008,” “State Compensation
Insurance Fund . . . 08/15/2008[-]08/01/2010,” “exempt 06/02/2010,” and “State
Compensation Insurance Fund . . . 06/15/2011[-]06/15/2012.”

Hong’s
separate statement set forth the following undisputed facts she claimed were
established by the documents of which she requested judicial notice. On August 24, 2010, she and Creed entered
into the written contract for construction work (citing the exhibit 1, the
written contract). She paid Creed $85,000
(citing Creed’s allegations in its cross-complaint). From June 2, 2010, to June 14, 2011, Creed
did not have workers’ compensation insurance and was exempted from having
workers’ compensation insurance because it certified it had no employees
(citing exhibits 2 and 3). Creed had
employees including Hyunsung Park and Dukyong Lee (citing Creed’s discovery
responses).

Creed
opposed the motion asserting it contained no admissible evidence and Hong
therefore failed to meet her burden of proof.
Creed’s separate statement disputed each of Hong’s asserted undisputed
facts, objecting to the evidence in support of each undisputed fact as being
inadmissible hearsay, lacking foundation, or that it was “impossible to
determine what evidence [Hong was] referencing” in her separate statement, and
objecting to the court taking judicial notice of the documents. The opposition included no declarations or
other evidence.

The
trial overruled Creed’s evidentiary objections, granted Hong’s request for
judicial notice, and granted Hong’s motion for summary adjudication of the
third cause of action. The court found
Hong had established Creed had employees during the time it worked on Hong’s
house. During that time, Creed did not
carry workers’ compensation insurance, and therefore, its contractor’s license
was automatically suspended. Moreover, because
Creed certified it had no employees, it did not act reasonably or in good faith
to maintain its license and could not avail itself of the substantial
compliance/good faith exception to section 7031, subdivision (e). Creed produced no evidence showing any
triable issue of fact. The court
concluded judgment would be entered in Hong’s favor on the third cause of
action for $85,000. Hong subsequently
dismissed her remaining causes of action with prejudice, and Creed dismissed
its cross-complaint with prejudice, and a judgment for Hong was entered.

DISCUSSION

Standard of Review

“A
motion for summary adjudication proceeds in all procedural respects as a motion
for summary judgment. [Citations.]” (Westlye
v. Look Sports, Inc. (1993) 17 Cal.App.4th 1715, 1727.) “Any party to an action may move for summary
judgment on a cause of action or defense—a plaintiff contending that there is
no defense to the action, a defendant contending that the action has no merit. [Citations.]”
(Hartford Casualty Ins. Co. v.
Swift Distribution, Inc. (2012) 210 Cal.App.4th 915, 920 (>Hartford).)

“A
plaintiff moving for summary judgment has met its burden of showing that there
is no defense to a cause of action if it has proved each element of the cause
of action entitling it to judgment on that cause of action. Once the plaintiff has met that burden, the
burden shifts to the defendant to show the existence of a triable issue of one
or more material facts as to that cause of action or a defense thereto. The defendant may not rely upon the mere
allegations or denials of its pleadings to show that a triable issue of
material fact exists, but instead must set forth specific facts showing that a
triable issue of material fact exists as to that cause of action or a defense
thereto. [Citations.] [¶]
The court must grant the motion if all the papers submitted show there
is no triable issue as to any material fact—that no issue requires a trial as
to any fact that is necessary under the pleadings and the law—and that the
moving party is entitled to a judgment as a matter of law. [Citations.]”
(Hartford, supra, 210
Cal.App.4th at p. 920.)

We
review the trial court’s ruling granting summary judgment or summary
adjudication de novo. (>Wiener v. Southcoast Childcare Centers, Inc.
(2004) 32 Cal.4th 1138, 1142.) We must
view the evidence in the light most favorable to the party opposing the motion,
liberally construing the opposing party’s evidence and strictly scrutinizing
the moving party’s “in order to resolve any evidentiary doubts or ambiguities
in [the opposing party’s] favor.
[Citation.]” (>Ibid.)

“‘A
different analysis is required for our review of the trial
court’s . . . rulings on evidentiary objections. Although it is often said that an appellate
court reviews a summary judgment motion ‘de novo,’ the weight of authority
holds that an appellate court reviews a court’s final rulings on evidentiary
objections by applying an abuse of discretion standard. [Citations.]’
[Citation.]” (>Miranda v. Bomel Construction Co., Inc. (2010)
187 Cal.App.4th 1326, 1335.)href="#_ftn2"
name="_ftnref2" title="">[2]

>Judicial Notice

Creed contends the trial court erred in taking
judicial notice of the printouts from the California Contractors State License
Board website (Exhibits 2 and 3) to establish as an undisputed fact that Creed
did not carry workers’ compensation insurance during the time it performed work
on Hong’s house. Moreover, as that was
the only evidence Hong submitted to establish that Hong lacked workers’
compensation insurance, she failed to carry her burden and was not entitled to
summary adjudication on her third cause of action. We agree.

Judicial
notice is a court’s recognition of the existence of a href="http://www.mcmillanlaw.com/">matter of law or fact relevant to an
issue as a substitute for formal proof of that matter. (Fontenot
v. Wells Fargo Bank, N.A. (2011) 198 Cal.App.4th 256, 264 (>Fontenot); Poseidon Development, Inc. v. Woodland Lane Estates, LLC (2007) 152
Cal.App.4th 1106, 1117.) “Judicial
notice may not be taken of any matter unless authorized or required by
law.” (Evid. Code, § 450.) Matters that are subject to judicial notice
are listed in Evidence Code sections 451 and 452. A matter ordinarily is subject to judicial
notice only if the matter is reasonably beyond dispute. (Post
v. Prati (1979) 90 Cal.App.3d 626, 633.)


Hong
contends the two website printouts were proper subjects for judicial notice
under Evidence Code section 452, subdivision (c) [official acts of
legislative, executive, or judicial departments], and subdivision (h) [facts
and propositions not reasonably subject to dispute and capable of immediate and
accurate determination by resort to sources of reasonably indisputable
accuracy], because they were from a government website and as such were
“self-authenticating.” But assuming the
documents are what Hong says they are (see Evid. Code, § 1400
[“[a]uthentication of a writing means (a) the introduction of evidence
sufficient to sustain a finding that it is the writing that the proponent of
the evidence claims it is or (b) the establishment of such facts by any other
means provided by law[]”]), that does not answer whether they are adequate to
allow judicial notice of the fact for
which Hong offered them, i.e., that Creed did not carry workers’ compensation
insurance.

“‘Taking
judicial notice of a document is not the same as accepting the truth of its
contents or accepting a particular interpretation of its meaning.’ [Citation.]
While courts take judicial notice of public records, >they do not take notice of the truth of
matters stated therein.
[Citation.] ‘When judicial notice
is taken of a document, . . . the truthfulness and proper
interpretation of the document are disputable.’
[Citation.]” (>Herrera v. Deutsche Bank National Trust Co.
(2011) 196 Cal.App.4th 1366, 1375 (Herrera),
italics added; see also In re Christian
P. (2012) 207 Cal.App.4th 1266, 1275, fn. 4 [judicial “notice [of court
record] is limited to the existence of the documents and is not the same as
taking notice of the truth of any matters or facts stated therein”].)

>Herrera, supra, 196 Cal.App.4th 1366, is
instructive. In that case, plaintiffs
sued to set aside the nonjudicial foreclosure sale of their home contending,
among other things, defendants who conducted the sale (a bank and a reconveyance
company) were not in fact the beneficiary and the trustee under the deed of
trust and, thus, did not have authority to conduct the sale. (Id.
at pp. 1368-1369.) In defendants’
summary judgment motion, they claimed the undisputed evidence showed they were
the beneficiary and the trustee and to establish those facts, defendants asked
the trial court to take judicial notice of the recorded assignment of the deed
of trust and substitution of trustee showing them substituted as beneficiary
and trustee. (Id. at p. 1374.)
Plaintiffs disputed defendants’ facts and objected to the court taking
judicial notice of disputed facts contained in a hearsay document—the recorded
substitution and assignment. (>Id. at p. 1374.) The trial court overruled plaintiffs’ hearsay
objections, granted the request for judicial notice, and granted summary
judgment.

In
reversing, the court of appeal explained that although the recorded documents
were public records subject to judicial notice, that matters stated therein were
not subject to judicial notice. (>Herrera, supra, 196 Cal.App.4th at
p. 1369.) Although the recorded
documents recited the bank was the present beneficiary under the deed of trust
and the reconveyance company was the successor in interest to the original
trustee, those facts were hearsay and disputed so the trial court could not
take judicial notice of them. “The
truthfulness of the contents of the [assignment document] remains subject to
dispute [citation], and plaintiffs dispute the truthfulness of the contents of
all of the recorded documents.” (>Id. at p. 1375.) Because “[j]udicial notice of the recorded
documents did not establish [defendants were the beneficiary and the trustee]
under the . . . deed of trust[,] [d]efendants failed to
establish ‘facts justifying judgment in [their] favor’ [citation], through
their request for judicial notice.” (>Ibid.)

Here,
Hong relied solely on the printouts from a government website reciting that
Creed was exempt from carrying workers’ compensation insurance and had
certified it had no employees, to prove the essential fact that it did not have
workers’ compensation insurance. But the
truthfulness of the contents of the printout was subject to dispute and the
court could not take judicial notice of the contents of the website
printout. Accordingly, Hong failed to
establish all the essential elements of her cause of action. Summary adjudication was improper and the
judgment must be reversed. We recognize
this may well be a hollow victory for Creed.
It either had workers’ compensation insurance during the relevant time
period or it did not, and that seems an easy enough fact for Hong to prove
through properly obtained discovery.

>Other Contentions

In view
of our conclusion with regard to website printouts, we need only briefly touch
on Creed’s remaining contentions. Creed
argues the trial court also erred by allowing Hong to rely upon statements in
the written contract and in Creed’s unverified cross-complaint to establish as
undisputed facts that: Creed and Hong
entered into a contract; Creed agreed all work would be performed by properly
licensed persons; the contract period was September 1, 2010, to October 31,
2010; and Hong paid Creed $85,000. Creed
repeats the argument made with regard to the website printouts, i.e., that
taking judicial notice of court documents, in this case its own pleadings, does
not permit the court to take judicial notice of the truth of the matters
alleged in those pleadings. (>Arce v. Kaiser Foundation Health Plan, Inc. (2010)
181 Cal.App.4th 471, 483-484.)

Creed’s
arguments in this regard are frivolous.
Creed attached the contract to its cross-complaint alleging it was a
true and correct copy of the contract.
It alleged the contract amount was $96,430 and Hong failed to pay the
balance due of $11,430 ($96,430-$11,430=$85,000). These constitute judicial admissions by Creed
by which it is bound. (See >Valerio v. Andrew Youngquist Construction
(2002) 103 Cal.App.4th 1264, 1272 [an admission in a pleading is
conclusive on the pleader]; Foxborough v.
Van Atta (1994) 26 Cal.App.4th 217, 222, fn. 3 [party’s admission in its
pleadings “are conclusive concessions of the truth of a matter and effectively
remove it from the issues”]; Reichert v.
General Ins. Co. (1968) 68 Cal.2d 822, 836 [doctrine of judicial admissions
applies to unverified as well as verified complaints].)

DISPOSITION

The
judgment is reversed and the matter is remanded for trial on Hong’s third cause
of action for violation of Business and Professions Code section 7031,
7215, and 7125.2. In the interests of
justice, the parties shall bear their own costs on this appeal. (Cal. Rules of Court, rule 8.278(a)(5).)







O’LEARY,
P. J.



WE CONCUR:







MOORE, J.







FYBEL, J.