DOI TODD, Acting P. J.
Plaintiffs, cross-defendants and appellants Nelli Ogandzhanyan and Beverly Ventures, LLC sued defendant, cross-complainant and respondent Hanmi Bank (the Bank) for breach of contract alleging the Bank wrongfully declared a default on a construction loan obtained by appellants. The Bank filed a cross-complaint against Ogandzhanyan for breach of guaranty. The Bank successfully moved for summary judgment on both actions asserting that conditions precedent under the loan agreement to its obligation to fund the loan never occurred because the scope and cost of the project changed and the Bank did not approve the changed plans.
Appellants contend the trial court erroneously sustained evidentiary objections and triable issues of fact exist that preclude the grant of summary judgment. We affirm.
Nelli Ogandzhanyan purchased property with the intent to build an eight-unit condominium complex (the Project). Title was transferred to Beverly Ventures LLC (BV), an entity owned by Ogandzhanyan. Ogandzhanyan's son, Nubar Terzyan, was the manager of the Project, and Artur Artenyan was the assistant manager.
In or about September 2007, appellants sought a construction loan from the Bank and submitted building plans approved by the City of Los Angeles Department of Building and Safety on November 2, 2006, and January 11, 2007 (collectively January 2007 Building Plans), depicting a four-level, eight-unit building with a single level, semi-subterranean garage. Appellants also submitted a line-item budget and a construction schedule prepared by their contractor, Ardvan Construction, Inc. (the contractor), showing construction would take 12 months.
In a letter dated August 28, 2007, the City of Los Angeles Planning Commission (Planning Commission) issued its approval of the Project subject to various conditions primarily associated with the provision of parking spaces. Appellants informed the Bank that they were confident that many of the conditions could be eliminated or modified on appeal.
On September 13, 2007, BV signed the Construction Loan Agreement (CLA) and Promissory Note, and Ogandzhanyan signed a commercial guaranty of the loan. The purpose of the loan was to finance construction of the Project and to pay Washington Mutual Bank the balance owing on the purchase of the property. The loan amount was $3,120,000 with a maturity date of March 13, 2009.
The CLA included provisions setting forth conditions to be fulfilled to the Bank's satisfaction for each payment by the bank. Changes or additions to the plans required approval by the Bank in writing.
The CLA provided several means by which appellants would be in default and which would constitute the failure of a condition precedent. In general, a construction default would occur if appellants failed to comply with the provisions of the CLA or if construction ceased before completion regardless of the reason. In addition, the CLA provided that a default would occur if work on the Project ceased for a period of more than 10 days for any reason or if the Project was not completed prior to March 13, 2009, regardless of the reason for the delay. Upon default, the Bank had the option without notice to appellants to withhold further disbursement of loan funds and call the loan due.
On September 26, 2007, the Bank advanced $610,258.77 under the CLA to pay off the Washington Mutual Bank loan. In early November 2007, the contractor submitted a request to respondent for payment for demolition of the existing house on the property. Appellants made no further draw requests from the loan fund.
Following the hearing of appellants' appeal of the imposition of conditions regarding parking by the Planning Commission, appellants sought to make changes to the January 2007 Building Plans to comply with the final approval conditions. In April or May 2008, the Bank denied appellants' request to modify the Project from eight units to six units.
In June 2008, appellants submitted new plans to the Bank (June 2008 Building Plans) that modified the original January 2007 Building Plans. The new plans were for additional construction work to add a full level of subterranean parking at a substantial additional cost. Appellants also submitted a new schedule of construction prepared by the contractor that stated construction would take 13 months and would be completed in August 2009.
On July 24, 2008, the Bank notified appellants in writing that they were in default under the CLA and refused to make any further advances under the loan. After November 13, 2008, the Bank ceased taking automatic interest payments and proceeded with judicial foreclosure. The principal balance on the loan as of that date was $692,490.72.
On May 5, 2009, the Bank purchased the property for $525,000 at a trustee's sale and applied this to the amount owed by appellants, leaving a balance of $175,635.56 outstanding.
Appellants sued the Bank for breach of contract, promissory estoppel, intentional misrepresentation, and negligent misrepresentation.
The Bank answered and pled the affirmative defenses of breach of contract and failure of condition precedent. The Bank filed a cross-complaint against Ogandzhanyan personally for breach of commercial guaranty.
The Bank moved for summary judgment on both the complaint and cross-complaint. It asserted that as a matter of law, it did not breach the CLA because it did not accept or agree to the plans submitted in June 2008; appellants failed to meet their burden to show that the Bank waived its rights under the CLA; and Ogandzhanyan remained personally liable to the Bank for breach of guaranty.
The Bank's evidence consisted of declarations from Henry Suh, Hanmi Bank vice-president and loan officer, and George Badal, Hanmi Bank vice-president and construction manager; portions of the deposition testimony of Badal, Artenyan, and Vrej Bahariance, president of the construction company; the January 2007 and June 2008 Building Plans, the initial construction schedule and budget, and the new construction schedule and budget; the CLA, promissory note, deed of trust, grant deed trustee's deed, loan history and commercial guaranty; the default letter; the complaint and portions of appellants' responses to the Bank's first set of form interrogatories.
Appellants opposed the motion. Their evidence consisted of building permits, planning requests, a letter dated August 28, 2007 from the Planning Commission, and the loan application and progress checklist. They also submitted a declaration from Ogandzhanyan and one from Artenyan stating that he and Terzyan had multiple discussions with the Bank, during which the Bank approved changes to the plans and budget.
The Bank filed evidentiary objections to the Artenyan declaration on the grounds that large portions were contradicted by Artenyan's deposition testimony.
The trial court sustained most of the evidentiary objections and granted the motion. It found that appellants had failed to dispute the fact that the Bank never agreed to modifications of the CLA, and that appellants failed to satisfy a condition precedent and were in default. It further found appellants had failed to raise a triable issue of material fact with respect to their cause of action for breach of contract. The court rejected appellants' arguments that the Bank was required to give notice and opportunity to cure the alleged breaches, and that the Bank was required to wait until the March 13, 2009 deadline had passed before declaring a default.
The trial court denied appellants motion for a new trial. This appeal followed.
Appellants contend that the trial court erred in granting summary judgment because: (1) the Bank failed to meet its burden of showing appellants were in default when they submitted the June 2008 Building Plans; (2) the Bank failed to show it had the right to call the loan when appellants ceased working for more than 10 days; and (3) the Bank failed to show it had the right to call the loan because appellants could not complete construction by March 13, 2009. Appellants also contend the trial court erred in striking portions of the Artenyan declaration.
We review de novo a trial court's ruling on a motion for summary judgment, "considering `all of the evidence set forth in the [supporting and opposition] papers, except that to which objections have been made and sustained by the court, and all [uncontradicted] inferences reasonably deducible from the evidence.'" (Artiglio v. Corning Inc. (1998) 18 Cal.4th 604, 612; Code Civ. Proc., § 437c, subd. (c).)
A motion for summary judgment "shall be granted if all the papers submitted show that there is no triable issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." (Code Civ. Proc., § 437c, subd. (c).) "[T]he party moving for summary judgment bears an initial burden of production to make a prima facie showing of the nonexistence of any triable issue of material fact; if he carries his burden of production, he causes a shift, and the opposing party is then subjected to a burden of production of his own to make a prima facie showing of the existence of a triable issue of material fact." (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 850.)
We review the trial court's evidentiary rulings for an abuse of discretion. (Mitchell v. United National Ins. Co. (2005) 127 Cal.App.4th 457, 467.)
Appellants' opposition to the motion for summary judgment consisted primarily of the declaration of nonparty Artenyan, the assistant manager for the Project, in which Artenyan declared that the Bank agreed to approve changes to the plans and budget during discussions he and manager Terzyan had with Suh and Badal. The trial court sustained the Bank's evidentiary objections to the portions dealing with those issues.
First, appellants contend that the trial court abused its discretion sustaining the evidentiary objections to the Artenyan declaration because the declaration is not contradicted by his earlier deposition testimony. We disagree. "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." (Visueta v. General Motors Corp. (1991) 234 Cal.App.3d 1609, 1613.)
Artenyan's declaration directly contradicted his deposition testimony on multiple topics. On the issue of whether the Bank approved the revised plans submitted in June 2008, Artenyan testified at his deposition that Suh said nothing when the plans were presented: "Q. At this meeting, the fifth meeting, did Henry say that these revised plans were acceptable to the bank? A. At when? I'm sorry. Q. At the fifth meeting, when you presented the revised plans—. A. Uh-huh. Q. —did the bank—what did the bank say to you? A. Nothing. He accepted it, and he didn't say anything. No comments." Paragraph 19 of Artenyan's declaration directly contradicted this because it stated: "At the time Suh received the revised plans, he again reaffirmed that the project had been approved by the Bank . . . ."
Similarly, Artenyan testified at his deposition that at the time the loan documents were signed there was no discussion with Suh or Badal about the impact of the Planning Commission's decision on the January 2007 Building Plans: "Q. Did George say anything about what the bank would do or not do if the plans you submitted had to be changed? A. No. Q. Did Henry say anything . . .? A. No. Q. At any time before the loan documents were signed . . . did George Badal ever say anything to you about what the bank would do or not do if the plans that you submitted in connection with the loan application . . . had to be changed as a result of any rulings by the Planning Department? A. He has never said anything like that. Q. And did Henry Suh . . .? A. No. Q. And . . . did George Badal ever say anything to you about what the bank would do or not do should the budget . . . need to change as a result of anything that the Planning Commission required? A. Conversation never came up. Q. Same thing for Henry Suh . . . did Henry Suh ever say anything to you . . .? A. No. Conversation never came up." Again, his declaration directly contradicted this because it stated at paragraph 13: "We informed Suh and Badal that, based on the Planning Commission's decision of August 28, 2007, there undoubtedly would be changes made to the January 2007 Building Plans which could result in changes to the budget and the time frame within which the St. Andrews Villa Project could be completed, especially since it would take time to pursue the appeal with the Planning Commission." Appellants' contentions regarding the remaining portions of the Artenyan declaration subject to the court's ruling are equally unpersuasive because they were also contradicted by Artenyan's deposition testimony in a similar manner.
Next, appellants contend the trial court improperly sustained objections where the deposition testimony was consistent with the Artenyan declaration. Appellants' argument appears to be premised on the notion that every word on every page of every document submitted to the lower court is "in the record" and can be relied upon by the parties. Appellants contend that the "consistent" deposition testimony was part of the record because it was included among the Bank's submissions, even though it was not marked by either party, or brought to the attention of the court. Appellants are mistaken. We will only consider facts that were properly before the trial court and not allow appellants to attempt to create for the first time a triable issue before this court, by citing to materials not called to the attention of the trial court. (DiCola v. White Brothers Performance Products, Inc. (2008) 158 Cal.App.4th 666, 676.)
"[W]here the evidence is not referenced, is hidden in voluminous papers, and is not called to the attention of the court at all, a summary judgment should not be reversed on grounds the court should have considered such evidence." (San Diego Watercrafts, Inc. v. Wells Fargo Bank (2002) 102 Cal.App.4th 308, 316.) While the evidence here may not have been hidden in "voluminous papers," we reject appellants' contention that it was incumbent upon the court to see it. The fact that it could have been found in the filed documents is of no value because it improperly imposes the burden on the trial court to determine the existence and significance of facts which counsel failed to bring out. (North Coast Business Park v. Nielsen Construction Co. (1993) 17 Cal.App.4th 22, 31.)
Lastly, appellants contend the court erred in sustaining the Bank's objection to a portion of the Artenyan declaration on relevancy grounds. They argue that when they presented the budget accompanying the June 2008 Building Plans, instead of calling the loan the Bank should have exercised its right to demand that appellants place additional money into the loan funds. But appellants' argument is flawed because even though the addition of the full level of subterranean parking increased costs by $548,000 those increases were offset by decreases in other areas, resulting in the total construction budget remaining the same for the June 2008 Building Plans and the January 2007 Building Plans. Appellants do not dispute this. Because there was no amount the Bank could have asked appellants to deposit into the loan funds, the trial court properly sustained the objection on relevancy grounds.
The thrust of the Bank's argument is that appellants' breach of contract claims failed because it was appellants who were in breach. Conditions precedent to respondent's obligation to fund the balance of the loan did not occur and appellants were in default per the terms of the CLA. The Bank offered evidence to show that it did not approve the plans submitted in June 2008 which differed significantly from the plans approved by them during the loan application process; appellants could not complete the Project by March 13, 2009; and appellants had ceased work on the Project for more than 10 days.
We find that the Bank met its initial burden of offering evidence to support their claims and that once the burden shifted to appellants, appellants failed to present sufficient evidence to create a triable issue of material fact.
The CLA contained a condition precedent to each advance requiring that "Lender shall have received and accepted a complete set of written Plans and Specifications setting forth all Improvements for the Project . . . ." Plans and Specifications were defined as "the plans and specifications for the Project which have been submitted to and initialed by Lender, together with such changes and additions as may be approved by Lender in writing." The Bank provided the January 2007 Building Plans submitted to them by appellants and the Suh and Badal declarations confirmed that the plans described a four-level, eight-unit building with a single level, semi-subterranean garage. Bahariance testified that construction would take 12 months and be completed by March 13, 2009. The Bank provided the June 2008 Building Plans and through the testimony of Bahariance and the declaration of Badal established that they were materially different from the January 2007 Plans. Badal declared that the June 2008 Building Plans did not bear an "approved" stamp from the City of Los Angeles Department of Building and Safety. Bahariance testified that the June 2008 Building Plans added a full level of subterranean parking, used a 6-level elevator instead of a 5-level elevator, deleted the use of steel moment frames, and removed masonry from the façade of the building. He also testified that the additional parking structure increased costs by $548,000.
The Bank produced evidence that conditions existed at the time they called the loan in July 2008 that constituted a default. According to the CLA, appellants would be in default if "Prior to the completion of construction of the Improvements and equipping of the Project, the construction of the Improvements or the equipping of the Project is abandoned or work thereon ceases for a period of more than ten (10) days for any reason, or the Improvements are not completed for purposes of final payment to the General Contractor prior to March 13, 2009, regardless of the reason for the delay."
To establish that appellants would be unable to complete the Project by March 13, 2009, the Bank provided the testimony of Bahariance who stated that construction of the entire Project as outlined in the June 2008 Building Plans would take 13 months with completion to occur in August 2009. Moreover, the Badal declaration ascertained that the June 2008 Building Plans had not even been approved by the Department of Building and Safety, or the Planning Commission when appellants submitted them to the Bank, thereby necessitating a further delay in the completion date.
With respect to cessation of work for more than 10 days, the loan history supplied by the Bank, the Suh declaration, and the Bahariance testimony all confirmed that appellants made no draw requests from the loan funds for any work performed between November 2007 and April or May 2008, when appellants first proposed modifications to the Project.
We agree with the trial court that the Bank produced sufficient evidence of appellants' default and the failure of a condition precedent that shifted the burden of production to appellants to provide admissible evidence that created a triable issue of fact that the June 2008, plans, budget, and timeline had been approved in writing by respondent.
Beyond the Artenyan declaration, appellants offered no other evidence that the June 2008 Building Plans were approved by the Bank. Because the trial court properly exercised its discretion in sustaining the Bank's objections to that declaration, appellants failed to offer evidence sufficient to create a triable issue of fact. A party may not attempt to create a triable issue of fact by submitting a declaration that contradicts his deposition testimony. (Benavidez v. San Jose Police Dept. (1999) 71 Cal.App.4th 853, 860.)
On appeal, appellants reiterate their evidentiary arguments. As previously discussed, we find the evidentiary objections were properly sustained. Appellants never disputed that the Bank's obligation to fund under the CLA was conditioned on its approval of the plans and specifications, budget and timeline. Appellants did not meet their burden of creating a triable issue of material fact that the June 2008 Building Plans were approved in writing. The failure of a condition precedent constitutes an excuse for nonperformance and appellants' breach of contract claim fails as a matter of law. (Britschgi v. McCall (1953) 41 Cal.2d 138, 144.)
Appellants various other contentions are meritless and many are being raised for the first time on appeal. "It is axiomatic that arguments not asserted below are waived and will not be considered for the first time on appeal." (Ochoa v. Pacific Gas & Electric Co. (1998) 61 Cal.App.4th 1480, 1488, fn. 3.)
Appellants contend that the Bank failed to plead or argue that appellants' submission of different plans failed to satisfy a condition precedent. First, this matter was not raised in the trial court and we take the facts from the record before the trial court when it ruled on the motion. (Conroy v. Regents of University of California (2009) 45 Cal.4th 1244, 1249.) Appellants did not fail to satisfy a condition precedent because the June 2008 Building Plans were different from the preloan approved January 2007 Building Plans, but because they were not approved. In any event, the Bank's affirmative defenses to the breach of contract claim placed the failure of conditions precedent in issue.
Appellants also contend that since the Bank knew that another financial institution was considering making a loan to appellants, an inference can be drawn that the Bank was willing to agree to any and all changes to the original plans in order to keep its loan fee. This matter was not raised in the trial court and is waived. Additionally, there is nothing in the record to support this bare assertion and it is insufficient to raise a triable issue as to whether the Bank agreed to accept any changes to the January 2007 Building Plans. A party may not avoid summary judgment based on mere speculation and conjecture but instead must produce admissible evidence raising a triable issue of fact. (Compton v. City of Santee (1993) 12 Cal.App.4th 591, 595-596.)
In addition to appellants' failure to satisfy the condition precedent to the Bank's obligation to fund the loan, appellants were in default under the terms of the CLA and in a breach of the contract. There is no merit to appellants' contention that the Bank could not declare a completion deadline default until March 13, 2009 had passed.
Appellants produced no evidence to show that construction could be completed on time in accordance with the approved plans, nor did appellants cite any authority for the proposition that the Bank was required to wait until March 13, 2009 to establish nonperformance. The law does not require performance of an idle act. (Glendale Fed. Sav. & Loan Assn. v. Marina View Heights Dev. Co. (1977) 66 Cal.App.3d 101, 152.) The Bank correctly treated the prospective failure of appellants to complete the Project by the March 13, 2009 deadline as an anticipatory breach. (Central Valley General Hospital v. Smith (2008) 162 Cal.App.4th 501, 514, fn. 4.)
Appellants do not dispute that work ceased for a period of time in excess of 10 days but argue that the Bank did not have the right to call the loan for this reason or for the failure to complete by March 13, 2009, because appellants had a right to cure these defaults. Appellants never referenced the "cure" clause or made any argument concerning this issue in their opposition papers, and raised it for the first time at the hearing on the motion. For this reason alone the trial court correctly rejected this claim. "The due process aspect of the separate statement requirement is self evident-to inform the opposing party of the evidence to be disputed to defeat the motion." (United Community Church v. Garcin (1991) 231 Cal.App.3d 327, 337.)
Under Evidence Code section 500,
Appellants' contentions regarding the causes of action for promissory estoppel, fraud and negligent misrepresentation fail because they also rely on the Artenyan declaration to provide the statements allegedly made by the Bank.
The trial court properly granted the Bank's motion for summary judgment on appellants' complaint and the Bank's cross-complaint.
The judgment is affirmed. Respondent is to recover its costs on appeal.
We concur:
ASHMANN-GERST, J.
CHAVEZ, J.
