Judge: Alison Mackenzie, Case: 24STCV19787, Date: 2025-02-05 Tentative Ruling
Case Number: 24STCV19787 Hearing Date: February 5, 2025 Dept: 55
NATURE OF PROCEEDINGS: Hearing on Defendants’ Demurrers - Without Motion to Strike
Defendants’ Demurrers are overruled.
BACKGROUND
Plaintiffs Amena Mebane and Brendon Mebane
filed this action against Tal Dream Design, Inc (Tal), Birkat
Hadasa, Roi Edery, Future Home Builders, Inc. (FHB), Ofir Grushkovski, Luna
Custom Pools, Inc., Jabs Pools and Spas, LLC, American Contractors Indemnity
Company, and Wesco Insurance Company (collectively “Defendants”), alleging that Defendants sold Plaintiffs
a house in Encino, California (the “property”) containing defects.
The causes of action are: (1) Negligence; (2) Breach of
Express Warranty; (3) Breach of Implied Warranty; (4) Breach of Contract; and
(5) Action on Performance Bonds.
Defendants Tal, Hadasa, Edery, FHB, and
Grushkovski (collectively the “Builders”) each filed a Demurrer - Without Motion to Strike. While filed separately, because the Builders
share the same counsel and make identical arguments, the Court addresses all the
demurrers in this order.
REQUEST FOR JUDICIAL NOTICE
The Builders request the Court take judicial notice of the “New
Construction Addendum to RPA-CA” (the “Addendum”) which is referenced in
paragraphs 32, 42, and 57 of the Complaint. However, Builders fail to attach a
copy of the addendum to their requests for judicial notice. Because Builders failed
to furnish the Court with “sufficient information to enable it to take judicial
notice of the matter,” the request is denied. Evid. Code, § 453, subd. (b); see
CREED-21 v. City of San Diego (2015) 234 Cal.App.4th 488, 521 (“Because the
copy of the document City included in its request for judicial notice did not
include a copy of the attachment referred to therein … the trial court properly
found the document included in City's request for judicial notice was
incomplete and therefore it did not have ‘sufficient information’ for the court
to take judicial notice of it.”)
LEGAL STANDARD
When considering demurrers, courts read the allegations
liberally and in context. Wilson v. Transit Authority of City of Sacramento
(1962) 199 Cal.App.2d 716, 720-21. In a demurrer proceeding, the defects must
be apparent on the face of the pleading or via proper judicial notice. Donabedian
v. Mercury Ins. Co. (2004) 116 Cal.App.4th 968, 994. “A demurrer tests the
pleading alone, and not on the evidence or facts alleged.” E-Fab, Inc. v.
Accountants, Inc. Servs. (2007) 153 Cal.App.4th 1308, 1315. As such, courts
assume the truth of the complaint’s properly pleaded or implied factual
allegations. Ibid. However, it does not accept as true deductions,
contentions, or conclusions of law or fact. Stonehouse Homes LLC v. City of
Sierra Madre (2008) 167 Cal.App.4th 531, 538.
Leave to amend must be allowed where there is a reasonable
possibility of successful amendment. See Goodman v. Kennedy
(1976) 18 Cal.3d 335, 349 (court shall not “sustain a demurrer without leave to
amend if there is any reasonable possibility that the defect can be cured by
amendment”); Kong v. City of Hawaiian Gardens Redevelopment Agency
(2002) 108 Cal.App.4th 1028, 1037 (“A demurrer should not be sustained without
leave to amend if the complaint, liberally construed, can state a cause of
action under any theory or if there is a reasonable possibility the defect can
be cured by amendment.”). The burden is on the complainant to show the Court
that a pleading can be amended successfully. Blank v. Kirwan (1985) 39
Cal.3d 311, 318.
ANALYSIS
The Builders demur to causes of action one through four.
I. Procedural Requirements
Plaintiffs correctly note that the Builders’ notices
misidentify the causes of action as “First Cause of Action for Negligence
Fraud,” “Second Cause of Action for Breach of Express Warranty,” Second Cause
of Action for Breach of Implied Warranty,” and “Second Cause of Action for
Breach of Contract.” Notice of Demurrer and Demurrer at p. 3. However, as
Plaintiff addresses the merits, the Court declines to exercise its discretion
under Code of Civil Procedure section 430.60 to disregard the demurrers.
II. Negligence
Plaintiffs allege that Defendants were negligent in the
initial construction of the property and in making subsequent repairs.
A. Initial Construction
First, the Builders argue that any negligence claim
regarding the initial construction of the property is time-barred under Code of
Civil Procedure section 337.1. “Section 337.1 limits the time for instituting
an action to recover damages for patent deficiencies in improvements to real property.
Such actions generally must be brought no more than four years after
substantial completion of the improvement.” Nichols v. Swimquip (1985)
171 Cal.App.3d 216, 219 (Nichols) (fn. omitted). “As used in this
section, ‘patent deficiency’ means a deficiency which is apparent by reasonable
inspection.” Code Civ. Proc., § 337.1, subd. (e).
“A patent defect is
one which can be discovered by such an inspection as would be made in the
exercise of ordinary care and prudence. This is contrasted with a latent
defect, one which is hidden, and which would not be discovered by a reasonably
careful inspection.” Wagner v. State of California (1978) 86 Cal.App.3d
922, 927 (citations omitted). “A companion statute, section 337.15, contains
essentially the same language. However, it places a 10-year limitation on
actions involving latent deficiencies in improvements to real property. Nichols,
supra, 171 Cal.App.3d at p. 220 (fn. omitted). The term “latent
deficiency” is defined in California Code of Civil Procedure Section 337.15 as “a
deficiency which is not apparent by reasonable inspection.” “The 10-year
statute is the outside limit for an action against a contractor for latent
defects. If a latent defect is discovered, an action must be filed within three
years (§ 338) or four years (§ 337) of discovery, but in any event must be
filed within ten years (§ 337.15) of substantial completion.” A & B
Painting & Drywall, Inc. v. Superior Court (1994) 25 Cal.App.4th 349,
355 (citations omitted).
The statute of limitations under sections 337.1 and 337.15
are measured from the event giving rise to the cause of action. Ibid. Courts
employ an objective test to determine whether the deficiency is patent or
latent. “The use of an objective test for a patent defect effectuates the broad
protection afforded contractors by the statute by eliminating the possibility
that a defect could be deemed patent as to some plaintiffs and latent as to
others depending on the circumstances of each person injured as a result of the
defect. ... [T]he test focuses on the nature of the defect, the circumstances
surrounding it, and the nature and gravity of the harm it presents. The
question to be answered is whether the average consumer, during the course of a
reasonable inspection, would discover the defect. The test assumes that an
inspection takes place.” Geertz v. Ausonio (1992) 4 Cal.App.4th 1363,
1370.
“‘[A] demurrer on the ground of the bar of the statute of
limitations does not lie where the complaint merely shows that the action may
have been barred. It must appear affirmatively that, upon the facts stated, the
right of action is necessarily barred.’” Stueve Bros. Farms, LLC v. Berger
Kahn (2013) 222 Cal.App.4th 303, 313 (quoting Baright v. Willis
(1984) 151 Cal.App.3d 303, 311) (citations omitted) (internal quotation marks
omitted).
The Builders argue that construction on the property was
substantially completed by the end of June 2019, when Plaintiffs purchased the
property. Accordingly, they contend that the limitations period ran on June 30,
2023, more than a year before Plaintiffs filed the Complaint. The Builders
argue that the defects described in paragraph 37 of the Complaint were patent
defects because a reasonably careful inspection would discover them. In
particular, the Builders claim that the allegations that “(1) the swimming pool
“[lacks] a pool bench in the deep end”; (2) the “pool shell is cracked”; (3)
the dining room ceiling is leaking; (4) “water passes into the floor of the
[master bedroom] balcony”; (5) “the bench in the master bathroom shower is
cracking”; and (6) “the earthquake valve is installed in the wrong place” would
be “glaring obvious to anyone who looked at them. Demurrers at p. 5:
Except for the lack of a pool bench in the deep end, the
Court cannot find, as a matter of law, that a reasonably careful inspection
would discover these defects. Based on the allegations of the Complaint alone,
it is impossible to determine whether these defects were visible when
Plaintiffs purchased the property or only became noticeable later. Nor are
these the only defects alleged in the Complaint. Compl. at ¶ 37.
Additionally, the Builders argue that because Plaintiffs
admit they knew of the defects “from May of 2020”, the claims are not timely
because the suit was not brought within four years of discovery. Demurrers at
p. 5:16-23. However, the Complaint states, “From May 2020 through the present
day, Plaintiffs discovered the Encino Property was defectively designed,
developed and/or constructed….” Compl. at ¶ 37. The Complaint does not identify
which alleged defects were discovered in May 2020 or state that all defects
were discovered before August 6, 2020. Because the Complaint does not
definitively show the cause of action accrued before August 6, 2024, the Court
may not sustain the demurrers based on the statute of limitations.
B. Repair Work
Next, the Builders argue that Plaintiffs fail to state facts
upon which a negligence claim can be granted regarding the repair work because the
Complaint lacks sufficient specificity as to what repairs were made.
“Demurrers for uncertainty are disfavored, and are granted
only if the pleading is so incomprehensible that a defendant cannot reasonably
respond. A demurrer for uncertainty is strictly construed, even where a
complaint is in some respects uncertain, because ambiguities can be clarified
under modern discovery procedures.” A.J. Fistes Corp. v. GDL Best
Contractors, Inc. (2019) 38 Cal.App.5th 677, 695 (cleaned up).
The Builders argue that Plaintiffs should identify in the
Complaint which portion of the property was repaired by Defendants, why the
repairs were substandard, and when the repairs were performed. Demurrers at p.
6:18-23. None of these omissions render the Complaint so incomprehensible that
the Builders could not respond. Moreover, all of them may be clarified through
discovery.
Additionally, there is no merit to the argument that the
Complaint is uncertain as to which of the Defendants are responsible for the repair
work. Plaintiffs define the same subset of defendants as the “Builders,” as the
Court does here. Compl. at ¶ 29. Plaintiffs allege they “notified the Builders
about the defects. Every time, the Builders (specifically, FHB/Grushkovski, the
Builders’ Designated Agent) continued to agree to repair the problems….” Moreover,
Plaintiffs allege that each of the Defendants was the agent of the other
Defendants. Compl. at ¶ 10. Therefore, no ambiguity results from Plaintiffs identifying
“Defendants” as the subjects of the negligence claim and alleging FHB and
Grushkovski promised to make the repairs. Accordingly, the Court overrules the
demurrers to the negligence claim.
III. Breach of Express
Warranty
Next, the Builders argue that Plaintiffs failed to bring
their claim for breach of express warranty within one year, as the Addendum
requires. However, the Court may not consider extrinsic evidence when ruling on
a demurrer, and as noted above, the Court has rejected Builders’ request for
judicial notice of the Addendum. Accordingly, the Court overrules the demurrers
to the second cause of action.
IV. Breach of Implied Warranty
The Builders argue that in the Addendum, Plaintiffs waived “any
implied warranty of merchantability or fitness.” For the reasons given above, the
Court may not consider the contents of that document. Accordingly, the Court
overrules the demurrers to the third cause of action.
V. Breach of Contract
Finally, the Builders argue that the breach of contract
action fails to plead the legal effects of the contract and is barred by the
statute of limitations.
A. Legal Effect
To properly plead breach of contract, “[i]f the action is
based on an alleged breach of a written contract, the terms must be set out
verbatim in the body of the complaint or a copy of the written instrument must
be attached and incorporated by reference.” Otworth v. Southern Pac.
Transportation Co. (1985) 166 Cal.App.3d 452, 459. Alternatively, “in an
action based on a written contract, a plaintiff may plead the legal effect of
the contract rather than its precise language.” Construction Protective
Services, Inc. v. TIG Specialty Ins. Co. (2002) 29 Cal.4th 189, 198-199. “‘In
order to plead a contract by its legal effect, plaintiff must “allege the
substance of its relevant terms. This is more difficult, for it requires a
careful analysis of the instrument, comprehensiveness in statement, and
avoidance of legal conclusions.”’” Heritage
Pacific Financial, LLC v. Monroy (2013) 215 Cal.App.4th 972, 993 (quoting McKell
v. Washington Mutual, Inc. (2006) 142 Cal.App.4th 1457, 1489) (citation
omitted).
Here, Plaintiffs allege that Defendants promised in the
Residential Purchase Agreement (RPA) that they would “endeavor to guard
Plaintiff against defects and deficiencies in their construction work at the
Encino Property, and would warranty the work for a period of 10 years as set
forth in the RPA” and “agreed to make all repairs necessary either by doing the
repair work themselves or by having their subcontractors make the repairs.” Compl.
at ¶ 75. Plaintiffs further allege, “Defendants expressly promised that repairs
shall be performed in a good, skillful manner with materials of quality and
appearance comparable to existing materials, as detailed in paragraph 16 of the
RPA.” Ibid. Additionally, Plaintiffs allege Defendants breached paragraph
22 of the RPA by failing to mediate this
dispute after Plaintiffs requested mediation. Based on these allegations, the
Court concludes that Plaintiffs have alleged the substance of the relevant
contract terms.
B. Statute of Limitations
The limitations period for breach of written contract is
four years. Cal. Code Civ. Pro. § 337. The Builders argue that the breach of
contract cause of action accrued in May of 2020 when Plaintiffs first noticed
some defects. Demurrers at p. 10:17-22. However, the alleged breach is not the
existence of defects, but Defendants failure to repair. As alleged in the
Complaint, Plaintiffs did not realize until “the end of summer 2022 … [that] the
Builders and Defendants had abandoned the repair work altogether as Grushkovski
made affirmative statements that the Builders could not complete the work, that
the repair work was too expensive, and that the Builders could not afford to
make any additional repairs to the Encino Property.” Compl. at ¶ 42. Because it
is not clear that this repudiation occurred before August 6, 2020, the demurrers
are overruled.
CONCLUSION
Defendants’ Demurrers are overruled.