Judge: Andrew E. Cooper, Case: 24CHCV01501, Date: 2025-04-22 Tentative Ruling

Case Number: 24CHCV01501    Hearing Date: April 22, 2025    Dept: F51

LOS ANGELES SUPERIOR COURT

NORTH VALLEY DISTRICT

DEPARTMENT F-51

DEMURRER

Demurrer filed: 12/20/24

MOVING PARTY: Defendants/Cross-Defendants Sargenti Design; and Robert Sargenti, Jr. (collectively, “Cross-Defendants”)

RESPONDING PARTY: Defendant/Cross-Complainant Menemsha Development Group, Inc. (“Cross-Complainant”)

NOTICE: OK

RELIEF REQUESTED: Cross-Defendants demur against the third, fifth, and sixth causes of action in Cross-Complainant’s cross-complaint.

TENTATIVE RULING: The demurrer is overruled. Cross-Defendants to file their answer to Cross-Complainant’s cross-complaint within 20 days.

BACKGROUND

“This action involves negligence on the part of the Architect [Cross-Defendants] and Contractor [Cross-Complainant] while performing work for the Plaintiff to design and construct a franchise restaurant according to the specifications required by the franchisor.” (Compl. ¶ 14.)

Cross-Defendants “were negligent in that their architectural drawings, which were submitted to and approved by the City of Santa Clarita Building Department, failed to include a structural column that conflicted with the design of the restaurant.” (Ibid.) Cross-Complainant “failed to raise the issue of the error/inconsistency in the construction plans and specifications, the structural column that conflicted with the design of the restaurant, until construction was approximately 85% complete.” (Ibid.)

On 4/23/24, Plaintiff filed its complaint, alleging against Defendants the following causes of action: (1) Negligence; (2) Breach of Contract; (3) Breach of the Implied Covenant of Good Faith and Fair Dealing; (4) Professional Negligence; and (5) Breach of the Implied Covenant to Perform Work in a Good and Competent Manner.

On 6/21/24, Cross-Defendants filed their answer to Plaintiff’s complaint. On 10/31/24, Cross-Complainant filed its answer and cross-complaint, alleging against Cross-Defendants the following causes of action: (1) Express Indemnity; (2) Equitable Indemnity; (3) Implied Indemnity; (4) Apportionment of Fault; (5) Declaratory Relief; and (6) Professional Negligence.

On 12/20/24, Cross-Defendants filed the instant demurrer. On 4/9/25, Cross-Complainant filed its opposition. On 4/15/25, Cross-Defendants filed their reply.

ANALYSIS

As a general matter, a party may respond to a pleading against it by demurrer on the basis of any single or combination of eight enumerated grounds, including¿that¿“the pleading does not state facts sufficient to constitute a cause of action;” is uncertain, meaning “ambiguous and unintelligible;” or the pleading fails to assert whether an alleged contract is written, oral, or implied. (Code Civ. Proc., § 430.10, subds. (e), (f), and (g)).¿

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 the evidence or facts alleged.” (E-Fab, Inc. v. Accountants, Inc. Servs. (2007) 153 Cal.App.4th 1308, 1315.) As such, the court assumes the truth of the complaint’s properly pleaded or implied factual allegations. (Ibid.) The only issue a demurrer is concerned with is whether the complaint, as it stands, states a cause of action. (Hahn v. Mirda (2007) 147 Cal.App.4th 740, 747.)

Here, Cross-Defendants demur to Cross-Complainant’s third, fifth, and sixth causes of action on the basis that Cross-Complainant fails to allege facts sufficient to constitute those causes of action, rendering them fatally uncertain.

A.    Meet-and-Confer

Before filing its demurrer, “the demurring party shall meet and confer in person or by telephone with the party who filed the pleading that is subject to demurrer for the purpose of determining whether an agreement can be reached that would resolve the objections to be raised in the demurrer.” (Code Civ. Proc. § 430.41, subd. (a).) The demurring party must file and serve a meet and confer declaration stating either: “(A) The means by which the demurring party met and conferred with the party who filed the pleading subject to demurrer, and that the parties did not reach an agreement resolving the objections raised in the demurrer;” or “(B) That the party who filed the pleading subject to demurrer failed to respond to the meet and confer request of the demurring party or otherwise failed to meet and confer in good faith.” (Id. at subd. (a)(3).)

Here, Cross-Defendants’ counsel declares that beginning on 11/14/24, he met and conferred with Cross-Complainant’s counsel prior to filing the instant demurrer, but the parties were unable to come to an informal resolution. (Decl. of Christopher C. Lee ¶¶ 6–10.) Accordingly, the Court finds that counsel has satisfied the preliminary meet and confer requirements under Code of Civil Procedure section 430.41, subdivision (a).

B.     Implied Indemnity

Cross-Complainant’s third cause of action alleges Implied Indemnity against Cross-Defendants. “Implied contractual indemnity is a form of equitable indemnity, arising from equitable considerations either by contractual language not specifically dealing with indemnification or by the equities of the specific matter.” (Sehulster Tunnels/Pre-Con v. Traylor Brothers, Inc./Obayashi Corp. (2003) 111 Cal.App.4th 1328, 1350.) “To state a claim for equitable indemnity, a defendant must allege the same harm for which he may be held liable is properly attributable—at least in part—to the cross-defendant.” (Platt v. Coldwell Banker Residential Real Estate Services (1990) 217 Cal.App.3d 1439, 1445, fn.7.)

Here, Cross-Defendants argue that “as set forth in California Civil Code section 2778, a claim for implied indemnity must be based on, or arise from, a contract between the party demanding such indemnity and the party to whom such demand is made.” (Dem. 7:10–12.) Cross-Defendants argue that this cause of action therefore fails because the parties “did not have a contract for the project/subject property in question. In fact, the CROSS COMPLAINT does not even allege this.” (Id. at 7:13–14.)

In opposition, Cross-Complainant asserts that the “claim for implied indemnity is based in equity, not contract,” and as such, it was not required to allege any underlying contractual relationship between the parties. (Opp. 4:11; citing Prince v. Pacific Gas & Electric Co. (2009) 45 Cal.4th 1151, 1158 [“Unlike express indemnity, traditional equitable indemnity requires no contractual relationship between an indemnitor and an indemnitee.”]; Link-Belt Co. v. Star Iron & Steel Co. (1976) 65 Cal.App.3d 24, 28 [“Indemnification, as a form of relief, may be based upon a contractual obligation … or it may be based upon equitable considerations without a contractual relationship between the parties.”].)

In reply, Cross-Defendants argue that “Menemsha’s Cross-Complaint—does not plead or mention this in any way shape or form. In fact, Menemsha’s Cross-Complaint is completely devoid of any facts or allegations to show what equitable considerations are being used to set forth a basis for its claim.” (Reply 2:23–25.) The Court disagrees, and finds that at the pleading stage, it is sufficient that Cross-Complainant has alleged that “the damage to Plaintiff, if any, was proximately caused by the actions and primary negligence of Cross-Defendants, and each of them, in that Cross-Defendants, are completely and solely liable for the damages sought by Plaintiff, and that the conduct, if any, of Cross-Complainant was passive, secondary, and remote.” (Cross-Compl. ¶ 23.)

As “Plaintiff’s Complaint is incorporated by reference only for the purposes of illustrating the allegations,” the Court finds that Cross-Complainant has alleged facts sufficient to constitute a cause of action for Implied Indemnity. (Id. at ¶ 7.) Accordingly, the demurrer against Cross-Complainant’s third cause of action is overruled.

C.    Declaratory Relief

Cross-Complainant’s fifth cause of action alleges Declaratory Relief against Cross-Defendants. “To qualify for declaratory relief, a party would have to demonstrate its action presented two essential elements: (1) a proper subject of declaratory relief, and (2) an actual controversy involving justiciable questions relating to the party’s rights or obligations.” (Jolley v. Chase Home Finance, LLC (2013) 213 Cal.App.4th 872, 909.)

Here, Cross-Defendants argue that “a claim for declaratory relief arises out of a written instrument (i.e., a contract) between the party making the claim and the party the claim is made against. Again, MENEMSHA and SARGENTI did not have such a contact between each other, and therefore, there is no controversy as to each other’s duties and rights towards each other, and thus, no basis/merit to this claim against SARGENTI.” (Dem. 8:14–18, citing Code Civ. Proc. § 1060.)

In opposition, Cross-Complainant argues that “the plain text of the code makes clear that while declaratory relief may be available under a written instrument, it is also available for anyone who desires a declaration of their rights or duties with respect to any ongoing controversy.” (Opp. 5:22–24.) “MENEMSHA’s Cross-Complaint makes it plain that such a controversy has arisen between itself and SARGENTI. MENEMSHA has properly asserted that it is entitled to be held harmless and indemnified for costs it has incurred and will continue to incur stemming from SARGENTI’s defective work.” (Id. at 6:14–17.)

In reply, Cross-Defendants maintain that “the simple and universally understood requirement that a declaratory relief action (other than for a declaration of property rights) must arise out of a written instrument or contract – regardless of whether there is an actual controversy or not.” (Reply 5:6–9.) The Court disagrees, and notes that a cross-complaint for equitable indemnity properly takes the form of an action for declaratory relief. (Postley v. Harvey (1984) 153 Cal.App.3d 280, 285.)

Based on the foregoing, the Court finds that Cross-Complainant has alleged facts sufficient to constitute a cause of action for Declaratory Relief. Accordingly, the demurrer against Cross-Complainant’s fifth cause of action is overruled.

D.    Professional Negligence

Cross-Complainant’s sixth cause of action alleges Professional Negligence against Cross-Defendants. “There are four essential elements of a professional negligence claim: (1) the duty of the professional to use such skill, prudence, and diligence as other members of his profession commonly possess and exercise; (2) a breach of that duty; (3) a proximate causal connection between the negligent conduct and the resulting injury; and (4) actual loss or damage resulting from the professional’s negligence.” (Osornio v. Weingarten (2004) 124 Cal.App.4th 304, 319 [internal quotations omitted].)

1.      Duty

Cross-Defendants argue that “given there is no contract between MENEMSHA and SARGENTI, it is questionable how MENEMSHA will ever be able to establish that SARGENTI owed MENEMSHA any kind of duty – likely because SARGENTI did not owe MENEMSHA this duty, as it owed PLAINTIFF this duty instead (whom SARGENTI did have a contract with).” (Dem. 9:1–4.)

Whether a duty should be imposed on professionals toward third parties with whom they are not in privity is a matter of policy that requires a balancing of factors, including: the extent to which the transaction was intended to affect the third party; the foreseeability of harm to the third party; the degree of certainty that the third party suffered injury; the closeness of the connection between defendant’s conduct and the injury suffered; the moral blame attached to defendant’s conduct; and the policy of preventing future harm. (Biakanja v. Irving (1958) 49 Cal.2d 647.)

While the Court acknowledges Cross-Defendants’ arguments that the Biakanja factors weigh against a finding of duty owed to Cross-Complainant here, the Court finds this determination to be premature at the pleading stage. The Court finds it sufficient that Cross-Complainant has alleged that Cross-Defendants “had a duty to act with the level of care, diligence, and skill ordinarily possessed and exercised by members of the profession they are currently practicing, in the same locality, under similar conditions.” (Cross-Compl. ¶ 37.)

2.      Exclusion

Cross-Defendants further argue that the agreement they entered into with Plaintiff specifically states that “Sargenti is not responsible for any unseen or unforeseen conditions at the job site.” (Ex. A to Compl., p. 5, ¶ 9.) Cross-Defendants argue that Cross-Complainant, as the general contractor on the project, is therefore the only party responsible for discovering the unforeseen column at the subject property. (Dem. 9:14–22.)

The Court agrees with Cross-Complainant that “SARGENTI’s unsubstantiated references as to which party was primarily on site for the majority of the project and whether SARGENTI or MENEMSHA should have been the party with the most knowledge of the conditions of the property is a matter of factual dispute, and inappropriate for consideration of its demurrer.” (Opp. 8:18–21.)

3.      Damages

Cross-Defendants further argue that “here, MENEMSHA’s claim for professional negligence against SARGENTI is seeking to recover damages sought by PLAINTIFF in this matter, which is the same exact damages sought in MENEMSHA’s equitable indemnity and contribution/apportionment claim against SARGENTI – and therefore, seeks derivative damages, and thus, is subject to demurrer pursuant to the above.” (Dem. 10:4–7.)

In opposition, Cross-Complainant argues that “MENEMSHA’s claim of Professional Negligence against SARGENTI is not derivative of its other causes of action. A cursory look at MENEMSHA’s Cross-Complaint shows that MENEMSHA alleges damages separate and apart from SLAM DUNK, including its own costs for investigation of the defective condition and cost of defense, which are not set to be borne by SLAM DUNK.” (Opp. 9:24–28, citing Cross-Compl. ¶ 40.)

The Court agrees, and therefore finds that the damages alleged by Cross-Complainant are not derivative of those sought by Plaintiff.

4.      Economic Loss Doctrine

Cross-Defendants further argue that this cause of action is barred by the economic loss doctrine. (Dem. 10:13.) “In general, there is no recovery in tort for negligently inflicted ‘purely economic losses,’ meaning financial harm unaccompanied by physical or property damage.” (Rattagan v. Uber Technologies, Inc. (2024) 17 Cal.5th 1, 20.)

In opposition, Cross-Complainant argues that “the California Supreme Court has endorsed the view that plaintiffs can sue design professionals even if they only allege economic loss and there is no privity of contract, pending a factual analysis of the plaintiffs’ claims.” (Opp. 10:12–17, citing Beacon Residential Community Assn. v. Skidmore, Owings & Merrill LLP (2014) 59 Cal.4th 568, 576.) The Court agrees, and further notes that Plaintiff’s complaint, incorporated by reference into the cross-complaint, alleges that Defendants caused damage to the subject property. (Compl. ¶¶ 16, 18.) Based on the foregoing, the Court finds that Cross-Complainant’s sixth cause of action is not barred by the economic loss doctrine.

Accordingly, the demurrer against Cross-Complainant’s sixth cause of action is overruled.

CONCLUSION 

The demurrer is overruled. Cross-Defendants to file their answer to Cross-Complainant’s cross-complaint within 20 days.