Judge: Armen Tamzarian, Case: 23STCV30345, Date: 2024-10-07 Tentative Ruling

Case Number: 23STCV30345    Hearing Date: October 7, 2024    Dept: 52

Tentative Ruling:

Cross-Defendant Universal Protection Service, LP’s Demurrer to First Amended Cross-Complaint

Cross-defendant Universal Protection Service, LP, doing business as Allied Universal Security Services (Universal) demurs to the first amended cross-complaint by Jamison Services, Inc. and Jamison Properties, Inc. (collectively, “Jamison”).

Universal demurs only to Jamison’s sixth cause of action for negligence.  Jamison does not allege sufficient facts to constitute a cause of action for negligence.  The economic loss rule bars this claim.  “In general, there is no recovery in tort for negligently inflicted ‘purely economic losses,’ meaning financial harm unaccompanied by physical or property damage.”  (Sheen v. Wells Fargo Bank, N.A. (2022) 12 Cal.5th 905, 922.)  “[T]he rule functions to bar claims in negligence for pure economic losses in deference to a contract between litigating parties.”  (Ibid.)  

“ ‘[T]he economic loss rule requires a [contractual party] to recover in contract for purely economic loss due to disappointed expectations, unless [the party] can demonstrate harm above and beyond a broken contractual promise.’ ”  (Rattagan v. Uber Technologies, Inc. (2024) 17 Cal.5th 1, 20 (Rattagan).)  “[T]he economic loss doctrine applies when the parties have entered into a contract; the plaintiff sues for tort damages, alleging the defendant failed to perform as the contract requires; and negligently caused economic losses flowing from the breach.  In such a case, the plaintiffs are generally limited to recovery of those economic damages and cannot seek to expand their remedies beyond those available in contract.  The doctrine does not apply if the defendant’s breach caused physical damage or personal injury beyond the economic losses caused by the contractual breach and the defendant violated a duty flowing, not from the contract, but from a separate, legally recognized tort obligation.”  (Id. at p. 44.)

The complaint in this action by plaintiff Jane Doe D.R. asserts claims against Jamison and Universal arising from sexual assault she suffered at a property where Jamison and Universal provided security or other services.  Jamison’s first amended cross-complaint alleges Jamison Services, Inc. entered a written contract with Universal’s predecessor.  (FACC, ¶ 19.)  The sixth cause of action for negligence alleges Universal “owed a duty to Cross-Complainants to exercise reasonable care in supplying the product and/or service, and/or performing the work required of them arising out of their express and/or implied agreements with Cross-Complainants that Jane Doe alleges caused her injuries.”  (¶ 32a.)  (The first amended cross-complaint includes two paragraphs numbered 32.  The court refers to them as 32a and 32b.)    

Jamison thus alleges Universal negligently performed the services for which Jamison hired it via the Universal’s “agreements with Cross-Complainants.”  (FACC, ¶ 32a.)  Jamison does not allege it suffered physical damage or property damage.  Only plaintiff Jane Doe D.R. alleges a physical injury.  Jamison’s alleges it was injured because it “incurred costs and expenses associated with the resolution of” plaintiff’s claims against Jamison.  (¶ 32b.)  Those are purely economic losses arising out of the contractual relationship between Jamison and Universal.

Even if Jamison alleged it personally suffered property damage, negligence requires both an injury “beyond the economic losses caused by the contractual breach and [that] the defendant violated a duty flowing, not from the contract, but from a separate, legally recognized tort obligation.”  (Rattagan, supra, 17 Cal.5th at p. 44, italics added.)  Jamison alleges no facts establishing Universal owed it a tort duty independent of its contractual duties.

Disposition

Cross-defendant Universal Protection Service, LP, doing business as Allied Universal Security Services’ demurrer to the sixth cause of action alleged in the first amended cross-complaint by Jamison Services, Inc. and Jamison Properties, Inc. is sustained with 20 days’ leave to amend.