Judge: Armen Tamzarian, Case: 24STCV06424, Date: 2024-08-30 Tentative Ruling
Case Number: 24STCV06424 Hearing Date: August 30, 2024 Dept: 52
Tentative Ruling:
Pro
Hac Vice Application of Peter N. Farley to Appear as Counsel for Defendant Trea
SH Brockman, LLC
The
application to admit Peter N. Farley to appear as counsel pro hac vice for
plaintiff defendant Trea SH Brockman, LLC is granted.
Tentative Ruling:
Defendant
Trea SH Brockman, LLC’s Demurrer
Defendant Trea SH Brockman, LLC demurs to
the second, third, and fourth causes of action alleged in the complaint by
plaintiff BHFC Operating, LLC, dba Bottega Louie.
Economic
Loss Rule
Defendant argues the economic loss rule
bars plaintiff’s second cause of action for general negligence, third cause of
action for “intentional tort,” and fourth cause of action for fraud. The economic loss rule does not bar plaintiff’s
second cause of action for general negligence.
Because the court will sustain the demurrer to the third and fourth
causes of action for other reasons, the court does not reach the issue of
whether the economic loss rule applies to those causes of action.
Under the
economic loss rule, generally “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 (Sheen).) “[T]he rule functions to bar claims in
negligence for pure economic losses in deference to a contract between
litigating parties.” (Ibid.)
Plaintiff’s second
cause of action alleges defendant violated the same duties as in the first
cause of action for breach of contract. Both
causes of action arise from a contract between the parties: a commercial lease
titled the “First Amendment to Retail Lease Agreement.” (Comp., p. 5.) The first cause of action for breach of
contract alleges defendants “have failed, and continue to fail to properly
maintain, provide and repair the leasehold premises” and thereby “continues to
cause water intrusion.” (Id., p.
4.)
The second cause
of action for general negligence alleges defendant “negligently maintained,
installed, designed, repaired the property/real property/common areas, which
are the subject of this action, so as the same are in disrepair, neglect,
defective, not fit for commercial use and subject to water intrusion and other
defective conditions and damages.” (Comp.,
p. 5.) It further alleges “Water
Remediation Work performed pursuant to … the First Amendment to Retail Lease
Agreement … has been performed negligently and incompetently.” (Ibid.)
In substance, these
factual allegations amount to negligent performance of contractual duties. Plaintiff therefore can only bring a
negligence claim if it alleges physical or property damage to something other
than the subject of the contract.
Plaintiff adequately alleges such property
damage. The complaint alleges
defendant’s negligence caused damage because “floods destroy[ed]
Plaintiff’s ceilings and moulding, host and server stations, and the
patisserie, among other things.” (Comp.,
p. 5.)
Defendant argues that “damage to the property that
is the subject of the lease is the proper subject of a breach of contract
claim, not a tort claim.” (Reply, p. 3.) Defendant analogizes the premises to the product
itself in a products liability case, where “ ‘the economic loss rule allows a
plaintiff to recover in strict products liability in tort when a product defect
causes damage to “other property,” that is, property other than the product
itself. The law of contractual
warranty governs damage to the product itself.’ ” (Robinson Helicopter Co., Inc. v. Dana
Corp. (2004) 34 Cal.4th 979, 989.)
Assuming defendant correctly applies this
doctrine to a lease contract, it is not clear from the face of the complaint
that the things allegedly damaged are part of the premises themselves. On demurrer, the court must liberally
construe the complaint in favor of the plaintiff. (Perez v. Golden Empire Transit Dist.
(2012) 209 Cal.App.4th 1228, 1238). While
“ceilings and moulding” seem to be part of the premises (and perhaps not even
plaintiff’s property), the court must construe the allegation that defendant
caused damage to “host and server stations, and the patisserie” to constitute
damages to plaintiff’s personal property that was not itself the subject of the
lease.
Second
Cause of Action for General Negligence
Defendant also demurs to the second
cause of action on the grounds that plaintiff does not allege sufficient facts
for duty. For negligence, “[a] ‘ duty may arise through statute,
contract, or the relationship of the parties.’ ” (Lichtman v. Siemens Industry Inc.
(2017) 16 Cal.App.5th 914, 920.) “The
general rule in California is that ‘[e]veryone is responsible ... for an injury
occasioned to another by his or her want of ordinary care or skill in the
management of his or her property or person....’ ” (Cabral v. Ralphs Grocery Co. (2011)
51 Cal.4th 764, 771.) “[I]n the absence
of a statutory provision establishing an exception to the general rule of Civil
Code section 1714, courts should create one only where ‘clearly supported by
public policy.’ ” (Ibid.)
Defendant’s argument on duty relies on Sheen,
which concluded the law does not “impose a tort duty on a contracting party to avoid
negligently causing monetary harm to another party to that contract.” (Sheen, supra, 12 Cal.5th at p. 938.) There, the California Supreme Court applied
the economic loss rule. The Court
reasoned, “the rationales behind the economic loss rule
provide a compelling basis to reject ‘a duty of care’ ” under the
circumstances. (Id. at p.
942.) As discussed above, the economic
loss rule does not apply here. Plaintiff
alleges defendant’s negligence caused damage to plaintiff’s personal property. Defendant does not show grounds for any
exception to the general rule that everyone owes a duty not to harm to others.
Third Cause of Action for “Intentional Tort”
Plaintiff’s
third cause of action for “intentional tort” is uncertain or, in the
alternative, does not allege sufficient facts to constitute a cause of action. “Demurrers
for uncertainty are disfavored, and are granted only if the pleading is so
incomprehensible that a defendant cannot reasonably respond.” (A.J. Fistes Corp. v. GDL Best
Contractors, Inc. (2019) 38 Cal.App.5th 677, 695, internal quotes and
alterations omitted.) The complaint must
sufficiently apprise defendants of the claims against them. (Ibid.)
“Intentional tort” is a
category of causes of action. It is not
a cause of action itself. The factual
allegations plaintiff makes for this cause of action are equivalent to those
alleged for other cause of action. A cause
of action is subject to demurrer when “it merely duplicates” other causes of
action. (Shoemaker v. Myers (1990)
52 Cal.3d 1, 24.) In Award Metals, Inc.
v. Superior Court (1991) 228 Cal.App.3d 1128, 1135, the court stated a
cause of action “labeled ‘Intentional Tort’ ” was “merely a duplication of”
another cause of action. The court found
that, while the “demurrer was properly overruled as to” the latter cause of
action, it “should have been sustained as to” the cause of action labeled
“Intentional Tort.” (Ibid.) The same reasoning applies here.
Fourth Cause of Action
for Fraud
Plaintiff does not allege fraud with the specificity
required. “Fraud must be pleaded with
specificity rather than with ‘ “general and conclusory allegations.” ’ [Citation.]
The specificity requirement means a plaintiff must allege facts showing
how, when, where, to whom, and by what means the representations were made,
and, in the case of a corporate defendant, the plaintiff must allege the names
of the persons who made the representations, their authority to speak on behalf
of the corporation, to whom they spoke, what they said or wrote, and when the
representation was made.” (West v.
JPMorgan Chase Bank, N.A. (2013) 214 Cal.App.4th 780, 793 (West).)
Both parties in this action are business entities. The complaint does not identify an individual
who made misrepresentations on behalf of defendant or an individual to whom the
misrepresentations were made.
Plaintiff’s opposition relies on the exception when the defendant has “superior
knowledge” or that information was “uniquely within” defendant’s
knowledge. (Opp., p. 12.) Plaintiff, not defendant, should have
superior knowledge about which individual acting on plaintiff’s behalf received
or heard the misrepresentations. And as
to any misrepresentations included in the lease itself, plaintiff fails to show
defendant has superior knowledge about who made them. Plaintiff has a copy of the lease and should know
who signed it on defendant’s behalf.
As for any misrepresentations not made in the lease itself, plaintiff
does not allege how or when those representations were made. In contrast, in West the plaintiff alleged a bank made
misrepresentations in two documents that were attached to the complaint and in
two phone calls on specific dates. (West,
supra,
214 Cal.App.4th at p. 793.) The court
reasoned, “The identification of the Chase Bank employees who spoke with West
on those dates is or should be within Chase Bank’s knowledge.” (Id. at p. 794.)
Here, plaintiff does not allege details sufficient to permit defendant
to identify the individual responsible. Without
more specific details of when and by what means defendant made any
misrepresentations, the court cannot conclude defendant has superior knowledge
about who acted on its behalf.
Disposition
Defendant Trea SH Brockman, LLC’s demurrer
to plaintiff BHFC Operating, LLC, dba Bottega Louie’s second cause of action is
overruled. Defendant’s demurrers
to plaintiff’s third and fourth causes of action are sustained with 20
days’ leave to amend.