Judge Christopher K. Lui, Case Number: 19STCV41053, Date: 2024-06-04 Tentative Ruling

The following tentative ruling is issued pursuant to Rule of Court 3.1308 at 2:55 p.m. on June 3, 2024.

Notice of intent to appear is REQUIRED pursuant to California Rule of Court 3.1308(a)(1). The Court does not desire oral argument on the motion addressed herein.

As required by Rule 3.1308(a)(1), any party seeking oral argument must notify ALL OTHER PARTIES and the staff of Department 76 by 4:00 p.m. on June 3, 2024.

Notice to Department 76 may be sent by email to smcdept76@lacourt.org or telephonically at 213-830-0776.

Per Rule of Court 3.1308, if notice of intention to appear is not given, oral argument will not be permitted.

Defendant/Cross-Complainant Cochrane Construction, Inc.’s demurrer to the Cross-Complaint filed by Lauren Shahid Architect, Inc. is SUSTAINED without leave to amend as to the sixth, seventh and eighth causes of action. Cross-Defendant is to answer the remaining allegations in the Cross-Complaint within 10 days.

Cross-Defendant requests that the Court take judicial notice of the following: 1. The Cross-Complaint of Lauren Shadid Architect, Inc., Page 8, Line 22 through Page 10, Line 9, and Exhibits “A” and “B” thereto pursuant to Shadid’s Notice of Errata to Cross-Complaint filed by Lauren Shadid Architect, Inc., on March 13, 2024; 2. The Standard Form Construction Agreement, PDF Page 9 of 16 of Exhibit “B” to Shadid Cross-Complaint pursuant to Shadid’s Notice of Errata to Cross-Complaint filed by Lauren Shadid Architect, Inc., on March 13, 2024;

3. The Standard Form Construction Agreement, PDF Page 13 of 16 of Exhibit “B” to Shadid Cross-Complaint pursuant to Shadid’s Notice of Errata to Cross-Complaint filed by Lauren Shadid Architect, Inc., on March 13, 2024; 4. Shadid Cross-Complaint, Page 10, Line 10 through Page 11, Line 26, and Exhibits “A” and “B” thereto pursuant to Shadid’s Notice of Errata to Cross-Complaint filed by Lauren Shadid Architect, Inc., on March 13, 2024; 5. Shadid Cross-Complaint, Page 12, Lines 4-25.

Cross-Complaint requests that the Court take judicial notice of the following:1. Cross-Complaint of Cochrane Construction, Inc., filed in the instant matter (Los Angeles County Superior Court Case No. 19STCV41053) on June 18, 2020; 2. Amendment to Cross-Complaint (MOE 40 - Lauren Shadid Architect, Inc.), filed on October 28, 2021.

The Declaration of Todd A. Daley reflects that Cross-Defendant’s counsel satisfied the meet and confer requirement set forth in Civ. Proc. Code, § 430.41.

Defendant/Cross-Complainant Cochrane Construction, Inc. demurs to the Cross-Complaint filed by Lauren Shahid Architect, Inc. as follows:

Cross-Defendant argues that the language of the Construction Contract entered into between the Contractor Cochrane and the owners, Morfords, contains indemnification language that identifies Cochrane as the Contractor, not the subcontractor, and cannot be construed to impose an indemnity obligation upon itself.

Cross-Defendant argues that there are no facts pled whereby Shahid is an intended third-party beneficiary of the indemnity provision. Cross-Defendant argues that Shahid is an independent architect and non-signatory to the agreement, and the contractual language cannot be interpreted to benefit Shahid.

Cross-Defendant also argues that the terms of the agreement expressly reject CCI’s liability for any damages arising from the performance of an independent contract between the Morfords (as Owners), and Lauren Shadid Architect, Inc. (as Architect) – at Paragraph “F” – Hold Harmless provision;

Cross-Complainant argues: even though Cochrane might be considered in ordinary parlance to be a “general contractor” – statutes and case law hold that where, as here – the homeowner has been defined as the “Owner-Builder, the homeowner is technically both the owner and the general contractor and Cochrane is therefore a “subcontractor” That is why the document is titled as it is. That is why Addendum “A” refers to the contracting parties under the agreement as Cochrane itself and “Owner/Client.” That is why the only two spaces for signature are for “Cochrane Construction” and “Owner-Builder”. That is why the only entities that signed it – and each page of Addendum “A” – were Cochrane and the Morfords. Many of the provisions refer to Cochrane by name, and define rights and obligations by and between Cochrane and the Morfords. In other words, Addendum “A” was clearly designed to be signed by, provide provisions concerning, and bind “Cochrane Construction” and the “Owner-Builder.”

Cross-Complainant argues that a hold harmless clause is not synonymous with an indemnification provision because the hold harmless clause simply refers to a waiver by one party of the right to sue another for first party damage claims, whereas an indemnity clause requires a third-party claim.

Cross-Complainant argues that, as a matter of fact and law, an architect acts as a representative or agent of the owner in its dealings with contractors and subcontractors. Cross-Complainant argues that where Shadid acted as the owner’s agent/representative in dealing

with Cochrane, a provision requiring Cochrane to indemnify the owner’s agents clearly manifests the intent and obligation of the parties that such be done, and obviously and on its face directly inures to the benefit of that agent – in this case, Shadid.

In the Reply, Cross-Defendant argues that the contract does not refer to the Morfords as “Owner-Builders.” Instead, every signature line refers to the Morfords as “Owner-Buyer,” not “Owner-Builder.” Nowhere, in the Contract are the Morfords referred to as “Owner-Builders.”

Cross-Defendant also argues that Cross-Complainant’s third-party beneficiary status must appear from the language of the agreement, not merely alleging such.

In general, indemnity refers to “the obligation resting on one party to make good a loss or damage another party has incurred.” (Rossmoor Sanitation, Inc. v. Pylon, Inc. (1975) 13 Cal.3d 622, 628 [119 Cal. Rptr. 449, 532 P.2d 97].) Historically, the obligation of indemnity took three forms: (1) indemnity expressly provided for by contract (express indemnity); (2) indemnity implied from a contract not specifically mentioning indemnity (implied contractual indemnity); and (3) indemnity arising from the equities of particular circumstances (traditional equitable indemnity). n2 (Ibid.; see PPG Industries, Inc. v. Transamerica Ins. Co. (1999) 20 Cal.4th 310, 318 [84 Cal. Rptr. 2d 455, 975 P.2d 652].)

Express indemnity refers to an obligation that arises “‘by virtue of express contractual language establishing a duty in one party to save another harmless upon the occurrence of specified circumstances.’” (Bay Development, supra, 50 Cal.3d at p. 1029.) Express indemnity generally is not subject to equitable considerations or a joint legal obligation to the injured party; rather, it is enforced in accordance with the terms of the contracting parties' agreement. (Markley v. Beagle (1967) 66 Cal.2d 951, 961 [59 Cal. Rptr. 809, 429 P.2d 129].) In the context of noninsurance indemnity agreements, if a party seeks to be indemnified for its own active negligence, or regardless of the indemnitor's fault, the contractual language on the point “must be particularly clear and explicit, and will be construed strictly against the indemnitee.” (Crawford v. Weather Shield Mfg. Inc. (2008) 44 Cal.4th 541, 552 [79 Cal. Rptr. 3d 721, 187 P.3d 424]; see also E. L. White, supra, 21 Cal.3d at p. 507.) In this sense, express indemnity allows contracting parties “great freedom to allocate [indemnification] responsibilities as they see fit,” and to agree to “protections beyond those afforded by the doctrines of implied or equitable indemnity.” (Crawford v. Weather Shield Mfg. Inc., supra, 44 Cal.4th at pp. 551–552.) . . .

45. The Construction Contract entered into between COCHRANE and the MORFORDS includes a two page “ADDENDUM A”. Although for some reason, the title refers to it relating to “HOME OWNER & SUBCONTRACTOR,” the only signatories to “ADDENDUM A” are COCHRANE and the MORFORDS, and no subcontractor is identified in it, and so it appears that the obligations referenced in “ADDENDUM A” are those of COCHRANE and the MORFORDS, respectively. As relevant hereto, ADDENDUM A provides, in relevant part:

G. INDEMNIFICATION: To the fullest extent permitted by law, subcontractor shall indemnify and hold harmless owner and contractor and their agents and

employees from claims, demands, causes of action, and liabilities of every kind and nature whatsoever arising out of or in connection with sub-contractor’s operations performed under this agreement. This indemnification shall extend to claims occurring after this agreement is terminated as well as while it is in force. The indemnity shall apply regardless of any active and/or passive negligent act or

negligence or willful misconduct of owner or contractor or their agents or employees or caused solely by the designs provided by such parties.

46. Under the totality of the circumstances, it appears that the parties intended that the indemnification obligations referencing “sub-contractor” to be applicable to COCHRANE.

47. As a matter of fact, and law, an architect acts as a representative or agent of the owner, in its dealings with contractors and subcontractors [See e.g., Atherly v. MacDonald, Young & Nelson (1956) 142 Cal.App. 2d 575, 582 -584 (construction manager, as a matter of law, owner's representative); Huber,

Hunt & Nichols v. Moore (1977) 67 Cal.App.3d. 278, 289, 299-302; 136 Cal.Rptr. 603 [architect acts as owner's representative when supervising construction work, and is immune from suit by contractor in that capacity]; Alexander v. Hammarberg (1951) 103 Cal.App.2d 872, 880, 884 ["An architect is the agent of the owner, empowered to supervise and instruct the builders, and to see to it that they comply with their contract]; Ratcliff Architects v. Vanir Construction Management, Inc., (2001) 88 Cal.App.4th 595, 606 [noting that construction manager, as representative of owner, owes an undivided duty of loyalty to the same]; The Fifth Day, LLC v. Bolotin (2009) 172 Cal.App.4th 939, 943-945, 948, 955 [listing duties of the same and noting that such was properly characterized as "generally to act as Owner's agent with respect to the various parties connected with the development of the project"]; Ruiz v. Herman Weissker, Inc. (2005) 130 Cal.App.4th 52, 55, 56 [contract administrator for owner deemed owner's representative for purposes of the Privette doctrine]; Buzgheia v. Leasco Sierra Grove (1997) 60 Cal.App.4th 374, 379; Garden Grove

Comm. Church v. Pittsburgh-Des Moines Steel Co. (1983) 140 Cal.App.3d 251, 256-258]. As such, COCHRANE had and has an obligation to defend, indemnify and hold Cross-Complainant harmless from and against the MORFORDS’ claims.

48. In light of these circumstances, Cross-Complainant is an express and/or intended third party beneficiary of the express indemnity provision and is entitled to the benefit of the same.

49. By way of this Cross-Complaint, and by other means, Cross-Complainant has tendered its defense to cross-defendants, and each of them. Cross-Defendants have and continue to refuse to pay for Cross-Complainants defense and other costs or expenses, or to agree to indemnify Cross-Complainant herein. As such, Cross-Complainant has and continues to be damaged to the extent of all losses, costs, expenses and attorney fees, among other damages, as a result thereof.

The Court examines the following pertinent contractual language in ADDENDUM A (RJN, Exh. B to Cross-Complaint per Notice of Errata filed on March 13, 2024):

Cochrane Construction Inc. hereinafter called "Contractor" and/or “Beneficiary”

agrees to provide the following labor, materials and construction its accordance with the plans and specifications as may be added and initialed by the parties attached hereto.

F) HOLD HARMLESS. The homeowner/client agrees to ' hold harmless' Cochrane Construction, Inc. in any and all instances where independent contractors, sub-contractors, and/or contracted labor, engaged independently by the homeowner / client and/or hired specifically by Cochrane Construction, Inc., cause real and actual damage to personal property and/or the project and materials/ components associated with such in general, due to negligence, in which instances, the independent contractors, sub-contractors, and/or contracted labor 's liability insurance and/or bond is surrendered. Homeowner / client agrees to pursue restitution with said independent contractors, sub- contractors, and/or contracted labor exclusively and hold Cochrane Construction, Inc., writer of contactor's license bond, and insurance carriers, harmless in such instances. Cochrane Construction, Inc. cannot be held liable for work performed under independent contracts executed between the homeowner/ client and independent contractors, sub-contractors, and/or contracted labor specifically outside the scope of work expressly contracted between the homeowner / client and Cochrane Construction, Inc. due to fraud, negligence, abandonment or otherwise. Furthermore, homeowner agrees to pay Cochrane Construction, Inc. restitution, in full, for any and all real and actual damage to company equipment, vehicles, personal property and/or the project and materials / components associated with such in general, as specifically caused by independent contractors, sub-contractors, and/or contracted labor procured independently by the homeowner/ client.

G) INDEMNIFICATION: To the fullest extent permitted by law, sub-contractor shall indemnify and hold harmless owner and contractor and their agents and

employees from claims, demands, causes of actions and liabilities of every kind and nature whatsoever arising out of or in connection with sub-contractor's

operations performed under this agreement. This indemnification shall extend to claims occurring after this agreement is terminated as well as while it is in force. The indemnity shall apply regardless of any active and/or passive negligent act or omission of owner or contractor, or their agents or employees, but subcontractor shall not be obligated to indemnify any party for claims arising from the sole negligence or willful misconduct of owner or contractor or their agents or employees or caused solely by the designs provided by such parties. The indemnity set forth in the addendum shall not be limited by insurance requirements or by any other provision of this agreement. All work covered by this agreement done at the site or in preparing or delivering materials or equipment to the site shall be the sole risk of sub-contractor until the completed work is accepted by contractor.

A common-sense reading of the foregoing language reveals that the reference to “sub-contractor,” “owner,” and “contractor,” refers to three separate parties. “The language of a contract is to govern its interpretation, if the language is clear and explicit, and does not involve an absurdity.” (Civ. Code § 1638.) Further, as pointed out by Cross-Defendant, the Morfords are referred to as “Owner-Buyer,” not “Owner-Builder.” Thus, Cross-Complainant’s argument that the Morfords are intended to be the “contractor” referred to in the Agreement is not persuasive.

As such, the contractual language holds Contractor—here, demurring Cross-Defendant Cochrane Construction, Inc., harmless from the negligence of work performed under independent contracts executed between homeowner / client (i.e., the Morfords), and independent contractors such as Cross-Complainant Lauren Shahid Architect, Inc. Moreover, the express indemnification provision is only imposed upon a sub-contractor, relative to the owner (the Morfords) or the contractor (Cochrane Construction, Inc.) There is no language whereby Lauren Shahid Architect, Inc. may claim that it is entitled to claim indemnity from Cochrane under this language.

Nor does the contractual language permit a reading whereby Shahid is an intended third-party beneficiary:

“The test for determining whether a contract was made for the benefit of a third person is whether an intent to benefit a third person appears from the terms of the contract. [Citation.] If the terms of the contract necessarily require the promisor to confer a benefit on a third person, then the contract, and hence the parties thereto, contemplate a benefit to the third person. The parties are presumed to intend the consequences of a performance of the contract.” (Johnson v. Holmes Tuttle Lincoln-Merc. (1958) 160 Cal.App.2d 290, 297 [325 P.2d 193]; accord, Prouty, supra, 121 Cal.App.4th at p. 1232; Souza v. Westlands Water Dist. (2006) 135 Cal.App.4th 879, 891 [38 Cal. Rptr. 3d 78].) In other words, “the doctrine presupposes that the defendant made a promise which, if performed, would have benefited the third party.” (Souza v. Westlands Water Dist., at p. 891.)

Under the intent test, “it is not enough that the third party would incidentally have benefited from performance.” (Souza v. Westlands Water Dist., supra, 135 Cal.App.4th at p. 891.) “The circumstance that a literal contract interpretation would result in a benefit to the third party is not enough to entitle that party to demand enforcement. The contracting parties must have intended to confer a benefit on the third party.” (Neverkovec v. Fredericks (1999) 74 Cal.App.4th 337, 348 [**469] [87 Cal. Rptr. 2d 856].) “The effect of the section is to exclude enforcement by persons who are only incidentally or remotely benefited.” (Lucas v. Hamm (1961) 56 Cal.2d 583, 590 [15 Cal. Rptr. 821, 364 P.2d 685].)

On the other hand, “the third person need not be named or identified individually to be an express beneficiary.” (Kaiser Engineers, Inc. v. Grinnell Fire Protection Systems Co. (1985) 173 Cal.App.3d 1050, 1055 [219 Cal. Rptr. 626]; accord, Soderberg v. McKinney (1996) 44 Cal.App.4th 1760, 1774 [52 Cal. Rptr. 2d 635].) “A third party may enforce a contract where he shows that he is a member of a class of persons for whose benefit it was made.” (Garratt v. Baker (1936) 5 Cal.2d 745, 748 [56 P.2d 225]; see also, e.g., Soderberg v. McKinney, at p. 1774; Souza v. Westlands Water Dist., supra, 135 Cal.App.4th at p. 891.)

While intent is pivotal, there is no requirement that “both of the contracting parties must intend to benefit the third party … .” (Schauer v. Mandarin Gems of Cal., Inc. (2005) 125 Cal.App.4th 949, 958 [23 Cal. Rptr. 3d 233].) Rather, “it is sufficient that the promisor must have understood that the promisee had such intent.” (Lucas v. Hamm, supra, 56 Cal.2d at p. 591; accord, Schauer v. Mandarin Gems of Cal., Inc., at p. 958.) Thus, a third party will qualify as an intended beneficiary where “the circumstances indicate that the promisee”—here, Mobile—“intends to give the beneficiary the benefit of the promised performance.” (Rest.2d., supra, § 302, subd. (1)(b).)

Ultimately, the determination turns on the manifestation of intent to confer a benefit on the third party. (Hess v. Ford Motor Co. (2002) 27 Cal.4th 516, 524 [117 Cal. Rptr. 2d 220, 41 P.3d 46].) “Ascertaining this intent is a question of ordinary contract interpretation.” (Ibid.)

(Spinks v. Equity Residential Briarwood Apartments (2009) 171 Cal. App. 4th 1004, 1022-23 [bold emphasis added].)

Moreover, a third party beneficiary cannot assert rights greater than those of the contracting party. “[A]n agent ordinarily has no contract rights greater than those of the principal, because in seeking to assert rights under the principal's contract, the agent ‘is subject to the same defenses by the other party thereto.’” (Ronay Family Limited Partnership v. Tweed (2013) 216 Cal.App.4th 830, 840.) Even if Shahid is considered to the agent of the Owner (Morfords), they have no right of indemnity as against Cochrane pursuant to the above quoted language.

As such, this cause of action fails. The demurrer to the sixth cause of action is SUSTAINED without leave to amend.

Cross-Defendant argues that the Construction Agreement defines CCI as “Contractor” and the Morfords as “Owners,” but only imposes indemnity obligations upon subcontractors and homeowner toward Cochrane as the Contractor.

Cross-Defendant argues that there are no facts pled whereby Shahid is an intended third-party beneficiary of the Construction Agreement. Cross-Defendant argues that Shahid is an independent architect and non-signatory to the agreement, and the contractual language cannot be interpreted to benefit Shahid.

For the reasons discussed above re: the sixth cause of action, this cause of action also fails. The demurrer to the sixth cause of action is SUSTAINED without leave to amend.

Cross-Defendant argues that purely economic loss, with no personal injury or property damage, is not recoverable under a tort theory of negligence. (See e.g., Southern California Gas Leak Cases (2019) 7 Cal.5th 391, 397-398.)

Cross-Defendant also argues that it owed no duty to Shahid as architect under the Biakanja factors.

Cross-Complainant argues that Cochrane has asserted an identical cause of action against Shahid in the Cochrane Cross-Complaint and thus is estopped from asserting no duty of care exists or cause of action can be stated because its own arguments apply with equal or greater force to its own cause of action.

Cross-Complainant alleges that the economic loss doctrine is limited, particularly where intended beneficiary status is alleged. Cross-Complainant also alleges that Cross-Defendant did not engage in a detailed analysis of the Biakanja factors.

Cross-Complainant argues that in the construction/design context, the Courts will often impose a duty to prevent pure economic loss when there is no privity of contract when the injured party is an intended beneficiary of a contract between the defendant and another party.

In the Reply, Cross-Defendant argues that, unlike Shadid, CCI was required under Cal. Code of Civ. Proc. § 411.35, to retain, and did retain, the services of a California licensed Professional Engineer and licensed Architect, Edward R. Panasci, P.E., AIA, to review the architectural plans drawn up by Lauren Shadid Architect, Inc., and to issue a Certificate of Merit before any claim for professional design negligence could be plead. CCI’s architect found Shadid’s design plans to be incompetent, and further found that Lauren Shadid Architect, Inc. was negligent in the performance of its professional services in this matter, thus issuing a Certificate of Merit filed with this Court on October 28, 2021. (RFJN of CCI’s Certificate of Merit filed 10-28-21). Shadid’s general tort claim for negligence was not brought under the statutory requirements of C.C.P. § 411.35 and is not “identical.”

59. COCHRANE and BURGOS owed a duty to the other participants in the construction process to ensure that its work, and the work of its/their subcontractors, complied with the applicable standard of care, and was not so woefully deficient as to cause delays and additional cost and expense to the other participants in the design and/or construction process, including Cross-Complainant.

60. COCHRANE and BURGOS work was grossly negligent and in almost every particular. For example, COCHRANE effectively failed to be involved with the work and/or to supervise the work of its subcontractors, particularly BURGOS. The plans were not followed and numerous mistakes were made. By way of example only, COCHRANE and BURGOS placed the foundations and walls in the wrong locations. All of these errors had entirely foreseeable consequences, including, but not limited to, additional design expenditures, and the institution of litigation, which eventually encompassed Cross-Complainant.

61. As a consequence of Cross-Defendants acts and omissions, Cross-Complainant was forced to spend hundreds of hours attempting to address the problems, preparing as-built drawings and the like, for which it has not been compensated. It therefore seeks to recover these additional fees and costs, as well as other damages, against Cross-Defendants. In addition, it has been named as a defendant, and forced to incur defense costs and expenditures, solely as a result of the negligent and other acts and omissions of the Cross-Defendants, for which it seeks recovery under the “tort of another” doctrine, as well as under other relevant theories and causes of action herein.

For the reasons discussed above re: the sixth and seventh causes of action, Cross-Complainant has not pled facts demonstrating that it is an third-party beneficiary of the Construction contract between the Owners (Morfords) and the Contractor (Cochrane). As such, Cross-Complainant’s discussion of duties imposed in third-party beneficiary situations are inapposite.

To establish a cause of action for negligence, the plaintiff must show that the “defendant had a duty to use due care, that he breached that duty, and that the breach was the proximate or legal cause of the resulting injury.” (Nally v. Grace Community Church (1988) 47 Cal.3d 278, 292 [253 Cal. Rptr. 97, 763 P.2d 948].) Recovery for negligence depends as a threshold matter on the existence of a legal duty of care. (Gas Leak Cases, supra, 7 Cal.5th at p. 397.)

[E]conomic damages, standing alone, can be recovered under some circumstances in an action for negligence. "[A]n injury to the plaintiff's economic interests should not go uncompensated merely because it was unaccompanied by any injury to his person or property." (Citations omitted.) Further, the reasoning of J'Aire is wholly incompatible with a limitation of the cause of action to those instances in which the plaintiff and defendant are not in privity, the secondary basis for the trial court's ruling.

Nevertheless, J'Aire does require that the parties have a "special relationship" for such a cause of action to arise. (J'Aire, supra, 24 Cal. 3d at p. 804.) That special relationship must give rise to a duty on the part of the defendant to use due care to avoid economic injury to the plaintiff. (Id. at p. 803.) In the context of a motion for judgment on the pleadings, this means the complaint must allege facts constituting such special relationship. . . .

J'Aire set forth six “criteria” for determining whether a special relationship exists pursuant to which a tort duty should be imposed: “(1) the extent to which the transaction was intended to affect the plaintiff, (2) the foreseeability of harm to the plaintiff, (3) the degree of certainty that the plaintiff suffered injury, (4) the closeness of the connection between the defendant's conduct and the injury suffered, (5) the moral blame attached to the defendant's conduct and (6) the policy of preventing future harm.” (J'Aire, supra, 24 Cal.3d at p. 804; see Biakanja v. Irving (1958) 49 Cal.2d 647, 648–651 [320 P.2d 16] [applying these factors and holding that notary public who prepared defective will had duty to intended beneficiary].) “Ultimately, duty is a question of public policy. [Citation.] When determining whether a duty of care exists” in a purely economic loss case, courts examine and balance the factors set forth above. (Ratcliff Architects v. Vanir Construction Management, Inc., supra, 88 Cal.App.4th at p. 605.)

The primary exception to the general rule of no recovery for negligently inflicted purely economic losses is where the plaintiff and the defendant have a “special relationship.” (J'Aire, supra, 24 Cal.3d at p. 804.) What we mean by special relationship is that the plaintiff was an intended beneficiary of a particular transaction but was harmed by the defendant's negligence in carrying it out. Take, for example, Biakanja v. Irving (1958) 49 Cal.2d 647 [320 P.2d 16] (Biakanja). There, we held that the intended beneficiary of a will could recover for assets she would have received if the notary had not been negligent in preparing the document. (Id. at pp. 650–651.) A special relationship existed between the intended beneficiary and the notary in Biakanja, we emphasized, because “the ‘end and aim’ of the transaction” between the nonparty decedent and the notary was to ensure that the decedent's estate passed to the intended beneficiary. (Id. at p. 650.)

For similar reasons, in J'Aire we held that a special relationship existed between a restaurant operator and a contractor hired by a third party property owner to renovate the space rented by the restaurant operator. (J'Aire, supra, 24 Cal.3d at pp. 804–805.) So when the contractor negligently failed to complete the construction work on time, the restaurant operator could recover purely economic losses it suffered as a result. (J'Aire, at pp. 804–805.)

(Southern California Gas Leak Cases (2019) 7 Cal.5th 391, 400 [bold emphasis and underlining added].)

There are no facts pled whereby the construction project—the transaction—was intended to benefit Lauren Shahid Architect, Inc. Clearly, the intended beneficiary of the transaction was the Morfords as Owners. This factor weighs heavily against a finding of duty owed by Cross-Defendant contractor to Cross-Complainant architect.

There is a low degree of foreseeability of harm to an architect—whose work generally precedes construction—and negligence of a contractor.

3. The degree of certainty that the plaintiff suffered injury and (4) The closeness of the connection between the defendant's conduct and the injury suffered.

As for degree of certainty that Cross-Complainant suffered injury and the closeness of the connection between Cross-Defendant’s conduct and Cross-Complainant’s injury, such injury is two degrees removed from the contractor: the claim of having to draw additional plans and not being paid for it is the direct result of the Owners not paying the architect for those plans, and the claim of having to defend against the lawsuit is the direct result of the Owners suing the architect.

Alleged negligence in construction does not carry a high degree of moral blame, absent catastrophic failure which caused injury to life or limb. This factor weighs against finding a duty.

There is no strong policy of preventing future harm of the type asserted in the Cross-Complaint. Having to perform additional work and not being paid for it is just an unavoidable aspect of doing business. This factor weighs against finding a duty.

For the foregoing reason, the Court finds that no special relationship exists between Cross-Defendant and Cross-Complainant which would give rise to a duty to avoid negligently inflicting economic harm upon Cross-Complainant.

Cross-Complainant’s argument that Cross-Defendant should be estopped from challenging this negligence cause of action because Cochrane asserts a negligence cause of action against Shahid is meritless. Estoppel does not work that way[1]. Moreover, the J’Aire analysis is distinct. Further, Shahid should have demurred to the Cochrane Cross-Complaint.

The Court notes that Cross-Complainant is not left without recourse. The proper theory of recovery as against Cochrane is equitable indemnity and/or contribution, which is asserted against all Cross-Defendants in the tenth cause of action.

Cross-Defendant is to answer the remaining allegations in the Cross-Complaint within 10 days.

[1]

“ ‘ “Judicial estoppel precludes a party from gaining an advantage by taking one position, and then seeking a second advantage by taking an incompatible position. [Citations.] The doctrine's dual goals are to maintain the integrity of the judicial system and to protect parties from opponents' unfair strategies. [Citation.] Application of the doctrine is discretionary.” ’ [Citation.] The doctrine applies when ‘(1) the same party has taken two positions; (2) the positions were taken in judicial or quasi-judicial administrative proceedings; (3) the party was successful in asserting the first position (i.e., the tribunal adopted the position or accepted it as true); (4) the two positions are totally inconsistent; and (5) the first position was not taken as a result of ignorance, fraud, or mistake.’ [Citations.]” (Citations omitted.)

(People v. Castillo (2010) 49 Cal.4th 145, 155.)