Judge: Christopher K. Lui, Case: 23STCV24687, Date: 2025-02-24 Tentative Ruling

Case Number: 23STCV24687    Hearing Date: February 24, 2025    Dept: 76

            This is an action for common count and to foreclose on a mechanic’s lien arising out of labor, services, equipment and materials for the work of improvement to Defendants’ property performed by Plaintiff.

Defendants/Cross-Complainants Katan 915 LLC, CRA Dogwood LLC and MTK RE LLC move for judgment on the pleadings as to the Complaint.

TENTATIVE RULING

Defendants/Cross-Complainants Katan 915 LLC, CRA Dogwood LLC and MTK RE LLC’s motion for judgment on the pleadings as to the Complaint is DENIED as to the third cause of action.

ANALYSIS

Motion For Judgment On The Pleadings

Request For Judicial Notice

            Defendants request that the Court take judicial notice of the following:

Exhibit A Standard Abbreviated Form of Agreement Between Owner and Contractor;

GRANTED. This was attached to the Complaint as Exh. A.

Exhibit B Secretary of State Statement of Information for The Blakerie, LLC under entity number 202109111209;

GRANTED.

The Court may take judicial notice of a business entity’s corporate status as reflected in the Secretary of State’s records. (Gamet v. Blanchard (2001) 91 Cal.App.4th 1276, 1286; Pedus Bldg. Servs. v. Allen (2002) 96 Cal.App.4th 152, 156 n.2.)

Exhibit C Secretary of State Statement of Information for The Bakerie, LLC under entity number 202027610740;

GRANTED.

Exhibit D Recommendation on Mechanic’s Lien Law (Feb. 2008) 37 Cal. Law Revision Com. Rep. (2008);

GRANTED.

            The Court may take judicial notice of legislative history materials relevant to a material issue. (See Doe v. City of Los Angeles (2007) 42 Cal.4th 531, 544 n.4.)

Exhibit E Sen. Com. on Judiciary, Rep. on Sen Bill. No. 189 (2009-2010 Reg. Sess.)

GRANTED.

Meet and Confer

            The Declaration of Michael L. Jensen reflects that the meet and confer requirement set forth in CCP § 439 was satisfied.

Discussion

Defendants/Cross-Complainants Katan 915 LLC, CRA Dogwood LLC and MTK RE LLC move for judgment on the pleadings as to the Complaint as follows:

1.         Third Cause of Action (Foreclosure of Mechanics Lien).

            Defendants argue that Plaintiff named the wrong hiring party (that is to say, a different hiring party altogether) in its notice of mechanic’s lien. 

Defendants have submitted judicially noticeable documents which reflect that “The Bakerie LLC” is a different entity from “The Blakerie LLC,” which is the entity with which Plaintiff entered into the contract of improvement. (RJN, Exhs. A (contract is with The Blakerie, LLC), B (The Blakerie, LLC is an Advertising Agency), C (The Bakerie, LLC is a Retail Dispensary), although they both pertain to the same parcel of property.

In this regard, the Claim of Mechanic’s Lien recorded on August 15, 2023  (Complaint, Exh. B) identifies The Bakery LLC, which is not “[t]he name of the person by whom the claimant was employed or to whom the claimant furnished work.” (Civil. Code, § 8416(a)(4)[1].) However, the Claim of Mechanic’s Lien includes the property address and the names of the property owners, as well as the amount due.

In reference to the second defect referred to, as to the name of the party to whom the materials were furnished, the respondent relies on such cases as Madera Flume etc. Co. v. Kendall, 120 Cal. 182 [52 P. 304, 65 Am. St. Rep. 177], Hogan v. Bigler, 8 Cal. App. 71 [96 P. 97], and Santa Monica Lumber & Mill Co. v. Hege, 119 Cal. 376 [51 P. 555]. On the other hand, the appellant contends that under section 1203 of the Code of Civil Procedure, this claim must be held sufficient in the absence of any showing of injury. In Richman Sanitary Co. v. Franklin, 122 Cal. App. 229 [9 P.2d 855, 856], the court said: "Since the enactment of section 1203 of the Code of Civil Procedure many cases have been decided on the authority of that section. No one of them has followed the harsh rule stated in the case of Santa Monica L. & M. Co. v. Hege, supra." In Prince v. Hill, 170 Cal. 192 [149 P. 578, 580], the court said: "The statute does not require such literal exactness and rigid adherence to precise form as the appellants contend." In that case the court held that the name of the person to whom the materials were furnished was sufficiently disclosed by the allegations of the notice. In Jarvis v. Frey, 175 Cal. 687 [166 P. 997], a notice of lien was held to be sufficient where it could be reasonably inferred from statements in the notice to whom the materials were furnished. A somewhat similar rule was followed in the case of Trout v. Siegel, 202 Cal. 706 [262 P. 320]. In Consolidated Pipe Co. v. Wolski, 211 Cal. 563 [296 P. 277, 278], it is said: "Liens of mechanics or materialmen will not be held invalid unless they tend to defraud or fail to impart notice."

(Shafer v. Los Serranos Co. (1932) 128 Cal.App. 357, 360 [bold emphasis and underlining added].)

            Here, the Claim of Mechanic’s Lien stated that the services were rendered to “The Bakerie LLC, 915 Venice Boulevard, Los Angeles CA 90015.” (Compliant, Exh. B.) Per the Statement of Information submitted by Defendants, this is the principal address of  The Blakerie LLC. (RJN, Exh. B.) On the other hand, the principal address of The Bakerie LLC is stated as 2711 N Sepulveda Blvd #341—and nowhere is 915 Venice Boulevard identified on The Bakerie’s Statement of Information. (RJN, Exh. C.) As such, it can be reasonably inferred from the statements in the recorded notice that the entity to which Plaintiff furnished labor and materials was The Blakerie. (Shafer, supra, 128 Cal.App. at 360.) The Court finds that the Notice of Lien was sufficient and not invalid by virtue of identifying The Bakerie LLC instead of The Blakerie, LLC.

Defendants also argue that Plaintiff failed to provide Owner Defendants, who are the owners of the Property, with a preliminary notice of its intent to record the mechanic’s lien. 

The Complaint alleges at ¶ 13 re: the third cause of action in pertinent part: “Defendants knew of and welcomed Plaintiffs contract with Defendant The Bakerie LLC and thus no 20-day preliminary notice was required.”

            Defendants argue that Plaintiff’s failure to give preliminary notice is fatal to the third cause of action, based on Civil Code, § 8200, which provides:

(a) Except as otherwise provided by statute, before recording a lien claim, giving a stop payment notice, or asserting a claim against a payment bond, a claimant shall give preliminary notice to the following persons:

(1) The owner or reputed owner.

(2) The direct contractor or reputed direct contractor to which the claimant provides work, either directly or through one or more subcontractors.

(3) The construction lender or reputed construction lender, if any.

(b) The notice shall comply with the requirements of Chapter 2 (commencing with Section 8100) of Title 1.

(c) Compliance with this section is a necessary prerequisite to the validity of a lien claim or stop payment notice under this title.

(d) Compliance with this section or with Section 8612 is a necessary prerequisite to the validity of a claim against a payment bond under this title.

(e) Notwithstanding the foregoing subdivisions:

(1) A laborer is not required to give preliminary notice.

(2) A claimant with a direct contractual relationship with an owner or reputed owner is required to give preliminary notice only to the construction lender[2] or reputed construction lender, if any.

     (Civ. Code § 8200 [bold emphasis and underlining added].)

            Neither Civil Code § 8200, nor other sections in the statutory scheme, define “direct contractual relationship.” However, case law has held that if an owner with actual knowledge of the improvements being made to the property fails to avail himself of the mode of exempting his interest from liability, he is deemed to have a “direct contract with the owner” for purposes of the preliminary notice exemption—which exists under the current version of Civil Code § 8442:

An owner may be estopped, however, to assert that a claim is invalid because the claimant failed to give him the prior notice required by section 1193. Where a noncontracting owner has actual knowledge of the improvements being made to his property and fails to avail himself of the mode of exempting his interest from liability for the work provided by section 1183.1, subdivision (b), 2 he is estopped to deny that the work was done at his instance and request. ( Halspar, Inc. v. La Barthe, 238 Cal.App.2d 897 [48 Cal.Rptr. 293], hrg. denied Feb. 16, 1966.) Under such circumstances the claimant has a "direct contract with the owner" for the purposes of section 1193[3] and consequently is not required to give the notice prescribed therein. ( Citations [*354]  omitted.) "This result is entirely logical as . . . the owner is already in possession of the type of information otherwise provided by the prelien notice of section 1193." (Citation omitted.)

(Scott, Blake & Wynne v. Summit Ridge Estates, Inc. (1967) 251 Cal.App.2d 347, 353-54 [bold emphasis and underlining added].)

            Former section 1183.1 provided as follows regarding a claim of nonresponsiblity:

2 The pertinent portion of section 1183.1, subdivision (b) provides that every improvement constructed with the knowledge of the owner shall be held to have been constructed at the instance of the owner subject to any lien filed in accordance with the provisions of the mechanic's lien statute unless the owner shall give the statutory notice of nonresponsibility within 10 days after he has obtained knowledge of the improvement.

(Scott, Blake & Wynne, supra, 251 Cal.App.2d at 353 n.2.)

      The present-day version of § 1183.1 is found at Civil Code, § 8442:

The following interests in real property to which a lien attaches are subject to the lien:

(a) The interest of a person that contracted for the work of improvement.

(b) The interest of a person that did not contract for the work of improvement, if work for which the lien is claimed was provided with the knowledge of that person, unless that person gives notice of nonresponsibility under Section 8444[4].

(Civ. Code § 8442 [bold emphasis added].)

            As such, because the prior statutory language has carried over to the new version, there is no reason to ignore the case law which interpreted the prior, identical statutory scheme, especially when Civil Code, § 8200 utilizes the term “direct contractual relationship with an owner,” without defining that phrase. The statutory language above has carried over to the current version. Indeed, as argued in the Opposition, even in the legislative history materials submitted by Defendants themselves, this construction of a “participating owner” even if not a directly contracting owner, applies:

Comment. Section 8442 restates the last part of former Section 3128,

and former Section 3129, without substantive change. A reference to

“work” is substituted for the former reference to “commencement of the

work or of the furnishing of the materials.” See Section 8048 (“work”).

It should be noted that under this section, the interest of a person that

contracts for a work of improvement indirectly, for example through a

provision in a lease that requires a tenant to make the work of

improvement, may be subject to the lien. Likewise, the interest of a

person that did not contract for a work of improvement might in some

circumstances be subject to the lien if the person is a “participating

owner.” See, e.g., Los Banos Gravel Co. v. Freeman, 58 Cal. App. 3d

785, 130 Cal. Rptr. 180 (1976).

See also Sections 8016 (“know or knowledge”), 8024 (“lien”), 8032

(“person”), 8050 (“work of improvement”).

(Defendants’ Request For Judicial Notice, Ex. E (Recommendation on Mechanic’s Lien Law (Feb. 2008) 37 Cal. Law Revision Com. Rep. (2008) p. 682.)

The Court finds that for purposes of this motion for judgment on the pleadings Plaintiff has sufficiently pled that the 20-day preliminary notice was not required.

            Moving party argues in the Reply that Civ. Code, § 8442 relates to lien interests that may attached after a lien is validly established, not the requirements for validity establishing a lien, which requirements are found in § 8200. This argument is not persuasive, as the statutory scheme contemplates that a lien has already attached independently of the preliminary notice requirement.

            See, e.g., Civ. Code, § 8410: “A claimant may enforce a lien only if the claimant has given preliminary notice to the extent required by Chapter 2 (commencing with Section 8200) and made proof of notice.” (Civ. Code § 8410.) Recordation of the claim of lien establishes enforceability (validity). (See Civ. Code, § 8412.) As discussed above,

it can be reasonably inferred from the statements in the recorded notice that the entity to which Plaintiff furnished labor and materials was The Blakerie. (Shafer, supra, 128 Cal.App. at 360.

            Defendants point to the legislative history of 8200, which states that the provisions of Civil Code, § 8200 are new or substantively different from former law. (Supplemental Reply, Page 5:25-1; 2010 Cal. Legis. Serv. Ch. 697, § 107, subd. (b) (S.B. 189).) However, as noted above, § 8200 retains the substance of the concept of a “claimant with a direct contractual relationship with an owner” without defining “direct contractual relationship. (See Civ. Code § 8200(e)(2).) In that regard, there is no reason to ignore prior case law construing similar language.

            Accordingly, Defendants’ arguments are not persuasive. The motion for judgment on the pleadings as to the third cause of action is DENIED.