Judge Daniel M. Crowley, Case Number: 24STCV02982, Date: 2024-12-05 Tentative Ruling

NOTE: The Court has a conflict on the morning of December 5, 2024. For the convenience of the parties, the Court is posting the following tentative. If the parties stipulate to the tentative, so advise the Judicial Assistant upon checking in at 8:30 a.m. via Court-Connect. If either party wishes to be heard, the Court will call the matter at 11:00 a.m.

Defendants Green Pastures Group, Inc.’s and John Cohen’s demurrer to Plaintiffs Carl Jacobs’ and Beverly Jacobs’ 4th and 7th causes of action is overruled.

Defendants Green Pastures Group, Inc.’s and John Cohen’s motion to strike portions of Plaintiffs’ first amended complaint is denied.

Defendants Green Pastures Group, Inc. (“GPG”) and John Cohen (“Cohen”) (collectively, “Moving Defendants”) demur to the 4th and 7th causes of action to Plaintiffs Carl Jacobs’ (“Carl”) and Beverly Jacobs’ (“Beverly”) (collectively, “Plaintiffs”) first amended complaint (“FAC”). (Notice of Demurrer, pgs. 1-2; C.C.P. §430.41(e).)

Defendants also move to strike portions of Plaintiffs’ FAC. (Notice of MTS, pgs. 1-2; C.C.P. §§435, 436, 437.)

Before filing a demurrer, the demurring party must meet and confer in person, by telephone, or by video conference with the party who filed the pleading to attempt to reach an agreement that would resolve the objections to the pleading and obviate the need for filing the demurrer. (C.C.P. §430.41(a).)

The demurring party shall file and serve with the demurrer a declaration stating either of the following: (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. (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. (C.C.P. §430.41(a)(3).)

Moving Defendants’ counsel declares that on September 13, 2024, she attempted to meet and confer with Plaintiffs’ counsel telephonically to discuss the instant demurrer and motion to strike and was unable to reach him. (Decl. of Bassi ¶3.) Moving Defendants’ counsel declares that she attempted to reach Plaintiffs’ counsel numerous times and did not hear back from him. (See Decl. of Bassi ¶3.) Moving Defendants’ counsel’s declaration is sufficient under C.C.P. §430.41(a). Therefore, the Court will consider Moving Defendants’ demurrer.

Plaintiffs filed their initial Complaint on February 5, 2024 against Moving Defendants and Non-moving Defendants Old Republic Surety Company (“Old Republic”) and Western Surety Company (“Western”) (collectively, “Defendants”), alleging eight causes of action: (1) Breach of Contract; (2) Negligence; (3) Breach of Express Warranty; (4) Breach of Implied Warranty; (5) Negligence/Construction Defect; (6) Breach of Implied Warranty; (7) Fraud-Failure to Disclose Defects; and (8) Action Against License Bond.

On June 10, 2024, this Court sustained Moving Defendants’ demurrer to the 4th and 7th causes of action with 20 days leave to amend and overruled Moving Defendants’ demurrer to the 2nd and 3rd causes of action as well as the demurrer to the entire Complaint. (See 6/10/24 Minute Order.)

Plaintiffs filed the operative FAC on August 5, 2024, alleging the same eight causes of action.

Moving Defendants filed the instant demurrer and accompanying motion to strike on September 20, 2024. Plaintiffs filed their opposition on November 18, 2024. As of the date of this hearing no reply has been filed.

Plaintiffs allege they are husband and wife and together own the real property located at 420 N. Las Palmas Ave., Los Angeles, CA 90004 (“Property”). (FAC ¶1.) Plaintiffs allege in or about May 2021, Plaintiffs and GPG entered into a verbal contract for the design and construction of a swimming pool and spa and related electrical and plumbing systems, pool equipment, as well as various hardscape items including a pool deck and related drainage systems, and landscaping, for a total contract price of approximately $250,000.00. (FAC ¶9.) Plaintiffs allege during the course of construction, the parties entered into numerous modifications to the contract consisting of changes in the scope of work and additions and/or credits to the contract price. (FAC ¶9.)

Plaintiffs allege GPG began work on the Property in approximately May 2021 but never completely finished its work as of July 2023, after numerous attempts by the Plaintiffs to correct or finish multiple items including, without limitation, fencing, delaminating stone tiles around the pool deck, fixing the leaks in the spa, and deck lighting. (FAC ¶10.) Plaintiffs allege after these attempts failed, in or about August 2023, Plaintiffs notified Moving Defendants that their services were being terminated. (FAC ¶11.)

Plaintiffs allege subsequently, they engaged the services of pool construction experts for the purpose of inspecting and evaluating Defendants’ work on the Property, at which time Plaintiffs discovered numerous defects enumerated in paragraph 16 below. (FAC ¶12.) Plaintiffs allege in consideration for the work described herein, Plaintiffs have paid GPG and/or its vendors approximately $317,000.00. (FAC ¶13.) Plaintiffs allege at all times material hereto, Defendant expressly agreed to provide Plaintiffs with high quality work, to be constructed in a first class, professional and workmanlike manner and in accordance with all applicable building codes and in accordance with the approved plans and specifications. (FAC ¶14.)

Plaintiffs allege Moving Defendants billed themselves as “Pool Builders to the Stars” and “A Master Craftsman Expert Design/Build Firm.” (FAC ¶15.) Plaintiffs allege they have performed all conditions, covenants and promises required in accordance with the terms and conditions of the written contract and change orders entered into between the Plaintiffs and Defendant. (FAC ¶16.)

Plaintiffs allege beginning in or about July 2023, and continuing thereafter, GPG breached the contract with the Plaintiff by failing to construct the improvements in a first class, professional and workmanlike manner as manifested by, but not limited to numerous defects which have resulted in damage to Plaintiffs and Plaintiffs’ Property, as herein alleged, during the period between the initial construction of the above-described improvements until the present time. The defects include, without limitation, the following:

a. Failure to construct the pool and spa with proper permits required by the City of Los Angeles, in particular building a new pool inside an old pool without proper engineering or approval by the City of Los Angeles;

b. Failure to follow plans and engineering drawings, causing the City of Los Angeles, Department of Building & Safety to disapprove the construction of the pool and spa;

d. Failure to enlist the services of a licensed geotechnical consultant to verify existing soils conditions;

e. There is uncompacted and uncertified fill material, as well as moisture trapped between the old pool deep end floor and the new pool floor.

g. The MEP system is not designed properly for the optimal functioning of the pool and spa;

i. The pool requires a two-pump system whereas only a one pump system was designed and installed;

m. No pool enclosure fence and gates required by State and local building codes;

n. The pool deck was constructed at the wrong elevation, causing the weep screed on an adjacent structure to be “buried” in violation of the City’s building codes;

o. Stone pavers around the pool and spa are incorrectly installed and are delaminating;

p. Pool deck is improperly sloped causing inadequate drainage and causing water migration under the stone pavers around the pool and spa;

r. The spa has voids of 6” to 12” on its western face that show exposed steel and plumbing; water is leaking from the spa into this void, causing corrosion to the steel reinforcing bars in the spa;

s. The pebble finish was installed on top of two different applications of Hydrazo without use of the proper bonding materials;

t. Leaking from the pool and spa causing saturation and damage to the landscaped area between the pool and the Plaintiffs’ residence.

u. The combined result of the foregoing defects will require complete removal of the old pool and new pool and spa, as well as other alterations to the property noted above.

Moving Defendants demur to the 4th cause of action on the basis it fails to state facts sufficient to constitute causes of action against Cohen, and 7th cause of action on the basis it fails to allege facts sufficient to allege a cause of action. (Demurrer, pg. 2.)

The doctrine of implied warranties of quality and fitness applies to not only the sale of goods, but also to the sale of newly constructed real property. (Pollard v. Saxe & Yolles Development Co. (1974) 12 Cal. 3d 374, 378-380).

“[T]here is implied in a sales contract for newly constructed real property a warranty of quality and fitness. . . . ‘[T]he builder or seller of new construction—not unlike the manufacturer or merchandiser of personalty—makes implied representations, ordinarily indispensable to the sale, that the builder has used reasonable skill and judgment in constructing the building.’ . . . ‘[W]e conclude builders and sellers of new construction should be held to what is impliedly represented—that the completed structure was designed and constructed in a reasonably workmanlike manner.’” (Burch v. Superior Court (2014) 223 Cal.App.4th 1411, 1422, disapproved on other grounds in McMillin Albany LLC v. Superior Court (2018) 4 Cal.5th 241, 258.)

A plaintiff must allege the following elements: (1) that defendant failed to perform its work competently or provide the proper materials by means; and (2)that plaintiff was harmed by defendant’s failure. (See CACI 4510.)

Plaintiffs allege in agreeing to make the improvements to the Plaintiffs’ Property as herein alleged, Defendants impliedly warranted that the improvements would be properly constructed in a first class, professional and workmanlike manner, free of defects in material and workmanship, and built in accordance with the project plans and specifications and in accordance with all applicable building and safety codes. (FAC ¶31.) Plaintiffs allege the improvements to the Property performed by GPG, Cohen and Does 1 through 25 were not constructed in a professional and workmanlike manner, the improvements were not made in accordance with the applicable project plans and specifications, are not free from defects in material and workmanship, and are not completed accordance with all applicable building and safety codes. (FAC ¶32.)

Plaintiffs sufficiently allege a cause of action for implied warranties of quality and fitness. (See FAC ¶¶17, 19-20, 31-32.)

Accordingly, Moving Defendants’ demurrer to Plaintiffs’ 4th cause of action is overruled.

“[T]he elements of an action for fraud and deceit based on a concealment are: (1) the defendant must have concealed or suppressed a material fact, (2) the defendant must have been under a duty to disclose the fact to the plaintiff, (3) the defendant must have intentionally concealed or suppressed the fact with the intent to defraud the plaintiff, (4) the plaintiff must have been unaware of the fact and would not have acted as he did if he had known of the concealed or suppressed fact, and (5) as a result of the concealment or suppression of the fact, the plaintiff must have sustained damage.” (Boschma v. Home Loan Center, Inc. (2011) 198 Cal.App.4th 230, 248; see also Alfaro v. Community Housing Improvement System & Planning Assn., Inc. (2009) 171 Cal.App.4th 1356, 1384 [rule of specifically pleading how, when, where, to whom, and by what means, misrepresentations were communicated, applies to affirmative misrepresentations, not to concealment].)

“A duty to speak may arise in four ways: it may be directly imposed by statute or other prescriptive law; it may be voluntarily assumed by contractual undertaking; it may arise as an incident of a relationship between the defendant and the plaintiff; and it may arise as a result of other conduct by the defendant that makes it wrongful for him to remain silent.” (SCC Acquisitions, Inc. v. Central Pacific Bank (2012) 207 Cal.App.4th 859, 860.)

“In transactions which do not involve fiduciary or confidential relations, a cause of action for non-disclosure of material facts may arise in at least three instances: (1) the defendant makes representations but does not disclose facts which materially qualify the facts disclosed, or which render his disclosure likely to mislead; (2) the facts are known or accessible only to defendant, and defendant knows they are not known to or reasonably discoverable by the plaintiff; (3) the defendant actively conceals discovery from the plaintiff.” (Warner Construction Corp. v. L.A. (1970) 2 Cal.3d 285, 294, footnotes omitted.)

Plaintiffs allege that Moving Defendants knew during the course of construction of the improvements described herein, that said improvements were required to be performed in a first class, professional and workmanlike manner, free from defects in material and workmanship, and performed in accordance with the project plans and specifications and in accordance with all applicable building and safety codes. (FAC ¶47.) Plaintiffs allege Moving Defendants, who contractually undertook the work of improvement for a premium consideration, were under a duty to disclose to the Plaintiffs any failure to perform the work of improvement described herein that was not performed in a first class, professional and workmanlike manner, free from defects in material and workmanship, and performed in accordance with the project plans and specifications and in accordance with all applicable building and safety codes. (FAC ¶47.)

Plaintiffs allege that during the time of performance of the work of improvement described herein, which was between May 2021 and July 2023, Defendant Cohen, on behalf of Defendant GPG as GPG’s responsible managing officer intentionally failed to disclose to the Plaintiffs the following defects known to him in the design, planning, permitting, engineering and construction of the contracted for improvements:

a. That the construction of the pool and spa was performed without the proper permits required by the City of Los Angeles, in particular building a new pool inside an old pool without proper engineering or approval by the City of Los Angeles;

b. That Defendants failed to follow the approved plans and engineering drawings, causing the City of Los Angeles, Department of Building & Safety to disapprove the construction of the pool and spa in or about September 2023;

c. That the Spa structure infringes on required five-foot setback from the north property line of the Plaintiffs’ property; the setback requirement not being known to Plaintiffs who are lay people and have no experience with construction or city building codes;

d. That Defendants failed to enlist the services of a licensed geotechnical consultant to verify existing soils conditions before the pool and spa were built;

e. There is uncompacted and uncertified fill material, as well as moisture trapped between the old pool deep end floor and the new pool floor, causing hydrostatic pressure resulting in the cracking of the original Hydrazzo pool finish.

g. The MEP system is not designed properly for the optimal functioning of the pool and spa;

i. The pool requires a two-pump system whereas only a one pump system was designed and installed;

m. No pool enclosure fence and gates required by State and local building codes;

n. The Defendants constructed the pool deck at the wrong elevation, causing the weep screed on an adjacent structure to be “buried” in violation of the City’s building codes;

o. The Stone pavers around the pool and spa are incorrectly installed causing delamination of the pavers;

p. Defendants constructed the pool deck at an improper slope causing inadequate drainage and causing water migration under the stone pavers around the pool and spa;

r. Defendants installed the pebble finish of the pool on top of two different applications of Hydrazo without use of the proper bonding materials;

s. Leaking from the pool and spa causing saturation and damage to the landscaped area between the pool and the Plaintiffs’ residence.

t. Plaintiffs are informed and believe, and thereon allege, that there was no structural observation of the improvements by a structural engineer as required by law.

Plaintiffs allege the vast majority of the defects in the improvements are latent and these defects were not discovered by Plaintiffs until in or about July 2023, when continuing problems with the pool, spas and related structures led Plaintiffs to enlist the services of a pool construction experts who, thereafter, conducted destructive testing of the new pool shell, in order to identify the defects alleged herein. (FAC ¶49.)

Plaintiffs allege Moving Defendants intentionally concealed the foregoing facts from the Plaintiffs with the intent to deceive and defraud the Plaintiffs in order to continue to extract monetary payments from the Plaintiffs despite the Defendants’ defective work. (FAC ¶50.)

Plaintiffs allege in reliance thereon, Plaintiffs have paid to Defendants in excess of $317,000.00 for the improvements described herein, which are now discovered to be defectively built, built without conformance to the project plans and specifications, built in violation of applicable building and safety codes, all as previously alleged herein. (FAC ¶51.)

Plaintiffs allege in reliance thereof, Plaintiffs have suffered damages in an amount to be proven at trial, but which Plaintiffs believe to exceed the sum of $1,000,000. (FAC ¶52.)

Plaintiffs sufficiently allege a cause of action for concealment. Plaintiffs allege in ¶48 that during the period of time between May 2021 and July 2023, Defendant Cohen, on behalf of Defendant GPG, intentionally concealed the specific defects enumerated in ¶48. Plaintiffs itemize 20 defective items that Defendant Cohen failed to disclose to the Plaintiffs, and allege that he did so intentionally “with the intent to “deceive and defraud the Plaintiffs, in order to continue to extract monetary payments from the Plaintiffs despite the Defendants’ defective work.” (FAC ¶¶48, 50.) Plaintiffs allege Defendant GPG had a statutory duty under Business & Professions Code §7068.1 to “be responsible for exercising supervision and control of their employer’s or principal’s construction operations to secure compliance with this chapter and the rules and regulations of the board.” (FAC ¶¶2, 46) and Cohen was an alter ego of GPG (FAC ¶4). Plaintiffs allege Moving Defendants were under a duty to disclose to the Plaintiffs any failure to perform the work of improvement described herein that was not performed in a first class, professional and workmanlike manner, free from defects in material and workmanship, and performed in accordance with the project plans and specifications and in accordance with all applicable building and safety codes. (FAC ¶47.)

Accordingly, Moving Defendants’ demurrer to Plaintiff’s 7th cause of action is overruled.

Moving Defendants’ demurrer to Plaintiffs’ 4th and 7th causes of action is overruled.

C.C.P. §436 provides that the Court may, upon a motion made pursuant to C.C.P. §435, or at any time within its discretion and upon terms it deems proper, “strike out any irrelevant, false, or improper matter inserted in any pleading” or any pleading or part thereof “not drawn or filed in conformity with the laws of this state, a court rule, or an order of the court.” (C.C.P. §436.)

Moving Defendants move to strike portions of the FAC pertaining to recovery of exemplary or punitive damages (FAC ¶53, Prayer ¶6). (Notice MTS, pg. 2; C.C.P. §§435, 436, 437.)

Punitive damages may be recovered upon a proper showing of malice, fraud, or oppression. (Civ. Code §3294(a).) “Malice” is defined as conduct intended to cause injury to a person or despicable conduct carried on with a willful and conscious disregard for the rights or safety of others. (Turman v. Turning Point of Cent. Cal., Inc. (2010) 191 Cal.App.4th 53, 63.) “Oppression” means despicable conduct subjecting a person to cruel and unjust hardship, in conscious disregard of the person’s rights. (Id.) “Fraud” is an intentional misrepresentation, deceit, or concealment of a material fact known by defendant, with intent to deprive a person of property, rights or otherwise cause injury. (Id.) Conclusory allegations, devoid of any factual assertions, are insufficient to support a conclusion that parties acted with oppression, fraud, or malice. (Smith v. Superior Court (1992) 10 Cal.App.4th 1033, 1042.)

“Conduct which warrants punitive damages must be of ‘such severity or shocking character [as] warrants the same treatment as accorded to willful misconduct – conduct in which defendant intends to cause harm.’” (Woolstrum v. Mailloux (1983) 141 Cal.App.3d Supp. 1, 10, quoting Nolin v. National Convenience Stores, Inc. (1979) 95 Cal.App.3d 279, 286.) “Despicable Conduct” is conduct that is so vile, base, contemptible, miserable, wretched or loathsome that it would be looked down upon and despised by ordinary decent people.” (Scott v. Phoenix Schools, Inc. (2009) 175 Cal.App.4th 702, 715.)

Plaintiffs’ FAC sufficiently alleges a cause of action for fraud, thereby justifying a request for punitive damages.

Accordingly, Moving Defendants’ motion to strike Plaintiff’s request for punitive damages from the FAC is denied.

Hon. Daniel M. Crowley

Judge of the Superior Court