Judge Daniel M. Crowley, Case Number: 24STCV08345, Date: 2024-10-04 Tentative Ruling

Defendants Skanska-Traylor-Shea’s, Skanska USA Civil West California District Inc.’s, Traylor Bros, Inc.’s, and J.F. Shea Construction, Inc.’s demurrer to Plaintiff EW Corporation Industrial Fabricators’ complaint is sustained without leave to amend as to the 1st, 2nd, 3rd, 4th, 5th, 6th, 7th, 8th, 9th, 10th, 11th, 12th, 13, 14th, 15th, and 16th causes of action.

Defendants Skanska-Traylor-Shea (“STS”), Skanska USA Civil West California District Inc. (“Skanska”), Traylor Bros, Inc. (“Traylor”), and J.F. Shea Construction, Inc. (“Shea”) (collectively, “Defendants”) demur to Plaintiff EW Corporation Industrial Fabricators’ (“EWC”) (“Plaintiff”) complaint (“Complaint”) on the grounds Plaintiff fails to state facts sufficient to constitute its 1st, 2nd, 3rd, 4th, 5th, 6th, 7th, 8th, 9th, 10th, 11th, 12th, 13, 14th, 15th, or 16th causes of action. (Demurrer, pgs. 2-7; C.C.P. §430(e).)[1]

Defendants also move to strike portions of Plaintiff’s Complaint. (Notice of MTS, pg. 2.)

Defendants’ 7/24/24 request for judicial notice of (1) Plaintiff’s 2021 Complaint filed in Case No. 21STCV07434 on February 25, 2021 (D-RJN, Exh. A); (2) Defendants’ Cross-Complaint filed in Case No. 21STCV07434 on July

28, 2021 (D-RJN, Exh. B); (3) Request for Dismissal with Prejudice entered in Case No. 21STCV07434 on February 14, 2022 (D-RJN, Exh. C); (4) Defendants’ First Amended Cross Complaint filed in Case No. 21STCV07434 on October 4, 2021 (D-RJN, Exh. D); (5) Code of Federal Regulations Title 49, Section 26.29(e)(1) (D-RJN, Exh. E); (6) A screenshot of the webpage from the website of the Los Angeles County Metropolitan Transportation Authority (https://business.metro.net/webcenter/portal/ VendorPortal/pages_home/business_global/forms) containing a link to the Diversity & Economic Opportunity Department Contract Compliance Manual (RC-FTA) (D-RJN, Exh. F), is granted.

Defendants’ 7/24/24 request for judicial notice of A screenshot of the Google search results from the website of Skanska USA (https://partners.skanska.com/usa/clients/lametro/WSE/PreBid/OwnDoc/RFP/RFP/Vol_IV_Manuals/DEOD%20Contract%20Compliance%20Manual%20RC-FTA.pdf) containing two links to the Diversity & Economic Opportunity Department Contract Compliance Manual (RC-FTA) is denied.

Before filing a demurrer, the moving 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, emphasis added.)

Defendants’ counsel declares that on June 13, 2024, he met and conferred telephonically with Plaintiff’s counsel, and the parties were unable to reach an agreement. (See Decl. of Steinbach ¶¶3-4.) Defendants’ counsel’s declaration is sufficient under C.C.P. §430.41. Accordingly, the Court will consider Defendants’ demurrer.

Plaintiff filed its operative Complaint on March 3, 2024, against Defendants alleging sixteen causes of action: (1) fraudulent inducement of contract (concealment of material fact); (2) recission of contract (mutual mistake); (3) recission of contract (unilateral mistake); (4) recission of contract (violation of public policy); (5) breach of written contract; (6) work, labor, and services performed/agreed price; (7) reasonable value of goods and services provided (quantum meruit); (8) open book account; (9) account states; (10) fraudulent inducement of subsequent documents (intentional fraud); (11) fraudulent inducement of subsequent documents (negligent fraud); (12) fraudulent inducement of subsequent documents (concealment of material fact); (13) recission of subsequent documents (duress); (14) recission of subsequent documents (mutual mistake); (15) recission of subsequent documents (unilateral mistake); and (16) recission of subsequent documents (violation of public policy).

Defendants filed the instant demurrer and accompanying motion to strike on July 24, 2024. Plaintiff filed its untimely opposition on September 23, 2024. Defendants filed their reply on September 30, 2024.

Defendants object to Plaintiff’s opposition on the basis it was untimely filed. Plaintiff’s opposition was due September 20, 2024, to account for observance of Native American Day, a Court holiday on September 27, 2024. (See C.C.P. §1005(b).) Therefore, Plaintiff’s opposition is untimely. However, the Court in its discretion will consider Plaintiff’s opposition.

Defendants demur to all causes of action on the basis Plaintiff released/waived the cause of action pursuant to a written settlement agreement and therefore Plaintiff fails to state facts sufficient to constitute a cause of action. (Demurrer, pgs. 2-7; C.C.P. §430.10(e).) Defendants demur to the 1st, 2nd, 3rd, 4th, 7th, 10th, 11th, 12th, 14th, 15th, and 16th causes of action on the basis they are barred by the applicable statute of limitations. (Demurrer, pgs. 2-7; C.C.P. §430.10(e).) Defendants demur to the 1st, 10th, 11th, and 12th causes of action on the basis they fail to meet the heightened pleading requirements to plead fraud causes of action. (Demurrer, pg. 2; C.C.P. §430.10(e).) Defendants demur to the 5th, 6th, 7th, 8th, and 9th causes of action on the basis they are barred by the doctrine of res judicata because the same allegations were made in Plaintiff’s prior complaint, which was dismissed with prejudice. (Demurrer, pgs. 2-5; C.C.P. §430.10(e).)

“[A] demurrer tests the legal sufficiency of the allegations in a complaint.” (Lewis v. Safeway, Inc. (2015) 235 Cal.App.4th 385, 388.) A demurrer can be used only to challenge defects that appear on the face of the pleading under attack or from matters outside the pleading that are judicially noticeable. (See Donabedian v. Mercury Insurance Co. (2004) 116 Cal.App.4th 968, 994 [in ruling on a demurrer, a court may not consider declarations, matters not subject to judicial notice, or documents not accepted for the truth of their contents].) For purposes of ruling on a demurrer, all facts pleaded in a complaint are assumed to be true, but the reviewing court does not assume the truth of conclusions of law. (Aubry v. Tri-City Hospital District (1992) 2 Cal.4th 962, 967.)

In December 2021, Plaintiff and Defendants entered into a settlement agreement by which Defendants paid Plaintiff $2,500,000 to resolve all claims arising from a February 25, 2021, Complaint and action. (Complaint, Exh. 4 at ¶1.1; D-RJN, Exh. A.) STS and EWC negotiated and executed the Settlement Agreement with the below broad release language, and a separate Civil Code §1542 waiver (¶3.2), releasing all claims—including future and unknown claims—“arising out of or connected with” the Project, the Subcontract, and the 2021 litigation:

[Plaintiff] hereby release[s] and discharge[s] [Defendants] . . . each of them . . . from any and all claims, lawsuits, demands, debts, liabilities, remedies, damages, accounts, obligations, costs, expenses (including attorneys’ fees), liens, actions, and causes of action of every kind and nature, whether known or unknown, suspected or unsuspected, that it now owns or holds or at any time heretofore has owned or held, based on, related to or arising from any transaction, contract, tort, lien, liability, matter, cause, cause of action, fact, thing, conduct, act, or omission whatsoever, which [Plaintiff] may now have or may hereafter have arising out of or connected with the PROJECT, the Subcontract and the LAWSUIT. . ..

Further, the parties agreed the Settlement Agreement’s release was entered into with both parties having legal representation and advice of counsel (Complaint, Exh. 4 at ¶4.3); there had been no duress (Complaint, Exh. 4 at ¶4.17); and that the parties executed the release with the understanding they may learn of different or additional facts (Complaint, Exh. 4 at ¶4.2).

The parties then entered into change orders which contained similar waiver and release language, and act as accord and satisfaction barring Plaintiff’s claims. (Complaint, Exhs. 6-7.)

In Salehi v. Surfside III Condominium Owners Association, the Court of Appeal held that a settlement barred the plaintiff’s causes of action in a subsequent litigation related to the same dispute because plaintiff and defendant executed a settlement agreement releasing known and unknown claims, and plaintiff assumed the risk of unknown claims by waiving Civil Code §1542. (Salehi v. Surfside III Condominium Owners Assn. (2011) 200 Cal.App.4th 1146, 1160.)

Here, like in Salehi, all of Plaintiff’s causes of action were released and waived by the Settlement Agreement because they arise from the Project and the Subcontract, were released in the 2021 litigation, and Plaintiff assumed the risk of unknown claims by waiving Civil Code §1542. (See, e.g., Complaint ¶¶19, 31, 36, 44, 48, 64, 67, 71, 74, 82, 90, 97, 102, 109, 119, 129; Kaufman v. Goldman (2011) 195 Cal.App.4th 734, 745 [upholding settlement agreement and stating, “[i]t is important to recognize there is a strong public policy favoring settling of disputes”].)

Accordingly, Defendants’ demurrer to all of Plaintiff’s causes of action is sustained without leave to amend.

Defendants’ demurrer to Plaintiff’s 1st, 2nd, 3rd, 4th, 5th, 6th, 7th, 8th, 9th, 10th, 11th, 12th, 13th, 14th, 15th, and 16th causes of action is sustained without leave to amend.

In light of this Court’s ruling on the demurrer, Defendants’ motion to strike is denied as moot.

Hon. Daniel M. Crowley

Judge of the Superior Court

[1] The Court notes Defendants cite to C.C.P. §430(e); no such statute exists. The correct statute is C.C.P. §430.10(e).