Judge: Douglas W. Stern, Case: 22STCV11265, Date: 2023-03-08 Tentative Ruling
Case Number: 22STCV11265 Hearing Date: March 8, 2023 Dept: 68
Manifest Valley Wellness, LLC v. County of Los Angeles,
Case No. 22STCV11265
MOVING PARTY: Defendant
County of Los Angeles
RESPONDING PARTY: Plaintiff
Manifest Valley Wellness, LLC
Demurrer to Third Amended Complaint
BACKGROUND
Factual
Plaintiff’s
Third Amended Complaint (TAC) alleges six causes of action against Defendant,
including (1) breach of contract; (2) breach of implied-in-fact contract; (3)
breach of implied covenant of good faith and fair dealing; (4) promissory
estoppel; (5) Violation of 42 USC 1983 Violation of First Amendment Rights; and
(6) Violation of Los Angeles County Ordinance 5.02.060. Plaintiff filed this
action after Defendant did not approve its application to be a Drug Medi-Cal
Contractor. Further, Plaintiff is alleging that Los Angeles County owes it
money for services performed based on a Master Agreement which Plaintiff
signed. After Plaintiff sent an email to the County about the slow processing
of its application, Plaintiff alleges that the County terminated their
agreement shortly after that. Plaintiff alleges that this termination was a
retaliation for it sending the email, which Plaintiff claims is a violation of
its First Amendment Rights.
Procedural
This action was originally filed by Plaintiff
on April 1, 2022. After three previous demurrers were filed by Defendant and
sustained by this Court, Plaintiff’s Third Amended Complaint was filed on January
5, 2023. Defendant filed its Demurrer as to Plaintiff’s Third Amended Complaint,
the one that is now before the Court, on February 7, 2023. Plaintiff filed its opposition
on February 23, 2023. Defendant filed its reply on March 1, 2023.
MOVING
PARTY’S GROUNDS
FOR THE DEMURRER
Defendant demurs to the six causes of action
on the basis that Plaintiff has failed to plead facts sufficient to constitute
causes of action, and because Plaintiff has not submitted a government claim
for some of the cause of action or pled a statutory basis for such liability.
ANALYSIS
The Demurrer
As a general matter, in a demurrer
proceeding, the defects must be apparent on the face of the pleading or via
proper judicial notice. (Donabedian
v. Mercury Ins. Co. (2004) 116 Cal.App.4th 968, 994.) “A demurrer
tests the pleading alone, and not the evidence or facts alleged.” (E-Fab, Inc. v. Accountants, Inc. Servs. (2007) 153 Cal.App.4th 1308, 1315.) As
such, the court assumes the truth of the complaint’s properly pleaded or
implied factual allegations. (Id.)
The only issue a demurrer is concerned with is whether the complaint, as it
stands, states a cause of action. (Hahn
v. Mirda (2007) 147 Cal.App.4th 740,
747.)
Where a demurrer is sustained, leave to amend
must be allowed where there is a reasonable possibility of successful
amendment. (Goodman v. Kennedy (1976)
18 Cal.3d 335, 348.) The burden is on the plaintiff to show the court that a
pleading can be amended successfully. (Id.;
Lewis v. YouTube, LLC (2015) 244 Cal.App.4th 118, 226.) However, “[i]f
there is any reasonable possibility that the plaintiff can state a good cause
of action, it is error to sustain a demurrer without leave to amend.” (Youngman v. Nevada Irrigation Dist.
(1969) 70 Cal.2d 240, 245).
1. First Cause of Action for Breach of Contract
Defendant argues
that Plaintiff has failed to state a claim for breach of contract.
“To state a cause
of action for breach of contract, it is required that there be a pleading of
the contract, plaintiffs’ performance (or excuse for nonperformance),
defendant's breach, and damage to plaintiff therefrom.” (Gautier v. Gen.
Tel. Co. (1965) 234 Cal.App.2d 302, 305 (“Gautier”).) A cause of
action for breach of contract fails to state a claim where a party fails to
“set out the actual terms of the contract, either in haec verba or in legal
effect.” (Ibid.) “If the action is based on an alleged breach of a
written contract” and the party does not set out the terms in the complaint, “a
copy of the written instrument must be attached and incorporated by reference.”
(Otworth v. S. Pac. Transportation Co. (1985) 166 Cal. App.3d 452,
458-59.) At least, Plaintiff must allege the “substance of [the agreement’s]
relative terms.” (Gautier, at 305.)
This time around, Plaintiff’s
TAC includes a copy of the alleged Master Agreement between Plaintiff and
Defendant. However, the copy that Plaintiff attached to its TAC was not signed
by a representative of the County. It was not until February 24, 2023, that
Plaintiff filed a notice of errata with a version of the Master Agreement
signed by someone who allegedly represents the County.
The text of the
Master Agreement itself does not show that there was a breach of contract.
Section 5.1 of the Master Agreement specifically states that the “Contractor
shall not be entitled to any payment by the County under this Master Agreement
except pursuant to validly executed and satisfactorily performed Work Orders.”
(TAC, Ex. B, p. 5.) Plaintiff has not pled the existence of any Work Orders
from the County. Without a Work Order, Plaintiff is not entitled to the payment
that it is claiming, and therefore, cannot maintain a cause of action for
breach of contract.
It is also of note
that previously, Plaintiff did not allege that the supposed contract met any of
the requirements of Los Angeles County Code section 2.121.380. Contracts
between the County and private businesses to perform personal services must
comply with the prerequisites of this code for a valid contract to exist. Now,
however, Plaintiff is claiming that this section does not apply to it.
Plaintiff’s reasons for making this claim are unclear, beyond its claim that it
could more adequately perform the services than the County, though Plaintiff
does not provide any facts to back up this assertion beyond saying that it has
state of the art facilities and well-trained staff.
Accordingly,
Defendant’s Demurrer as to Plaintiff’s First Cause of Action for breach of
contract is SUSTAINED without leave to amend.
2. Second Cause
of Action for Breach of an Implied-in-Fact Contract
Defendant
argues that the Second Cause of Action fails for the same reasons that the
First Cause of Action fails.
The concept
of an Implied-in-Fact Contract is contrary to County Code section 2.121.380,
which requires the Board of Supervisors to issue a written statement attesting
to compliance with that County Code section before a contract may be approved.
Plaintiff has
not pled any facts showing that the alleged implied-in-fact contract would
comply with County Code section 2.121.380. As was the case with the prior cause
of action, Plaintiff simply states that it does not need to comply with that
section. Additionally, Plaintiff claims that Defendant failed to pay Plaintiff
an amount to be proven at trial. However, as was the case with Plaintiff’s
breach of contract claim, Plaintiff is not owed unless there was a Work Order,
which Plaintiff has not pled exists.
Accordingly,
Plaintiff’s Second Cause of Action fails to plead sufficient facts. Defendant’s
Demurrer as to Plaintiff’s Second Cause of Action for Breach of an
Implied-in-Fact Contract is SUSTAINED without leave to amend.
3. Third
Cause of Action for Breach of the Covenant of Good Faith and Fair Dealing
Defendant
argues that the Third Cause of Actions fails to state a claim upon which relief
may be granted.
A cause of action for breach of the covenant of
good faith and fair dealing “depends on the existence of a valid and existing
contractual relationship.” (Careau & Co. v. Sec. Pac. Bus. Credit, Inc.
(1990) 222 Cal.App.3d 1371, 1391 (“Careau”).) Failing to adequately
plead the existence of a valid contract allows the Court to “dispose of [this]
count [] summarily.” (Id. at p. 1392.) Moreover, “the implied covenant
of good faith and fair dealing does not extend beyond the terms of the contract
at issue.” (Poway Royal Mobilehome Owners Assn. v. City of Poway (2007)
149 Cal.App.4th 1460, 1477 (“Poway”).) A plaintiff must allege that the defendant
“failed in any way to perform pursuant to the terms of the contract.” (Ibid.)
A cause of action for breach of the covenant of good faith and fair dealing is
subject to demurrer where “the allegations do not go beyond the statement of a
mere contract breach and, relying on the same alleged acts, simply seek the
same damages or other relief already claimed in a companion contract cause of
action.” (Careau, 222 Cal.App.3d at 1391.)
Plaintiff has not adequately pled that Defendant
failed to perform pursuant to the terms of the alleged contract.
Accordingly, Plaintiff’s Third Cause of Action
fails to state a claim. As such, Defendant’s Demurrer as to Plaintiff’s Third
Cause of Action for breach of the covenant of good faith and fair dealing is
SUSTAINED without leave to amend.
4. Fourth
Cause of Action for Promissory Estoppel
Defendant
argues that the Fourth Cause of Actions fails because Plaintiff has failed to
state a claim by failing to file a government claim for promissory estoppel,
failing to plead any statute that would permit Plaintiff to sue Defendant for
promissory estoppel, and failing to plead extraordinary circumstances to
justify promissory estoppel.
The “timely filing of a written claim with the
proper officer or body is an element of a valid cause of action against a
public entity.” (Gong v. City of Rosemead (2014) 226 Cal.App.4th 363,
374 (“Gong”); see Government Code §§ 900.4, 905.) “Compliance is
mandatory [ ] and cannot be excused on the theory that the entity was not
surprised by the suit.” (Gong, at 374.) The “facts alleged in a
complaint filed in the trial court supporting a cause of action” against a
public entity “must be consistent with the facts contained within the
government claim.” (Id. at 376.) A “complaint is vulnerable to a
demurrer if it alleges a factual basis for recovery which is not fairly
reflected in the written claim.” (Ibid.)
Plaintiff’s Government Claim (attached as Attachment
1 to Exhibit A of the TAC) does not state that Plaintiff is seeking to recover
based on a claim for promissory estoppel. Plaintiff’s failure to comply with
this requirement renders its complaint vulnerable to demurrer.
Next, “In California, all government tort
liability must be based on statute.” (Becerra v. Cnty. of Santa Cruz
(1998) 68 Cal.App.4th 1450, 1457 (“Becerra”).) Government Code section
815 provides that “[e]xcept as otherwise provided by statute” a “public entity
is not liable for an injury, whether such injury arises out of an act or
omission of the public entity or a public employee or any other person.” (Gov.
Code, § 815(a).) “This section abolished all common law or judicially declared
forms of liability for public entities, except for such liability as may be
required by the federal or state Constitution.’” (Becerra, at 1457.)
Therefore, absent “some constitutional requirement, public entities may be
liable only if a statute declares them to be liable.” (Ibid.)
Plaintiff has not alleged in its TAC that there
is any statute that allows it to maintain a cause of action for promissory
estoppel against Defendant. Therefore, Plaintiff’s cause of action for
promissory estoppel fails to state a claim.
There are
also no extraordinary circumstances that would justify Plaintiff’s cause of
action for promissory estoppel.
Accordingly,
Plaintiff’s Fourth Cause of Action fails to state a claim. As such, Defendant’s
Demurrer as to Plaintiff’s Fourth Cause of Action for Promissory Estoppel is
SUSTAINED without leave to amend.
5. Fifth
Cause of Action for Violation of 42 USC Section 1983 due to Deprivation of
First Amendment Rights
Defendant
demurs to this cause of action on the basis that it fails to state facts
sufficient to constitute a cause of action. Defendant also alleges that the
cause of action fails because the County is not liable for the constitutional
injuries inflicted by its employees; Plaintiff failed to plead any policy,
custom, or practice of the County that caused constitutional deprivation; and
Plaintiff’s speech was not protected by the First Amendment.
Local governmental entities are not liable under Section
1983 for a constitutional injury inflicted by its employees. (Monell v.
Department of Social Services of the City of New York (1978) 436 U.S. 658.)
No vicarious liability exists under Section 1983. (Connick v. Thompson
(2011) 563 U.S. 51, 60.) To hold a public entity liable, Plaintiff has the
burden of establishing that identifying a “policy or custom that caused the
constitutional injury.” (Harman v. City & Cnty. of San Francisco
(2006) 136 Cal.App.4th 1279, 1296.)
The speech that Plaintiff claims was suppressed
was an email sent by Plaintiff’s representative to someone in the County.
Plaintiff claims that the alleged contract was terminated shortly after it sent
this email and that this was retaliation for the email that Plaintiff sent.
Plaintiff has not shown that the County has a policy or injury that causes
constitutional injury. Plaintiff cannot maintain this cause of action.
Accordingly, Defendant’s Demurrer as to
Plaintiff’s Fifth Cause of Action is SUSTAINED with leave to amend.
6. Sixth Cause of Action for
Violation of Section 5.02.060 of the Los Angeles County Code
Defendant demurs to this cause of action because
Plaintiff never submitted a Government Claim for this cause of action and
because Plaintiff alleged no statute that permits it to sue for violation of
this Ordinance.
“[T]he purpose of the claim requirement is to
provide public entities with sufficient information so that they can
investigate claims and settle them, if appropriate.” (Gong, supra,
226 Cal.App.4th at 377.)
here is nothing in Plaintiff’s Government Claim
that would have put the County on notice that Plaintiff planned to sue the
County based on a violation of this Section. Nor has Plaintiff provided any
authority that would allow it to sue the County for a violation of this
Section.
Accordingly, Defendant’s Demurrer as to
Plaintiff’s Sixth Cause of Action is SUSTAINED without leave to amend.
CONCLUSION
Defendant’s Demurrer as to Plaintiff’s First,
Second, Third, Fourth, and Sixth Causes of Action is sustained without leave to
amend. Defendant’s Demurrer as to Plaintiff’s Fifth Cause of Action is
sustained with leave to amend. Plaintiff is given 20 days to file an amended
pleading.