Superior Court of California 

County of Los Angeles – West District  

Beverly Hills Courthouse / Department 205 

 

 

BACKGROUND 

This case arises out of the construction of a boarding high school campus in downtown Los Angeles (the “Project”), which was built on public land (“Property”), owned by the County of Los Angeles (“County”).  On December 31, 2020, Plaintiff Bernards Builders Inc. and Defendant SEED LA Facilities LLC entered into the contract, which was amended and restated on April 28, 2021.  (First Amended Complaint (“FAC”) ¶ 8.)  Under the Contract, Plaintiff agreed to serve as a contractor on the Project.  (Id.)   

Various disputes arose between the parties relating to Project delays and entitlement to progress payments. On May 22, 2024, and as amended on August 29, 2024, Plaintiff recorded a mechanics lien against the Property for $10,520,371 (“Lien”).  (Request for Judicial Notice (“RJN”), Exs. 2, 3.)  The Lien expressly liens the Property, which is then described solely by the metes and bounds of the underlying piece of land.  (Id.)  However, the Property is public land owned by the County, in which Defendant only holds a limited leasehold interest.  (RJN, Ex. 4.)  

On June 11, 2024, Plaintiff filed its initial complaint alleging three causes of action for breach of contract, violation of prompt payment statutes, and foreclosure of a mechanics lien. The Complaint alleged that Defendant owned the Property and asked the Court to declare a lien against, and foreclose upon, the Property.  

On October 10, 2024, Plaintiff filed its First Amended Complaint (“FAC”).  The FAC asks to foreclose on the Lien, and the prayer asks the Court to sell “that certain real property interest, which is less than a fee simple estate in certain real property—or so much thereof as may be necessary be sold according to law and the practice of this Court.”  (FAC at 9:6-17)  

This hearing is on Defendant’s demurrer to the third cause of action for foreclosure of the Lien.  Defendant argues California law does not permit a lien claimant to record or enforce a mechanics lien on public land, and therefore, the remedy Plaintiff seeks is legally unenforceable.  Defendant further argues that no amendment would cure this defect because even if Plaintiff amends the FAC, the Lien remains invalid as it expressly liens public land.  

REQUEST FOR JUDICIAL NOTICE 

Defendant requests judicial notice of (1) the First Amended Complaint, filed with the Court on October 10, 2024; (2) Plaintiff’s mechanics lien, recorded in the County of Los Angeles Recorder’s Office, on May 22, 2024, bearing document no. 20240336761; (3) Plaintiff’s amended mechanics lien, recorded in the County of Los Angeles Recorder’s Office, on August 29, 2024, bearing document no. 20240584348; and (4) the Memorandum of Lease, recorded in the County of Los Angeles Recorder’s Office, on May 12, 2021, bearing document no. 20210760405.  

The Court denies the request as to (1).  It is unnecessary to seek judicial notice of documents filed in this case.  Defendant may simply refer to the complaint filed in this action.  The Court grants the request as to (2)-(4) pursuant to Evid. Code §§ 452(b) and (h) as official acts of the legislative, executive, or judicial department of the State of California, and also as facts and propositions that are not reasonably subject to dispute and are capable of immediate and accurate determination by resort to sources of reasonably indisputable accuracy.  (See e.g., Evans v. California Trailer Court, Inc. (1994) 28 Cal.App.4th 540, 549 (a court may take judicial notice of recorded deeds and similar documents); accord Maryland Casualty Co. v. Reeder (1990) 221 Cal.App.3d 961, 977; Cal-American Income Property Fund II v. County of Los Angeles (1989) 208 Cal.App.3d 109, 112, fn. 2.)  

LEGAL STANDARD 

“[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 Ins. 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 Hosp. Dist. (1992) 2 Cal.4th 962, 967.)  

Further, the court may, upon motion, or at any time in its discretion, and upon terms it deems proper, strike any irrelevant, false, or improper matter inserted in any pleading.  (Code Civ. Proc., § 436, subd. (a).)  The court may also strike all or any part of any pleading not drawn or filed in conformity with the laws of this state, a court rule, or an order of the court. (Code Civ. Proc. § 436, subd. (b).)  The grounds for moving to strike must appear on the face of the pleading or by way of judicial notice. (Code Civ. Proc., § 437.) 

Leave to amend must be allowed where there is a reasonable possibility of successful amendment. (See Goodman v. Kennedy (1976) 18 Cal.3d 335, 349 (court shall not “sustain a demurrer without leave to amend if there is any reasonable possibility that the defect can be cured by amendment”); Kong v. City of Hawaiian Gardens Redevelopment Agency (2002) 108 Cal.App.4th 1028, 1037 (“A demurrer should not be sustained without leave to amend if the complaint, liberally construed, can state a cause of action under any theory or if there is a reasonable possibility the defect can be cured by amendment.”).)  The burden is on the complainant to show the Court that a pleading can be amended successfully. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.)  

MEET AND CONFER 

Code Civ. Proc. §§ 430.41 and 435.5 requires that before the filing of a demurrer or motion to strike, the moving party “shall meet and confer in person or by telephone” with the party who filed the pleading that is subject to demurrer or motion to strike for the purpose of determining whether an agreement can be reached that would resolve the objections to be raised in the demurrer or motion to strike.  (Code Civ. Proc. §§ 430.41(a), 435.5(a).)  The parties are to meet and confer at least five days before the date the responsive pleading is due. (Code Civ. Proc. §§ 430.41(a)(2), 435.5(a)(2).)  Thereafter, the moving party shall file and serve a declaration detailing their meet and confer efforts. (Code Civ. Proc. §§ 430.41(a)(3), 435.5(a)(3).)  Defendant submits the Declaration of Nicholas Fortino which attests the parties met and conferred by videoconference on September 18, 2024, more than five days before Defendant filed its demurrer and motion to strike on November 18, 2024.  This satisfies the meet and confer requirements of Code Civ. Proc. §§430.41 and 435.5.) 

DISCUSSION 

Demurrer 

Defendant demurs to the third cause of action for foreclosure of mechanic’s lien on the ground Plaintiff cannot foreclose on a lien against public property.  The Court agrees.   

California law does not confer to any contractor the right to record a mechanics lien against public property.  (Civ. C. § 8160; A. J. Setting Co. v. Trustees of Cal. State Univ. & Colleges (1981) 119 Cal.App.3d 374, 381; see also Gen. Elec. Co. v. Cent. Sur. & Ins. Corp. (1965) 232 Cal.App.2d 590, 595 (“The right to file a mechanic’s lien does not inure against public property”); accord Miles v. Ryan (1916) 172 Cal. 205, 207.)  Plaintiff does not dispute this legal principle.    

Rather, Plaintiff argues that the FAC only seeks to adjudge a lien against Defendant’s real property interest in the Property.  Plaintiff alleges in its FAC that “Venue in this Court is proper pursuant to California Code of Civil Procedure §392(a)(1) because this is an action to foreclose on a real property interest which is less than a fee simple estate in a certain real property located in Los Angeles County and pursuant to California Code of Civil Procedure §395.5 because performance of the contract at issue occurred in Los Angeles County and because many of the breaches of the contract at issue took place in Los Angeles County.” ((FAC at ¶ 6 (emphasis added).)   

The FAC further alleges: “Upon information and belief, SEED LA and DOES 1-10, inclusive, are the owners or reputed owners of a certain real property interest which is less than a fee simple estate in a certain real property located in Los Angeles County and described as follows:  

“LOTS 30 THROUGH 37 AND 77 THROUGH 87, OF SUNNY SIDE PARK IN THE CITY OF LOS ANGELES, COUNTY OF LOS ANGELES, AS PER MAP RECORDED BOOK 6, PAGE 8 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, EXCEPTING THEREFROM THOSE PORTIONS, IF ANY, IN AND WITHIN LIMITS OF VERMONT AVENUE. ALSO EXCEPTING AN EASEMENT OR PUBLIC ALLEY EASEMENT PURPOSES, OVER THE WESTERLY 3.00 FEET AND THE SOUTHERLY 3.00 FEET OF SAID LOT 37. ALSO EXCEPTING THEREFROM THE SOUTHERLY 20.00 FEET OF SAID LOT 87 AS CONDEMNED FOR STREET WIDENING OF MANCHESTER AVENUE, AS RECORDED IN BOOK 6627, PAGE 299, OFFICIAL RECORDS. ALSO EXCEPTING THEREFROM AN EASEMENT FOR PUBLIC ALLEY PURPOSES. CONTAINS: 183,094 SQUARE FEET, OR 4.203 ACRES, MORE OR LESS.  Hereinafter, the ‘PROPERTY.’”  

((FAC at ¶ 7 (emphasis added).)  

Therefore, “PROPERTY” as used throughout the FAC is not the land which is described by meets and bounds, but rather the “certain real property interest” in the land of which Defendant is an owner or reputed owner. Accordingly, the FAC does not seek to have the Court force the sale of the public land.  It is upon “that certain real property interest, which is less than a fee simple estate in certain real property” which Plaintiff seeks to foreclose. (FAC at Prayer as to the Third Cause of Action at ¶ 2 (emphasis added).)  

However, regardless of the allegations in the FAC, the Lien is expressly recorded against public land owned by the County. (RJN, Exs. 2-4.)  In In re South Bay Expressway, L.P., 434 B.R. 589 (Bankr. S.D. Cal 2010), the Chapter 11 debtor’s bankruptcy proceeding was joined with a mechanics lien foreclosure action. A motion for summary judgment was brought seeking to invalidate the mechanics lien. The Debtor was a private developer granted a “governmental franchise” in public property to construct a public toll road.  After completion of the toll road, Debtor failed to pay several contractors, who then recorded mechanics liens against the Debtor’s franchise interest in the public property.  

The Debtor moved for summary judgment claiming the mechanics liens were invalid because California precludes recording and enforcing mechanics liens on public works, and construction of the toll road was a public work, constructed on public property. (Id. at 592-593.) While the court ultimately denied the motion, it affirmed that under California law, no mechanics’ lien remedy is available against public property, or for a public works project. (Id. at 592.)  However, a mechanic’s lien can attach to less than the whole estate, such as a leasehold interest. (Id. at 593.)  

In South Bay, the court determined that the Debtor’s “government franchise” was a private “leasehold interest.” (Id. at 599, 601.) The court also emphasized that the contractors’ mechanics liens and the operative complaint did not attempt to record their mechanics liens against the actual property; rather, the mechanics lien expressly provided: “NOTWITHSTANDING THE FOREGOING, EXCEPT TO THE EXTENT PERMITTED BY LAW, CLAIMANT DOES NOT ASSERT A PRESENT MECHANICS LIEN ON REAL PROPERTY WHICH IS OWNED BY THE STATE OF CALIFORNIA, OR ANY OTHER GOVERNMENTAL ENTITY WHOSE PROPERTY IS NOT SUBJECT TO MECHANICS LIENS UNDER CALIFORNIA LAW.” (Id. at 596.)  

Similarly, the Debtor’s complaint expressly provided that, “[Contractor] does not assert a mechanics lien on real property which is owned by the State of California, or any other governmental entity whose property is not subject to mechanics lien under California law.” (Id.) Based on the foregoing express language in the mechanics lien and complaint that the contractor was seeking remedy against a lease, not the underlying real property, the court denied the motion for summary judgment.   

Unlike in South Bay, here, the Lien neither implies nor expresses any intent to limit its application to SEED’s leasehold interest, which is required by law.  Accordingly, the Court sustains the demurrer to the third cause of action.  Moreover, the Court does so without leave to amend because Plaintiff recorded the Lien against property owned by the County, which means on its face the Lien is invalid and barred by California law.  No amendment to the Complaint can cure the defect in the Lien.   

Motion to Strike 

Defendant moves to strike allegations in the FAC relating to its alleged ownership of am “interest” in the Property, the third cause of action, and the prayer for relief relating to the third cause of action.  As the Court sustained the demurrer to the third cause of action, the motion to strike as to the third cause of action and the prayer for relief associated with that cause of action is moot.  Accordingly, the Court will only evaluate the motion to strike the allegations in paragraphs 6 and 7.   

Defendant argues that allegations in the Complaint that it is the “owner” or “reputed owner” of less than a fee simple interest in the Property is ambiguous and uncertain.  The Complaint fails to clearly allege that Defendant does not own the Property, but only leases it.  The Court disagrees.  The FAC alleges “BERNARDS is informed and believes that SEED LA’s PROPERTY is a certain real property interest which is less than a fee simple estate—to wit that it possesses a leasehold estate.”  (FAC at ¶ 28.)  The FAC, therefore, does not allege that Defendant owns the Property.   

CONCLUSION 

Based on the foregoing, the Court SUSTAINS the demurrer without leave to amend and DENIES the motion to strike.       

 

IT IS SO ORDERED. 

 

DATED:  December 17, 2024 ___________________________ 

Edward B. Moreton, Jr. 

Judge of the Superior Court