Judge Gregory Keosian, Case 20STCV10953 2023-02-02 Tentative Ruling

Judge: Gregory Keosian, Case: 20STCV10953, Date: 2023-02-02 Tentative Ruling

Case Number: 20STCV10953 Hearing Date: February 2, 2023 Dept: 61

Cross-Defendants CV Communities, LLC and Cross Ventures, LLC’s Demurrer to the First Amended Cross-Complaint of Cross-Complainant City of Palmdale is SUSTAINED without leave to amend as to the second cause of action for implied indemnification and OVERRULED as to the first cause of action for express indemnification.

I. DEMURRER

A demurrer should be sustained only where the defects appear on the face of the pleading or are judicially noticed. (Code Civ. Pro., §§ 430.30, et seq.) In particular, as is relevant here, a court should sustain a demurrer if a complaint does not allege facts that are legally sufficient to constitute a cause of action. (See id. § 430.10, subd. (e).) As the Supreme Court held in Blank v. Kirwan (1985) Cal.3d 311: “We treat the demurrer as admitting all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law. . . . Further, we give the complaint a reasonable interpretation, reading it as a whole and its parts in their context.” (Id. at p. 318; see also Hahn. v. Mirda (2007) 147 Cal.App.4th 740, 747 [“A demurrer tests the pleadings alone and not the evidence or other extrinsic matters. Therefore, it lies only where the defects appear on the face of the pleading or are judicially noticed. [Citation.]”)

“In determining whether the complaint is sufficient as against the demurrer … if on consideration of all the facts stated it appears the plaintiff is entitled to any relief at the hands of the court against the defendants the complaint will be held good although the facts may not be clearly stated.” (Gressley v. Williams (1961) 193 Cal.App.2d 636, 639.)

“A demurrer for uncertainty is strictly construed, even where a complaint is in some respects uncertain, because ambiguities can be clarified under modern discovery procedures.” (Khoury v. Maly’s of Cal., Inc. (1993) 14 Cal.App.4th 612, 616.) Such demurrers “are disfavored, and are granted only if the pleading is so incomprehensible that a defendant cannot reasonably respond.” (Mahan v. Charles W. Chan Insurance Agency, Inc. (2017) 14 Cal.App.5th 841, 848.)

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. (Schifando v. City of Los Angeles, supra, 31 Cal.4th at p. 1081.) The demurrer also may be sustained without leave to amend where the nature of the defects and previous unsuccessful attempts to plead render it probable plaintiff cannot state a cause of action. (Krawitz v. Rusch (1989) 209 Cal.App.3d 957, 967.)

Plaintiffs and Cross-Defendants CV Communities, LLC and City Ventures, LLC (Plaintiffs) demurrer to the first and second causes of action for express and implied indemnity asserted in Cross-Complainant City of Palmdale’s (Palmdale) First Amended Cross-Complaint (FAXC). The basis for the demurrer is the same as that which supported Plaintiffs’ previous demurrer to the same claims, which this court sustained with leave to amend: that the contact language underlying the express indemnification claim forecloses indemnification for an action not “brought within the time period provided for in Government Code section 66499.37,” and that the implied indemnification claim fails because it is effectively preempted by the express indemnification language in the Final Conditions of Approval at issue. (Demurrer at pp. 13–19.)

The relevant indemnity clause states as follows:

The applicant [Plaintiffs’ predecessors in interest] shall defend, indemnify, and hold harmless the City of Palmdale its elected and appointed officials, officers, employees, and agents from and against any claim, action, or proceeding against the City of Palmdale, its elected and appointed officials, officers, employees, or agents to attack, set aside, void, or annul any approval or condition of approval of the City of Palmdale concerning this subdivision, including but not limited to any approval or condition of approval of the City Council, Planning Commission, or Planning Director, which action is brought within the time period provided for in Government Code Section 66499.37. . . .

(FAXC ¶ 15, Exh. C.)

In sustaining the previous demurrer, the court partially disagreed with the premise of Plaintiff’s argument as to the express indemnity claim. The court ruled that the language of the indemnity clause at issue — applying as it does to “any claim . . . to . . . set aside . . . any approval or condition of approval of the City of Palmdale concerning this subdivision” — was capacious enough to reasonably encompass claims not brought under the Subdivision Map Act. (Gov. Code § 65000, et seq.) However, the court sustained the demurrer, reasoning that Palmdale had not alleged any claim brought within the 90-day time period provided for in Gov. Code § 66499.37.

In the FAXC, Palmdale pleads an interpretation of the clause that would allow indemnification to occur even for claims brought outside the 90-day period: namely that the 90-day time-limit applies “only to the subset of approvals and conditions of approvals imposed under the Subdivision Map Act,” not those imposed pursuant to Planning and Zoning law and Palmdale’s police powers. (FAXC ¶ 16.)

Plaintiff argues that such an interpretation was argued in Palmdale’s opposition to the previous demurrer, and that the inclusion of this interpretation into the FAXC amounts to an improper motion for reconsideration. (Demurrer at pp. 13–15.) But the previous demurrer was sustained with leave to amend, and the FAXC is not an “application for an order” to which Code of Civil Procedure § 1008 applies. (Code Civ. Proc. § 1008, subd. (a), (b).) Moreover, the interpretation that Palmdale advanced in its previous opposition was not advanced within its previous pleading, as it is now. “Where a complaint is based on a written contract which it sets out in full, a general demurrer to the complaint admits not only the contents of the instrument but also any pleaded meaning to which the instrument is reasonably susceptible.” (Schmier v. City of Berkeley (2022) 76 Cal.App.5th 549, 558.) The inclusion of the new interpretation is a material difference from the prior iteration of the pleading, and given the plausible breadth of the clause at issue, Palmdale’s interpretation of the “time period” language is reasonable. The demurrer is therefore OVERRULED as to the first cause of action for express indemnity.

The demurrer is more persuasive, however, as to the second cause of action for implied (or equitable) indemnity. This court sustained the previous demurrer to this claim, embracing Plaintiffs’ argument that the equitable indemnity claim was effectively preempted by the express indemnity clause in the Final Conditions of Approval. “[W]here, as here, the parties have expressly contracted with respect to the duty to indemnify, the extent of that duty must be determined from the contract and not by reliance on the independent doctrine of equitable indemnity.” (Rossmoor Sanitation, Inc. v. Pylon, Inc. (1975) 13 Cal.3d 622, 628.)

The amended pleading and subsequent round of briefing on demurrer does little to affect this court’s prior ruling. Palmdale relies on the case E. L. White, Inc. v. City of Huntington Beach (1978) 21 Cal.3d 497, 507–509, in which the court held that an indemnification clause, which required an indemnitor to reimburse a designated indemnitee, did not foreclose an equitable indemnification claim by the contractual indemnitor against the indemnitee, who otherwise could hope for no indemnification under the contract, where the indemnitee’s active negligence had been previously established by binding judicial decisions. The court stated that where “the duty established by contract is by the terms and conditions of its creation inapplicable to the particular factual setting before the court, the equitable principles of implied indemnity may indeed come into play.” (Id. at p. 508.) The court otherwise recognized that “when parties by express contractual provision establish a duty in one party to indemnify another, the extent of that duty must be determined from the contract and not from the independent doctrine of equitable indemnity.” (Id. at p. 508, internal quotation marks omitted.)

Here, Palmdale is a contractual indemnitee under the Final Conditions of Approval, who hopes to obtain compensation from Plaintiffs by virtue of language requiring them to “hold harmless the City of Palmdale” under specified circumstances. (FAXC ¶ 28.) “Where, as here, the parties have expressly contracted with respect to the duty to indemnify, the extent of that duty must be determined from the contract and not by reliance on the independent doctrine of equitable indemnity. (Rossmoor Sanitation, Inc. v. Pylon, Inc. (1975) 13 Cal.3d 622, 628.)

Accordingly, the demurrer is SUSTAINED to the second cause of action without leave to amend.

Dated: February 2, 2023