Judge: Gregory Keosian, Case: 21STCV07384, Date: 2023-02-23 Tentative Ruling
Case Number: 21STCV07384 Hearing Date: February 23, 2023 Dept: 61
Defendants
Control Air Enterprises, LLC and Nevall-Standard JV, LLC’s Demurrers to the
Second Amended Complaint are SUSTAINED without leave to amend.
Defendant Nevall-Standard JV, LLC’s Motion to
Strike Portions of the Second Amended Complaint is DENIED as moot.
Defendants to provide notice.
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.) 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.”))
“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.)
Defendant
Control Air Enterprises, LLC (CAE) demurrer to the causes of action alleged
against it in the Second Amended Complaint (SAC) for negligence, negligent
interference with economic relations, and equitable indemnity. The basis for
the demurrer is the argument that Plaintiff Retrolock Corp. (Plaintiff), like
CAE a subcontractor on the alleged project, cannot allege that Defendant CAE
owed it, a fellow subcontractor, a duty of care to avoid economic damages.
Duty is an element of negligence. (Thomas v. Stenberg
(2012) 206 Cal.App.4th 654, 662.) “Courts are reluctant to impose duties to
prevent economic harm to third parties because ‘[a]s a matter of economic and
social policy, third parties should be encouraged to rely on their own
prudence, diligence and contracting power, as well as other informational tools.’”
(The Ratcliff Architects v. Vanir Construction Management, Inc. (2001)
88 Cal.App.4th 595, 605, quoting Bily v. Arthur Young & Co. (1992) 3
Cal.4th 370, 403.) The existence of a duty is a question of public
policy, requiring analysis of multiple factors, including “the extent to
which the transaction was intended to affect the plaintiff, the foreseeability
of harm to him, the degree of certainty that the plaintiff suffered injury, the
closeness of the connection between the defendant's conduct and the injury
suffered, the moral blame attached to the defendant's conduct, and the policy
of preventing future harm.” (The Ratcliff Architects, supra, 88
Cal.App.4th at p. 605.)
Plaintiff argues that these factors favor the existence of
duty, analogizing each factor to the facts of the case J’Aire Corp. v.
Gregory (1979) 24 Cal.3d 799, in which the court held that a commercial
tenant could proceed in tort against a contractor who negligently damaged the
leased premises. (Opposition at pp. 3–7.) The basis for Plaintiff’s claims
against CAE are that CAE failed to perform its contracted work in a workmanlike
manner, and therefore prevented Plaintiff from the work it was itself under
contract to perform. (SAC ¶¶ 224–228.)
CAE owed Plaintiff no duty of care
to avoid economic harm under the facts alleged. Plaintiff is not like the
commercial tenant of J’Aire, who intended to use the property being
renovated, but is rather a fellow subcontractor on the same project, who
expected no similar benefit from the work to be performed by CAE. Plaintiff’s
claims against CAE are more akin to those raised in State Ready Mix, Inc. v.
Moffatt & Nichol (2015) 232 Cal.App.4th 1227, and The
Ratcliff Architects v. Vanir Construction Management, Inc. (2001) 88
Cal.App.4th 595. In the former case, the court concluded that a
subcontractor could maintain no negligence claim against an engineering firm whose
negligent instructions had allegedly resulted in liability for a faulty
building foundation. (State Ready Mix, Inc., supra, 232 Cal.App.4th
at p. 1233–1234.) In the latter case, the court held that a construction
manager could not be liable to an architect hired on the same project, where
the architect suffered only economic losses. (The Ratcliff Architects, supra,
88 Cal.App.4th at pp. 605–606.) The situation here is essentially
similar. Although Plaintiff and CAE are alleged to lack contractual privity,
they performed their respective work on the same project pursuant to contracts
with the general contractor, Webcor. (SAC ¶¶ 224–228.) “[W]hen a defendant's
liability rests partially under the control of another party's conduct and the
plaintiff is free to contract with the other party, the defendant's ‘moral
blame’ and connection to the plaintiff's alleged injury is too remote to justify
imposition of a tort duty.” (The Ratcliff Architects, supra, 88
Cal.App.4th at pp. 606–607.) Plaintiff here was free to contract
with Webcor regarding economic losses caused by other subcontractors. These
facts and legal authority vitiate the existence of any legal duty on the part
of CAE.
The above reasoning eliminates Plaintiff’s negligence
claim, as well as the claim for negligent interference with economic advantage
and equitable indemnity. “The tort of negligent interference with
economic relationship arises only when the defendant owes the plaintiff a duty
of care.” (LiMandri v. Judkins (1997) 52 Cal.App.4th 326, 348.) And
there must be “some basis for tort liability against the proposed indemnitor”
in order to maintain a claim for equitable indemnity. (Stop Loss Ins.
Brokers, Inc. v. Brown & Toland Medical Group (2006) 143 Cal.App.4th
1036, 1040.) With no duty of care, and no basis for tort liability, Plaintiff’s
claims against CAE fail.
CAE’s demurrer is therefore SUSTAINED without leave to
amend.
Defendant Nevell-Standard JV,
LLC’s (NSJV) demurrer to the SAC raises similar arguments as CAE’s: namely that
the 14th, 15th, and 16th causes of action for
negligence, negligent interference, and equitable indemnity fail for lack of
allegations sounding in tort, as well as the economic loss doctrine. (Demurrer
at pp. 7–12; see Aas v. Superior Court (2000) 24 Cal.4th 627, 643 [“A person may not ordinarily
recover in tort for the breach of duties that merely restate contractual
obligations.”].) These arguments succeed for the reasons discussed above, and
the NSJV demurrer is also SUSTAINED without leave to amend.
Defendant
NSJV has also filed a motion to strike Plaintiff’s prayer for attorney fees.
The motion is DENIED as moot.