Judge: Helen Zukin, Case: 21STCV28298, Date: 2023-03-07 Tentative Ruling

Case Number: 21STCV28298    Hearing Date: March 7, 2023    Dept: 207

Background

This litigation is composed of ten consolidated actions arising from the construction of a six-building housing project known as AMLI Marina Del Rey, each of which involve actions brought by subcontractors seeking, among other relief, payment for work performed on the project. One of these actions, Case No. 21STCV28298, is brought by Plaintiff Pacific Carpets, LLC (“Plaintiff”) against Defendants AMLI 4242 Via Marina, LLC and AMLI 4242 Via Marina GP, LLC (collectively “AMLI”), Defendant Western National Builders (“WNB”), and Fidelity and Deposit Company of Maryland (“Fidelity” or, collectively with AMLI and WNB, “Defendants”). Pacific’s operative pleading is the First Amended Complaint filed on June 17, 2022, alleging it had not been paid for work in connection with the AMLI Marina Del Rey development. Pacific moves for summary judgment, or, alternatively, summary adjudication of every cause of action asserted in its First Amended Complaint. Defendants oppose Plaintiff’s motion.

Request for Judicial Notice and Objections to Evidence

The Court GRANTS Pacific’s request for judicial notice of prior filings in this action and OVERRULES AMLI and Fidelity’s objections to Pacific’s request for judicial notice.

The Court SUSTAINS AMLI and Fidelity’s objection number 7 to the Declaration of Fred Ferrari. AMLI and Fidelity’s objections are otherwise OVERRULED.

The Court OVERRULES WNB’s objections to the Declaration of Fred Ferrari.

Legal Standards

Motions for summary judgment are governed by Code Civ. Proc. § 437c, which allows a party to “move for summary judgment in an action or proceeding if it is contended that the action has no merit or that there is no defense to the action or proceeding.” (C.C.P. § 437c(a)(1).) The function of a motion for summary judgment or adjudication is to allow a determination as to whether an opposing party cannot show evidentiary support for a pleading or claim and to enable an order of summary dismissal without the need for trial. (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 843.) Code Civ. Proc. § 437c(c) “requires the trial judge to grant summary judgment if all the evidence submitted, and ‘all inferences reasonably deducible from the evidence’ and uncontradicted by other inferences or evidence, show that there is no triable issue as to any material fact and that the moving party is entitled to judgment as a matter of law.” (Adler v. Manor Healthcare Corp. (1992) 7 Cal.App.4th 1110, 1119.) “The function of the pleadings in a motion for summary judgment is to delimit the scope of the issues; the function of the affidavits or declarations is to disclose whether there is any triable issue of fact within the issues delimited by the pleadings.” (Juge v. County of Sacramento (1993) 12 Cal.App.4th 59, 67, citing FPI Development, Inc. v. Nakashima (1991) 231 Cal. App. 3d 367, 381-382.) Courts “liberally construe the evidence in support of the party opposing summary judgment and resolve doubts concerning the evidence in favor of that party.” (Dore v. Arnold Worldwide, Inc. (2006) 39 Cal.4th 384, 389.)

As to each claim as framed by the complaint, the plaintiff moving for summary judgment must satisfy the initial burden of proof by presenting facts to prove each element of the cause of action entitling the party to judgment on the cause of action. (C.C.P. § 437c(p)(1). On a plaintiff’s motion for summary judgment, the plaintiff bears the burden of persuasion that each element of the cause of action in question has been proved, and that there is no defense thereto. (C.C.P. § 437c(o)(1); Aguilar v. Atlantic Richfield Company, et al. (2001) 25 Cal. 4th 826, 850.) Courts “liberally construe the evidence in support of the party opposing summary judgment and resolve doubts concerning the evidence in favor of that party.” (Dore v. Arnold Worldwide, Inc. (2006) 39 Cal.4th 384, 389.)

“A party may move for summary adjudication as to one or more causes of action within an action, one or more affirmative defenses, one or more claims for damages, or one or more issues of duty, if that party contends that the cause of action has no merit or that there is no affirmative defense thereto . . . . A motion for summary adjudication shall be granted only if it completely disposes of a cause of action, an affirmative defense, a claim for damages, or an issue of duty.” (C.C.P. § 437c(f)(1).)

When moving for summary judgment or adjudication, “A plaintiff or cross-complainant has met his or her burden of showing that there is no defense to a cause of action if that party has proved each element of the cause of action entitling the party to judgment on the cause of action. Once the plaintiff or cross-complainant has met that burden, the burden shifts to the defendant or cross-defendant to show that a triable issue of one or more material facts exists as to the cause of action or a defense thereto. The defendant or cross-defendant shall not rely upon the allegations or denials of its pleadings to show that a triable issue of material fact exists but, instead, shall set forth the specific facts showing that a triable issue of material fact exists as to the cause of action or a defense thereto.” (C.C.P. § 437c(p)(1).)

Analysis

Defendants argue Pacific’s motion must be denied in its entirety because Pacific has failed to carry its initial burden of proving every element of its claims against Defendants. Specifically, Defendants contend each of Pacific’s claims is dependent on Pacific having been a licensed contractor, pointing to Business and Professions Code § 7031. Under section 7031, a subcontractor such as Pacific seeking damages must allege and prove it held a valid license before it can bring any claim for damages. Section 7031(a) provides:

Except as provided in subdivision (e), no person engaged in the business or acting in the capacity of a contractor, may bring or maintain any action, or recover in law or equity in any action, in any court of this state for the collection of compensation for the performance of any act or contract where a license is required by this chapter without alleging that they were a duly licensed contractor at all times during the performance of that act or contract regardless of the merits of the cause of action brought by the person….

When a plaintiff’s licensure is controverted, section 7031(d) places the burden of proof of licensure on the subcontractor: “When licensure or proper licensure is controverted, the burden of proof to establish licensure or proper licensure shall be on the licensee.” By statute, a plaintiff may only carry this burden by producing a verified certificate of licensure from the Contractors State License Board: “proof of licensure pursuant to this section shall be made by production of a verified certificate of licensure from the Contractors State License Board which establishes that the individual or entity bringing the action was duly licensed in the proper classification of contractors at all times during the performance of any act or contract covered by the action” (Bus. & Prof. Code § 7031(d).)

Defendants argue Pacific’s licensure is controverted in this action, thus triggering the application of 7031(d) and Pacific’s burden to produce a verified certificate of licensure from the Contractors State License Board. In support of this argument, Defendants point to Advantec Group, Inc. v. Edwin's Plumbing Co., Inc. (2007) 153 Cal.App.4th 621 (Advantec) as holding a general denial in an Answer is sufficient to “controvert” allegations of licensure made in a Complaint, and thus triggering the requirements of section 7031(d).

In Advantec, the cross-complainant made the appropriate licensing allegation in the cross-complaint. (Advantec, supra, 153 Cal.App.4th at p. 625.) During trial, cross-defendant objected to cross-complainant's testimony regarding its licensure, and the court sustained the objection on the ground that section 7031(d) requires proof of licensure be made by a verified certificate of licensure from the Contractors State License Board. (Id.) The cross-complainant did not have such a certificate in its possession, and at that time it took approximately two weeks to obtain a certificate from the License Board. Cross-complainant requested a trial continuance to allow it to obtain the required certificate. The trial court denied the request and granted cross-defendant’s motion for nonsuit based on cross-complainant’s failure to prove licensure as required by section 7031(d). (Id. at p. 626.)

On appeal, cross-complainant argued the court abused its discretion in denying a continuance to allow the cross-complainant to secure the necessary certificate, given that cross-defendant had waited until midtrial to raise the issue. (Id. at 630-631.) The Court of Appeal affirmed the trial court, concluding the licensing issue had been raised by way of cross-defendant’s general denial. The Court noted, “[cross-complainant] could have had available for trial a verified certificate of its licensure, or could have clarified by way of contention interrogatories whether Advantec intended to contest the validity of its license, but it did neither” and therefore it could not be said that the cross-defendant had engaged in “sandbagging” by failing to raise the issue of licensure prior to trial. (Id. at p. 631.) Thus, under Advantec, licensure is not a special defense which must be affirmatively pled by a defendant, but rather “is a required element of a contractor plaintiff’s case in chief.” (Jeff Tracy, Inc. v. City of Pico Rivera (2015) 240 Cal.App.4th 510, 517-518.)

Defendants argue the same facts are presented here in that Pacific’s operative First Amended Complaint contains allegations of Pacific’s licensure, which under Advantec they controverted by asserting a general denial to Pacific’s claims in their respective Answers. Because Defendants controverted Pacific’s allegations of licensure, they argue Plaintiff was required to prove its licensure pursuant to section 7031(d) in moving for summary judgment or adjudication of its claims. The Court agrees.

Pacific does not dispute its licensure status is a threshold issue on each of its causes of action against Defendants. Rather, Pacific argues Defendants have not carried their burden of establishing a triable issue of material fact exists as to Pacific’s licensure status because Defendants have not submitted any admissible evidence suggesting Pacific was not licensed. However, Defendants are not arguing the general denial of their Answers has established the existence of a disputed material fact. Defendants’ argument is that Pacific has failed to carry its initial burden of establishing the elements of its claims because its licensure status is a threshold question on which Plaintiff bears the burden of proof at trial. The question is thus whether Pacific has met its initial burden in moving for summary judgment or adjudication. Defendants’ evidentiary showing only becomes relevant if Pacific has made a sufficient showing to shift the burden of production to Defendants.

Pacific argues it has met this initial burden through the Declaration of Fred Ferrari, which states Pacific “is a licensed subcontractor.” (Ferrari Decl. at ¶2.) Pacific also points to its subcontract agreement with WNB, which includes a Contractors State License Board number for Pacific. (Ex. 1 to Ferrari Decl.) The Court finds this showing is insufficient to carry Pacific’s initial burden. Under Code Civ. Proc. § 437c(d), a motion for summary judgment or adjudication must be supported with “admissible evidence.” (C.C.P. § 437c(d).) Under Advantec and Business and Professions Code § 7031(d), a verified certificate of licensure from the Contractors State License Board is the only admissible evidence by which Pacific can establish the threshold issue of licensure. In the absence of such a verified certificate, the Court finds Pacific has failed to carry its initial burden in moving for summary adjudication or judgment on its claims against Defendants. (See (Buzgheia v. Leasco Sierra Grove (1997) 60 Cal.App.4th 374, 389 [production of a verified certificate establishes a prima facia case of licensure which may then be rebutted by a defendant].)

Plaintiff also argues this case is governed by Womack v. Lovell (2015) 237 Cal.App.4th 772 (Womack) rather than Advantec. The Court disagrees. In Womack the plaintiff filed a complaint against a general contractor and its bond company. The complaint “explicitly alleged in the complaint that the contractor was licensed at all times.” (Id. at 775.) The contractor cross-complained against the plaintiff for unpaid work, and in response the plaintiff filed a general denial of all allegations of the cross-complaint. The case proceeded to trial, and as the contractor was about to rest his case on the cross-complaint, the plaintiff made a motion for nonsuit based on the contractor’s failure to prove his licensure under section 7031(d) through production of a verified certificate. (Id.) The trial court granted the motion and entered judgment for plaintiff. The Court of Appeal reversed, holding the plaintiff’s express allegation of the contractor’s licensure was a judicial admission which bound plaintiff on the issue of licensure:

In our case, counsel for Aztec was effectively trapped in a room with several doors, all locked from the outside, and in her opposition to the JNOV motion she tugged at all of them. And we conclude the trial judge had no choice but to keep them all locked—save one.

That one is the clear statement in Womack's complaint admitting Aztec was licensed, and even going so far as to sue Aztec's license bonding company under section 7071.6. Valerio v. Andrew Youngquist Construction (2002) 103 Cal.App.4th 1264 [127 Cal. Rptr. 2d 436] (Valerio) demonstrates there are times it is error for a trial court to ignore the impact of an admission made in a party’s pleadings, and we conclude this case was one of those times.

(Id. at 786.) The Court concluded “Because of the judicial admission, the rule of Advantec Group, Inc. v. Edwin's Plumbing Co., Inc. (2007) 153 Cal.App.4th 621 (Advantec) does not apply.” (Id. at 776.)

The Court acknowledged plaintiff had made a general denial of the allegations of licensure in the cross-complaint, but held the sham pleading doctrine rendered the general denial insufficient to controvert the contractor’s licensure status under section 7031(d). “The second argument—the actual denial in the answer to Aztec’s cross-complaint—fails because of the sham pleading doctrine. Under the sham pleading doctrine, a pleader cannot circumvent prior admissions by the easy device of amending a pleading without explanation.” (Id. at 787.) The Court noted “all doubt as to the application of the sham pleading doctrine in this case is removed by Womack's failure to comply with the local rule requiring specification of all ‘controverted issues.’” (Id. at 788.)

Pacific argues Womack applies here because AMLI did not identify Pacific’s licensure as a controverted issue in its verified statement of contentions. (Reply at 4; Ex. 1 to Watson Decl.) The Court finds this is insufficient to trigger the exception set forth in Womack. As set forth above, the Court of Appeal distinguished Advantec on the basis that the plaintiff in Womack had judicially admitted the defendant contractor was licensed. It was this judicial admission, not the failure to identify the licensure in its list of controverted issues, which formed the primary basis for the Womack Court’s reasoning. Pacific has not shown Defendants have made any analogous judicial admission here, and thus the Court finds Womack does not apply.

The Court finds Pacific has failed to carry its initial burden of proving the essential elements of each of its claims against Defendants. Therefore the Court declines to adjudicate the additional arguments raised in defendants’ opposition briefs. Pacific’s motion for summary judgment or, alternatively, summary adjudication is DENIED.

Conclusion

Pacific’s motion for summary judgment or adjudication of its claims is DENIED.