Judge: Holly J. Fujie, Case: 22STCV23949, Date: 2022-12-29 Tentative Ruling

Case Number: 22STCV23949    Hearing Date: December 29, 2022    Dept: 56

SUPERIOR COURT OF THE STATE OF CALIFORNIA

FOR THE COUNTY OF LOS ANGELES - CENTRAL DISTRICT

MOVING PARTY: Defendant Freeman Group, Inc. (“Moving Defendant” or “FGI”)

RESPONDING PARTY: Plaintiffs Thomas D Kraemer Revocable Trust (the “Trust”) and Thomas Kraemer (“Kraemer”) (collectively, “Plaintiffs”)

The Court has considered the moving, opposition and reply papers.

BACKGROUND

This action arises out of a construction project on real property (the “Property”).  The complaint (the “Complaint”) alleges: (1) breach of contract; (2) professional negligence; (3) breach of fiduciary duty; (4) breach of contract; and (5) breach of fiduciary duty.[1]

In relevant part, the Complaint alleges: The Trust owns the Property.  (Complaint ¶ 1.)  Kraemer was the trustee of the Trust and resided at the Property after completion of the construction project.  (Complaint ¶ 2.)  On or about August 22, 2016, the Trust entered into an architectural and engineering agreement with Defendant Woods + Dangaran (“W+D”).  (Complaint ¶ 8.)  On or about April 24, 2018, the Trust and Moving Defendant entered into an agreement (the “FGI Agreement”) for FGI to provide construction management services related to the construction project at the Property.  (Complaint ¶ 11.)  The Trust learned that there were delays, added costs, and problems with the construction.  (See Complaint ¶¶ 12-13.)  Moving Defendant did not notify the Trust of any of the issues that arose during construction.  (Complaint ¶ 14.) 

Moving Defendant filed a demurrer (the “Demurrer”) on the grounds that: (1) Kraemer lacks standing to prosecute his claims; (2) the Complaint fails to allege whether the contract upon which it is based is oral or written; (3) the Complaint fails to state sufficient facts to constitute the fourth or fifth causes of action; and (6) the fourth cause of action is uncertain.

REQUEST FOR JUDICIAL NOTICE

            Moving Defendant’s Request for Judicial Notice is DENIED.  (See L.B. Research & Education Foundation v. UCLA Foundation (2005) 130 Cal.App.4th 171, 180, n. 2.)

DISCUSSION

Meet and Confer

The meet and confer requirement has been met.

Legal Standard

A demurrer tests the sufficiency of a complaint as a matter of law.  (Durell v. Sharp Healthcare (2010) 183 Cal.App.4th 1350, 1358.)  The court accepts as true all material factual allegations and affords them a liberal construction, but it does not consider conclusions of fact or law, opinions, speculation, or allegations contrary to law or judicially noticed facts.  (Shea Homes Limited Partnership v. County of Alameda (2003) 110 Cal.App.4th 1246, 1254.)  With respect to a demurrer, the complaint must be construed liberally by drawing reasonable inferences from the facts pleaded.  (Rodas v. Spiegel (2001) 87 Cal.App.4th 513, 517.)  A demurrer will be sustained without leave to amend if there exists no reasonable possibility that the defect can be cured by amendment.  (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.) 

Kraemer’s Standing

Only a real party in interest has standing to prosecute an action, except as otherwise provided by statute.  (Redevelopment Agency of San Diego v. San Diego Gas & Electric Co. (2003) 111 Cal.App.4th 912, 920.)  A party who is not the real party in interest lacks standing to sue.  (Id.)  A real party in interest ordinarily is defined as the person possessing the right sued upon by reason of the substantive law.  (Id. at 920-21.)  A complaint filed by someone other than the real party in interest is subject to general demurrer on the ground that it fails to state a cause of action.  (Id. at 921.)  Under California Code of Civil Procedure (“CCP”) section 369, a trustee of an express trust may sue without joining the persons for whose benefit the action is prosecuted as parties.  (CCP § 369, subd. (a)(2).) 

            While the Complaint alleges that Kraemer is the trustee of the Trust, it specifies that he is pursuing this action in his individual capacity.  Further, the Complaint does not include allegations that Kraemer was personally injured by any of the alleged wrongdoing.  The Court therefore finds that the Complaint does not sufficiently allege that Kraemer has standing and SUSTAINS the Demurrer in its entirety to Kraemer’s personal claims with 20 days leave to amend. 

Fourth Cause of Action: Breach of Contract

The elements of a claim for breach of contract are: (1) the contract; (2) the plaintiff’s performance or excuse for nonperformance; (3) the defendant’s breach; and (4) damage to plaintiff therefrom.  (Wall Street Network, Ltd. v. New York Times Co. (2008) 164 Cal.App.4th 1171, 1178.)  A plaintiff may plead the legal effect of the contract rather than its precise language.  (Construction Protective Services, Inc. v. TIG Specialty Insurance Co. (2002) 29 Cal.4th 189, 198-99.) 

A defendant may demur to an action founded upon a contract if it cannot be ascertained from the pleading whether the contract is written, is oral, or is implied by conduct.  (CCP § 430.10, subd. (g).)

            Although the Complaint alleges the general contours of the FGI Agreement, it does not allege whether the FGI Agreement is oral, written, or implied by conduct.  Unlike the contract alleged in Maxwell v. Dolezal (2014) 231 Cal.App.4th 93, 99, the Complaint does not include allegations that refer to the format of the FGI Agreement.  The Court therefore SUSTAINS the Demurrer to the fourth cause of action with 20 days leave to amend. 

Fifth Cause of Action: Breach of Fiduciary Duty

            To state a cause of action for breach of fiduciary duty, a plaintiff must allege: (1) the existence of a fiduciary relationship; (2) breach of that relationship; and (3) damages.  (Shopoff & Cavallo LLP v. Hyon (2008) 167 Cal.App.4th 1489, 1509.) 

A fiduciary relationship is any relation existing between parties to a transaction wherein one of the parties is in duty bound to act with the utmost good faith for the benefit of the other party.  (Wolf v. Superior Court (2003) 107 Cal.App.4th 25, 29.)  Such a relation ordinarily arises where a confidence is reposed by one person in the integrity of another, and in such a relation the party in whom the confidence is reposed, if he voluntarily accepts or assumes to accept the confidence, can take no advantage from his acts relating to the interest of the other party without the latter's knowledge or consent.  (Id.)  Before a person can be charged with a fiduciary obligation, he must either knowingly undertake to act on behalf and for the benefit of another or must enter into a relationship which imposes that undertaking as a matter of law.  (Hasso v. Hapke (2014) 227 Cal.App.4th 107, 140.)  Fiduciary duties are imposed by law in certain technical, legal relationships such as those between partners or joint venturers, trustees and beneficiaries, principals and agents, and attorneys and clients.  (Id.)  A fiduciary duty under common law may arise when one person enters into a confidential relationship with another.  (Id.)  Every contract to some extent requires each party to repose trust and confidence in the other; one party's right to contingent compensation, standing alone, does not give rise to a fiduciary duty.  (City of Hope National Medical Center v. Genentech, Inc. (2008) 43 Cal.4th 375, 391.)

Whether a fiduciary duty exists is generally a question of law.  (Marzec v. California Public Employees Retirement System (2015) 236 Cal.App.4th 889, 915.)  Whether the defendant breached that duty towards the plaintiff is a question of fact.  (Id.)

Moving Defendant argues that the Complaint fails to allege the existence or breach of a fiduciary duty.  The fifth cause of action is rooted in Moving Defendant’s alleged obligations under the FGI Agreement.  (See Complaint ¶ 41.)  Plaintiff argues that the Complaint adequately alleges a fiduciary relationship based on a principal-agent relationship.  The Court finds, however, that the Complaint does not identify a source of a fiduciary relationship other than the FGI Agreement.  Because it does not sufficiently allege a breach of contract claim, the Court finds that the Complaint likewise does not allege the existence of a fiduciary duty.  The Court therefore SUSTAINS the Demurrer to the fifth cause of action with 20 days leave to amend.

Moving party is ordered to give notice of this ruling.

In consideration of the current COVID-19 pandemic situation, the Court¿strongly¿encourages that appearances on all proceedings, including this one, be made by LACourtConnect if the parties do not submit on the tentative.¿¿If you instead intend to make an appearance in person at Court on this matter, you must send an email by 2 p.m. on the last Court day before the scheduled date of the hearing to¿SMC_DEPT56@lacourt.org¿stating your intention to appear in person.¿ The Court will then inform you by close of business that day of the time your hearing will be held. The time set for the hearing may be at any time during that scheduled hearing day, or it may be necessary to schedule the hearing for another date if the Court is unable to accommodate all personal appearances set on that date.¿ This rule is necessary to ensure that adequate precautions can be taken for proper social distancing. 

Parties who intend to submit on this tentative must send an email to the Court at SMC_DEPT56@lacourt.org as directed by the instructions provided on the court website at www.lacourt.org.  If the department does not receive an email and there are no appearances at the hearing, the motion will be placed off calendar. 

  Dated this 29th day of December 2022