Judge: Holly J. Fujie, Case: 22STCV23949, Date: 2023-03-16 Tentative Ruling

Case Number: 22STCV23949    Hearing Date: March 16, 2023    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: Plaintiff

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 currently operative first amended complaint (the “FAC”) alleges: (1) breach of contract; (2) professional negligence; (3) breach of fiduciary duty; (4) breach of contract; and (5) breach of fiduciary duty.

In relevant part, the FAC alleges: Plaintiff owns the Property.  (FAC ¶ 1.)  On or about April 24, 2018, Plaintiff 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.  (FAC ¶ 11, Exhibit B.)  Under the FGI Agreement, Moving Defendant was required to attend jobsite meetings, review requests and documents, and advise Plaintiff about delays costs, and other issues that arose during construction.  (Id.)  Plaintiff eventually learned that there were delays, added costs, and problems with the construction project.  (See FAC ¶¶ 12-13.)  Moving Defendant did not notify Plaintiff of any of the delays and other issues that arose during construction.  (FAC ¶ 14.) 

Moving Defendant filed a demurrer (the “Demurrer”) to the fifth cause of action on the grounds that the FAC fails to state facts sufficient to constitute a cause of action.  

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.) 

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 FAC fails to allege the existence or breach of a fiduciary duty.  The FAC alleges that the FGI Agreement imposed a fiduciary relationship on Moving Defendant by creating a principal-agency relationship.  (See FAC ¶ 42.)  The FAC does not identify which portions of the FGI Agreement purportedly created this agency relationship between Plaintiff and Moving Defendant.  The remainder of the alleged breaches of the duty appear to be duplicative of the alleged breaches of the FGI Agreement that form the basis for the fourth cause of action for breach of contract.  (See FAC ¶¶ 37, 43.)  The Court therefore SUSTAINS the Demurrer with 20 days leave to amend.  If Plaintiff files an amended pleading that fails to allege facts that show the creation of an agency relationship that would give rise to a fiduciary duty, the Court will consider sustaining a demurrer without allowing further 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 16th day of March 2023