Judge: Joel L. Lofton, Case: 21AHCV00102, Date: 2023-05-10 Tentative Ruling

Case Number: 21AHCV00102    Hearing Date: May 10, 2023    Dept: X

   Tentative Ruling

Judge Joel L. Lofton, Department X

HEARING DATE:     May 10, 2023                          TRIAL DATE: No date set.

CASE:                         THE BIRD AND THE BEAR LLC dba LA DEVELOPMENT COMPANY, v. INTERNATIONAL MAC CONSTRUCTION, INC., a California corporation; MAC CONSTRUCTION BUILDERS, INC., JAE WOO CHUNG, and DOES 3 to 10

CASE NO.:                 21AHCV00102

DEMURRER WITHOUT MOTION TO STRIKE

MOVING PARTY:               Defendants International Mac Construction, Inc., (“IMC”) Mac Construction Builders, Inc. and Jae Woo Chung       

RESPONDING PARTY:      Plaintiff The Bird and The Bear LLC

SERVICE:                              Filed March 20, 2023

OPPOSITION:                       Filed April 25, 2023

REPLY:                                   Filed May 5, 2023

RELIEF REQUESTED

            Defendants demurrer to Plaintiff’s first amended complaint.

BACKGROUND

            This case arises out of Plaintiff Larry Finch’s (“Plaintiff”) claim that Defendants International Mac, Construction, Inc., Mac Construction Builders, Inc, and Jae Woo Chung (“Defendants”) failed to pay under an agreement for a construction project. Plaintiff alleges that it entered into a contract with on or around May 22, 2017, where Plaintiff would provide construction services in exchange for $300,000 paid in $45,000 installments. Plaintiff alleges that it completed the work but only received $71,700. Plaintiff alleges that Defendants still owe approximately $288.300.

            Plaintiff filed a first amended complaint (“FAC”) on February 1, 2023, alleging two causes of action for (1) breach of contract and (2) breach of the covenant of good faith and fair dealing.

TENTATIVE RULING

            Defendants’ demurrer is SUSTAINED with leave to amend.

LEGAL STANDARD

A general demurrer may be taken to a complaint where “[t]he pleading does not state facts sufficient to constitute a cause of action.” (Code of Civ. Proc. § 430.10(e).) A demurrer for sufficiency tests whether the complaint states a cause of action.  (Hahn v. Mirda (2007) 147 Cal. App. 4th 740, 747.) In a demurrer proceeding, the defects must be apparent on the face of the pleading or by proper judicial notice.  (Code Civ. Proc. section 430.30(a).)  A demurrer tests the pleadings alone and not the evidence or other extrinsic matters.  (SKF Farms v. Superior Court (1984) 153 Cal. App. 3d 902, 905.)  The only issue involved in a demurrer hearing is whether the complaint, as it stands, unconnected with extraneous matters, states a cause of action.  (Hahn v. Mirda, supra, 147 Cal.App.4th 740, 747.)

DISCUSSION

            Plaintiff’s complaint was initially filed by Larry Finch as its assignee. Defendants’ previous demurrer was sustained with leave to amend based on the fact that Finch lacked capacity to sue as the assignee of a suspended corporation. In its FAC, Plaintiff brings the claims on its own behalf.

            Business and Professions Code section 7031

            Defendants demurrer to Plaintiff’s first cause of action for breach of contract and second cause of action for breach of the covenant of good faith and fair dealings based on Plaintiff’s failure to allege it is a licensed contractor.

            The essential elements of a breach of contract are: (1) the contract, (2) plaintiff’s performance or excuse for nonperformance, (3) the defendant’s breach, and (4) the resulting damages to the plaintiff. (Green Valley Landowners Assn. v. City of Vallejo (2015) 241 Cal.App.4th. 425, 433.) “Under California law, every contract includes an implied covenant of good faith and fair dealing.” (Prager University v. Google LLC (2022) 85 Cal.App.5th 1022, 1039.) The covenant “exists merely to prevent one contracting party from unfairly frustrating the other party’s right to receive the benefits of the agreement actually made.” (Guz v. Bechtel Nat. Inc. (2000) 24 Cal.4th 317, 349.)  

            Business and Professions Code section 7031, subdivision (a), provides that “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, except that this prohibition shall not apply to contractors who are each individually licensed under this chapter but who fail to comply with Section 7029.”

            Business and Professions Code section 7026 defines a contractor, in part, as “any person who undertakes to or offers to undertake to, or purports to have the capacity to undertake to, or submits a bid to, or does himself or herself or by or through others, construct, alter, repair, add to, subtract from, improve, move, wreck or demolish any building . . ..” “ ‘Contractor’ includes subcontractor and specialty contractor.” (Bus. & Prof. Code section 7026.)

            Plaintiff’s FAC alleges that it entered into a contract with IMC for construction services. (FAC ¶ 13.) Plaintiff alleges that it had agreed to install materials provided by IMC. (Id. ¶ 14.) Plaintiff’s allegation are for services of a contractor. However, the FAC does not allege that Plaintiff is licensed to do so. As currently alleged, Plaintiff’s claims are barred by Business and Professions Code section 7031.

CONCLUSION

            Defendants’ demurrer is SUSTAINED with 20 days leave to amend.

            Moving Party to give notice.

Dated:   May 10, 2023                                                ___________________________________

                                                                                    Joel L. Lofton

                                                                                    Judge of the Superior Court

Parties who intend to submit on this tentative must send an email to the court indicating their

intention to submit.  Parties intending to appear are strongly encouraged to appear remotely.  alhdeptx@lacourt.org