Judge: John J. Kralik, Case: 20STCV47586, Date: 2023-03-17 Tentative Ruling

Case Number: 20STCV47586    Hearing Date: March 17, 2023    Dept: NCB

Superior Court of California

County of Los Angeles

North Central District

Department B

BACKGROUND

A.    Allegations

Plaintiff 710 East Verdugo Townhomes Association (“Plaintiff”) is a condominium complex consisting of 5 condominiums in Burbank.  Plaintiff exists for the purpose of governing, preserving, repairing, operating, maintaining, and managing the project for the benefit of its residents.  Plaintiff alleges that Defendant 710 East Verdugo, LLC (“Verdugo Developer”) acted as the general contractor/owner/developer/seller of the project; Defendant Gaveet Construction, Waterproofing, LLC (“GCW”) was the roofing, balcony, and walkway subcontractor; and Narvan Construction Company (“NCC”) was a subcontractor on the project.  Plaintiff also alleges that Defendant Vanik Manooki (“Manooki”) is a managing member and president/principal of Verdugo Developer and NCC and that Defendants Alis Merzakhani (“Merzakhani”) and Arthur H. Gasamanian are managing members of Verdugo Developer.  Plaintiff alleges that as managing members, Manooki, Merzakhani, and Gasamanian directly authorized and participated in the tortious conduct alleged. 

Plaintiff alleges that Defendants performed work in the common areas, but they violated the residential construction standards enumerated in Civil Code, § 896 for numerous reasons as stated in paragraph 5 on page 7 of the SAC.    

The second amended complaint (“SAC”), filed October 7, 2022, alleges a single cause of action for violation of standards under Civil Code, § 896, et seq.  

On March 29, 2021, Verdugo Developer and NCC filed a cross-complaint against Gaveet Construction, Inc., EBN Plumbing, Serj Air Condition, Calmex Fireplace Equipment Manufacturing Company, Inc., Lion Iron Works, Inc., and M5 Steel for: (1) breach of written contract; (2) breach of written contract to obtain insurance; (3) breach of written contract to indemnify and defend; (4) total equitable indemnity; (5) partial equitable indemnity; (6) implied indemnity; (7) contribution and repayment; (8) declaratory relief for duty to obtain insurance, duty to defend, duty to indemnity, duty to obtain insurance, and duty to contribute; and (9) negligence.

On April 19, 2021, Noraeir Hovsepain dba Gaveet Construction filed a cross-complaint against Vanik Manooki, NCC, NCC (a proprietorship), and Verdugo Developer for: (1) negligent misrepresentation; (2) negligence; (3) equitable indemnity; (4) contribution; (5) implied contractual indemnity; and (6) declaratory relief.

On December 5, 2022, Noraeir Hovsepain dba Gaveet Construction filed a cross-complaint against Vanik Manooki, NCC, NCC (a proprietorship), Verdugo Developer, Alis Merkakhani, and Arthur H. Gasamanian for: (1) equitable indemnity; (2) contribution; (3) implied contractual indemnity; and (4) declaratory relief.

B.     Demurrers on Calendar

There are 4 demurrers on calendar.  On January 19, 2023, Defendants Alis Merzakhani, Verdugo Developer, Arthur H. Gasamanian, and Vanik Manooki each filed a demurrer to the SAC.

On March 3, 2023, Plaintiff filed an opposition brief to each demurrer.                              

DISCUSSION

            Defendants each demur to the SAC, arguing that it fails to allege sufficient facts to constitute a cause of action, it is uncertain, and it is barred by the applicable statute of limitations in CCP § 895 et seq.  In the demurrers, Defendants inform the Court that the demurrer arguments are essentially the same and that the demurrer filed by Merakhani is the “lead” demurrer. 

            First, Defendants argue that the SAC does not allege sufficient facts showing that Verdugo Developer is in fact a “California Corporation,” which would give rise to the subsequent formation of the HOA and the adoption of the CC&Rs. However, Defendants have not provided legal citations showing that this is a necessary allegation to the complaint or for a cause of action of Violation of Civil Code, § 896, et seq. 

            Plaintiff cites to CACI 4570, which provides the elements for “Right to Repair Act – Construction Defects – Essential Factual Elements (Civ. Code, § 896)”:

[Name of plaintiff] claims that [he/she/nonbinary pronoun] has been harmed because of defects in [name of defendant]’s original construction of [name of plaintiff]’s home. To establish this claim, [name of plaintiff] must prove [one or more of the following:]

[Specify all defects from Civil Code section 896, e.g., that a defectively constructed door allowed unintended water to pass beyond, around, or through it.]

(CACI 4570.)  The aforementioned information sought by Defendants is not an element for this cause of action and will not be a ground to sustain the demurrers.

            Next, Defendants argue that the SAC only incorporates paragraphs 1-14 in the 1^st cause of action and not paragraphs 15 to 26.  However, the Court does not read the allegations of the 1^st cause of action in a vacuum, but reads the allegations of the SAC as a whole.  The Court will not sustain the demurrer on this basis.  There is only one cause of action in the SAC.  It should be understood by the parties that the entirety of the SAC’s allegations is in support of the 1^st and only cause of action alleged. 

            Defendants also argue that Plaintiff’s allegations regarding NCC (a subcontractor) are insufficient because Plaintiff has not alleged that it is a corporation affiliated with NCC or the status of NCC.  However, the demurrers at issue are not brought by NCC and, thus, arguments regarding NCC are not necessarily relevant to the demurrers before the Court. 

            The Court overrules the demurrers on the basis that they fail to allege sufficient facts to constitute causes of action against Defendants.

            Second, Defendants argue that the SAC fails to allege specific and articulable facts to establish a cause of action against Defendants as members of the LLC.  Defendants argue that the complaint and FAC were only alleged against Verdugo Developer and that the public records show that Manooki was a member of the LLC and Plaintiff should have been aware of this fact but argues that Merzakhani and Gasamanian are not in the public records.  The Court is not in receipt of any judicially noticeable documents to verify this information.  At this time, the Court takes the allegations of the SAC as true and the SAC alleges that these individual defendants were members of the Verdugo Developer LLC.  As such, the demurrer on this basis is overruled. 

Third, Defendants argue that the SAC is uncertain because the 1^st cause of action does not incorporate all of the preceding paragraphs.  As discussed above, the demurrer on this basis is overruled.  Defendants also argue that there is ambiguity as to the allegations regarding the individual defendants being managing members of Verdugo Developer.  However, as discussed above, the Court overrules the demurrer on this basis as well. 

            Fourth, Defendants argue that the SAC is barred by the statute of limitations.  Defendants argue that it is unclear why Plaintiff did not name the individuals as Doe Defendants when filing the original complaint in December 2020 and waited 2 years to file the SAC in October 2022 naming the individual defendants. 

            Defendants argue there is a bar to bringing this action beyond 10 years from the completion of the project (even if applying tolling) and that Civil Code, § 896 includes shorter statute of limitations periods.

            CCP § 337.15 provides for a 10-year statute of limitations period after the substantial completion of a development or improvement for construction/improvement projects to real property based on latent deficiencies or injury arising out of any such latent deficiency.  (CCP § 337.15(a).)  At this time, the Court cannot ascertain when the date of completion of the project was.  The SAC does not allege the dates of the project.  At most, the only relevant date provided is that Plaintiff sent Defendant Notice of Commencement of Legal Proceedings on September 10, 2020 pursuant to Civil Code, §§ 895 et seq. and 6000 et seq.  (SAC, ¶19.)  “In order for the bar of the statute of limitations to be raised by demurrer, the defect must clearly and affirmatively appear on the face of the complaint; it is not enough that the complaint shows merely that the action may be barred.”  (E-Fab, Inc. v. Accountants, Inc. Services (2007) 153 Cal.App.4th 1308, 1315-16.)  Thus, the Court cannot ascertain whether this action would be time-barred under the 10-year statute of limitations. 

            Next, Defendants argue that shorter statute of limitations periods apply pursuant to Civil Code, § 896.  While section 896 includes some statute of limitations periods, it is again unclear when the period for the time accrual would begin.  For example, in section 896(f), it states that no action for electrical systems shall be brought pursuant to the subdivision more than 4 years from the close of escrow.  The SAC does not allege the date of the close of escrow, such that the Court cannot make a determination on whether the statute of limitations period has elapsed. 

            In opposition, Plaintiff argues that the action should be tolled as a result of its recordation of the Notice of Completion on September 21, 2010 and sending the Notice of Commencement of Legal Proceedings on September 10, 2020 (Civ. Code, § 6000, 180 days) and COVID-19 Emergency Rule 9 (tolling and extension of the statute of limitations).  The action was likely tolled during this period, but the Court need not reach the merits of the tolling in light of the fact that the demurrers on the basis of the statute of limitations are overruled.

CONCLUSION AND ORDER 

Defendants Alis Merzakhani, 710 East Verdugo, LLC, Arthur H. Gasamanian, and Vanik Manooki’s demurrers to the Second Amended Complaint and the sole cause of action are overruled.  

Defendants shall give notice of this order.