Judge: Jon R. Takasugi, Case: 22STCV06421, Date: 2023-06-30 Tentative Ruling

Case Number: 22STCV06421    Hearing Date: June 30, 2023    Dept: 17

Superior Court of California

County of Los Angeles

DEPARTMENT 17

TENTATIVE RULING

Defendant’s demurrer is OVERRULED IN PART, SUSTAINED IN PART:

-         Defendant’s demurrer is overruled as the fourth and fifth causes of actions;

-         Defendant’s demurrer is sustained, without leave to amend, as to the sixth cause of action

-         Defendant’s demurrer is sustained, with 15 days leave to amend, as to the seventh cause of action.

Defendant’s motion to strike is granted. Plaintiff must file a motion for leave to amend in order to plead additional causes of action.

On 2/22/2022, Plaintiff Skyler Wells (Plaintiff) filed suit against Strategic Acquisitions, Inc., BDR, Inc., Open House Realty & Investments, LLC, and Peter Baer.

On 2/15/2023, Plaintiff filed a third amended complaint (TAC) alleging: (1) breach of contract; (2) construction defects; (3) construction defects; (4) negligence; (5) negligence; (6) negligent infliction of emotional distress; and (7) negligent infliction of emotional distress.

            Now, Defendant Christina Baer (Defendant) demurs to Plaintiff’s TAC.

Discussion

            As a preliminary matter, Plaintiff’s TAC went beyond the scope of leave previously afforded. Accordingly, the Court does not consider the breach of contract and “construction defects” cause of action.           

Defendant argues that Plaintiff’s allegations remain insufficient to state a claim against Defendant. More specifically, Defendant argues that: (1) Plaintiff’s claims against her are barred by the statute of limitations; (2) Plaintiff has not credibly alleged that Defendant was involved in the development or sale of the subject property; and (3) an NIED claim cannot stand for construction defects.

As to the first contention, Peter Baer passed away on April 4, 2021. (See TAC at ¶ 88.) Defendant argues that Plaintiff therefore had until April 4, 2022 to file a claim in probate against Peter Baer and his Estate for debts allegedly owed by the decedent. (See CCP § 366.2; Collection Bureau of San Jose v. Rumsey (2000) 24 Cal.4th 301, 306 (2000); Stoltenberg v. Newman (2009) 179 Cal.App.4th 287, 297).

However, as noted by Defendant in opposition, the Contract underlying Plaintiff’s claim provided that the agreement between Wells and Open House Realty was “binding upon the heirs, executors, administrators, successor and assigns of the Seller.” (TAC ¶¶ 128-141.) Moreover, Plaintiff’s claims do not concern “Peter Baer’s estate, but instead have to do with the decision by the Baer Vail to dissolve Open House Realty,” which Plaintiff alleges is an express breach of the Purchase Agreement. (TAC at ¶¶ 114-122.) As such, the Court agrees that Plaintiff does not seek to make a claim against Peter Baer’s estate, but instead intends to enforce the terms of the Purchase Agreement which allegedly binds the heirs, executors, administrators, successor and assigns of the Seller. As such, the Court cannot conclude, as a matter of law, that Plaintiff’s claims are time-barred under CCP section 366.2

Defendant also argues that Plaintiff’s claim is barred by the statute of limitations for development and construction claims.  However, as noted by this Court in its 6/9/2023 ruling to BDR’s demurrer, Plaintiff’s TAC alleges that between January 2016 and January 2022, the general contractor experts informed Plaintiff of the various construction defects at the property. (TAC ¶ 70.) The different defects alleged by Plaintiff are distinct, and even assuming there was knowledge of certain defects at a certain time, this would not establish that Plaintiff was therefore on notice of all defects. Rather, this would require factual determinations as to what Plaintiff knew, when, and what it should have put Plaintiff on notice of. As such, the Court cannot conclude, as a matter of law, that Plaintiff’s construction development and construction claims are time-barred on their face.

As for the second contention, Defendant argues that Plaintiff has not alleged facts which could show Defendant’s individual liability. As previously noted, an officer or director of a corporation cannot be personally liable for the actions of a corporation unless she participates in the wrongdoing or authorizes or directs that it be done. (See PMC v. Kadisha (2000) 78 Cal.App.4th 1368, 1378, 1381.) Here, Plaintiff alleges that he contacted Defendants by phone numerous times regarding the Office Rainwater Intrusion, and that during these phone calls, the name “Christina” was mentioned in the context of a participant and director, such as:

A. “I will ask Christina, then get back to you.”;

B. “I will discuss with Christina, then get back to you.”;

C. “I will relay the information to Christina.”; and

D. “I will convey your concerns to Christina.”

            (TAC ¶ 115.)

Plaintiff further alleges that there is such a unity of interest between BDR and its equitable owner Baer that the separate personalities of BDR and Baer do not in reality exist. (TAC ¶ 140.)

As such, Plaintiff not only alleges that Defendant personally participated in wrongdoing in her capacity as officer and director of BDR, but also argues that Defendant is an alter-ego of BDR such that the corporate veil can be pierced. These allegations are sufficient at the pleading stage to allege Defendant’s individual liability. While Defendant may contend these allegations are not credible, that speaks to a factual determination not properly made at this stage.

Finally, as to the third contention, the Court agrees with Defendant that Plaintiff has not alleged facts which could support an NIED claim. The Court agrees Plaintiff has not alleged sufficient facts to state a claim for either NIED cause of action. 

As for the sixth cause of action based on construction defects, this claim is barred as a matter of law. In Erlich v. Menezes (1999) 21 Cal.4th 543, the California Supreme Court held that a homeowner could not recover emotional distress damages in the context of a construction defect case where the contractor’s negligence directly caused only economic injury and property damage. (Id. at 888-889.) Here, Plaintiff’s emotional distress is alleged to directly arise from the construction defects at the Subject Property.

As for the seventh cause of action, this claim is not based on a construction defect and thus is not barred as a matter of law. However, it is uncertain whether or not the claim is time-barred. Plaintiff’s allegation does not state when the easement was allegedly provided in a negligent manner, and thus it is uncertain whether or not the claim would be time-barred. (“Defendants negligently provided Wells with a very poor photocopy of Pedestrian Promenade Easements Diagram of Pedestrian Promenade Easements on the Subject Property, resulting in Pedestrian Promenade Easements Diagram Negligence.” (TAC ¶ 283.).) The Court will afford leave to amend to provide Plaintiff an opportunity to allege facts which could show that this claim is not time-barred.

Based on the foregoing, Defendant’s demurrer is overruled in part, sustained in part. Defendant’s demurrer is overruled as the fourth and fifth causes of actions, sustained without leave to amend as to the sixth cause of action, and sustained, with 15 days leave to amend, as to the seventh cause of action.

Motion to Strike

Defendant moves to strike the new and additional causes of action asserted in the TAC. As noted above, the Court agrees these causes of action and their corresponding requests for relief are improper, and sustained Defendant’s demurrer to those cause of action.

            Given that the only operative causes of action remaining after the Court’s ruling are for negligence, Plaintiff necessarily has not alleged facts which could support a prayer for punitive damages. The Court strikes the prayer for punitive damages, with leave to amend, in the event that Plaintiff is able to assert additional causes of action through the motion for leave to amend the first, second, and third causes of action.

            Defendant’s motion to strike is granted. 

It is so ordered.

Dated:  June    , 2023

   Hon. Jon R. Takasugi
   Judge of the Superior Court

Parties who intend to submit on this tentative must send an email to the court at smcdept17@lacourt.org by 4 p.m. the day prior as directed by the instructions provided on the court website at www.lacourt.org.  If a party submits on the tentative, the party’s email must include the case number and must identify the party submitting on the tentative.  If all parties to a motion submit, the court will adopt this tentative as the final order.  If the department does not receive an email indicating the parties are submitting on the tentative and there are no appearances at the hearing, the motion may be placed off calendar.  For more information, please contact the court clerk at (213) 633-0517.