Judge: Joseph Lipner, Case: 23STCV13274, Date: 2023-09-14 Tentative Ruling
Case Number: 23STCV13274 Hearing Date: December 7, 2023 Dept: 72
SUPERIOR COURT OF CALIFORNIA
COUNTY OF LOS ANGELES
DEPARTMENT 72
TENTATIVE
RULING
|
MORDCHAI BRAFMAN, Plaintiff, v. SEAN BENAROYA, et al., Defendants. |
Case No:
23STCV13274 Hearing Date: December 7, 2023 Calendar Number: 6 |
Plaintiff and cross-defendant Mordchai Brafman (“Plaintiff”)
demurs to the cross-complaint brought by Defendants and cross-complainants Sean
Benaroya and BV Industries, LLC (“BV Industries”) (collectively, “Defendants”).
The Court OVERRULES Plaintiff’s demurrer to the first,
second, third, fourth, sixth and seventh causes of action in the
cross-complaint.
The Court SUSTAINS WITH LEAVE TO AMEND Plaintiff’s demurrer to
the fifth cause of action for breach of express warranty. Defendants may amend the fifth cause of
action within 20 days.
This case arises out of work that Plaintiff was hired to do
for Defendants as a building contractor. The building project was not
completed.
Plaintiff alleges that Defendants materially breached the
contract by failing to make required payments, demanding additional work
without providing additional compensation, refusing to provide required
materials, and stealing materials from the work site.
Defendants allege that Plaintiff breached the contract by
failing to exercise reasonable care, not conforming the work to industry
standards, misrepresenting the scope of work included in the contract,
demanding payments not due, leaving the property in question unsecured, and
abandoning the project.
Plaintiff filed this action on June 8, 2023. The operative
complaint is Plaintiff’s First Amended Complaint (“FAC”), which alleges breach
of written contract; breach of the covenant of good faith and fair dealing;
foreclosure of mechanic’s liens; common count; conversion; and finally,
intentional misrepresentation. All of the foregoing causes of action are
alleged against Benaroya; foreclosure and common count are also raised against
BV Industries. Two other causes of action against a different defendant were
stricken in an anti-SLAPP motion.
On September 6, 2023, Defendants filed the Cross-Complaint
against Plaintiff and Merchants Bonding Company (Mutual) (collectively,
“Cross-Defendants”), alleging (1) breach of contract; (2) breach of the
covenant of good faith and fair dealing; (3) negligence; (4) breach of implied
warranty; (5) breach of express warranty; (6) unfair business practices; and
(7) recovery on contractor’s bond.
As a general matter, in a demurrer proceeding, the defects
must be apparent on the face of the pleading or via proper judicial
notice. (Donabedian v. Mercury Ins.
Co. (2004) 116 Cal.App.4th 968, 994.) “A demurrer tests the pleading
alone, and not the evidence or facts alleged.” (E-Fab, Inc. v. Accountants,
Inc. Servs. (2007) 153 Cal.App.4th 1308, 1315.) The court assumes the truth
of the complaint’s properly pleaded or implied factual allegations. (Ibid.) The only issue a demurrer is
concerned with is whether the complaint, as it stands, states a cause of
action. (Hahn v. Mirda (2007) 147 Cal.App.4th 740, 747.)
Where a demurrer is sustained, leave to amend must be
allowed where there is a reasonable possibility of successful amendment. (Goodman v. Kennedy (1976) 18 Cal.3d 335,
348.) The burden is on the plaintiff to show the court that a pleading can be
amended successfully. (Ibid.;
Lewis v. YouTube, LLC (2015) 244 Cal.App.4th 118, 226.) However, “[i]f
there is any reasonable possibility that the plaintiff can state a good cause
of action, it is error to sustain a demurrer without leave to amend.” (Youngman v. Nevada Irrigation Dist.
(1969) 70 Cal.2d 240, 245).
Here, Plaintiff demurs to each of the Cross-Complaints
causes of action on the various grounds that Plaintiff was excused from
performance because Defendants had failed to adhere to the contract and failed
to pay Plaintiff; that Defendants caused their own injury by failing to adhere
to the contract; that Defendant committed fraud which would have caused
Defendant even more harm if Defendant [sic] had continued to perform;
As discussed above, Courts must accept the facts pleaded in
a complaint as true on a demurrer. (E-Fab Inc. v. Accountants Inc. Servs.,
supra, 153 Cal.App.4th at p. 1315.) “[F]acts facts have no place in a
demurrer. (Bainbridge v. Stoner (1940) 16 Cal.2d 423, 431.) A demurrer
which asserts facts outside of the complaint is referred to as a ‘speaking
demurrer’ and is improper. (Mohlmann v. City of Burbank (1986) 179
Cal.App.3d 1037, 1041 fn. 2.)
Most of Plaintiff’s bases for demurrer violate this
fundamental rule by asserting new facts or legal conclusions outside of the
bounds of the Cross-Complaint. Although some of these facts are alleged in
Plaintiff’s FAC, courts only address the subject pleading on demurrer.
A demurrer is not the motion in which to litigate factually
disputed issues. It only tests the
sufficiency of the pleading being challenged.
For this reason, the Court must overrule this demurrer, with one
exception set forth below.
To state a cause of action for breach of contract, Plaintiff
must be able to establish “(1) the existence of the contract, (2) plaintiff’s
performance or excuse for nonperformance, (3) defendant’s breach, and (4) the
resulting damages to the plaintiff.” (Oasis
West Realty, LLC v. Goldman (2011) 51 Cal.4th 811, 821.)
If a breach of contract claim “is based on alleged breach of
a written contract, the terms must be set out verbatim in the body of the
complaint or a copy of the written agreement must be attached and incorporated
by reference.” (Harris v. Rudin, Richman
& Appel (1999) 74 Cal.App.4th 299, 307.) In some circumstances, a
plaintiff may also “plead the legal effect of the contract rather than its
precise language.” (Construction
Protective Services, Inc. v. TIG Specialty Ins. Co. (2002) 29 Cal.4th 189,
198-199.)
Plaintiff
contends that he was excused from performance because Defendants had not
remitted payment to Plaintiff. The Cross-Complaint does not allege that
Defendants improperly failed to pay Plaintiff. Rather, the Cross-Complaint
alleges that Brafman demanded $122,286 to complete the remediation work that
Defendants requested, an amount far in excess of the contract price. Whether
the additional work was required by the contract and whether this amount was
appropriate are questions of fact not appropriately decided on demurrer. The
Court therefore overrules the demurrer to this cause of action.
“A breach of the implied covenant of good faith and fair
dealing involves something beyond breach of the contractual duty itself and it
has been held that bad faith implies unfair dealing rather than mistaken
judgment.” (Careau & Co. v. Security
Pacific Business Credit, Inc. (1990) 222 Cal.App.3d 1371, 1394.) “If the
allegations do not go beyond the statement of a mere contract breach and,
relying on the same alleged acts, simply seek the same damages or other relief
already claimed in a companion contract cause of action, they may be
disregarded as superfluous as no additional claim is actually stated … [T]he
only justification for asserting a separate cause of action for breach of the
implied covenant is to obtain a tort recovery.” (Id. at pp. 1394-1395.) To recover in tort for breach of the implied
covenant, the defendant must “have acted unreasonably or without proper cause.”
(Id. at p. 1395 [citations and
italics omitted].)
Plaintiff contends that Plaintiff was excused from
performing further work because Defendants failed to adhere to the contract and
that Plaintiff was therefore not bound by the covenant of good faith and fair
dealing. Plaintiff does not explain why further performance was excused, which
warrants overruling the demurrer. Further, even if Plaintiff’s reasons are
those discussed above, such assertions would constitute the improper
introduction of new facts on a demurrer. The Court therefore overrules the demurrer
to this cause of action.
In order to state a claim for negligence, Plaintiff must
allege the elements of (1) “the existence of a legal duty of care,” (2) “breach
of that duty,” and (3) “proximate cause resulting in an injury.” (McIntyre v.
Colonies-Pacific, LLC (2014) 228 Cal.App.4th 664, 671.)
Plaintiff argues that Defendants caused their own injury by
failing to adhere to the contract. Plaintiff further argues that Defendants
engaged in fraud and, as a result, performance would have caused Defendants
even worse harm. For the reasons discussed above, these assertions, which are
not supported by the Cross-Complaint’s allegations, are new facts not properly
considered on demurrer. The Court therefore overrules the demurrer to this
cause of action.
In general, “no warranty other than that of good workmanship
can be implied where the contractor faithfully complies with plans and
specifications supplied by the owner[.]” (Sunbeam Construction Co. v. Fisci
(1969) 2 Cal.App.3d 181, 186, citing Kurland v. United Pac. Ins. Co.
(1967) 251 Cal.App.2d 112.)
Plaintiff argues that he could not finish the work because
Defendants failed to adhere to the contract and therefore excused further
performance by Plaintiff. As discussed above, these are new facts not properly
considered on demurrer. Plaintiff further argues that if Plaintiff’s
workmanship was subpar, Defendants would not still have requested that he
continue to do the work for them. This is an inherently factual contention that
cannot be resolved as a matter of law. The Court therefore overrules the demurrer
to this cause of action.
“The essence of a warranty consists of a material promise or
a material affirmation from which a contractual or quasi-contractual obligation
may be implied.” (Corporation of Presiding Bishop of Church of Jesus Christ
of Latter-Day Saints v. Cavanaugh (1963) 217 Cal.App.2d 492, 504 (“Cavanaugh”)
[applying Uniform Sales Act definition of warranty to services performed by a
construction contractor].)
In the absence of a “special agreement,” a worker’s
undertaking “is not an absolute guaranty that satisfactory results will ensue.”
(Bonadiman-McCain, Inc. v. Snow (1960) 183 Cal.App.2d 58, 70.) “The
services of experts are sought because of their special skill. They have a duty
to exercise the ordinary skill and competence of members of their profession,
and a failure to discharge that duty will subject them to liability for
negligence. Those who hire such persons are not justified in expecting
infallibility, but can expect only reasonable care and competence. They
purchase service, not insurance.” (Ibid, quoting Gagne v. Bertran
(1954) 43 Cal.2d 481, 489.)
Plaintiff argues that Defendants have improperly brought
this cause of action and that the cause of action is unintelligible, without
providing a clear explanation as to the reason for these assertions. He does, however, cite the legal requirement
that there be some kind of actual express warranty. (Demurrer at p. 10:3-15.)
Defendants attach as Exhibit A to the Cross-Complaint the
building contract in question and incorporate it into the Cross-Complaint.
(Cross-Complaint at ¶ 8, Exh. A.) The contract contains an integration clause
stating that the written agreement is the entire agreement of the parties and
that no other agreements are part of the agreement. Plaintiff has not alleged
the existence of a separate agreement. (Cross-Complaint, Exh. A at p. 2.) The
contract provides that “the work will be done according to the plans I received
[sic] only.” (Cross-Complaint, Exhibit A at p. 1.) However, the contract, which
Defendants incorporated into the Cross-Complaint, does not appear to include an
express warranty clause.
Thus, although Defendants may be able to maintain a cause of
action for breach of contract, they cannot, as a matter of law, maintain that
the contract contained an express warranty. The Court therefore sustains the
demurrer as to this cause of action.
The Court grants Defendants leave to amend for the simple
reason that neither party has briefed this issue clearly. While Plaintiff has done just enough to point
out this problem, he did not argue the issue in a directed manner. Defendants have not addressed the issue in
their brief. If there is no actual
express warranty, this cause of action should not be in this case. But to the extent that Defendants have some
basis for alleging express warranty, they may attempt to do so by amending the
cross-complaint within 20 days.
Plaintiff argues that Defendants have failed to allege
sufficient facts to show that Plaintiff engaged in any unfair business
practice. Here, Defendants allege that Plaintiff demanded payment that was not
due, misrepresented his experienced in this type of project, misrepresented the
scope of work to be performed based on the contract, refused to finish his work
until he was paid an “extortionate” amount far in excess of the contract price,
and then abandoned the project. (Cross-Complaint ¶ 50.) These actions are
questions of fact which cannot be decided on a demurrer. The Court therefore
overrules the demurrer to this cause of action.
Pursuant to Business & Professions Code section 7071.5, Plaintiff
filed with the Contractors’ State License Board, Bond No. CA6027822 in the sum
of $25,000 issued by MERCHANTS BONDING COMPANY (MUTUAL), an Iowa Corporation.
(Cross-Complaint at ¶ 55; Demurrer at p. 11:3-5.) This bond is for the benefit
of any person, including Cross-Complainants, damaged as a result of willful and
deliberate violation of Business & Professions Code Division 3, Chapter 9
(§§ 7000 et seq.) by the licensee or the fraud of the licensee in the execution
and performance of a construction contract. (Bus. & Prof. Code, § 7071.5
(c)).
Defendants allege that Plaintiff willfully and deliberately
failed to perform his duties under the contract and change order. Plaintiff
argues that he did not willfully violate Business & Professions Code
section 7071.5. First, this is a factual contention. Second, even taking
Plaintiff’s factual contention as true, which the Court cannot, section 7071.5
is but one portion of Chapter 9. Non-violation of section 7071.5 therefore
would not preclude recovery on the bond. The Court therefore overrules the
demurrer to this cause of action.