Judge: Joseph Lipner, Case: 23STCV15607, Date: 2024-02-20 Tentative Ruling

Case Number: 23STCV15607    Hearing Date: February 20, 2024    Dept: 72

SUPERIOR COURT OF CALIFORNIA

COUNTY OF LOS ANGELES

DEPARTMENT 72

TENTATIVE RULING

Cross-Defendant San Gabriel/Pomona Valleys Developmental Services, Inc. (“SGPV”) demurs to the First Amended Cross-Complaint (“FACC”) filed by Defendant and Cross-Complainant PRBC VII Limited Partnership (“PRBC”).

The Court SUSTAINS the demurrer WITHOUT LEAVE TO AMEND.

Background

Plaintiff Lee & Associates Investment Services Group, Inc. (“Plaintiff”) alleges that it entered into a commission agreement (the Commission Agreement) with Defendant Phillips Ranch Development, LLC (“PRD”). The Commission Agreement provided that Plaintiff was entitled to commissions for the leasing by PRD, or its successor, of real property located at 41 Rancho Camino Road, Pomona, CA (the “Property”). The agreement provided for commissions of six percent of the base rent for the initial lease term, and three percent for any term of an option term exercised by the tenant of the Property.

SGPV entered into a lease of the Property on April 15, 2013 (the “Lease”). The Lease had an initial term of 10 years and gave SGPV two options to extend the Lease for five years each.

Plaintiff alleges that PRD’s successor, PRBC, continues to lease the property beyond the initial term of the Lease and that Plaintiff is therefore entitled to the three percent commission specified for the option terms of the Lease.

Plaintiff filed this action against PRD and PRBC (collectively, “Defendants”) on July 5, 2023, raising claims for (1) breach of contract; (2) breach of covenant of good faith and fair dealing; and (3) declaratory relief. All three causes of action seek to enforce the claimed right to commission for the extended term of the Lease.

On August 28, 2023, PRBC filed the Cross-Complaint against SGPV and Savills, Inc. (“Savills”) (collectively, “Cross-Defendants”). The operative cross-complaint is now the FACC, which raises claims for (1) equitable indemnity; (2) declaratory relief; (3) contribution; and (4) implied indemnity under Code of Civil Procedure, section 1021.6.

SGPV demurred to the FACC on January 8, 2024. On January 23, 2024, San Gabriel filed an amended demurrer, correcting typographical errors in the original demurrer. PRBC filed an opposition and San Gabriel filed a reply.

Legal Standard

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).  

Discussion

Equitable Indemnity – First Cause of Action

The elements for equitable indemnity are (1) a showing of fault on the part of the indemnitor and (2) resulting damages to the indemnitee for which the indemnitor is contractually or equitably responsible. (Gouvis Engineering v. Superior Court (1995) 37 Cal.App.4th 642, 646.) “To state a claim for equitable indemnity, a defendant must allege the same harm for which he may be held liable is properly attributable—at least in part—to the cross-defendant.” (Platt v. Coldwell Banker Residential Real Estate Services (1990) 217 Cal.App.3d 1439, 1445, fn.7.)

“Where, as here, the parties have expressly contracted with respect to the duty to indemnify, the extent of that duty must be determined from the contract and not by reliance on the independent doctrine of equitable indemnity.” (Rossmoor Sanitation, Inc. v. Pylon, Inc. (1975) 13 Cal.3d 622, 628.)

Section 16.13 of the Lease provides:

Tenant [SGPV] warrants that it has had no dealing with any real estate brokers or agent in connection with the negotiations of this Lease, except the broker(s), if any referenced in the applicable Lease Summary provision (“Broker”). Tenant shall indemnify, defend and hold harmless Landlord against all claims, demands, losses, liabilities, costs and expenses (including without limitation, legal fees) with respect to any commission or other compensation or other amounts owing or alleged to be owing to any broker (other than Broker [Plaintiff]) occurring by or through Tenant.

(FACC, Exh. 2 at p. 24.)

          The parties do not dispute the content of the Lease.

          PRBC alleges that SGPV informed PRBC that SGPV had used a broker other than Plaintiff, and that PRBC paid commissions to that broker as a result. PRBC argues that, as a result, SGPV must indemnify PRBC for the commissions that PRBC owes to Plaintiff.

          This contention misreads the contract. SGPV may well be obligated PRBC for the commission payments PRBC made to the third-party broker. However, those payments are not the commission payments that Plaintiff is suing for. Thus, SGPV is protected from liability to indemnify PRBC for the commissions that PRBC allegedly owes to Plaintiff in this action.

          The Court sustains the demurrer without leave to amend.

Declaratory Relief – Second Cause of Action

“To qualify for declaratory relief, a party would have to demonstrate its action presented two essential elements: (1) a proper subject of declaratory relief, and (2) an actual controversy involving justiciable questions relating to the party’s rights or obligations.” (Jolley v. Chase Home Finance, LLC (2013) 213 Cal.App.4th 872, 909, quotation marks and brackets omitted.)

A cause of action for declaratory relief should not be used as a second cause of action for the determination of identical issues raised in another cause of action. (General of America Insurance Co. v. Lilly (1968) 258 Cal.App.2d 465, 470.) “The availability of another form of relief that is adequate will usually justify refusal to grant declaratory relief” (California Insurance Guarantee Association v. Superior Court (1991) 231 Cal.App.3d 1617, 1624), and a duplicative cause of action is subject to demurrer (Palm Springs Villas II Homeowners Association, Inc. v. Parth (2016) 248 Cal.App.4th 268, 290). Further, “there is no basis for declaratory relief where only past wrongs are involved.” (Osseous Technologies of America, Inc. v. DiscoveryOrtho Partners LLC (2010) 191 Cal.App.4th 357, 366, quotation marks omitted.)

Here, PRBC’s declaratory relief claim is solely intended to secure a determination of a duty to indemnify. It is therefore derivative of the equitable indemnity claim. Thus, the declaratory relief claim also fails.

The Court sustains the demurrer without leave to amend.

Contribution – Third Cause of Action

A claim for contribution requires allegations of (1) “a money judgment,” (2) “rendered jointly against two or more defendants in a tort action,” (3) “in accordance with the principles of equity,” (4) “after one tortfeasor has, by payment, discharged the joint judgment or has paid more than his pro rata share thereof,” (5) without intentional injury by the tortfeasor. (Code Civ. Proc., § 875, subds. (a)-(d).)

Plaintiff’s action lies in contract, not tort. Additionally, there is no money judgment rendered against PRBC. Furthermore, PRBC does not allege that SGPV is a joint tortfeasor. Thus, PRBC does not have a claim against SGPV for contribution.

The Court sustains the demurrer without leave to amend.

Implied Indemnity – Fourth Cause of Action

Code of Civil Procedure, section 1021.6 provides:

Upon motion, a court after reviewing the evidence in the principal case may award attorney's fees to a person who prevails on a claim for implied indemnity if the court finds (a) that the indemnitee through the tort of the indemnitor has been required to act in the protection of the indemnitee's interest by bringing an action against or defending an action by a third person and (b) if that indemnitor was properly notified of the demand to bring the action or provide the defense and did not avail itself of the opportunity to do so, and (c) that the trier of fact determined that the indemnitee was without fault in the principal case which is the basis for the action in indemnity or that the indemnitee had a final judgment entered in his or her favor granting a summary judgment, a nonsuit, or a directed verdict.

(Code Civ. Proc., § 1021.6.)

According to its text, this statute does not create a cause of action. Rather, it provides for the recovery of attorney’s fees by a party who prevails in an indemnification action under certain circumstances.

PRBC argues that the demurrer to this claim should be overruled because a plaintiff may argue in the alternative and because a trial court, though it may delay an indemnity action to avoid complicating the plaintiff’s case, may not preclude the filing of an indemnity cross-complaint altogether. Both of these arguments are non-sequiturs. The right to argue in the alternative is not a right to invent causes of action from whole cloth. PRBC has not stated a claim, nor could it, because it is relying on an attorney fee statute. The Court therefore sustains the demurrer without leave to amend.