Judge: Joseph Lipner, Case: 24STCV13621, Date: 2024-10-15 Tentative Ruling
Case Number: 24STCV13621 Hearing Date: October 15, 2024 Dept: 72
SUPERIOR COURT OF CALIFORNIA
COUNTY OF LOS ANGELES
DEPARTMENT 72
TENTATIVE
RULING
|
GLYNN CONNOLLY, Plaintiff, v. BEAU LAUGHLIN, et al. Defendants. |
Case No:
24STCV13621 Hearing Date: October 15, 2024 Calendar Number: 8 |
Defendants Beau Laughlin (“Laughlin”) and Framework Design +
Build, LLC (“Framework”) (collectively, “Defendants”) demur to the Complaint
filed by Plaintiff Glynn Connolly (“Plaintiff”). Defendants state that
Defendants Victor Laughlin and Beau Laughlin are the same person despite being
named as separate defendants. (Demurrer at p. 2, fn. 1.)
The Court SUSTAINS the demurrer WITH LEAVE TO AMEND with
respect to the first, second, and fourth claims. Plaintiff shall have 20 days to amend the
Complaint.
The Court OVERRULES the demurrer with respect to the third
and fifth claims.
This
case relates to a home construction contract. The following facts are taken
from the allegations of the Complaint, which the Court accepts as true for the
purposes of the demurrer.
Plaintiff
owned the residential property located at 1896 Lucille Avenue, Los Angeles,
California, 90026 (the “Property”).
Plaintiff
and Defendants entered into a written contract (the “Contract”) under which
Defendants would perform a remodeling project (the “Project”) on the Property.
The initial budget estimate for the contract was $88,590.00. Plaintiff alleges
that the Contract provides that any extra work or change orders only become
part of the Contract once the order is prepared in writing and signed by the
parties prior to the commencement of any work covered by the change order.
(Complaint ¶ 32.)
Plaintiff
alleges that Laughlin signed the Contract for Framework and that the Contract
states that Framework was “a division of Michael Perkins Construction – Lic NO:
745743.” (Complaint ¶ 8.) Plaintiff alleges that The California State
Contractors License Board (“CSLB”) issued License No: 745743 to “Michael Ray
Perkins – Sole Ownership”, doing business as “Michael Perkins Construction”.
(Complaint ¶ 10.) Plaintiff alleges that the CSLB website does not show any
license having been issued to any business entitled “Framework Design + Build”
or “Framework Design + Build, LLC.” (Complaint ¶ 19.) Plaintiff alleges that
Laughlin has never been licensed by the CSLB or issued a license bond.
(Complaint ¶ 22.)
Plaintiff
alleges that Defendants told Plaintiff that she did not need permits for the
Project and that the Project would be cheaper if Plaintiff did not obtain
permits. Plaintiff alleges that Defendants did not obtain any permits for the
Project.
Framework
performed remodeling services on the Property and ultimately charged Plaintiff
over $530,000.00.
Plaintiff
alleges that between February and August 2022, Defendants presented a series of
new proposals with new costs starting at $244,604.00 and $279,744.00 on
February 1, 2022; then $475,366.41 on June 12, 2022; and then $468,706.31 on
August 1, 2022. (Complaint ¶ 35.) Plaintiff alleges that none of these
proposals were reduced to a signed contract.
Plaintiff
alleges that, pursuant to the August 1, 2022 proposal, Defendants demanded four
payments of $51,233.42 each - three in August and September of 2022, and the
fourth upon completion. (Complaint ¶ 37.) Plaintiff alleges that she made the
first three payments, whereupon Defendants “simply disappeared for essentially
a year” and abandoned the project. (Complaint ¶¶ 37-39.) Plaintiff alleges that
she repeatedly contacted Defendants and was reassured by a project manager that
staff would come to complete the work, but that staff would not appear.
(Complaint ¶ 43.)
Plaintiff
alleges that on August 22, 2023, Defendants demanded an additional amount of
$115,724.80, with $90,724.80 due immediately. (Complaint ¶ 44.) Plaintiff
alleges that she acquiesced to the demand and paid $95,000.00 to Defendants on
August 23, 2023. Plaintiff alleges that the Project was not completed until
January 2024, when a final payment of $18,204.00 was made for a total of
$530,682.00. (Complaint ¶ 45.)
Plaintiff
alleges that she originally contemplated moving into the Project when complete,
but that due to the delays, she was forced to put the Project on sale in March
2024. (Complaint ¶ 46.) The Project sold on April 16, 2024. (Complaint ¶ 46.)
Plaintiff
filed this action on May 31, 2024, raising claims for (1) breach of contract;
(2) breach of the covenant of good faith and fair dealing; (3) violation of
Business & Professions Code, sections 7107, 7110, 7159, 7159.5, 7159.6 and
7031(a); (4) fraud and concealment; and (5) disgorgement for violation of
Business and Professions Code, section 7031.
Defendants
demurred to the Complaint on September 11, 2024. Plaintiff filed an opposition
and Defendants filed a reply.
“The party against whom a complaint or cross-complaint has
been filed may object, by demurrer or answer as provided in Section 430.30, to
the pleading on any one or more of the following grounds:
(a) The court has
no jurisdiction of the subject of the cause of action alleged in the pleading.
(b) The person who filed the pleading does not have the
legal capacity to sue.
(c) There is
another action pending between the same parties on the same cause of action.
(d) There is a defect or misjoinder of parties.
(e) The pleading does not state facts sufficient to
constitute a cause of action.
(f) The pleading is
uncertain. As used in this subdivision, “uncertain” includes ambiguous and
unintelligible.
(g) In an action
founded upon a contract, it cannot be ascertained from the pleading whether the
contract is written, is oral, or is implied by conduct.
(h) No certificate was filed as required by Section 411.35.”
(Code Civ. Proc., § 430.10.)
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).
To state a cause of action for breach of
contract, a 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.)
Furthermore, a party may demur to a
contract claim where “it cannot be ascertained from the pleading whether the
contract is written, is oral, or is implied by conduct.” (Code Civ. Proc., §
430.10, subd. (g).)
Plaintiff contends that Plaintiff
and Defendants entered into “an ever expanding series of contractual
agreements” under which Defendants agreed to perform extensive remodeling
services on the Property. (Opposition p.
5:16-19.) Plaintiff has alleged that the original Contract was the only signed
agreement between Plaintiff and Defendants for contracting work. (Complaint ¶
8.) Thus, it follows that the subsequent agreements must have taken another
form. However, Plaintiff does not clearly allege the form of those agreements.
Furthermore, Plaintiff does not
attach the original Contract or quote its terms verbatim.
These defects create identifiable
problems for Defendants. It is unclear what work Plaintiff alleges she was
owed, whether time was of the essence, and even whether the subsequent
agreements that Plaintiff asserts were valid, given that the Contract provided
that it could only be modified in writing, signed by all parties. Plaintiff
must provide any written contracts that she alleges, and must allege the form
of any subsequent contracts, pursuant to section 430.10, subd. (g).
The Court sustains the demurrer to
this claim with leave to amend.
“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].)
Because the Court sustains the demurer to Plaintiff’s breach
of contract claim, the Court sustains the demurrer to this claim with leave to
amend.
“Abandonment without legal excuse of any construction
project or operation engaged in or undertaken by the licensee as a contractor
constitutes a cause for disciplinary action.” (Bus. & Prof. Code, § 7107.)
This section creates a cause for disciplinary action, and
not a private right of action.
“Willful or deliberate disregard and violation of the
building laws of the state, or of any political subdivision thereof, or of any
of the following references to or provisions of law, constitutes a cause for
disciplinary action against a licensee[.]” (Bus. & Prof. Code, section
7110.)
This section creates a cause for disciplinary action, and
not a private right of action.
Business and Professions Code 7159 sets forth requirements
relating to projects for which a home improvement is needed and various
requirements of such an action. On its
own, the section does not explicitly provide for a private right of action.
Business and Professions Code, section 7159.5 similarly sets
disciplinary and criminal penalties for violation of its provisions, but does
not create a private right of action.
“(a) An extra work
or change order is not enforceable against a buyer unless the change order sets
forth all of the following:
(1) The scope of work encompassed
by the order.
(2) The amount to be added or
subtracted from the contract.
(3) The effect the
order will make in the progress payments or the completion date.
(b) The buyer may
not require a contractor to perform extra or change-order work without
providing written authorization.
(c) Failure to
comply with the requirements of this section does not preclude the recovery of
compensation for work performed based upon legal or equitable remedies designed
to prevent unjust enrichment.”
(Bus. & Prof. Code, § 7159.6.)
Plaintiff has alleged that Defendants collected payment from
Plaintiff despite the extra work and change orders’ failure to state the scope
of the work encompassed by the order. Further, as discussed in the following
section, Plaintiff has alleged that Defendants were unlicensed, and therefore
could not recover the value of their work in equity. Plaintiff has therefore
stated a claim under this section.
“(a) Except as
provided in subdivision (e), 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.
(b) Except as
provided in subdivision (e), a person who utilizes the services of an
unlicensed contractor may bring an action in any court of competent
jurisdiction in this state to recover all compensation paid to the unlicensed
contractor for performance of any act or contract.”
(Bus. & Prof. Code, § 7031.)
Plaintiff
has alleged that Defendants were unlicensed and that she used their services
and paid them compensation. Plaintiff has therefore stated a claim under this
section.
The
Court overrules the demurrer to this claim.
“The elements of fraud are (a) a misrepresentation (false
representation, concealment, or nondisclosure); (b) scienter or knowledge of
its falsity; (c) intent to induce reliance; (d) justifiable reliance; and (e)
resulting damage.” (Hinesley v. Oakshade
Town Ctr. (2005) 135 Cal.App.4th 289, 294.)
“[T]he elements of an action for fraud and deceit based on
concealment are: (1) the defendant must have concealed or suppressed a material
fact, (2) the defendant must have been under a duty to disclose the fact to the
plaintiff, (3) the defendant must have intentionally concealed or suppressed
the fact with the intent to defraud the plaintiff, (4) the plaintiff must have
been unaware of the fact and would not have acted as he did if he had known of
the concealed or suppressed fact, and (5) as a result of the concealment or
suppression of the fact, the plaintiff must have sustained damage.” (Lovejoy
v. AT&T Corp. (2004) 119 Cal.App.4th 151, 157–158.)
A duty to disclose arises when “[1] a defendant owes a
fiduciary duty to a plaintiff … [2] when the defendant has exclusive knowledge
of material facts not known to the plaintiff; [3] when the defendant actively
conceals a material fact from the plaintiff; or [4] when the defendant makes
partial representations but also suppresses some material facts.” (Jones v.
ConocoPhillips Co. (2011) 198 Cal.App.4th 1187, 1199 [internal citations
and quotation marks omitted; cleaned up].)
“Each of the [latter] three circumstances in which
nondisclosure may be actionable presupposes the existence of some other
relationship between the plaintiff and defendant in which a duty to disclose
can arise.” (LiMandri v. Judkins (1997) 52 Cal.App.4th 326, 336–337.)
“[S]uch a relationship can only come into being as a result of some sort of
transaction between the parties.” (Id. at p. 337.) “Thus, a duty to
disclose may arise from the relationship between seller and buyer, employer and
prospective employee, doctor and patient, or parties entering into any kind of
contractual agreement.” (Ibid.)
The facts constituting the alleged fraud must be alleged
factually and specifically as to every element of fraud, as the policy of
“liberal construction” of the pleadings will not ordinarily be invoked. (Lazar v. Superior Court (1996) 12
Cal.4th 631, 645.) “[Fraud’s] particularity requirement necessitates pleading
facts which ‘show how, when, where, to whom, and by what means the
representations were tendered.’ [Citation.]” (Stansfield v. Starkey
(1990) 220 Cal.App.3d 59, 73.)
To properly allege fraud against a corporation, the
plaintiffs must plead the names of the persons allegedly making the false
representations, their authority to speak, to whom they spoke, what they said
or wrote, and when it was said or written. (Tarmann
v. State Farm Mut. Auto. Ins. Co. (1991) 2 Cal.App.4th 153, 157.)
Plaintiff alleges that Defendants misrepresented that they
were properly licensed, that they were a division of Michael Perkins
Construction, that Defendants had staff available to work on the project, and
that the project would be completed within the schedule set forth in the
Contract. Plaintiff has alleged that Defendants represented that permits were
not required for the Project and that the project would be less expensive
without permits.
The representations lack sufficient allegations of when they
were made and, with the exception of the licensing representations (which were
allegedly made by Laughlin), by whom. Further, insofar as the representations
are alleged against Framework, the representations other than those of
licensing do not have connected allegations as to the authority of the person
making them.
The Court sustains the demurrer to this claim with leave to
amend.
“(a) Except as
provided in subdivision (e), 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.
(b) Except as
provided in subdivision (e), a person who utilizes the services of an
unlicensed contractor may bring an action in any court of competent
jurisdiction in this state to recover all compensation paid to the unlicensed
contractor for performance of any act or contract.”
(Bus. & Prof. Code, § 7031.)
As discussed above, Plaintiff has alleged that Defendants
were unlicensed and that she used their services and paid them compensation.
Plaintiff has therefore stated a claim under this section.
The Court therefore overrules the demurrer to this claim.