Judge Kenneth J. Medel, Case 37-2023-00003700-CU-DF-CTL 2024-03-01 Tentative Ruling

Judge: Kenneth J. Medel, Case: 37-2023-00003700-CU-DF-CTL, Date: 2024-03-01 Tentative Ruling

SUPERIOR COURT OF CALIFORNIA,

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HALL OF JUSTICE

TENTATIVE RULINGS - February 29, 2024

03/01/2024 09:30:00 AM C-66 COUNTY OF SAN DIEGO

JUDICIAL OFFICER:Kenneth J Medel

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Civil - Unlimited Defamation Demurrer / Motion to Strike 37-2023-00003700-CU-DF-CTL AMERIVET CONTRACTING VS RYAN PEACOCK INC [IMAGED] CAUSAL DOCUMENT/DATE FILED: Demurrer, 09/01/2023

Defendant BUSINESS ALLIANCE INSURANCE COMPANY's Demurrer to the Eleventh Cause of Action is SUSTAINED without leave to amend.

The Eleventh Cause of Action for Claim on License Bond is against Defendant Business Alliance Insurance Company's as surety, and RPI, as principal. The SAC alleges activity that did not require a contractor's license, i.e., alleged false statements made to a third-party after the completion of the project.

To state a claim against a contractor license bond, Plaintiff must allege that 1) the existence of a contractor's bond, 2) a violation of contractors' license law, and 3) damages resulting from the violation.

Cal. Bus. & Prof. Code ('B&P) § 7071.5; Brown v. Surety Co. of Pacific 122 Cal.App.3d 614 (1981).

- Liability is not imposed for just any alleged acts by a licensee; instead, liability is only imposed against a licensee when acting as a 'contractor' defined under B&P 7026. See Brown v. Surety Co. of Pacific (1981) 122 Cal.App.3d 614, 622.

The licensing law aims to protect the public from incompetence and dishonesty in those who provide building and construction services. Contractors Labor Pool, Inc. v. Westway Contractors, Inc. (1997) 53 Cal.App.4th 152, 165 ('the [licensing] law need apply only to those who actually perform or supervise the performance of construction services; it need not apply to those who only supply materials to be used by others or laborers who will be supervised by others'); Hydrotech Systems, Ltd. v. Oasis Waterpark (1991) 52 Cal.3d 988, 995; Home Depot, U.S.A., Inc. v. Contractors' State License Bd. (1996) 41 Cal.App.4th 1592, 1598.

Plaintiff has not alleged any act that falls under B&P Code § 7026. By supplying generators, RPI never engaged in any activity described or anticipated by B&P Code § 7026. Rather, RPI acted solely as an equipment supplier that serviced that equipment when necessary but never acted to 'construct, alter, repair, add to, subtract from, improve, move, wreck or demolish any building, highway, road, parking facility, railroad, excavation or other structure, project, development or improvement, [etc.],' as set out in B&P Code § 7026. '[A] person or company in the business of supplying equipment [...] is not deemed to act in the capacity of a contractor.' Contractors Labor Pool, Inc., supra, 53 Cal.App.4th at 165.

- Even if Peacock and RPI were acting as contractors in supplying generators to Amerivet, the purported violation alleged in the SAC are false statements made by Peacock, and not any actions by RPI or Peacock made while acting as contractors.

To have an actionable claim as to BAIC and RPI's license bond pursuant to B&P Code § 7071.5(c), Amerivet must plead that it was '[a] person damaged as a result of a willful and deliberate violation of this chapter by the licensee, or by the fraud of the licensee in the execution or performance of a construction contract'. Amerivet has not pled that RPI or Peacock were acting as a contractor when the alleged false statements were made.

Amerivet's claims that Peacock made defamatory statements about Amerivet cannot support a claim Calendar No.: Event ID: TENTATIVE RULINGS

3014928 30 CASE NUMBER: CASE TITLE: AMERIVET CONTRACTING VS RYAN PEACOCK INC [IMAGED] 37-2023-00003700-CU-DF-CTL against BAIC because defamatory statements do not fall within B&P Code § 7026. As made clear in Brown, 'the licensee must be acting in the capacity of a contractor before the license bond can be subjected to liability.' Brown, supra, 122 Cal.App.3d at 622. Intentional torts by a party not engaged in the acts of a contractor-even when in proximity to an actual construction project and undertaken by a licensed contractor-do not bring a party within B&P Code § 7026. Id. Even if RPI's services renting the generators to Amerivet constituted contracting work under B&P Code § 7026 (they do not), they are not the basis of Amerivet's claims against BAIC as RPI's bond-provider.

Amerivet's claims clearly arise solely from RPI and Peacock's alleged defamatory statements, not the provision of rental generators.

In its SAC, Amerivet claims that B&P Code § 7071.5 exposes BAIC and the license bond to liability, because B&P Code § 7110 creates a claim for a party that has been damaged by a licensed contractor when violating the building laws of the states. SAC ¶ 95. However, B&P Code § 7071.5(c) specifically states that it only protects Amerivet from a violation by RPI that occurred 'in the execution or performance of a construction contract' (emphasis added).

Amerivet cites to a plethora of statutes allegedly violated: B&P Code § 7110; Gov't Code § 14842.5(a)(2); Public Contract Code § 10115.10(a)(2); and MVC § 999.9(a)(2). SAC ¶ 95. While these statutes do create potential disciplinary actions or civil penalties for violations, none of these statutes create an independent claim against a surety or a license bond. These statutes do not obviate the requirement of the above-referenced statutes and case law that RPI and Peacock be engaged in contractor activity-as defined by B&P Code § 7026- before BAIC and the license bond can face liability.

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