Judge: Latrice A. G. Byrdsong, Case: 22STLC07723, Date: 2023-10-23 Tentative Ruling
Case Number: 22STLC07723 Hearing Date: October 23, 2023 Dept: 25
Hearing Date: Monday, October 23, 2023
Case Name: UNITED
FINANCIAL CASUALTY COMPANY, a corporation v. PATRICIA ELIZETH GARCIA DELGADO,
an individual; DELGADO ANGEL REYES, an individual; and DOES 1-20
Case No.: 22STLC07723
Motion: Demurrer to Third Cause of Action
in the Cross-Complaint
Moving Party: Cross-Defendant
Anthony Jose Barela, Jr.
Responding Party: Cross-Complainants Patricia Elizeth
Garcia Delgado, Delgado
Angel Reyes, and Aspire General Insurance Company
Notice: OK
Recommended Ruling: Cross-Defendant Anthony Jose Barela,
Jr.’s Demurrer to the Third Cause of Action Raised in the Cross-Complaint is SUSTAINED
without leave to amend.
Cross-Defendant Anthony Jose Barela, Jr.'s Answer to be filed within 10 days.
BACKGROUND
On November
15, 2023, Plaintiff United Financial Casualty Company (“Plaintiff”) initiated
this action against Defendants Patricia Elizeth Garcia Delgado (“Delgado”),
Delgado Angel Reyes (“Reyes”), and Does 1 through 20 for (1) motor vehicle
negligence, and (2) subrogation. Plaintiff alleges that Delgado and Reyes were
responsible for causing a motor vehicle accident on February 28, 2022 that
injured their insured.
On
December 16, 2022, Delgado and Reyes filed their joint answer to the complaint.
On the same day, Delgado, Reyes, and
Aspire General Insurance Company (“Aspire”) (collectively,
“Cross-Complainants”) filed a cross-complaint against Cross-Defendant Anthony
Jose Barela Jr. (“Cross-Defendant”), alleging the following causes of action:
(1) declaratory relief; (2) comparative indemnity; and (3) subrogation.
On September 6, 2023,
Cross-Defendant filed the instant demurrer to the third cause of action for
subrogation raised in the cross-complaint. Cross-Complainants oppose.
MOVING PARTY
POSITION
Cross-Defendant
claims the third cause of action for subrogation is subject to demurrer on the
principle of res judicata and because the Cross-Complainants lack the legal
capacity to sue for property damage caused in the subject collision. In
particular, Cross-Defendant asserts that Delgado pursued a claim in small
claims court against him for bodily injury and property damage. In that claim,
Delgado and a nonparty, Maria Sanchez sought to recover $10,000 from
Cross-Defendant, which included the $1,000 property damage deductible.
Ultimately, the small claims court entered judgment on March 21, 2023 in
Cross-Defendant’s favor. Thus, because a prior action adjudicated Delgado’s
property claim, the cause of action for subrogation is barred.
OPPOSITION
In
Opposition, Cross-Complainants argue that the small claims action was filed
after this action was commenced, and that Plaintiff was aware of this fact.
Thus, there was an obligation to relate and consolidate these actions.
Regardless, the small claims action only concerned Delgado’s out of pocket
expenses for her personal injuries and deductible. It did not seek
reimbursement for the property damage that is now being claimed within the
cross-complaint. Ultimately, an insurance company has the right to subrogation
as part of its insurance policy.
REPLY
In Reply, Cross-Defendant
argues that Plaintiff was under no obligation to join or consolidate the small
claims action with the instant action. Also, even though the small claim only
sought recovery of the deductible, that fact is inconsequential because it is
tied to property damages. Thus, Delgado and Cross-Complainants are
impermissibly engaged in splitting the cause of action of subrogation. Thus,
the demurrer should be sustained without leave to amend.
ANALYSIS
I. Demurrer
A.
Meet and Confer Requirement
Prior to
filing a demurrer or a motion to strike, the demurring or moving party is
required to meet and confer with the party who filed the pleading demurred to
or the pleading that is subject to the motion to strike for the purposes of
determining whether an agreement can be reached through a filing of an amended
pleading that would resolve the objections to be raised in the demurrer. (CCP
§§ 430.41 and 435.5.)
On July 13, 2023, Cross-Defendant’s
counsel sent a meet and confer email regarding the basis for the instant
demurrer. See Nivinskus
Decl., ¶¶ 6-8, Exh. C. The parties were
unable to come to an agreement and Cross-Defendant moved forward with the
instant demurrer.
B. Legal Standard
A demurrer for sufficiency tests
whether the complaint states a cause of action. Hahn v. Mirda (2007) 147
Cal.App.4th 740, 747. When considering demurrers, courts read the
allegations liberally and in context. 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; Weil & Brown, Civ.
Pro. Before Trial (The Rutter Group 2011) ¶7:8. “A demurrer tests the pleadings
alone and not the evidence or other extrinsic matters. Therefore, it lies only
where the defects appear on the face of the pleading or are judicially noticed
(430.30, 430.70). The only issue involved in a demurrer hearing is whether the
complaint, as it stands, unconnected with extraneous matters, states a cause of
action.” Hahn 147 Cal.App.4th at 747.
A complaint will be upheld against a demurrer if it pleads facts
sufficient to place the defendant on notice of the issues sufficient to enable
the defendant to prepare a defense. Doe
v. City of Los Angeles (2007) 42 Cal.4th 531, 549-50. The same standard
applies to demurrer made toward an answer. A demurrer to an answer may be taken
to the whole answer or to any one or more of the several defenses set up in the
answer. (Code Civ. Proc., §§430.50(b).) The demurrer to the answer may object to
failure to state facts sufficient to constitute a defense or is uncertain. (Code
Civ. Proc., §§430.20.)
1. Third Cause of Action – Subrogation
Cross-Defendant demurs to Cross-Complainants’
Third Cause of Action for subrogation on the grounds that the doctrine of res
judicata applies and that Cross-Complainants are improperly engaged in claim
splitting.
“[T]he doctrine of res judicata
precludes parties or their privities from relitigating a cause of action that
has been finally determined by a court of competent jurisdiction.” Gamble v. General Foods Corp. (1991)
229 Cal.App.3d 893, 898. “The rule
against a plaintiff "splitting" a single cause of action so as to
make it the basis of several suits is, in part, an application of the doctrine
of res judicata.” Allstate Insurance
Company v. Mel Rapton, Inc. (2000) 77 Cal.App. 4th 901, 907. “The violation of one primary
right constitutes a single cause of action, though it may entitle the
injured party to many forms of relief . . . .” Wulfjen v. Dolton (1944) 24
Cal.2d 891, 895-896. “Ordinarily, it is
the duty of the insurer to protect its right to subrogation by not permitting
the splitting of a cause of action.” Allstate
Insurance Company v. Mel Rapton, Inc. (2000) 77 Cal.App.4th 901, 912.
Here, Cross-Defendant argues that
the subrogation claim is barred because Delgado previously filed an action in
small claims seeking to recover $10,000 against him on December 9, 2022, which
included damages for the property damage deductible, and judgment was entered
on March 21, 2023 in Cross-Defendant’s favor. Demurrer at pg. 3, Exhs.
A-B. Thus, because the cross-complaint
now seeks to recover payment Aspire made to its insured for their property
damage, including the deductible, Cross-Defendant argues that Cross-Defendants
are engaging in improper claim splitting to maximize their recovery. See Demurrer at pp. 5-6, relying on Allstate
Insurance Company, supra, 77 Cal.App.4th 901; see also Cross-Compl.
¶¶ 19-20.
In opposition, Cross-Complainants
argues that Aspire had no knowledge of Delgado’s small claim action in order to
intervene. However, this argument is not
persuasive because it was not the Cross-Defendant’s responsibility to inform
Aspire of its insured’s action. See
Allstate Insurance Company, supra, 77 Cal.App.4th at 914 (“If the
insurer is not aware of the insured's small claims action, it is not the
defendant's fault as it is not defendant's responsibility to protect the
insurer's subrogation rights and potential future action.”).
Next, Cross-Complainants argues
that Plaintiff was aware of the small claims action, and the instant action was
filed prior to Delgado’s small claims action.
Opposition at pg. 2. Thus, they
reason Plaintiff was responsible for filing a notice of joinder or notice to
consolidate. Ibid. In reply,
Plaintiff and Cross-Defendant do not dispute that they were aware of Delgado’s
small claims, but they assert that they were under no obligation to act. See Reply at pg. 2. This admission would have been fatal to
Cross-Defendant’s demurrer had Cross-Complainants filed their cross-complaint
prior to the small claims action and Cross-Defendant chose not to file a plea
in abatement. “[A] waiver generally
arises when the tortfeasor has been sued in two actions and could have avoided
the multiplicity of actions by bringing a plea in abatement in response to
the second action while the first action was pending.” See Allstate Insurance Company,
supra, 77 Cal.App.4th at 910.
Thus, Cross-Defendant did not waive his res judicata objection by
allowing the small claims action to proceed. Ultimately, it was Aspire’s burden
to protect its subrogation rights. See
Pacific Indemnity Group v. Dunton (1966) 243
Cal.App.2d 504, 508
Lastly, Cross-Complainants argue
that the damages Delgado sought in the small claims action are distinct from
those asserted in the cross-complaint. See
Opposition at pp. 3, 6. This argument is
not persuasive. “In determining
whether a cause of action has been split, the relief sought by the injured
party should not be confused with the cause of action. . . .” Allstate Insurance Company, supra,
77 Cal.App.4th at 908. The fact that Delgado sought property damages that were
less than the full amount of her damages is immaterial.
In terms of leave to amend,
Cross-Complainants have failed to meet their burden in showing how the defects
in their pleadings can be cured. The burden is on the plaintiff to show how the
complaint might be amended so as to cure the defect. Association of Community Organizations for
Reform Now v. Department of Industrial Relations (1995) 41 Cal.App.4th
298, 302. Therefore, Cross-Complainants are not entitled to leave to amend.
Accordingly, because the third
cause of action is barred by the doctrine of res judicata, Cross-Defendant’s
demurrer is SUSTAINED without leave to amend.
II. Conclusion
Based on the foregoing, Cross-Defendant’s Demurrer is
SUSTAINED as to the Third Cause of Action without leave to amend.
Cross-Defendant Anthony Jose Barela, Jr.'s Answer to the Cross-Complaint to be filed within 10-days.