Judge Lee S. Arian, Case Number: 22STCV29218, Date: 2023-11-16 Tentative Ruling

On September 8, 2022, Plaintiff Levon Erdoglyan filed this action on a Judicial Council form against Defendants Silver Lake Brewery, Inc. (“SLB”), Plotke Plumbing (“Plotke”), Inc., Martin Bros. Plumbing and Sewer Inc. (“Martin Bros.”), which arises from damage to Plaintiff’s property. Plaintiff later amended the Complaint to name Hambarsoon O. Gharibian (“Gharibian”) as Doe 1. Plaintiff asserts one cause of action for General Negligence against all defendants.

On May 12, 2023, SLB and Gharibian filed a demurrer. On July 13, 2023, the Court overruled the demurrer as to SLB and sustained the demurrer as to Gharibian and granted leave to amend. (07/13/2023 Minute Order.)

On September 8, 2023, Plaintiff filed its First Amended Complaint (“FAC”) on a Judicial Council form against SLB, Plotke, Martin Bros., alleging causes of action for general negligence. Plaintiff amended the complaint to name American Contractors Indemnity Company (“ACIC”) as Doe 11. On October 18, 2023, ACIC filed this demurrer and motion to strike. On November 2, 2023, Plaintiff filed an opposition. On November 8, 2023, ACIC filed a reply.

ACIC requests that the Court take judicial notice of the July 13, 2023, Minute Order, September 8, 2022 complaint, August 8, 2023 FAC, and License History for Martin Bros.

The party against whom a complaint has been filed may object to the pleading, by demurrer, on several grounds, including the ground that the pleading does not state facts sufficient to constitute a cause of action, or that the pleading is uncertain. (Code Civ. Proc. §§ 430.10(e), (f).) For purposes of demurrer, “uncertain” includes the meanings “ambiguous and unintelligible.” (Id. at (f).)

“A demurrer tests the sufficiency of the complaint as a matter of law; as such, it raises only a question of law.” (Osornio v. Weingarten (2004) 124 Cal.App.4th 304, 316.) No matter how unlikely or improbable, the complainant’s allegations must be accepted as true for the purpose of ruling on the demurrer. (Del E. Webb Corp. v. Structural Materials Co. (1981) 123 Cal.App.3d 593, 604.) However, the Court does not need to assume the truth of “contentions, deductions or conclusions of law.” (Aubry v. Tri-City Hospital Dist. (1992) 2 Cal.4th 962, 967.)

Each evidentiary fact that might eventually form part of the plaintiff's proof need not be alleged. (C.A. v. William S. Hart Union High School Dist. (2012) 53 C4th 861, 872.) The complaint should be liberally, but reasonably construed. (Fisher v. San Pedro Peninsula Hospital (1989) 214 Cal.App.3d 590, 604.) It must be read as a whole, and its parts in their context to give the complaint a reasonable interpretation. (Estate of Holdaway (2019) 40 Cal.App.5th 1049, 1053.)

A demurrer tests the pleadings alone and not the evidence or other extrinsic matters. (SKF Farms v. Superior Court (1984) 153 Cal. App. 3d 902, 905.)

Before filing a demurrer, 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. (Code Civ. Proc., § 430.41.)

On September 13, 2023, ACIC’s counsel sent an email to Plaintiff’s counsel to meet and confer regarding ACIC’s grounds for a demurrer and motion to strike and intent to file a declaration in support of Defendant’s efforts to avoid demurrer. (Kim Decl. ¶4.) Counsel called and left a voicemail with Plaintiff’s counsel to meet and confer on September 15, 2023. (Id. at ¶5.) On September 15, 2023, ACIC’s counsel filed her declaration providing ACIC until October 18, 2023, to respond to Plaintiff’s FAC. On September 29, 2023, Plaintiff’s counsel met and conferred with ACIC’s counsel by telephone but could not reach an agreement to resolve ACIC’s objections. (Id. at ¶ 7.) On October 17, 2023, ACIC’s counsel emailed Plaintiff’s counsel that they could not reach an agreement. (Id. at ¶8.) Accordingly, ACIC’s counsel’s meet and confer efforts are sufficient and the motion to strike is accompanied by a meet and confer declaration.

ACIC demurs on the basis that the FAC fails to state facts sufficient to constitute a cause of action for negligence and fails to state a cause of action against ACIC.

“The elements of a cause of action for negligence are well established. They are (a) a legal duty to use due care; (b) a breach of such legal duty; and (c) the breach as the proximate or legal cause of the resulting injury.” (Ladd v. County of San Mateo (1996) 12 Cal.4th 913, 917; CACI No. 400.) (Quotations omitted.)

“A surety or guarantor is one who promises to answer for the debt, default, or miscarriage of another, or hypothecates property as security therefore.’ (Civ. Code, § 2787.) A surety bond is a ‘“written instrument executed by the principal and surety in which the surety agrees to answer for the debt, default, or miscarriage of the principal.” (Butterfield v. Northwestern National Ins. Co. (1980) 100 Cal.App.3d 974, 978.) The risk of loss remains with the principal while the surety lends its credit in the situation that the principal defaults. (Schmitt v. Insurance Co. of North America (1991) 230 Cal.App.3d 245,257.) Absent a default, the surety has no obligation. (Ibid.)

ACIC argues that Plaintiff fails to allege that ACIC owed a legal duty, breached a duty, or their breach caused damages. ACIC disputes that Plaintiff is entitled to recover the statutory bond issued by ACIC to Martin Bros. since the FAC fails to state a cause of action for recovery on the bond. Furthermore, ACIC asserts that the FAC fails to state a cause of action against them because there are no allegations of willful violations or allegations of fraud by Martin Bros. in the execution or performance of a construction contract.

In opposition, Plaintiff argues that the FAC sets forth facts showing that Martin Bros committed negligence by replacing the existing chimney connection with the wrong fitting and cutting off Plaintiff’s access to the main sewer. Plaintiff asserts that it made a valid claim for relief under California Bus. & Prof. Code section 7071.6. Should the Court be inclined to sustain Defendants’ demurrer, Plaintiff requests leave to amend the operative complaint.

In reply, ACIC asserts that leave to amend should not be granted since there are no facts supporting the allegation that ACIC is an agent, servant, and/or employee of the co-defendants. ACIC disputes that Plaintiff can add a new cause of action against the surety for recovery of Martin Bros.’s bond issued by ACIC without seeking leave. ACIC further argues that Plaintiff confuses the purpose of the bond and Plaintiff fails to allege facts for seeking recovery against the bond. ACIC reiterates that Plaintiff fails to state a cause of action against the surety.

Here, Plaintiff states that “Plotke and Martin Bros improperly and negligently cut off Plaintiff’s access to the sewer by cutting off Plaintiff’s sewer line and replacing the existing chimney connection with the wrong fitting. (FAC, at p. 4.) As to ACIC, Plaintiff only alleges that he is “entitled to recover the statutory bond issued by American Contractors Indemnity Company to Martin Brosnder under CA Bus & Prof. Code 7071.6, due to Martin Bros’ willful or deliberate violations of CA Bus & Prof. Code 7109, 7110 et seq.” (Id.) The FAC states a cause of action for negligence against Martin Bros. but does not plead the elements of negligence as to ACIC. The Court acknowledges that Plaintiff is also a surety. As such, the Court finds that Plaintiff fails to state a cause of action for negligence against ACIC. Thus, Defendant’s demurrer to the first cause of action is sustained without leave to amend.

Although Plaintiff asserts that he is entitled to the recovery of the surety bond under Bus. & Prof. Code section 7071.6, Plaintiff has not filed a separate cause of action for this claim against ACIC. Plaintiff fails to allege that Martin Bros. defaulted on its debt, or ACIC issued a surety bond promising to answer for the debt of Martin Bros. As a result, Plaintiff fails to plead that ACIC has an obligation to Plaintiff.

Plaintiff further fails to allege any facts demonstrating that Plaintiff is a beneficiary and entitled to recover the statutory bond issued by ACIC to Martin Bros. The complaint does not allege any willful or deliberate violations and fails to allege fraud. The elements of fraud, which give rise to the tort action for deceit, are (a) misrepresentation (false representation, concealment, or nondisclosure); (b) knowledge of falsity (or “scienter”); (c) intent to defraud, i.e., to induce reliance; (d) justifiable reliance; and (e) resulting damage.” (Citation omitted.) Each such element must be alleged with particularity.” (Golden Eagle Land Investment, L.P. v. Rancho Santa Fe Assn. (2018) 19 Cal.App.5th 399, 428). Plaintiff’s FAC is not pled with specificity to allege fraud. Plaintiff must seek leave to amend from the Court to allege a cause of action under Bus. & Prof. Code sections §§ 7071.6, 7109, 7110. Given that Plaintiff has made a request in his reply for leave to amend the operative complaint, the Court is inclined to grant leave to amend as to the operative complaint.

ACIC moves to strike the following portions of Plaintiff’s FAC: “As a result, Plaintiff is entitled to recover the statutory bond issued by American Contractors Indemnity Company to Martin Brosnder under CA. Bus & Code 7071.6, due to Martin Bros’ willful or deliberate violations of CA Bus & Prof. Code 7109, 7110, et seq.”

Since the Court has granted Plaintiff leave to amend the operative complaint, the motion to strike is moot.

Defendant’s demurrer to the first cause of action is SUSTAINED without leave to amend. Plaintiff is GRANTED leave to amend the operative complaint to allege a cause of action under Bus. & Prof. Code sections §§ 7071.6, 7109, 7110. The motion to strike is denied as moot.

Parties who intend to submit on this tentative must send an email to the Court at SSCDEPT27@lacourt.org indicating intention to submit on the tentative as directed by the instructions provided on the court website at www.lacourt.org. Please be advised that if you submit on the tentative and elect not to appear at the hearing, the opposing party may nevertheless appear at the hearing and argue the matter. Unless you receive a submission from all other parties in the matter, you should assume that others might appear at the hearing to argue. If the Court does not receive emails from the parties indicating submission on this tentative ruling and there are no appearances at the hearing, the Court may, at its discretion, adopt the tentative as the final order or place the motion off calendar.

Hon. Lee S. Arian

Judge of the Superior Court