Judge: Lee W. Tsao, Case: 23NWCV01150, Date: 2023-11-07 Tentative Ruling
Case Number: 23NWCV01150 Hearing Date: November 7, 2023 Dept: C
NCP Imperial, LLC, et al. vs Los
Angeles County Flood Control District
NO.: 23NWCV01150
HEARING:
11/07/23
#8
TENTATIVE
ORDER
Defendant’s
demurrer is SUSTAINED, without leave to
amend.
Moving party to give notice.
Background
The basis of Plaintiffs’ title
to the Subject Property is that certain Grant Deed recorded on February 7,
2018, as Document No. 20180126396, Official Records of the Los Angeles County
Recorder’s Office. Plaintiffs seek a judgment of this Court determining that as
of the date of entry of judgment in this action, District holds no overflow
easement or other legal right to use any part of the Subject Property, and
quieting Plaintiffs’ title to the Subject Property as against any adverse
claims of District.
On April 14, 2023, Plaintiffs
NCP Imperial, LLC and Family Property Holdings, LLC (collectively “Plaintiffs”)
filed a Complaint against Los Angeles County Flood Control District
(“Defendant”) alleging two causes of action for (1) Quiet Title and (2) Declaratory
Relief.
On June 26, 2023, Defendant
filed the instant demurrer on the grounds that the first and second causes of
action and the Complaint fail to state facts sufficient to constitute a cause
of action against the District, under the doctrine of res judicata.
Judicial Notice
Defendant requests the Court
take judicial notice the existence and content of the “Stipulation By
Plaintiffs And Defendant Los Angeles County Flood Control District To Entry Of
Judgment To Facilitate Appeal”, filed on December 8, 2022, in Los Angeles
Superior Court Case No. 21STCV37773, entitled NCP Imperial, LLC, a California
Limited Liability Company and Family Property Holdings, LLC, a California
Limited Liability Company, Plaintiffs, vs. Los Angeles County Flood Control
District; California Department Of State Hospitals; and DOES 1 through 25,
inclusive, Defendants.
The Court grants the request
under California Evidence Code Section 452(d).
Meet and Confer
A
party filing a demurrer “shall meet and confer in person or by telephone with the
party who filed the pleading that is subject to demurrer for the purpose of
determining whether an agreement can be reached that would resolve the
objections to be raised in the demurrer.” (Code Civ. Proc., section 430.41(a).)
“The parties shall meet and confer at least five days before the date the
responsive pleading is due. If the parties are not able to meet and confer at
least five days prior to the date the responsive pleading is due, the demurring
party shall be granted an automatic 30-day extension of time within which to
file a responsive pleading, by filing and serving, on or before the date on
which a demurrer would be due, a declaration stating under penalty of perjury
that a good faith attempt to meet and confer was made and explaining the
reasons why the parties could not meet and confer.” (Code Civ. Proc., section
430.41(a)(2).) A failure to meet and confer does not constitute grounds to
sustain or overrule a demurrer. (See Code Civ. Proc., sections 430.41 (a)(4).)
Defense counsel engaged in
meet and confer efforts with Plaintiffs’ counsel on May 18, 2023, and again on
June 13, 2023. (Richard Decl., ¶¶ 8, 9; Exhibit G, H.)
Demurrer
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.) “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. (Code Civ. Proc., §§ 430.30, 430.70.) At the pleading
stage, a plaintiff need only allege ultimate facts sufficient to apprise the
defendant of the factual basis for the claim against him. (Semole v. Sansoucie (1972) 28 Cal. App. 3d 714, 721.) A “demurrer does
not, however, admit contentions, deductions or conclusions of fact or law
alleged in the pleading, or the construction of instruments pleaded, or facts
impossible in law.” (S. Shore Land Co. v. Petersen (1964) 226
Cal.App.2d 725, 732 (internal citations omitted).)
Discussion
i.
Defendant’s Moving Arguments
Defendant offers that on
October 13, 2021, NCP Imperial filed its original complaint and on April 15,
2022, NCP Imperial filed a First Amended Complaint (“FAC”) against the Los
Angeles County Flood Control District alleging that a large drainage pipe
prevented NCP Imperial’s hoped-for development of the property. (See Request
for Judicial Notice (“RJN”), Exhibit 1, attached as Exhibit A to the
Declaration of Patrick J. Richard.) That alleged inability to develop the
property in the manner it desired was the “wrong” or injury NCP Imperial’s
litigation sought to address in its suit for damages. In particular, NCP
Imperial’s first action specifically alleged “Plaintiffs are the fee owners of
certain real property located at 12501 Imperial Highway, Norwalk.” The FAC in
the first action also alleged that the 1976 conveyance by the State to IBM “did
not reserve to the State any interest (including an easement interest) in and
to the 78” RCP located within the Subject Property.” (FAC, ¶ 14.)
Defendant argues that the previous
court determined that NCP Imperial’s inverse condemnation claim had no merit. A
key element of the claim was missing, namely, ownership at the time of the
alleged taking. The trial court, determining that not all of the elements had
been properly pled, sustained the Flood Control District’s demurrer, and
dismissed the action. (RJN, Exh. 2, 10/7/2022 Notice of Ruling, Richard Decl.,
Exh. B.) The court served notice of entry of Judgment on December 12, 2022.
(RJN, Exh 3, Richard Decl., Exh. C, 12-12-2022 Notice of Entry of Judgment.)
The Judgment is now final because the Court of Appeal issued its Notice of
Dismissal on June 14, 2022. (RJN, Exh. 5, Richard Decl., Exh. E.)
Defendant shows that on
February 3, 2022, NCP Imperial appealed the judgment. While the appeal was pending, Plaintiffs
filed a second lawsuit alleging what Defendant stated was nearly identical
allegations that in the 1976 conveyance “the State did not reserve any
rights—for an easement or otherwise—relating to the portion of the 78” RCP
located upon the subject property.” Instead of seeking damages, however, Plaintiffs
seek a declaration of ownership. (Quiet Title Complaint, ¶ 8.) NCP Imperial
alleges that the same drainage pipe caused the same harm, again alleging it
“creates severe hardship upon Plaintiffs because it interferes with Plaintiffs’
efforts to redevelop the Subject Property.” (Quiet Title Complaint, ¶ 14.) When
counsel for the Flood Control District pointed out, during meet and confer,
that the present lawsuit was barred by the doctrine of claim-splitting and
requested that the action be stayed or dismissed pending appeal of the first
action, NCP Imperial dismissed the appeal in the first lawsuit. (Richard Decl.,
¶¶ 8-9.) Defendant then notified Plaintiffs that res judicata barred the filing
of the second lawsuit.
ii.
Plaintiffs’ Opposition
Plaintiff opposes the demur
based on the fact that: (1) the Court may judicially notice res judicata does
not apply in this case because the prior judgment in the inverse condemnation
action was not on the merits; (2) res judicata also does not apply because
causes of action for inverse condemnation and quiet title/declaratory relief
involve different primary rights; (3) the res judicata doctrine has been held
inapplicable where, as here, it would promote injustice and fundamental
unfairness.
Plaintiff further argues that
the inverse condemnation action never got past the threshold issue of whether
Plaintiffs had standing to prosecute that claim. After the court sustained the
demurrer of Defendant California Department of State Hospitals (DSH) in that
action without leave to amend, based solely on the standing issue, (See
Declaration of Patrick Richard filed in support of the present demurrer
(Richard Declaration), Exhibit B), Defendant LACFCD entered into a stipulation
for entry of judgment with Plaintiffs (Stipulation for Entry of Judgment) to
facilitate and expedite an appeal solely on the standing issue. Defendants
argue that here, in contrast, the substantive issue of whether Defendant LACFCD
holds an easement upon Plaintiffs’ property in Norwalk was never addressed or
adjudicated by the court in the inverse condemnation action.
iii.
Defendant’s Reply
Defendant argues that
Plaintiff conceded that res judicata was applicable here. Defendant also maintains that the claims are
based on the same alleged wrong and therefore involve the same primary right.
Because the prior demurrer was based on the absence of facts supporting an
element of the dismissed claim, the ruling was “on the merits” for purposes of
res judicata. (Boccardo v. Safeway (1982) 134 Cal. App. 3d 1037, 1042.)
Analysis
"Res judicata"
describes the preclusive effect of a final judgment on the merits. Res
judicata, or claim preclusion, prevents relitigation of the same cause of
action in a second suit between the same parties or parties in privity with
them. (Mycogen v Monsanto (2002) 28 Cal. 4th 888, 896 [second suit for
damages barred by earlier suit for specific performance arising out of the same
contract].) “A clear and predictable res judicata doctrine promotes judicial
economy. Under this doctrine, all claims based on the same cause of action must
be decided in a single suit; if not brought initially, they may not be raised
at a later date.” (Id. at
897.) “A final judgment on the merits between parties who in law are the same
operates as a bar to a subsequent action upon the same cause of action,
settling not only every issue that was raised, but also every issue that might
have been raised in the first action." (Roybal Olwell v. Hopkins
(1946) 28 Cal.2d 147, 152 (emphasis added).)"'Res judicata precludes
piecemeal litigation by splitting a single cause of action or relitigation of
the same cause of action on a different legal theory or for different
relief.'" (Weikel v. TCW Realty Fund II Holding Co., (1997) 55
Cal.App.4th 1234, 1245.) T
Defendants argue the Judgment
entered on December 8, 2022, became final on or about June 14, 2023 when the
Court of Appeal issued its dismissal and remittitur. Although a judgment is not
sufficiently final for preclusive effect while on appeal, once the appeal is
dismissed, the judgment becomes sufficiently final for purposes of res
judicata. (Sandoval v. Superior Court (1983) 140 Cal. App. 3d 932,
936-937.) The prior action bars not just issues actually litigated, but also
bars claims that could have been brought in the prior action. (Mycogen v.
Monsanto, supra, 28 Cal. 4th at 897.)
Here, Plaintiffs dispute res
judicata should be given to the prior judgment because Plaintiffs alleged only
a claim for inverse condemnation seeking damages, and the claims it alleges in
this second action seek only non-monetary relief (quiet title and declaratory
relief). (Richard Decl., ¶ 9.) However, both suits are between the same parties
and are regarding the same alleged drainage pipe and alleging the same injury.
A party cannot avoid res judicata by alleging claims with “a different legal
theory or for different relief.” (Weikel v. TCW Realty Fund II Holding Co.,
supra, 55 Cal.App.4th at 1245.)
Plaintiffs contend the primary
right theory is unnecessary here, as Plaintiffs have already established above
that Defendant LACFCD’s demurrer is groundless because the Stipulated Judgment
in the inverse condemnation was not “on the merits.”
For the purposes of res
judicata, "the judgment is on the merits if it is based on the substantive
law, and determines that the plaintiff has no cause of action.” (Boccardo v.
Safeway (1982) 134 Cal. App. 3d 1037, 1042.) Ownership is an element of
claim for inverse condemnation under California law. (City of Los Angeles v.
Ricards (1973) 10 Cal.3d 385, 389.) In the demurrer in the prior action,
Defendants expressly argued that Plaintiffs First Amended Complaint failed to
allege an essential element of the claim. “[I]n an inverse condemnation action,
the property owner must first clear the hurdle of establishing that the public
entity has, in fact, taken [or damaged] his or her property before he or she
can reach the issue of ‘just compensation.’” (Oliver v. AT&T Wireless
Service (1999) 76 Cal.App.4th 521, 529-530 [brackets in original].)
Property is “taken or damaged” when: (1) it has been physically invaded; (2) it
has been physically damaged; or (3) an intangible intrusion has placed a direct
and substantial burden that is peculiar to the property at issue. (Id. at 530.) In the action giving rise
to the prior judgment, Plaintiffs only alleged diminution in value due to a
preexisting drain project; they did not allege facts supporting the essential
element of a “taking.” (FAC ¶¶35; 37.) Because the prior demurrer was based on
the absence of facts supporting an element of the dismissed claim, the ruling
was “on the merits” for purposes of res judicata. (Boccardo, supra, 134
Cal. App. 3d at 1042.)
Plaintiffs argue that since
the ruling was based on an issue of standing, the decision was not decided on
the merits. However, here, the earlier
ruling was on the merits because the Plaintiffs failed to allege an essential
element of the claim, as noted above.
Plaintiffs then argue that res
judicata cannot apply where it promote fundamental unfairness. Plaintiffs cite Bostick
v. Flex Equipment, Inc. (2007) 147 Cal.App. 4th 80. However, the Court in Bostick
made the ruling based on the fact that two co-defendants had not settled their
claims against one another and thus, in fairness, res judicata did not
apply. Here, it is the same parties with
claims that have already been adjudicated, therefore the fairness contention
does not have merit.
Accordingly,
Plaintiffs fail to contest the central point of this demurrer: Plaintiffs could
have included the equitable claims now raised, but they did not. Instead,
Plaintiffs pursued a claim for damages, lost the claim, appealed the claim, and
then dismissed the claim. California law precludes such actions. A party may
not bring claims for damages and then, having lost the claim, filing a separate
suit seeking equitable relief.
Conclusion
Defendants demur is
SUSTAINED. The Court is not persuaded
that leave would allow Plaintiffs to cure their deficiencies in the Complaint,
therefore the demur is sustained without leave to amend.
Moving party to give notice.