Judge: Mark A. Young, Case: 23SMCV03405, Date: 2024-04-24 Tentative Ruling

Case Number: 23SMCV03405    Hearing Date: April 24, 2024    Dept: M

CASE NAME:           Breslow, et al., v. Westland Contracting Inc., et al.

CASE NO.:                23SMCV03405

MOTION:                  Demurrer to the Cross-Complaint

HEARING DATE:   4/24/2024

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. (CCP §§ 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.)

            A special demurrer for uncertainty is disfavored and will only be sustained where the pleading is so bad that defendant cannot reasonably respond—i.e., cannot reasonably determine what issues must be admitted or denied, or what counts or claims are directed against him/her. (CCP § 430.10(f); Khoury v. Maly’s of Calif., Inc. (1993) 14 Cal.App.4th 612, 616.) Moreover, even if the pleading is somewhat vague, “ambiguities can be clarified under modern discovery procedures.” (Ibid.)

            “Liberality in permitting amendment is the rule, if a fair opportunity to correct any defect has not been given.” (Angie M. v. Superior Court (1995) 37 Cal.App.4th 1217, 1227.) It is an abuse of discretion for the court to deny leave to amend where there is any reasonable possibility that plaintiff can state a good cause of action. (Goodman v. Kennedy (1976) 18 Cal.3d 335, 349.) The burden is on plaintiff to show in what manner plaintiff can amend the complaint, and how that amendment will change the legal effect of the pleading. (Id.)

Analysis

Defendant/Cross-Defendant Windows N’ Things Corp. (“WNT”) demurs to the fourth, fifth, seventh, eighth and ninth causes of action of the Cross-Complaint filed by Defendant/Cross-Complainant Westland Contracting Inc. In response, Westland filed a request for dismissal as to the fourth, fifth, seventh, and eighth causes of action. This leaves only the ninth cause of action for declaratory relief re: duty to indemnify.

            Code of Civil Procedure section 1060 provides that a person may bring an action for declaratory relief if he or she “desires a declaration of his or her rights or duties with respect to another, or in respect to, in, over or upon property . . ..” To state a declaratory relief claim, the plaintiff must allege a proper subject of declaratory relief and an actual controversy involving justiciable questions relating to the party’s rights or obligations. (Jolley v. Chase Home Finance, LLC (2013) 213 Cal.App.4th 872, 909.)

In general, indemnity refers to “the obligation resting on one party to make good a loss or damage another party has incurred.” (Rossmoor Sanitation, Inc. v. Pylon, Inc. (1975) 13 Cal.3d 622, 628.) Historically, the obligation of indemnity took three forms: (1) indemnity expressly provided for by contract (express indemnity); (2) indemnity implied from a contract not specifically mentioning indemnity (implied contractual indemnity); and (3) indemnity arising from the equities of particular circumstances (traditional equitable indemnity). (Ibid.; see PPG Industries, Inc. v. Transamerica Ins. Co. (1999) 20 Cal.4th 310, 318.) Although the foregoing categories of indemnity were once regarded as distinct, California courts now recognize only two basic types of indemnity: express indemnity and equitable indemnity. (See Bay Development, Ltd. v. Superior Court (1990) 50 Cal.3d 1012, 1029–1030, fn. 10.) Though not extinguished, implied contractual indemnity is now viewed simply as “a form of equitable indemnity.” (Id. at 1029; see E.L. White, Inc. v. City of Huntington Beach (1978) 21 Cal.3d 497, 506–507.)  

The elements of a cause of action for indemnity are: (1) a showing of fault on the part of the indemnitor and (2) resulting damages to the indemnitee for which the indemnitor is contractually or equitably responsible. (Great Western Drywall, Inc. v. Interstate Fire & Gas Co. (2008) 161 Cal.App.4th 1033, 1041.) In order for the doctrine of equitable indemnity to apply, there must be some basis for tort liability against the proposed indemnitor, which generally is based on a duty owed to the underlying plaintiff; although vicarious liability, strict liability, and implied contractual indemnity between the indemnitor and the indemnitee can provide a basis for equitable indemnity. (BFGC Architects Planners, Inc. v. Forcum/Mackey Construction, Inc. (2004) 119 Cal.App.4th 848, 852 [equitable indemnity “applies only among defendants who are jointly and severally liable to the plaintiff.”].) Unless the prospective indemnitor and indemnitee are jointly and severally liable to the plaintiff there is no basis for indemnity. (Columbus Line Inc. v. Gray Line Sight-Seeing Companies Associated Inc. (1981) 120 Cal.App.2d 622, 628.) 

Westland alleges a duty to indemnify against WNT regarding liability for Plaintiff’s complaint, arising from both equity and contract. (CC ¶¶ 10-13; 15-18, 61-63.) “Under the indemnity agreement identified above and as contained in the written contracts[], the Cross-Defendants… are obligated to indemnify Cross-Complainant from all liability, loss, or damage in this action relating to matters embraced by the indemnity and arising out of the scope of work of the Cross-Defendants[.]” (CC ¶ 61.) A dispute has arisen and an actual controversy now exists between Cross-Complainant and the Cross-Defendants. Cross-Complainant contends that it is entitled to indemnity from the Cross-Defendants and Cross-Defendants deny such entitlement. (CC ¶62.)

The allegations state a cause of action for declaratory relief based on equity and an implied contract term. “In general, if a complaint for declaratory relief alleges the existence of an actual controversy . . . , the court should not sustain a general demurrer on the theory that any declaration would necessarily be adverse to the plaintiff.” (See Teachers Management & Investment Cop. v. City of Santa Cruz (1976) 64 Cal.App.3d 438, 449 [only where it is “clear that the order sustaining the demurrer amounted to a correct decision on the legal merits of the case, a reversal is not required instead, the appellate court may simply modify the judgment so as to declare that plaintiff was entitled to no relief”].) As the cross-complaint states a claim for implied contractual indemnity, the Court cannot say that Plaintiff is entitled to a negative declaration as a matter of law. (CC ¶¶14-18.) Further, because such a cause of action is rooted in equity and implied terms, rather than express terms, it would be difficult to apply the pleading standard for written contracts cited by Cross-Defendants. Moreover, Cross-Complainants plead the legal effect of the contract, and that is all that is required. (See Construction Protective Services, Inc. v. TIG Specialty Insurance Co. (2002) 29 Cal.4th 189, 198-99 [“[i]n an action based on a written contract, a plaintiff may plead the legal effect of the contract rather than its precise language”].)

Accordingly, the demurrer is OVERRULED.

WNT to file an answer within 20 days.