Judge: Martha K. Gooding, Case: 2021-01180848, Date: 2022-08-29 Tentative Ruling
1) Demurrer to the Amended Complaint
2) Case Management Conference
The general and special demurrer by Cross-Defendant Catholic Charities of Orange County, Inc. (“Catholic Charities”) to the Second Amended Cross-Complaint (“SACC”) filed by Defendant/Cross-Defendant/Cross-Complainant Friendly Center, Inc. (“Friendly Center”) is SUSTAINED as to the seventh cause of action for declaratory relief; in all other respects, it is OVERRULED.
Catholic Charities demurs generally to the first cause of action for breach of contract, second cause of action for implied contractual indemnity, third cause of action for express contractual indemnity and fifth cause of action for equitable contribution in Friendly Center’s SACC. Catholic Charities demurs generally and specially to the fourth cause of action for equitable indemnity, sixth cause of action for third party tort of another, and seventh cause of action for declaratory relief alleged in Friendly Center’s SACC.
Catholic Charities’ unopposed requests for the Court to take judicial notice of certain documents filed in this action are granted. (Evid. Code, § 452, subd. (d).) As a general matter, however, the Court may not take judicial notice of the truth of the matters stated in the documents. (Richtek USA, Inc. v. uPI Semiconductor Corp. (2015) 242 Cal.App.4th 651, 659-660.)
First cause of action for breach of contract
“[T]he elements of a cause of action for breach of contract are (1) the existence of the contract, (2) plaintiff’s performance or excuse for nonperformance, (3) defendant’s breach, and (4) the resulting damages to the plaintiff.” (Oasis West Realty, LLC v. Goldman (2011) 51 Cal.4th 811, 821.)
“The general measure of damages for a breach of the duty to defend an insured, even if it is ultimately determined there is no coverage under the policy, are the costs and attorney fees expended by the insured defending the underlying action…Where the policy provides coverage for the claim and, as occurred in this case, the insured settles the underlying action, an insured may also recover from the insurer the amount of any reasonable, good faith settlement.” (Emerald Bay Community Assn. v. Golden Eagle Ins. Corp. (2005) 130 Cal.App.4th 1078, 1088-1089.)
Friendly Center alleged sufficient facts to support this first cause of action. Accordingly, the demurrer to this cause of action is overruled.
Second cause of action for implied contractual indemnity AND third cause of action for express contractual liability
“Indemnity may be defined as the obligation resting on one party to make good a loss or damage another party has incurred.” (Smoketree-Lake Murray, Ltd. v. Mills Concrete Construction Co. (1991) 234 Cal.App.3d 1724, 1734 [internal citations omitted].)
The obligation of indemnity may arise “from either of two general sources. First, it may arise by virtue of express contractual language establishing a duty in one party to save another harmless upon the occurrence of specified circumstances. Second, it may find its source in equitable considerations brought into play either by contractual language not specifically dealing with indemnification or by the equities of the particular case.” (E. L. White, Inc. v. City of Huntington Beach (1978) 21 Cal.3d 497, 506-507.)
Implied contractual indemnity is a form of equitable indemnity. (Smoketree-Lake Murray, Ltd. v. Mills Concrete Construction Co., 234 Cal.App.3d at 1736.
“[U]nless the parties’ agreement expressly provides otherwise, a contractual indemnitor has the obligation, upon proper tender by the indemnitee, to accept and assume the indemnitee’s active defense against claims encompassed by the indemnity provision. Where the indemnitor has breached this obligation, an indemnitee who was thereby forced, against its wishes, to defend itself is entitled to reimbursement of the costs of doing so.” (Crawford v. Weather Shield Mfg., Inc. (2008) 44 Cal.4th 541, 555.)
Friendly Center alleged sufficient facts to state both of these causes of action. Accordingly, the demurrer to these two causes of action is overruled.
Fourth cause of action for equitable indemnity
“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 & Casualty Co. (2008) 161 Cal.App.4th 1033, 1041, citing Expressions at Rancho Niguel Ass'n v. Ahmanson Developments, Inc. (2001) 86 Cal.App.4th 1135, 1139 [emphasis original].) “The right to indemnity flows from payment of a joint legal obligation on another’s behalf.” (Great Western Drywall, Inc. v. Interstate Fire & Casualty Co., 161 Cal.App.4th at 1041.) “Joint and several liability is a prerequisite for equitable indemnity.” (Leko v. Cornerstone Building Inspection Service (2001) 86 Cal.App.4th 1109, 1115.)
Friendly Center alleged sufficient facts to state this cause of action. Accordingly, the demurrer to this cause of action is overruled.
Fifth cause of action for equitable contribution
Equitable contribution “is the right to recover, not from the party primarily liable for the loss, but from a co-obligor who shares such liability with the party seeking contribution.” (Fireman’s Fund Ins. Co. v. Maryland Cas. Co. (1998) 65 Cal.App.4th 1279, 1293.)
Friendly Center alleged sufficient facts to state this cause of action. Accordingly, the demurrer to this cause of action is overruled.
Sixth cause of action for third party tort of another
The tort of another doctrine is an exception to the general rule is that “[i]n the absence of some special agreement, statutory provision, or exceptional circumstances, attorney’s fees are to be paid by the party employing the attorney.” (Prentice v. North Am. Title Guaranty Corp., Alameda Division (1963) 59 Cal.2d 618, 620.) The tort of another doctrine allows a person “who through the tort of another has been required to act in the protection of his interests by bringing or defending an action against a third person is entitled to recover compensation for the reasonably necessary loss of time, attorney’s fees, and other expenditures thereby suffered or incurred.” (Id.)
Friendly Center alleged sufficient facts to state this cause of action. Accordingly, the demurrer to this cause of action is overruled.
Seventh cause of action for declaratory relief
Pursuant to Code of Civil Procedure section 1060, any person “interested under a written instrument, excluding a will or a trust, or under a contract, or who desires a declaration of his or her rights or duties with respect to another, or in respect to, in, over or upon property, or with respect to the location of the natural channel of a watercourse, may, in cases of actual controversy relating to the legal rights and duties of the respective parties, bring an original action or cross-complaint in the superior court for a declaration of his or her rights and duties in the premises, including a determination of any question of construction or validity arising under the instrument or contract.”
To state a cause of action for declaratory relief, Plaintiff must allege: (1) a proper subject of declaratory relief, and (2) an actual controversy involving justiciable questions relating to the party’s rights or obligations. (Wilson & Wilson v. City Council of Redwood City (2011) 191 Cal.App.4th 1559, 1582.)
“The purpose of a judicial declaration of rights in advance of an actual tortious incident is to enable the parties to shape their conduct so as to avoid a breach. ‘[D]eclaratory procedure operates prospectively, and not merely for the redress of past wrongs. It serves to set controversies at rest before they lead to repudiation of obligations, invasion of rights or commission of wrongs; in short, the remedy is to be used in the interests of preventive justice, to declare rights rather than execute them.’” (Babb v. Superior Court (1971) 3 Cal.3d 841, 848; see, Osseous Technologies of America, Inc. v. DiscoveryOrtho Partners LLC (2010) 191 Cal.App.4th 357, 366, citing 5 Witkin, Cal. Procedure (5th ed. 2008) Pleading, § 869 [There is no basis for declaratory relief where only past wrongs are involved. Where there is an accrued cause of action for an actual breach of contract or other wrongful act, declaratory relief may be denied.].)
This cause of action is entirely duplicative of the above causes of action for breach of contract, indemnity, and contribution. (See Ochs v. PacifiCare of California (2004) 115 Cal.App.4th 782, 794.)
In addition, this cause of action seeks to address alleged misconduct in the past, and not to address prospective behavior.
Accordingly, the demurrer to this cause of action is sustained.
The Court is inclined to sustain the demurrer to the seventh cause of action without leave to amend, but will hear argument at the hearing regarding (1) whether Cross-Complainant wishes to have leave to amend this cause of action; and (2) if so, what specific facts Cross-Complainant believes it could allege in an amended pleading that would state a proper claim for declaratory relief.
Uncertainty
A demurrer for uncertainty is strictly construed, even where a complaint is in some respects uncertain, because ambiguities can be clarified under modern discovery procedures.” (Khoury v. Maly’s of California, Inc. (1993) 14 Cal.App.4th 612, 616.) Errors and confusion created by “the inept pleader” are to be forgiven if the pleading contains sufficient facts entitling plaintiff to relief. (Saunders v. Cariss (1990) 224 Cal.App.3d 905, 908.) A demurrer for uncertainty should be overruled if the facts are presumptively within defendant’s knowledge. (Khoury, 14 Cal.App.4th at 616.)
A party attacking a pleading on “uncertainty” grounds must specify how and why the pleading is uncertain, and where that uncertainty can be found in the challenged pleading. (Fenton v. Groveland Community Services Dept. (1982) 135 Cal.App.3d 797, 809, disapproved on other grounds in Katzberg v. Regents of the University of California (2002) 29 Cal.4th 300.)
Here, the fourth, sixth, and seventh causes of action are not so unintelligible that Catholic Charities cannot reasonably respond. Any ambiguities can be clarified through discovery. (Lickiss v. Financial Industry Regulatory Authority (2012) 208 Cal.App.4th 1125, 1135; Khoury, 14 Cal.App.4th at 616.)
Accordingly, the demurrer on this ground is overruled.
Case Management Conference – parties to appear.