Judge: Melvin D. Sandvig, Case: 22CHCV00705, Date: 2023-01-04 Tentative Ruling
Case Number: 22CHCV00705 Hearing Date: January 4, 2023 Dept: F47
Dept. F47
Date: 1/4/23
Case #22CHCV00725
DEMURRER TO THE
ORIGINAL COMPLAINT
Demurrer filed on 10/25/22.
MOVING PARTY: Defendant Aram Abgaryan
RESPONDING PARTY: Plaintiff Farmers Insurance Exchange
NOTICE: ok
Demurrer is to the entire complaint for equitable
subrogation for damages to property:
1. Negligence
2. Negligence Per Se
3. Gross Negligence
4. Strict Liability for Ultrahazardous
Activities
RULING: The demurrer is sustained with 60 days
leave to amend.
This is an insurance subrogation action. Plaintiff Farmers Insurance Exchange
(Plaintiff) alleges that it, “its subsidiaries, affiliates, and/or parent
companies, duly organized and existing under and by virtue of the laws of the
State of California and authorized to do business in the State of California as
an insurer” issued an insurance policy to the owner of Owensmouth Business Park
(Owner) which was in effect on the date of the incident which is the subject of
this action. (See Complaint ¶¶1, 8). Plaintiff alleges that on 9/18/17 Defendant
Aram Abgaryan purchased a commercial condo unit within Owensmouth Business Park
out of which he, and the other defendants, operated an illegal marijuana
extraction processing laboratory (honey oil laboratory). (Complaint ¶9). Pursuant to that purchase, Abgaryan and Owner
agreed to the CC&Rs which governed Owensmouth Business Park. (Complaint ¶10). The CC&Rs allegedly included a bar
against noxious or offensive activities at the business park and required all
unit owners to comply with the requirements of local or state health
authorities and all other governmental authorities with respect to the light
industrial and business use of each condo.
(Complaint ¶11).
Plaintiff alleges that Abgaryan and the other defendants
ignored the CC&Rs by operating the honey oil laboratory on the
premises. (Complaint ¶12). As a result, on or about 9/21/19, Plaintiff
alleges that the condo unit purchased by Abgaryan blew up and caught fire
causing damage to Plaintiff’s insured and the death of an individual working
with/for defendants. (Complaint
¶13). Additionally, Abgaryan and the
other defendants were arrested and charged with involuntary manslaughter, drug
manufacturing and controlling a space, building, or room, or allowing someone
to use same for the purpose of unlawfully manufacturing, storing or
distributing any controlled substance
for sale or distribution. (Complaint
¶14).
Based on the foregoing, on 8/30/22, Plaintiff filed its
complaint for equitable subrogation for damages to property alleging causes of
action for: (1) negligence, (2) negligence per se, (3) gross negligence and (4)
strict liability for ultrahazardous activities.
On 10/25/22, Abgaryan filed and served the instant
demurrer to the entire complaint on the grounds that Plaintiff has failed to
allege standing thereby making the entire complaint uncertain and also that
Plaintiff has failed to allege sufficient facts to state any of the causes of
action alleged in the complaint. Plaintiff
has opposed the demurrer.
Abgaryan’s Request for Judicial Notice (RJN) is granted
only as to the existence of the documents in the court record.
STANDING
A set forth above, the complaint defines Plaintiff as “FARMERS
INSURANCE EXCHANGE, its subsidiaries, affiliates, and/or parent companies, duly
organized and existing under and by virtue of the laws of the State of
California and authorized to do business in the State of California as an
insurer.” (Complaint ¶1). Based on such definition, it is not clear
which entity (Farmers Insurance Exchange or one of its subsidiaries, affiliates
and/or parent companies) issued the policy of insurance at issue in this
action. (See also Complaint
¶8). As such, it is uncertain who the
Plaintiff in this action is and/or the basis for its standing to sue.
1ST CAUSE OF ACTION – NEGLIGENCE
The elements of a negligence cause of action are: (1) a
legal duty, (2) defendant’s breach of that duty, and (3) causation and (4)
damages. See United States
Liability Insurance Co. (1970) 1 C3d 586, 594. Based on the allegations in the complaint, it
appears that the basis for the negligence claim arises out of the CC&Rs
agreed to by Abgaryan when he purchased the condo unit. (Complaint ¶¶9-11, 15). The complaint does not allege any other basis
(i.e., Civil Code 1714(a)) for a duty owed by Abgaryan. Therefore, it appears that the claim is one
for breach of contract rather than negligence.
The complaint fails to adequately allege a claim for breach of contract. For example, the terms of the contract are
not sufficiently set forth. Since the
complaint does not adequately allege the basis for the duty allegedly owed by
Abgaryan to Plaintiff, the negligence claim fails to state a claim.
2ND CAUSE OF ACTION – NEGLIGENCE PER SE
The doctrine of negligence per se creates an evidentiary
presumption that affects the standard of care (i.e., duty) in a cause of action
for negligence. Das (2010) 186
CA4th 727, 737-738. As such, the Court
finds that a separate negligence cause of action based on a theory of
negligence per se would more clearly set forth the bases of Plaintiff’s claims
for the trier of fact. As such, the
Court will allow such claim to stated as a separate cause of action.
Additionally, contrary to Abgaryan’s assertion, his nolo
contendere plea may be used in this civil action because voluntary manslaughter
is a felony. See (RJN Ex.1, 2; Penal
Code 192(b); Penal Code 1016(3); Evidence Code 1300. Penal Code 1016(3) (miscited by Abgaryan as
Evidence Code 1016(3) at p.4:2 of the Reply) provides:
Nolo contendere, subject to the
approval of the court. The court shall ascertain whether the defendant
completely understands that a plea of nolo contendere shall be considered the
same as a plea of guilty and that, upon a plea of nolo contendere, the court
shall find the defendant guilty. The legal effect of such a plea, to a crime
punishable as a felony, shall be the same as that of a plea of guilty for all
purposes. In cases other than those punishable as felonies, the plea and any
admissions required by the court during any inquiry it makes as to the
voluntariness of, and factual basis for, the plea may not be used against the
defendant as an admission in any civil suit based upon or growing out of the
act upon which the criminal prosecution is based. (emphasis added).
Similarly, Evidence Code 1300 provides:
Evidence of a final judgment
adjudging a person guilty of a crime punishable as a felony is not made
inadmissible by the hearsay rule when offered in a civil action to prove any
fact essential to the judgment whether or not the judgment was based on a plea
of nolo contendere.
3RD CAUSE OF ACTION – GROSS NEGLIGENCE
Ordinary negligence involves a breach of the duty of
exercising reasonable care to protect others from harm. See Joshi (2022) 80 CA5th 814,
827. Gross negligence is defined as a
want of even scant care or an extreme departure from the ordinary standard of
conduct. Id. Based on the different standards of care at
issue, the Court finds that Plaintiff may separately allege claims for
negligence and gross negligence at the pleading stage.
However, because this cause of action incorporates the
allegations from the 1st cause of action for negligence, which seems
to be based on a breach of contract, the basis for the duty in this claim is
not sufficiently pled. (See
Complaint ¶18).
4TH CAUSE OF ACTION – STRICT LIABILITY
FOR ULTRAHAZARDOUS ACTIVITY
An activity is ultrahazardous if it: (1) necessarily
involves a risk of serious harm to the person, land or chattels of others which
cannot be eliminated by the exercise of the utmost care, and (2) is not a matter of common usage. Garcia (1986) 183 CA3d 413, 418; Smith
(1967) 247 CA2d 774, 785. Whether an
activity is ultrahazardous is a question of law to be determined by the court. Id.
Strict liability for ultrahazardous activity is limited
to “consequences which lie within the extraordinary risk posed by the
abnormally dangerous activity and is limited to the ‘class of persons who are
threatened by the abnormal danger, and the kind of damage they may be expected
to incur.’” Goodwin (1985)176 CA3d 86, 92.
Based on the allegations in the complaint, which must be
accepted as true on demurrer, the complaint
sufficiently alleged that the defendants, including Abgaryan, were
engaged in ultrahazardous activity which resulted in an explosion which damaged
Plaintiff’s insured’s property. (See
Complaint ¶¶21-24). Abgaryan’s argument
that the allegation in the complaint that honey oil laboratories have a
propensity to explode is factually incorrect cannot be determined on
demurrer. Allegedly engaging in illegal
conduct which allegedly carries a high risk of explosion satisfies the
definition of ultrahazardous activity.
Similarly, the complaint does not allege that the “escape of fire” was
the ultrahazardous activity. Rather, the
claim is based on the explosion which resulted from illegal conduct which
carried a high risk of explosion.
(Complaint ¶¶1-13, 23).
While this cause of action is defective based on the
standing issue noted above, all other bases
for the demurrer to this cause of action are overruled.
CONCLUSION
Based on the foregoing, the demurrer is sustained with
leave to amend. This leave includes
amending the causes of action already included in the complaint and/or
including a cause of action for breach of contract.
The Court notes that the reservation for this hearing
indicates that it is for a demurrer with motion to strike. However, the motion to strike filed by
Defendant Aram Abgaryan is scheduled for hearing on 2/2/23. (See Motion to Strike filed 10/25/22). Therefore, the motion to strike will be
considered by the Court on its 2/2/23 hearing date.