Judge Michael E. Whitaker, Case Number: 22SMCV01313, Date: 2023-11-03 Tentative Ruling

Judge: Michael E. Whitaker, Case: 22SMCV01313, Date: 2023-11-03 Tentative Ruling

This case stems from a dispute over the remodel of Plaintiff Glenn Vallecillos, M.D., Inc.’s (“Plaintiff”) surgical center.

Plaintiff’s operative Second Amended Complaint (“SAC”) alleges sixteen causes of action for (1) breach of written contract; (2) unjust enrichment; (3) intentional misrepresentation; (4) negligent misrepresentation; (5) unfair business practices; (6) negligence; (7) declaratory relief; (8) disgorgement of money paid to unlicensed contractor; (9) recovery on contractors bond; (10) conversion; (11) violation of Penal Code section 496; (12) negligence, (13) action on bond, (14) intentional misrepresentation; (15) negligent misrepresentation; and (16) for conspiracy to commit fraud.

As to moving Defendant American Contractors Indemnity Company (“ACI” or “Defendant”) Plaintiff has only alleged the thirteenth cause of action for “action on bond.”

ACI demurs to the thirteenth cause of action for failure to state facts sufficient to constitute a cause of action under Code of Civil Procedure section 430.10, subdivision (e) and demurs to the entire SAC for uncertainty under Code of Civil Procedure section 430.10, subdivision (d).

Code of Civil Procedure section 430.41, subdivision (a) requires: “Before filing a demurrer pursuant to this chapter, the demurring party 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.”

The statute further requires “As part of the meet and confer process, the demurring party shall identify all of the specific causes of action that it believes are subject to demurrer and identify with legal support the basis of the deficiencies.” (Code Civ. Proc., § 430.41, subd. (a)(1).) “The party who filed the complaint, cross-complaint, or answer shall provide legal support for its position that the pleading is legally sufficient or, in the alternative, how the complaint, cross-complaint, or answer could be amended to cure any legal insufficiency.” (Ibid.)

“The parties shall meet and confer at least five days before the date the responsive pleading is due. (Code Civ. Proc. § 430.41, subd. (a)(2).) “The demurring party shall file and serve with the demurrer a declaration stating either” the means by which the parties met and conferred, or that the party who filed the pleading subject to demurrer failed to respond to the meet and confer request. (Id., subd. (a)(3).)

Here, ACI contends it “communicated several meet and confers to plaintiff without response.” (Demurrer at p. 2.) In support, ACI provided the declaration it filed in support of an extension, and a meet and confer letter it sent to Plaintiff on November 30, 2023.

Plaintiff contends in opposition that he responded to ACI’s November 30, 2023 meet and confer letter on December 5, but never received a response.

The Court is satisfied that ACI made attempts to meet and confer regarding the issues prior to filing the instant demurrer and that further meet and confer efforts would not be fruitful under the circumstances.

“It is black letter law that a demurrer tests the legal sufficiency of the allegations in a complaint.” (Lewis v. Safeway, Inc. (2015) 235 Cal.App.4th 385, 388.) In testing the sufficiency of a cause of action, a court accepts “[a]s true all material facts properly pled and matters which may be judicially noticed but disregard contentions, deductions or conclusions of fact or law. [A court also gives] the complaint a reasonable interpretation, reading it as a whole and its parts in their context.” (290 Division (EAT), LLC v. City & County of San Francisco (2022) 86 Cal.App.5th 439, 450 [cleaned up]; Hacker v. Homeward Residential, Inc. (2018) 26 Cal.App.5th 270, 280 [“in considering the merits of a demurrer, however, “the facts alleged in the pleading are deemed to be true, however improbable they may be”].)

Further, in ruling on a demurrer, a court must “liberally construe” the allegations of the complaint “with a view to substantial justice between the parties.” (See Code Civ. Proc., § 452.) “This rule of liberal construction means that the reviewing court draws inferences favorable to the plaintiff, not the defendant.” (Perez v. Golden Empire Transit Dist. (2012) 209 Cal.App.4th 1228, 1238.)

In summary, “[d]etermining whether the complaint is sufficient as against the demurrer on the ground that it does not state facts sufficient to constitute a cause of action, the rule is that if one consideration of all the facts stated it appears the plaintiff is entitled to any relief at the hands of the court against the defendants the complaint will be held good although the facts may not be clearly stated, or may be intermingled with a statement of other facts irrelevant to the cause of action shown, or although the plaintiff may demand relief to which he is not entitled under the facts alleged.” (Gressley v. Williams (1961) 193 Cal.App.2d 636, 639.)

A demurrer for uncertainty will be sustained only where the pleading is so bad that the responding party cannot reasonably respond - i.e., he or she cannot reasonably determine what issues must be admitted or denied, or what claims are directed against him or her. (Khoury v. Maly’s of California (1993) 14 Cal.App.4th 612, 616.) Where a demurrer is made upon the ground of uncertainty, the demurrer must distinctly specify exactly how or why the pleading is uncertain, and where such uncertainty appears by reference to page and line numbers. (See Fenton v. Groveland Comm. Services Dist. (1982) 135 Cal.App.3d 797, 809.)

Although ACI contends the SAC is uncertain, pursuant to Code of Civil Procedure section 430.10, subdivision (f), ACI does not demonstrate that any portions of the SAC are so bad that ACI cannot reasonably determine what issues must be admitted or denied, or what claims are directed against it. The Court thus declines to sustain ACI’s demurrer based on uncertainty.

ACI also demurs to the thirteenth cause of action for “action on bond” on the basis that Plaintiff does not attach the bond or allege the bond’s provisions.[1] The Court disagrees. The SAC alleges as follows:

5. At all times herein mentioned defendant AMERICAN CONTRACTORS INDEMNITY COMPANY (“American”) was a corporation organized and existing under the laws of the State of California. Effective March 15, 2004, American issued Bond, No. 9093133, in favor of defendant Pacific in the amount of $10,000.00.

104. That upon application of defendants Pacific and Turner for insurance broker’s license or renewal thereof, defendants Pacific and Turner filed with the California Department of Insurance the various bonds identified herein all of which inure to the benefit of plaintiff for any damages as a result of the violation of the California Insurance Code by these defendants.

105. Defendants Pacific and Turner breached sections of said code by doing the things alleged above.

106. As a result of the actions of these defendants, plaintiff has been damaged in the maximum amount allowable under the bond.

(SAC ¶¶ 5, 104-106.) Thus, Plaintiff has adequately alleged that ACI, as surety on bond number 9093133, is liable to Plaintiff for the damages caused by Defendants Pacific and Turner to the maximum extent allowable under the bond.

ACI shall provide notice of the Court’s ruling and file a proof of service regarding the same.

[1] Although the context is different, the Court finds that the following rules instructive. With regard to the proper pleading standard for a breach of written contract, “[t]he correct rule is that a plaintiff may plead the legal effect of the contract rather than its precise language.” (Miles v. Deutsche Bank National Trust Co. (2015) 236 Cal.App.4th 394, 402.) In Miles, the Court of Appeal noted “where a written instrument is the foundation of a cause of action it may be pleaded in haec verba by attaching a copy as an exhibit and incorporating it by proper reference.” (Ibid., emphasis in original & quoting Wise v. Southern Pacific Co. (1963) 223 Cal.App.2d 50, overruled on other grounds.) Thus, attaching a copy of the written agreement and/or pleading the contents of a written agreement verbatim are two ways of pleading a breach of contract claim, but not “the exclusive means of pleading a contract.” (Ibid., emphasis in original). To wit, a “plaintiff's failure either to attach or to set out verbatim the terms of the contract was not fatal to his breach of contract cause of action.” (Ibid.) “A [written] contract should be pleaded either in haec verba or according to its legal intendment and effect.” (Scolinos v. Kolts (1995) 37 Cal.App.4th 635, 640 [cleaned up].)

DEPARTMENT	207
HEARING DATE	February 27, 2024
CASE NUMBER	22SMCV01313
MOTION	Demurrer to Second Amended Complaint
MOVING PARTY	Defendant American Contractors Indemnity Company
OPPOSING PARTY	Plaintiff Glenn Vallecillos M.D., Inc.