I. BACKGROUND 

Plaintiff Marbella Villa (“Plaintiff”) filed this action against defendants 200 Pine Avenue, LLC (“200 Pine”), Automac Parking, Inc. (“Automac”), and Does 1 to 50 for damages arising from a slip and fall on water.  

Plaintiff filed amendments to complaint naming Octopus Japanese Cuisine, Inc. as Doe 1 and Octopus Restaurant Long Beach, Inc. (“Octopus Restaurant”) as Roe 2. On December 13, 2023, the Court granted 200 Pine’s motion for summary adjudication (MSA) in part as to Octopus Restaurant’s duty to defend 200 Pine against Plaintiff’s claims. (Min. Order, Dec. 13, 2023.) 

On December 18, 2023, Octopus Restaurant filed a cross-complaint against 200 Pine and Automac for indemnity, contribution, and breach of contract.  

200 Pine now demurs to each cause of action in Octopus Restaurant’s cross-complaint. Octopus Restaurant opposes the motion, and 200 Pine filed a reply.  

200 Pine argues that the Court ruled Octopus Restaurant had an immediate duty to defend 200 Pine under the express indemnity language presented on its MSA, and that Octopus Restaurant’s cross-complaint seeks to undermine the ruling on an issue already adjudicated. Additionally, 200 Pine asserts that the breach of contract claim fails because Octopus Restaurant did not provide enough operative language from the Lease or attached the Lease to the cross-complaint. Lastly, 200 Pine asserts Octopus Restaurant is collaterally estopped from bringing a cross-complaint against it for equitable indemnity and contribution. 

Octopus Restaurant contends the Court’s prior ruling regarding the duty to defend is not determinative and does not preclude issues for indemnity. It argues that the issue of indemnity is not yet ripe, and that 200 Pine is introducing extrinsic evidence beyond the bounds for a demurrer. Should the demurrer be sustained, Octopus Restaurant requests leave to amend to add additional facts and to attach the lease agreement between 200 Pine and Octopus Restaurant.  

200 Pine reasserts that the cross-complaint alleges breach of contract without providing the contractual language, and that the Court should take judicial notice of documents previously reviewed in its MSA.  

II. DEMURRER 

A demurrer is a pleading used to test the legal sufficiency of other pleadings.  It raises issues of law, not fact, regarding the form or content of the opposing party's pleading (complaint, answer or cross-complaint).  (CCP §§ 422.10, 589; see Donabedian v. Mercury Ins. Co. (2004) 116 Cal.App.4th 968, 994.)  It is not the function of the demurrer to challenge the truthfulness of the complaint; and for purposes of the ruling on the demurrer, all facts pleaded in the complaint are assumed to be true. (Donabedian, 116 Cal.App.4th at 994.) 

A demurrer can be used only to challenge defects that appear on the face of the pleading under attack; or from matters outside the pleading that are judicially noticeable. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318; Donabedian, supra, 116 Cal.App.4th at 994.) No other extrinsic evidence can be considered.  (Ion Equip. Corp. v. Nelson (1980) 110 Cal.App.3d 868, 881 [error for court to consider facts asserted in memorandum supporting demurrer]; see also Afuso v. United States Fid. & Guar. Co. (1985) 169 Cal.App.3d 859, 862 [disapproved on other grounds in Moradi-Shalal v. Fireman’s Fund Ins. Cos. (1988) 46 Cal.3d 287] [error to consider contents of release not part of court record].) 

A demurrer can be utilized where the “face of the complaint” itself is incomplete or discloses some defense that would bar recovery. (Guardian North Bay, Inc. v. Superior Court (2001) 94 Cal.App.4th 963, 971-72.)  The “face of the complaint” includes material contained in attached exhibits that are incorporated by reference into the complaint; or in a superseded complaint in the same action.  (Frantz v. Blackwell (1987) 189 Cal.App.3d 91, 94; see also Barnett v. Fireman’s Fund Ins. Co. (2001) 90 Cal.App.4th 500, 505 [“[W]e rely on and accept as true the contents of the exhibits and treat as surplusage the pleader’s allegations as to the legal effect of the exhibits.”]). 

Before filing a demurrer, the demurring party is required to meet and confer with the party who filed the pleading demurred to for the purpose of determining whether an agreement can be reached that would resolve the objections to be raised in the demurrer. (CCP § 430.41(a).)   

The Court finds 200 Pine has fulfilled this requirement prior to filing the demurrer. (Smith Decl. ¶ 7.) 

200 Pine requests the court take judicial notice of (1) the Court’s Order regarding 200 Pine’s MSA, (2) Octopus’ Separate Statement of Undisputed Material Facts filed in opposition to 200 Pine’s MSA, (3) 200 Pine’s Requests for Admission, Set Two, which includes the Restaurant Lease, and (4) the cross-complaint filed by 200 Pine against Octopus Restaurant with the attached Restaurant Lease.  

Request 1 is granted. Courts cannot take judicial notice of a judge's findings unless the requirements of res judicata or collateral estoppel must apply pursuant to a final judgment. (Plumley v. Mockett (2008) 164 Cal.App.4th 1031, 1051.) Here, 200 Pine argues collateral estoppel. 

Request 2 is denied. “‘The hearing on demurrer may not be turned into a contested evidentiary hearing through the guise of having the court take judicial notice of affidavits, declarations, depositions, and other such material which was filed on behalf of the adverse party and which purports to contradict the allegations and contentions of the plaintiff.’” (Johnson v. Honeywell Intern. Inc. (2009) 179 Cal.App.4th 549, 559-60.) 

Request 3 is granted. A court may take judicial notice of a party's admissions or concessions, but only in cases where the admission ‘can not reasonably be controverted,’ such as in answers to interrogatories or requests for admission, or in affidavits and declarations filed on the party's behalf.”  (Arce ex rel. Arce v. Kaiser Found. Health Plan, Inc. (2010) 181 Cal.App.4th 471, 485.) 

Request 4 is granted. When a complainant references an agreement in the complaint, and gives no indication why judicial notice would be improper, the court may take judicial notice of the complete document. (Salvaty v. Falcon Cable TV (1985) 165 Cal. App. 3d 798, 800.) 

The cross-complaint alleges: 

“5. OCTOPUS RESTAURANT LONG BEACH, INC. entered into a contract to lease the premises specified in the contract with 200 PINE AVENUE, LLC. […] 

6. Under the terms of the lease, the garage and hallway are not OCTOPUS RESTAURANT LONG BEACH, INC.'s responsibility and the owner, 200 PINE AVENUE, LLC, had maintenance obligations for the common areas. 

… 

8. Any plumbing failure which allegedly caused or contributed to Plaintiffs injuries occurred well outside the four walls of the Premises and 200 Pine had a duty to repair and maintain the basic plumbing and sewage lines at issue. 

… 

10. If the Plaintiff sustained injuries, it was a direct result of the negligence of Cross-Defendants, and each of them. 

11. In the event the Cross-Complainant is held liable to the Plaintiff in the principal action, that such liability arises only by reason of the active and primary negligence of Cross- Defendants, and each of them, and through no fault of Cross-Complainant whose fault, if any, is secondary and passive only. 

12. The Plaintiffs damages, if any, were caused by the negligence and carelessness of the Cross-Defendants, and each of them, and as such under the rules of comparative negligence, Cross-Complainant is entitled to equitable indemnity and equitable contribution for the amount of negligence attributable to Cross-Defendants, and each of them. 

13. By reason of these premises, Cross-Complainant is entitled to equitable indemnification and equitable contribution from said Cross-Defendants, and each of them.” 

(Cross-complaint at ¶¶ 5-6, 8, 10-13.) 

First, 200 Pine argues that Octopus Restaurant is collaterally estopped from bringing a claim for equitable indemnity and contribution against it. A demurrer may be sustained based on a finding that the claims in a complaint are barred under the doctrine or collateral estoppel.  (See e.g., Alvarez v May Dep't Stores Co. (2006) 143 Cal.App.4th 1223, 1240 [claims properly resolved on demurrer based on collateral estoppel], and Dailey v. City of San Diego (2013) 223 Cal.App.4th 237, 255-56 [trial court correctly found that collateral estoppel barred the plaintiff’s cause of action in sustaining demurrer without leave to amend].) To establish issue preclusion, ““First, the issue sought to be precluded from relitigation must be identical to that decided in the former proceeding. Second, this issue must have been actually litigated in the former proceeding. Third, it must have been necessarily decided in the former proceeding. Fourth, the decision in the former proceeding must be final and on the merits. Finally, the party against whom preclusion is sought must be the same as, or in privity with, the party to the former proceeding.”  (Lucido, 51 Cal.3d at 341.)    

“[N]ormally, an order is not res judicata or collateral estoppel later in the same action.”  (Riverside County Trans. Commission v. Southern California Gas Co. (2020) 54 Cal.App.5th 823, 838.)  There is an exception to this: “an appealable order can be res judicata or collateral estoppel in a later phase of the same action.” 1  (Ibid.; In re Matthew C. (1993) 6 Cal.4th 386, 393, superseded by statute on a different point as stated in People v. Mena (2012) 54 Cal.4th 146 [“If an order is appealable, however, and no timely appeal is taken therefrom, the issues determined by the order are res judicata.”].)    

Here, 200 Pine previously moved for summary adjudication on the issue of duty against Octopus Restaurant and Automac. The Court granted 200 Pine’s MSA in part, holding that Octopus Restaurant had an express contractual duty to defend 200 Pine under the Restaurant Lease Agreement. (Min. Order, Dec. 13, 2023.) The Court’s records show that to date, Plaintiff has not appealed the order. Because the order granting the summary adjudication motion was appealable and no timely appeal was taken, the issues determined in the order can be collateral estoppel in this proceeding.  (Riverside County Trans. Commission, 54 Cal.App.5th at 838; see also McClain v. Rush (1989) 216 Cal.App.3d 18, 29-30 [collateral estoppel applied where issues previously determined by grant of summary judgment].)    

In analyzing whether all elements of issue preclusion are met, first, the issue sought to be precluded from relitigation must be identical to that previously decided. Here, the Court’s review of the Restaurant Lease was limited to whether Octopus Restaurant had the express contractual duty to defend 200 Pine against Plaintiff’s claims. Octopus Restaurant’s cause of action against 200 Pine is not for express indemnity, but for equitable indemnity and contribution. The Court’s analysis in 200 Pine’s motion for summary adjudication did not reach the issue of equitable indemnity, nor did the Court make any determinations as to whether Octopus Restaurant was barred from asserting an equitable indemnity or contribution claim against 200 Pine. Therefore, the elements of collateral estoppel have not been met. 200 Pine has not demonstrated the issue is identical, and that the issue was actually litigated and necessarily decided. The feature of traditional equitable indemnity is that it is wholly derivative of whether defendant is a concurrent tortfeasor responsible for plaintiff’s injuries. (Frank v. State of California (1988) 205 Cal.App.3d 488, 494.) In other words, “there can be no indemnity without liability”. (Centex Homes v. Superior Court (2013) 214 Cal.App.4th 1090, 1099.) Whether it is 200 Pine or Octopus Restaurant that are primarily liable for Plaintiff’s injuries is a question of fact to be established by the evidence. (Fremont Reorganizing Corp. v. Faigin (2011) 198 Cal.App.4th 1153, 1177 [“A right of equitable indemnity can arise only if the prospective indemnitor and indemnitee are mutually liable to another person for the same injury.”].) The demurrer to the first cause of action is overruled on this ground. 

Second, 200 Pine contends that the express indemnity language of 10.1.1 expressly waives any claim by Octopus against it “except to the extent caused by or arising from the gross negligence or willful misconduct of Landlord or its agents, employees or contractors.”  (Dem. 6:3-7.) 

 “The intention of the parties is to be ascertained from the ‘clear and explicit’ language of the contract. (Civ. Code §§ 1638-1639) And, unless given some special meaning by the parties, the words of the contract are to be understood in their ‘ordinary and popular sense.”’  (Continental Heller Corp. v. Amtech Mechanical Services, Inc. (1997) 53 Cal.App.4th 500, 504.) Here, the express terms provide that Octopus may maintain a claim against 200 Pine under certain conditions. Because this is still the pleading stage, in which evidence of fault or conduct has yet to be established, the Court cannot say at this juncture that Octopus Restaurant is affirmatively barred from asserting an equitable indemnity claim against 200 Pine pursuant to the contract. However, 200 Pine contends that there are no factual allegations pleading gross negligence or willful misconduct of 200 Pine or its agents. The Court agrees. On this basis, the demurrer to the first cause of action is sustained with leave to amend. 

The elements of a cause of action for breach of contract are: (1) the contract, (2) plaintiff's performance or excuse for nonperformance, (3) defendant's breach, and (4) the resulting damages to plaintiff.”  (Coles v. Glaser (2016) 2 Cal.App.5th 384, 391, internal quotations omitted.)   

In pleading the existence of a contractual relationship, “the complaint must indicate on its face whether the contract is written, oral, or implied by conduct. (Code Civ.Proc., § 430.10, subd. (g).).” (Otworth v. Southern Pac. Transportation (1985) 166 Cal.App.3d 452, 458-59.)   

For a written contract, the plaintiff may plead it “by its terms – set out verbatim in the complaint or a copy of the contract attached to the complaint and incorporated therein by reference – or by its legal effect.” (McKell v. Washington Mutual, Inc. (2006) 142 Cal.App.4th 1457, 1489 abrogated on other grounds in Freeman v. Quicken Loans Inc. (2012) 566 U.S. 624.) To plead a contract’s legal effect the plaintiff’s pleading must include “the substance of its relevant terms. This is more difficult, for it requires a careful analysis of the instrument, comprehensiveness in statement, and avoidance of legal conclusions.” (Id.)¿ 

Here, Octopus Restaurant does not plead whether the contract is written, oral, or implied by conduct. Further, the cause of action does not sufficiently set forth the contract in verbatim, nor is a copy of the contract incorporated by reference in the alternative. Octopus Restaurant appears to concede to this defect by way of its request for leave to amend in order to attach the referenced contract. Additionally, 200 Pine avers that there can be no breach of contract claim due to the express indemnity provision unless there is gross negligence or willful misconduct by 200 Pine. Because the defects are reasonably capable of cure, the demurrer to the second cause of action is sustained with leave to amend.  

III. CONCLUSION 

200 Pine’s demurrer to Octopus Restaurant’s cross-complaint is sustained. Octopus Restaurant is given 20 days leave to amend. 

PLEASE TAKE NOTICE: 

Dated this 8th day of March 2024