I. BACKGROUND 

Plaintiff Glynis Julien (“Plaintiff”) filed this action against defendants Valencia Lakeshore Condominium Association, Inc. (“Association”), BluSky Restoration Contractors, LLC (“BluSky”), BlueSky Restoration Contractors LLC (“BSRC”), and Does 1 through 10 for (1) breach of CC&Rs against Association, (2) negligence against all defendants, and (3) nuisance against all defendants.  

On February 14, 2024, the Court sustained BluSky’s demurrer to the second and third causes of action against it on the grounds that the tort claims are barred by the economic loss rule, with leave to amend. (Min. Order, Feb. 14, 2024.) Plaintiff orally dismissed BSRC. (Ibid.) 

On March 8, 2024, Plaintiff filed her First Amended Complaint (“FAC”) against defendants Association, BluSky, and Does 1 through 10 (collectively, “Defendants”) for (1) breach of CC&Rs against Association, (2) negligence against Defendants, and (3) nuisance against Defendants. 

BluSky demurs to the second and third causes of action. Plaintiff opposes the motion, and BluSky filed a reply. 

II. REQUEST FOR JUDICIAL NOTICE 

BluSky requests the Court take judicial notice of (1) “Authorization and Release” executed by Plaintiff, dated May 11, 2021, (2) “Waiver and Release of Liability” executed by Plaintiff, dated November 2, 2021, (3) “Release” agreement executed between Plaintiff and BluSky, dated June 13, 2022, and (4) February 14, 2024 “Notice of Ruling” order sustaining BluSky’s demurrer to Plaintiff’s original complaint. 

Requests 1, 2, and 3 are DENIED. BluSky urges this Court to take judicial notice of the releases for the purpose of making a determination that Plaintiff’s tort claims are barred. Plaintiff, in opposition, objects to these requests and argues the releases do not exculpate BluSky from a negligence claim. Indeed, while a release may negate the element of duty in a negligence action, this defense establishing its validity would require an evidentiary hearing that is ill-suited for a demurrer. “‘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 4 is GRANTED. (Cal. Evid. Code §452(d).) 

III. DEMURRER 

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 BluSky fulfilled this requirement prior to filing the demurrer. (Meyers Decl. ¶¶ 2-3.) 

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. (Code Civ. Proc., §§ 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).) 

The FAC’s alleges in pertinent part:  

“14. On May 11, 2021, Daniel Carrillo of BluSky submitted and had Plaintiff sign a Home Improvement Contract (“Contract”) to carry out the work outlined in the February 5, 2021 proposal, which BluSky attached to the Contract. […]. 

15. Plaintiff contracted with BluSky to abate the asbestos in her Unit; to remove, store, or dispose of all contaminated contents; and to remediate the Unit, by removing and replacing all contaminated walls, fixtures, framing, molding, etc. inside the Unit. The Association itself also contracted with BluSky to repair the roof and exterior stucco to the Unit. 

16. BluSky’s abatement work did not go well. BluSky’s work was delayed, incomplete, or counterproductive. BluSky failed to follow the Procedure 5 report that it helped prepare and submit to SCAQMD. BluSky commingled asbestos-contaminated items that were to be disposed of with personal and private effects of Plaintiff’s that she had asked to save so she could have them cleaned. BluSky failed to set up or maintain proper containment within the Unit. Despite BluSky’s claim that it had finished abating the asbestos, ETA and a separate hygienist (JLM Environmental) that Plaintiff hired kept finding evidence of asbestos fibers in the Unit. 

17. BluSky failed to fulfill the requirements that it promised in writing to perform. Contrary to its written promises, BluSky failed to remove the overspray from the interior of the supply and return vents; clean all ducting; and aggressively clean the residence (the Unit). Plaintiff therefore was forced to pay to have a different abatement company finish what BluSky failed to do. 

18. In May and November, 2021, in the course of the asbestos abatement work, BluSky drafted and proposed to Plaintiff two limited releases. […]. 

… 

22. BluSky’s delays and deficient abatement efforts meant that repairs on the Unit could not begin for many months. The roof and stucco were still open to the elements, but the winter rains were coming. 

23. BluSky’s negligent and deficient abatement work caused physical damage to the Unit and damaged Plaintiff’s personal property as follows: damage to or destruction of the walls, floor, stucco, fixtures, framing, molding, stove, microwave, dishwasher, TV, refrigerator, dishes, utensils, cookware, bowls, bottles, towels, food, houseplants, linens, toiletries, clothes, beds, tools, and so forth. 

… 

28. As a result of the damage that Defendants caused, Plaintiff has lost the use of the Unit and been forced to live offsite. Although the Unit was not habitable, Plaintiff still has been required to continue paying the mortgage, utilities, dues, insurance, and upkeep on the Unit.” 

(FAC ¶¶ 14-18, 22-23, 28.) 

BluSky argues Plaintiff’s damages are based on a contractual relationship, and that therefore Plaintiff’s tort claims for negligence and nuisance are barred by the economic loss rule. BluSky asserts that Plaintiff has not pled any facts to support an independent duty outside the contract, or that BluSky’s conduct amounted to harm above and beyond the contractual promise. The Court disagrees. 

For the economic loss rule to apply, there must be pecuniary losses unaccompanied by property damage or personal injury. (Sheen v. Wells Fargo Bank (2022) N.A., 12 Cal. 5th 905, 915.) In other words, this “purely economic loss” is “a shorthand for “pecuniary or commercial loss that does not arise from actionable physical, emotional or reputational injury to persons or physical injury to property.” (S. California Gas Leak Cases (2019) 7 Cal. 5th 391, 398.) Here, the injury in question involved BluSky’s alleged deficient abatement work, which resulted in physical damage to Plaintiff’s unit and personal property. The Court agrees with Plaintiff that the FAC has now alleged resulting property damage to preclude application of the economic-loss rule, at least on the pleading stage. “A contract to perform services gives rise to a duty of care which requires that such services be performed in a competent and reasonable manner. A negligent failure to do so may be both a breach of contract and a tort.” (North American Chemical Co. v. Superior Court (1997) 59 Cal.App.4th 764, 775, citing Perry v. Robertson (1988) 201 Cal.App.3d 333, 340.) 

The Court denied BluSky’s request to judicially notice the releases and will therefore not consider arguments that the signed releases have eliminated Plaintiff’s rights to bring claims against it. The Court’s review is limited to the face of the pleading, and all matters judicially noticeable. 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].)  

Even if the Court were to notice the release contained in Exhibit C, BluSky cites to no authority that this issue may be resolved on a demurrer. Plaintiff contests the validity of the releases. The cases relied upon by BluSky, Larner v. Los Angeles Doctors Hospital Associates, LP (2009) 168 Cal.App.4th 1291, Rosencrans v. Dover Images, Ltd. (2011) 192 Cal.App.4th 1072, City of Santa Barbara v. Superior Court (2007) 41 Cal. 4th 747, and Frittelli, Inc. v. 250 North Canon Drive, LP (2011) 202 Cal.App.,4th 35, all relate to either a motion for summary judgment or motion for summary adjudication.