Judge: Monica Bachner, Case: 21STCV36045, Date: 2023-02-07 Tentative Ruling

Case Number: 21STCV36045    Hearing Date: February 7, 2023    Dept: 71

Superior Court of California

County of Los Angeles

DEPARTMENT 71

TENTATIVE RULING

Plaintiff/Cross-Defendant Carla Barboza’s unopposed demurrer to the cross-complaint of Cross-Complainant H&E Builders Services, Inc. is sustained without leave to amend.

Plaintiff/Cross-Defendant’s motion to strike is denied as moot.

          Plaintiff/Cross-Defendant Carla Barboza (“Barboza”) (“Cross-Defendant”) demurs generally and unopposed, to the cross-complaint (“CC”) of Cross-Complainant H&E Builders Services, Inc. (“H&E”) (“Cross-Complainant”) and demurs specially to the 1st, 2nd, 3rd, 4th, 5th, and 6th causes of action of the CC on the grounds that the various causes of action fail to allege facts sufficient to constitute viable causes of action.  (Notice of Demurrer, pg. 1; C.C.P. §430.10.)

Request for Judicial Notice

          Cross-Defendant’s 7/13/2022 request for judicial notice is denied as to Exhibits A-F, as this Court does not need to take judicial notice of filings made in the instant case. Cross-Defendant’s 7/13/2022 request for judicial notice is granted as to Exhibits G (Cal. Code Regs. tit. 16 §832.53), H (C-53 Specialty License for Swimming Pool description), I (H&E Builders Services, Inc.’s contractor’s license “B”), J (Class B Contractors License meaning), and K (Fast Facts “B” General Contractor (Can Do, Cannot Do)).

Background

On June 10, 2022, Cross-Complainant filed its CC against Cross-Defendant in the instant action alleging six causes of action: (1) breach of oral contract, (2) breach of implied covenant of good faith and fair dealing, (3) breach of implied duty to perform with reasonable care, (4) intentional interference with contractual relations, (5) common count for goods and services rendered, and (6) false promise arising from an alleged oral agreement between Cross-Complainant and Cross-Defendant regarding construction of Cross-Defendant’s pool.  (See Cross-complaint.) 

Cross-Complainant alleges in or around November 2021, Cross-Complainant, Cross-Defendant, and Defendant Susan Devall (“Devall”) entered into an oral agreement regarding the construction of the Pool (the “Contract”).  (CC ¶12.)   Cross-Complainant alleges The terms of the Contract were that Cross-Complainant would build the Pool at the Property; the Pool design would be based on a photograph that Devall presented to Cross-Defendant of another pool, and thus, a design that Cross-Defendant approved; Cross-Defendant would pay $100,000.00 for the construction of the Pool, by remitting money to Devall, to pay Cross-Complainant; and Devall would charge a separate design fee that Cross-Defendant would pay to Devall directly.  (CC ¶13.)  Cross-Complainant alleges it, Cross-Defendant, and Devall subsequently orally modified the Contract to raise the Construction Fees to $108,000.00, after Cross-Complainant also agreed, upon Cross-Complainant’s request, to install a deck for the Pool.  (CC ¶14.)  

Cross-Complainant alleges it advised Cross-Defendant that building permits needed to be obtained before construction could begin.  (CC ¶15.)  Cross-Complainant alleges Cross-Defendant insisted that Cross-Complainant not apply for building permits.  (CC ¶15.) Cross-Complainant alleges Cross-Defendant told Cross-Complainant’s owner, Defendant Henry Garcia, that for years, construction was performed at the Property without permits, and Cross-Complainant is informed and believes that Livan Cartaya (“Cartaya”) performed the prior unpermitted construction.  (CC ¶15.)  Cross-Complainant alleges in or around December of 2020, Cross-Defendant falsely promised Cross-Complainant that she would honor the terms of the Contract if Cross-Complainant constructed the Pool without building permits, that this promise was false, as evidenced by the fact that even though Cross-Complainant built the Pool to 100% completion, and even though Cross-Complainant did not apply for building permits, Cross-Defendant refused to pay Cross-Complainant all monies owed under the Contract, and at the time Cross-Defendant made the promise, she knew she did not intend to honor it.  (CC ¶¶16, 17.)  Cross-Complainant alleges Cross-Defendant’s lack of intention to honor the promise is evidenced from the fact that Cross-Defendant “then did a 360 turn and falsely claimed that Cross-Complainant insisted on doing unpermitted work.”  (CC ¶17.)  

Cross-Complainant alleges Cross-Defendant only paid Cross-Complainant approximately $55,000.00 of the $108,000.00 owed under the Contract, even though Cross-Defendant enjoyed the use of the pool.  (CC ¶18.)  Cross-Complainant alleges at all times Cross-Defendant acted fraudulently and oppressively, knowingly made false promises to Cross-Defendant to induce Cross-Defendant to construct the Pool without permits, and induced Cross-Defendant to build the Pool while intending to place the blame on Cross-Defendant if she was cited for unpermitted construction.  (CC ¶19.)  Cross-Complainant alleges that consistent with these fraudulent and oppressive intentions, Cross-Defendant immediately blamed Cross-Complainant for the unpermitted work even though such work was done at her insistence.  (CC ¶19.)

1. Demurrer

    

On July 13, 2022, Cross-Defendant filed the instant demurrer.  On February 3, 2023, Cross-Defendant filed a notice of non-opposition by Cross-Complainant to the instant demurrer.

Summary of Demurrer

In support of her general demurrer to Cross-Complainant’s CC, Cross-Defendant argues Cross-Complainant’s causes of action fail because Cross-Complainant cannot allege it complied with Business and Professions Code §7031 and therefore cannot seek compensation for illegal unlicensed contract work.  (Demurrer, pgs. 3-5.)  In support of her specific demurrer to the 4th cause of action in the CC, Cross-Defendant argues the cause of action fails because there are no allegations specifying whether the contract between parties was written, oral, or implied by conduct, no ascertainable terms are alleged which Cross-Defendant could have known about or breached, the allegations are inchoate and uncertain, and Cross-Complainant fails to state a cause of action because there is no breach, no ascertainable causation, and no damages.  (Demurrer, pgs. 5-6.)

Failure to State a Claim

Breach of Oral Contract, Breach of Implied Covenant of Good Faith and Fair Dealing, Breach of Implied Duty to Perform with Reasonable Care, Intentional Interference with Contractual Relations, Common Count for Goods and Services Rendered, and False Promise (1st, 2nd, 3rd, 4th, 5th, & 6th COAs)

Business and Professions Code §7026 defines a “contractor” as:

[A]ny person, who undertakes to or offers to undertake to, or purports to have the capacity to undertake to, or submits a bid to, or does himself or by or through others, construct, alter, repair, add to, subtract from, improve . . . any building . . . or other structure, project, development or improvement, or to do any part thereof . . . .

(Bus. & Prof. Code §7026.)

Business and Professions Code §7025 defines “person,” as used in §7026, to include an “individual, a firm, partnership, corporation, limited liability company, association or other organization, or any combination thereof” who enters into a construction contract.  (Bus. & Prof. Code §7025(b).)

Business & Professions Code §7031 provides:

1. Except as provided in subdivision (e), no person engaged in the business or acting in the capacity of a contractor, may bring or maintain any action, or recover in law or equity in any action, in any court of this state for the collection of compensation for the performance of any act or contract where a license is required by this chapter without alleging that they were a duly licensed contractor at all times during the performance of that act or contract regardless of the merits of the cause of action brought by the person, except that this prohibition shall not apply to contractors who are each individually licensed under this chapter but who fail to comply with Section 7029.

    

   . . .

    

1. The judicial doctrine of substantial compliance shall not apply under this section where the person who engaged in the business or acted in the capacity of a contractor has never been a duly licensed contractor in this state. However, notwithstanding subdivision (b) of Section 143, the court may determine that there has been substantial compliance with licensure requirements under this section if it is shown at an evidentiary hearing that the person who engaged in the business or acted in the capacity of a contractor (1) had been duly licensed as a contractor in this state prior to the performance of the act or contract, (2) acted reasonably and in good faith to maintain proper licensure, and (3) acted promptly and in good faith to remedy the failure to comply with the licensure requirements upon learning of the failure.

(Bus. & Prof. Code §§7031(a), (e), emphasis added.)

Cross-Defendant argues Cross-Complainant fails to allege in its CC for recovery of damages for “building the pool” that it is a duly licensed contractor, per Business & Professions Code §7031(a).  (See CC.)  Hydrotech Systems, Ltd. v. Oasis Waterpark held §7031 bars all actions, however they are characterized, which effectively seek “compensation” for illegal unlicensed contract work and is dispositive.  (Hydrotech Systems, Ltd. v. Oasis Waterpark (1991) 52 Cal.3d 988, 997 [“[A]n unlicensed contractor may not circumvent the clear provisions and

purposes of section 7031 simply by alleging that when the illegal contract was made, the other party had no intention of performing.”].)  Cross-Complainant has not alleged it is subject to the exception stated in §7031(e) and has not requested this court set an evidentiary hearing to show it (1) had been duly licensed as a contractor in this state prior to the performance of the act or contract, (2) acted reasonably and in good faith to maintain proper licensure, and (3) acted promptly and in good faith to remedy the failure to comply with the licensure requirements upon learning of the failure.  Under Business & Professions Code §7031(a), Cross-Complainant cannot allege damages under its causes of action. 

Accordingly, Cross-Defendant’s unopposed demurrer to the CC is sustained without leave to amend.

1. Motion to Strike

In light of the demurrer, Cross-Defendant’s motion to strike is denied as moot.

Dated:  February ____, 2023

Hon. Monica Bachner

Judge of the Superior Court