Judge: Olivia Rosales, Case: 20NWCV00605, Date: 2023-01-03 Tentative Ruling

DEPARTMENT SE-C LAW & MOTION PROCEDURES ARE AS FOLLOWS: APPEARANCES: The Court will hear oral arguments on all matters at the scheduled time of hearing. If all counsel intend to submit on the Tentative Order and do not want oral argument, please advise the clerk, in Department “C”, by calling (562-345-3702). If all sides submit on the Tentative Order and the clerk is so advised, the Tentative Order will become the final order of the court and the prevailing party shall give written Notice of Ruling per CRC 3.1312. If the Moving and Responding parties do not agree to submit on the Tentative Order, the motion will be called as calendared for hearing. There is no need to contact Department “C”, as the matter will remain on calendar for hearing. If the Moving party does not call Department “C” to submit on the Tentative Order and there is no appearance by any party, then the motion(s), at the Court’s discretion, may be taken off calendar without ruling on the motion(s). ORDERS: The minute order reflecting the Court’s Order will constitute the final Order. No additional orders should be submitted to the Court for signature unless required by law or by the Court. Prevailing party shall give written Notice of Ruling per CRC 3.1312. Minute orders, which constitute the final Order of the Court, will only be sent to the parties via U.S. mail  for the following: OSC re: sanctions, OSC re: contempt or matters taken under submission after oral arguments or briefing. Counsel or parties may request copies of all other minute orders/final orders either at the clerk’s office or in writing. If a request is in writing, a self-addressed stamped envelope and the appropriate fee for copies shall be submitted.

Case Number: 20NWCV00605    Hearing Date: January 3, 2023    Dept: SEC

GALVANCO BUILDERS v. MOORE, et al.

CASE NO.:  20NWCV00605

HEARING:  1/3/23 @ 1:30 PM

JUDGE:  LEE W. TSAO

 

#5

TENTATIVE RULING

 

Cross-Defendant VTA Consulting Engineers, Inc.’s demurrer to [first amended] cross-complaint is SUSTAINED without leave to amend as to the 2nd cause of action, and OVERRULED on all remaining grounds.  Cross-Defendant is ORDERED to file and serve its Answer within 10 days.

Opposing Party to give NOTICE.

 

 

Cross-Defendant VTA Consulting Engineers, Inc. generally demurs to cross-complaint and all causes of action.

 

This is an action for indemnity and contribution filed by Plaintiff Galvanco Builders (“Galvanco”) against Defendants Roger Moore, L-A Electric, Catt Plumbing, Inc., and VTA Consulting Engineers.  In 2017, Galvanco was hired by Monarch Trading, LLC and Fiesta Foods, LLC (collectively Monarch) to build several cooler rooms.  Galvanco retained Defendants to act as subcontractors for various fields of specialty work on the Project.  In 2019, severe cracking in the concrete slab of the freezer room resulted in Monarch instructing Galvanco to stop work on the project.  Galvanco and Monarch settled for $1,000,000.00.  Galvanco now asserts the following causes of action against the subcontractors:

 

1.    Implied and Equitable Indemnity

2.    Contribution

3.    Breach of Implied Warranties

4.    Negligence

5.    Breach of Oral Contract

6.    Declaratory Relief

 

Lawrence Moore filed the operative First Amended Cross-Complaint (“FAXC”) against L-A Electric, Catt Plumbing, Inc., and VTA Consulting Engineers, asserting causes of action for:

 

1.    Indemnity

2.    Contribution and Apportionment

3.    Declaratory Relief

 

 

Economic Loss Rule

 

Economic loss consists of “damages for inadequate value, costs of repair and replacement of the defective product or consequent loss of profits—without any claim of personal injury or damages to other property.”  (Robinson, supra, 34 Cal.4th at 988.)  The economic loss rule requires a purchaser to recover in contract for purely economic loss due to disappointed expectations, unless the purchaser “can demonstrate harm above and beyond a broken contractual promise,” such as some form of personal injury or damage to property other than the defective product itself.  (Ibid.)  The existence of damages other than purely economic loss is an element of a plaintiff’s common law cause of action.” (Greystone Homes, Inc. v. Midtec, Inc. (2008) 168 Cal.App.4th 1194, 1215; accord Rosen v. State Farm General Ins. Co. (2003) 30 Cal.4th 1070, 1079 - “Under the economic loss rule, ‘appreciable, nonspeculative, present injury is an essential element of a tort cause of action.’”)

 

VTA contends that the 1st and 2nd causes of action are barred by the Economic Loss Doctrine because “there is no actual property damage in this pending action because construction was never completed.”  (Demurrer, 7:17-18.)  However, Plaintiff Galvanco Builders (“Galvanco”) has alleged that third-party Monarch Trading, LLC suffered property damage, and sued Galvanco in an underlying action.  ¶ 12 of the Complaint alleges Monarch’s injury, i.e. “severe cracking in the newly constructed concrete slab of the freezer room.”  Therefore, Galvanco settled with Monarch, and in turn, filed the instant action against its sub-contractors (including Moore) based on the defective workmanship.  Moore, in turn, filed the instant First Amended Cross-Complaint, alleging at ¶ 8 that VTA performed defective work.  Accordingly, the Economic Loss Rule is not a bar to this action because the Complaint alleges property damage.

 

Demurrer based on the Economic Loss Rule is OVERRULED.

 

Contractual Privity

 

VTA also contends that the lack of contractual privity bars the FAXC, citing Weseloh Family Limited Partnership v. K.L. Wessel Construction Co., Inc. (2004) 125 Cal.App.4th 152, Ratcliff Architects v. Vanir Construction Mgt., Inc., (2001) 88 Cal.App.4th 595, and BFGC Architects Planners, Inc. v. Forcum/Mackey Cont., Inc. (2004) 119 Cal.App.4th 848.

 

The court finds VTA’s authorities are distinguishable at this juncture in the litigation.  Weseloh was decided upon summary judgment, wherein the court noted that its holding should not be interpreted to create a rule that a subcontractor who provided only professional services could never be liable for general negligence to a property owner or general contractor with whom no contractual privity existed.  At summary judgment, Weseloh analyzed the checklist of “factors” to determine whether a duty existed.  At this early pleading stage, this court cannot find that a duty does not exist.  Moreover, Weseloh acknowledged, “It is correct the lack of privity of contract does not preclude imposition of a duty of care.”  (Weseloh, supra, 125 Cal.App.4th at 164.)

 

BFGC involved a complaint that alleged that the Defendants “breached their duties to district by failing to comply with the terms of their contracts.  This is not a cognizable claim on which to base equitable indemnity.”  (BFGC, supra, 119 Cal.App.4th at 853.)  Here, Moore’s FAXC does not allege solely breach of contract.  Moore alleges VTA’s negligence at ¶ 14.

 

Ratcliff is also distinguishable because the court engaged in a detailed analysis of the duty “factors”.  (See Ratcliff, supra 88 Cal.App.4th at 606.)  At this early pleading stage, and without additional facts, this court cannot find that a duty does not exist. 

 

Demurrer based on lack of contractual privity is OVERRULED.

 

Joint Tortfeasor & B&P Code § 6735

 

VTA contends that it is not a joint tortfeasor and B&P Code § 6735 absolves VTA from liability because Moore failed to comply with the structural plans.  However, this “fact” does not appear anywhere in the Complaint or FAXC in this matter.  VTA refers the Court to Monarch’s arbitration demand at ¶¶ 9-10 on Pages 036-037 to assert that Galvanco did not “follow structural drawings.”  (Demurrer, 11:15-16.)  However, the cited passages do not contain this allegation, and even if it did, it does not mention VTA at all.  A demurrer is limited to the operative complaint’s four corners, attached exhibits, and judicially noticeable matters. (Hoffman v. Smithwoods RV Park, LLC (2009) 179 Cal.App.4th 390, 400.) Questions of fact cannot be decided on demurrer.  (Berryman v. Merit Prop. Mgmt., Inc. (2007) 152 Cal.App.4th 1544, 1556.)

 

Demurrer on this ground is OVERRULED.

 

2nd CAUSE OF ACTION

 

CONTRIBUTION:  The contribution statute applies where “a money judgment has been rendered jointly against two or more defendants in a tort action” and provides that “[s]uch right of contribution may be enforced only after one tortfeasor has, by payment, discharged the joint judgment or has paid more than his pro rata share thereof.” (CCP § 875(a) & (c).) Thus, “[i]t has now been repeatedly held that the condition of this statute—a money judgment rendered jointly against two or more defendants—must exist before either may assert a right to contribution from the other.”  (General Electric Co. v. State of Cal. ex rel. Dept. Pub. Wks. (1973) 32 Cal.App.3d 918, 925

 

 

Moore acknowledges that “VTA may be correct that given the lack of a money judgment, the claim for contribution is not yet ripe.”  (Opposition, 10:16-17.)

 

As such, VTA’s demurrer to the 2nd cause of action is SUSTAINED without leave to amend. 

 

3rd CAUSE OF ACTION

 

DECLARATORY RELIEF:  Any person interested under a written instrument, excluding a will or a trust, or under a contract, or who desires a declaration of his or her rights or duties with respect to another, or in respect to, in, over or upon property, or with respect to the location of the natural channel of a watercourse, may, in cases of actual controversy relating to the legal rights and duties of the respective parties, bring an original action or cross-complaint in the superior court for a declaration of his or her rights and duties in the premises, including a determination of any question of construction or validity arising under the instrument or contract. He or she may ask for a declaration of rights or duties, either alone or with other relief; and the court may make a binding declaration of these rights or duties, whether or not further relief is or could be claimed at the time. The declaration may be either affirmative or negative in form and effect, and the declaration shall have the force of a final judgment. The declaration may be had before there has been any breach of the obligation in respect to which said declaration is sought.  (CCP § 1060.)

 

The court finds that the FAXC has properly alleged an actual controversy, and the necessity for a declaration of rights.  (FAXC, ¶¶ 17-18.)

 

Demurrer is OVERRULED.