Judge Peter A. Hernandez, Case Number: 23PSCV00946, Date: 2023-08-28 Tentative Ruling

Defendant Angeles Contractor, Inc.’s Demurrer to First Amended Complaint is OVERRULED. Defendant is ordered to file an Answer within 10 days.

Plaintiff is a licensed contractor primarily engaged in plumbing construction work; Defendant Angeles Contractor, Inc. (“ACI”) acted as the prime contractor for construction of the work of improvement known as the Malibu Middle & High School Campus Improvements (ACI Project No. 2239), located at 30215 Morning View Drive, Malibu, CA 90265 (“Malibu Project”). In or around April 10, 2017, Plaintiff entered into a written contract with ACI under which Plaintiff was to perform certain plumbing work on the Malibu Project, and provide related labor, material, equipment and services for the same, in exchange for ACI’s payment. ACI has failed to pay Plaintiff in full.

On June 22, 2023, Plaintiff filed a First Amended Complaint, asserting causes of action against ACI and Does 1-10 for:

A demurrer may be made on the grounds that the pleading, inter alia, does not state facts sufficient to constitute a cause of action. (Code Civ. Proc., § 430.10, subd. (e).)

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.” (SKF Farms v. Superior Court (1984) 153 Cal.App.3d 902, 905 [citations omitted].) 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 placed on an instrument pleaded therein, or facts impossible in law, or allegations contrary to facts of which a court may take judicial knowledge.” (S. Shore Land Co. v. Petersen (1964) 226 Cal.App.2d 725, 732 [citations omitted].)

ACI demurs to the first through third causes of action in Plaintiff’s FAC on the basis that they each fail to state facts sufficient to constitute causes of action.

At the outset, the court rules on ACI’s Request for Judicial Notice (“RJN”) as follows: Granted as to Exhibit 1 (i.e., Santa Monica Malibu Unified School District’s “Notice of Subcontractor Substitution Hearing” dated October 25, 2017 and Santa Monica Malibu Unified School District’s “Ruling of Hearing Officer Michael Bishop, Interim Chief Business Officer” dated November 28, 2017).

The court may take judicial notice of official acts of state agencies. (Evid. Code § 452, subd. (c)). School districts are agencies of the state. (Department of Finance v. Commission on State Mandates (2003) 30 Cal.4th 727, 751, fn. 20.)

ACI first demurs to the first through third causes of action (i.e., Breach of Written Contract, Common Count for Work, Labor, and Services Rendered—Agreed Price and Common Count for Work, Labor and Services Rendered—Reasonable Value, respectively) on the basis that they are time-barred by Code of Civil Procedure § 337[1] and 339.[2]

“A demurrer based on a statute of limitations will not lie where the action may be, but is not necessarily, barred. In order for the bar. . . to be raised by demurrer, the defect must clearly and affirmatively appear on the face of the complaint [and matters subject to judicial notice]; it is not enough that the complaint shows that the action may be barred.” (Committee for Green Foothills v. Santa Clara County Bd. of Supervisors (2010) 48 Cal.4^th 32, 42 [internal quotations and citation omitted].)

The court overrules ACI’s demurrer on statute of limitations grounds.[3] Here, Plaintiff has alleged the existence of a written agreement entered into “in or around April 10, 2017” between Plaintiff, as subcontractor, and ACI, as prime contractor under which Plaintiff was to perform certain plumbing work on the work of improvement known as the Malibu Middle & High School Campus Improvements (ACI Project No. 2239), located at 30215 Morning View Drive, Malibu, CA 90265 (“Malibu Project”) and to provide related labor, material, equipment and services for the same in exchange for ACI’s payment (i.e., “Subcontract Agreement”) (FAC, ¶¶ 10 and 11). Plaintiff’s second and third causes of action are for common counts based on work, labor and services associated with the Malibu Project. Plaintiff has alleged that ACI breached the Subcontract Agreement by failing to pay Plaintiff $74,865.00 (Id., ¶ 14).

ACI asserts that its RJN reflects that Plaintiff was substituted out from the Malibu Project as of November 28, 2017. (RJN, Exh. 1.) Plaintiff’s original complaint was not filed until April 3, 2023, or over five years and four months later.

Plaintiff argues that its substitution as a subcontractor did not commence the running of any statute of limitations because Section 3 of the Subcontract Agreement titled “Compensation and Payment” reflects that ACI did not have to make payment to Plaintiff until it was paid by the Owner and was entitled to retain 10% until 60 days after project completion, which dates are not identified in the FAC.

ACI, in turn, contends that Plaintiff is precluded by the sham pleading doctrine from omitting harmful facts contained in Plaintiff’s original complaint. The sham pleading doctrine is this: “If a party files an amended complaint and attempts to avoid the defects of the original complaint by either omitting facts which made the previous complaint defective or by adding facts inconsistent with those of previous pleadings, the court may take judicial notice of prior pleadings and may disregard any inconsistent allegations.” (Colapinto v. County of Riverside (1991) 230 Cal.App.3d 147, 151.) ACI argues that Plaintiff previously alleged that “Defendant caused the wrongful substitution of Plaintiff, at which time Defendant ACI effectively repudiated/cancelled the subcontract” in Paragraphs 24 and 25 of Plaintiff’s original complaint. Paragraphs 24 and 25 of Plaintiff’s original complaint, however, relate to a separately pled contract referred to therein as the Santa Monica Project, not the Malibu Project.

[1] Code of Civil Procedure § 337 states, in relevant part, as follows: “Within four years: (a) An action upon any contract, obligation or liability founded upon an instrument in writing. . .”

[2] Code of Civil Procedure § 339 states, in relevant part, as follows: “Within two years: 1. An action upon a contract, obligation or liability not founded upon an instrument or writing. . . “ “The statute of limitations for quantum meruit is two years.” (Maglica v. Maglica (1998) 66 Cal.App.4^th 442, 452.)

[3] ACI points out the contract attached as Exhibit A is unsigned; however, Plaintiff has alleged, in relevant part, that it “is informed and believes and based thereon alleges that it signed the attached Subcontract Agreement and delivered it to ACI, but does not recall if it ever received a fully executed copy with ACI’s signature.” (FAC, ¶ 11.) The court determines that the foregoing allegation is sufficient to plead the existence of a written contract.