TENTATIVE RULING

Calendar:    6

Date:          3/17/2023 

Case No: 22 GDCV00480 Trial Date: None Set 

Case Name: Conn v. Hudson Insurance Company

DEMURRER TO ANSWER

MOTION TO STRIKE

 

Moving Party:            Plaintiff Shannon Conn      

Responding Party: Defendant Hudson Insurance Company      

RELIEF REQUESTED:

Sustain demurrer to first through twentieth affirmative defenses in the First Amended Answer 

Strike each affirmative defense from the First Amended Answer. 

SUMMARY OF FACTS:

Plaintiff Shannon Conn alleges that in January of 2016, plaintiff entered into a Residential Purchase/Sale Agreement for the purchase of real property in Magalia, California, and that in February of 2016, the sellers agreed to make repairs to the subject property, including repairing the sinks and windows.  Plaintiff was assured that no leaks were found in the master bathroom, but in April of 2016, shortly after plaintiff moved into the subject property, plaintiff discovered leaks and water intrusion. 

Plaintiff alleges that in May of 2016 she hired Jim E. Hale dba Jim E. Hale B General Contractor and Plumbing Contractor to inspect and resolve the defects in the subject property.   Hale represented that he had repaired the leak, but the leak in fact remained unrepaired, and caused water intrusion and mold growth.  

Plaintiff alleges that plaintiff hired numerous contractors to repair and abate the leaks and became ill.  

In May of 2017, plaintiff filed a complaint for damages against Hale in the Superior Court of California, County of Butte.  On May 23, 2022, the court entered judgment against Hall and in favor of plaintiff in the sum of $15,000.00.  

The FAC alleges that at all times mentioned, Hale, as a licensed contractor, was required to be bonded, and was bonded through defendant Hudson Insurance Company (Hudson).  Plaintiff alleges that in July of 2022 plaintiff contacted defendant Hudson to recover against Hale’s contractor bond, but on July 20, 2022, defendant denied any claim by plaintiff.  Plaintiff alleges that she has been harmed by defendant’s unjustified refusal to recognize and pay plaintiff’s asserted claim.

Defendant Hudson filed a demurrer and motion to strike in response to the initial complaint, which was heard on November 4, 2022.    The motion to strike punitive damages was sustained without leave to amend.  The demurrer was sustained with leave to amend as to the first cause of action for recovery on a contractor’s license bond and second cause of action for breach of the covenant of good faith and fair dealing.  The demurrer was overruled to the third cause of action for intentional interference with contract and fourth cause of action for declaratory relief.  Plaintiff was permitted twenty days leave to amend and filed a First Amended Complaint. 

Defendant Hudson filed a demurrer in response to the FAC, which was heard on January 6, 2023.  The demurrer was overruled, and defendant permitted twenty days to answer.  

Defendant Hudson filed an answer to the FAC, and then a First Amended Answer.  The FAA consists of a general denial and twenty affirmative defenses.  Plaintiff by these motions challenge the sufficiency of the FAA. 

ANALYSIS:

Demurrer

CCP section 430.20 provides:

“A party against whom an answer has been filed may object, by demurrer as provided in Section 430.30, to the answer upon any one or more of the following grounds:

(a) The answer does not state facts sufficient to constitute a defense.

(b) The answer is uncertain.  As used in this subdivision, ‘uncertain’ includes ambiguous and unintelligible.

(c) Where the answer pleads a contract, it cannot be ascertained from the answer whether the contract is written or oral.”

Plaintiff Conn initially argues that the FAA fails to comply with CCP section 431.30(g), which provides, with respect to the content of answers:

“(g) The defenses shall be separately stated, and the several defenses shall refer to the causes of action which they are intended to answer, in a manner by which they may be intelligibly distinguished.”

The affirmative defenses in the FAA do not in fact refer to the causes of action which they are intended to answer. 

Defendant in the opposition argues that this argument was not raised prior to defendant’s filing of the FAA.   Defendant concedes, however, that the issue was raised in meet and confer efforts after the filing of the FAA and before the demurrer and motion to strike on this ground were filed.  It is not clear why defendant did not simply further amend the pleading to make this relatively simple adjustment.  This scenario is clearly a situation which meet and confer after an amended pleading is filed is intended to address.  Defendant also seems to argue that this action is relatively simple, involving only one plaintiff and one defendant, so there can be no confusion.  This response does not address the issue that the pleading does not identify which defense pertains to which cause of action.  

Defendant does not argue, for example, that all of the affirmative defenses apply to all four of the causes of action.  This seems like a very simple amendment to make to comply with the statute, and the demurrer is sustained on this ground. 

Plaintiff also argues that the first affirmative defense, for failure to state a cause of action, is improper, as the court has already heard demurrers asserting this argument, and the argument has been rejected, and the demurrer on this ground is overruled.  

It appears that under California statutory law, this is a valid objection to a pleading, as under CCP Section 430.80, it is expressly designated a valid objection which cannot be waived even if a party fails to timely assert it:

“(b) If the party against whom an answer has been filed fails to demur thereto, that party is deemed to have waived the objection unless it is an objection that the answer does not state facts sufficient to constitute a defense.”

Since this defense cannot be waived even if not asserted, it evidently can be asserted in an answer, and need not be alleged with any particularity.  In Stevens v. Torregano (1961) 192 Cal.App.2d 105, the court of appeal expressly observed:

“[T]he point that a complaint does not state a cause of action is never waived.  The point may be raised by answer, and it is not improper to do so, even though a previous demurer on the same ground has been overruled.”

Stevens, at 112, citations omitted. 

The demurrer on this ground is overruled. 

Plaintiff also argues that defendant’s second affirmative defense for statute of limitations cites inapplicable statutes governing wage and fringe benefits. 

Plaintiff concedes that a statute of limitations has been identified by code section in the pleading, but plaintiff argues that CCP section 7071.11 (c), subdivisions (1) and (2), which apply to “surety on a claim for wages and fringe benefits,” do not apply here. 

As pointed out in the opposition, the FAA does not cite to the CCP but to Business and Professions Code section 7071.11(c), which appears in the Licensing Article on the Chapter pertaining to Contractors, and provides, in connection with actions against a bond:

“(c) Except for claims covered by subdivision (d), any action against a bond required under this article, excluding the judgment bond specified under Section 7071.17, shall be brought in accordance with the following:

(1) Within two years after the expiration of the license period during which the act or omission occurred.  The provisions of this paragraph shall be applicable only if the license has not been inactivated, canceled, or revoked during the license period for which the bond was posted and accepted by the registrar as specified under Section 7071.7.

(2) If the license has been inactivated, canceled, or revoked, an action shall be brought within two years of the date the license of the active licensee would have expired had the license not been inactivated, canceled, or revoked. For the provisions of this paragraph to be applicable, the act or omission for which the action is filed must have occurred prior to the date the license was inactivated, canceled, or revoked….

(d) A claim to recover wages or fringe benefits shall be brought within six months from the date that the wage or fringe benefit delinquencies were discovered, but in no event shall a civil action thereon be brought later than two years from the date the wage or fringe benefit contributions were due.”

The FAA alleges that the statute of limitations stated in subdivision (c) applies, without reference to subdivision (d), or any wage or fringe benefits recovery.  Subdivision (c), subparts (1) and (2) appear to appropriately provide a statute of limitations defense apart from any wage or fringe benefits recovery, and facts are alleged showing the dates and conduct which support this affirmative defense.  [FAA, para. 2].  The demurrer on this ground is overruled.  

Plaintiff also argues that the third affirmative defense does not establish failure to mitigate damages as defendant admits in its eighteenth affirmative defense that the principal performed work in May of 2016, making the asserted dates in the third cause of action contradictory. 

However, as argued in the opposition, the California Supreme Court has recognized:

““ ‘ “[i]t is well settled in California that a defendant may plead as many inconsistent defenses in an answer as she may desire and that such defenses may not be considered as admissions against interest in the action in which the answer was filed.” ’ ” (Park City Services, Inc. v. Ford Motor Co., Inc. (2006) 144 Cal.App.4th 295, 309, 50 Cal.Rptr.3d 373.)

Harris v. City of Santa Monica (2013) 56 Cal.4th 203, 240-241.  

The demurrer on this ground accordingly is overruled. 

Plaintiff also argues that defendant has improperly pled equitable defenses, such as the fifth affirmative defense of laches, the seventh affirmative defense of estoppel, and the eighth affirmative defense of unclean hands, when plaintiff in the operative complaint does not seek equitable remedies, but the matter is strictly an action at law.  This assertion does not appear to be the case, as the FAC alleges a cause of action for declaratory relief.  In addition, as argued in the opposition, the FAC raises issues in equity in pleading that defendant is estopped from asserting the statute of limitations.  There is no authority cited under which equitable defenses cannot be alleged here.  This argument does not appear to be a ground for demurrer, and the demurrer on this ground also is overruled. 

The motion primarily argues that the affirmative defenses are not alleged with factual particularity, in reliance on FPI Development, Inc. v. Nakashima (1993) 231 Cal.App.3d 367, in which the court of appeal affirmed the granting of a motion for summary judgment, in part on the ground that the conclusory affirmative defenses stated in defendants’ answer were insufficient to place facts in issue. 

“All of the allegations are proffered in the form of terse 

legal conclusions, rather than as facts "averred as carefully and with as much detail as the facts which constitute the cause of action and are alleged in the complaint." (See Pomeroy, Code Remedies, supra, @ 563, at p. 917.) The only affirmative defenses that are mentioned in the summary judgment proceedings, fraud in the inducement and failure of consideration, are not well pled, consisting of legal conclusions, and would not have survived a demurrer. (See e.g.,   Metropolis etc. Sav. Bank v. Monnier (1915) 169 Cal. 592, 596 [147 P. 265] (Metropolis); Riegel v. Wollenshlager (1920) 49 Cal.App. 300, 301 302 [193 P. 160].)”

FPI, at 384.

The argument here is that the affirmative defenses consist primarily of a recitation of the defense, without providing sufficient details.  A review of the FAA here shows that, with the exception of the first affirmative defense for failure to state a cause of action, which is sufficient as discussed above, and the twentieth affirmative defense, reserving the right to assert additional affirmative defenses, the defenses include factual details, or legal statements.  Considering these details in connection with the allegations of the FAC, the defenses are sufficient to provide plaintiff notice of what is being alleged.  In addition, this court does not find this specificity argument under FPI Development persuasive, because the case stands for the generic proposition that mere allegations in a pleading are insufficient to withstand summary judgment.  It does not stand for the proposition of a heightened pleading standard for affirmative defenses in an answer. 

In fact, as pointed out in the opposition, it is recognized that plaintiffs rarely demur to answers, even though they have such a right pursuant to CCP § 430.30(a). See Weil & Brown, California Practice Guide: Civil Proc. Before Trial (The Rutter Group, 2022 rev.) para.  6:476.  The practice is disfavored due to the notice-based aspects of pleadings.  South Shore Land Co. v. Peterson (1964) 226 Cal.App.2d 725, 733.  

Sufficient notice has been provided here, and the demurrer on this ground is overruled. 

The demurrer accordingly is sustained with leave to amend only on the ground the FAA fails to comply with CCP section 431.30 (g).  The demurrer is overruled on all other grounds. 

 

Motion to Strike 

The motion to strike seeks to strike each affirmative defense on the ground the pleading does not conform with CCP section 431.30 (g). Since the demurrer is sustained on this ground with leave to amend, the motion to strike is deemed moot. 

RULING:

Plaintiff Shannon Conn’s Demurrer to Defendant Hudson Insurance Company’s First Amended Unverified Answer is SUSTAINED WITH LEAVE TO AMEND to the first through twentieth causes of action on the ground the pleading fails to comply with CCP section 431.30(g), in that the pleading fails to state which causes of action each affirmative defense is intended to answer. 

Demurrer on all other grounds is OVERRULED. 

Ten days leave to amend. 

Plaintiff Shannon Conn’s Motion to Strike portions of Defendant Hudson Insurance Company’s First Amended Unverified Answer is MOOT in light of the sustaining of the demurrer with leave to amend. 

Request for Judicial Notice by Hudson Insurance Company is GRANTED to the extent permitted by Day v. Sharp (1975) 50 Cal.App.3d 904, 914 (e.g., the Court takes judicial notice of the existence of court records, but not the truth of hearsay allegations contained therein, except in connection with certain exceptions enumerated in that case, such as orders, findings of fact and conclusions of law, and judgments.)

The parties are ordered to meet and confer in full compliance with CCP §§ 430.41 and 435.5 before any further demurrer or motion to strike may be filed.  

GIVEN THE CORONAVIRUS CRISIS, AND TO ADHERE TO HEALTH GUIDANCE THAT DICTATES SAFETY MEASURES, DEPARTMENT D IS ENCOURAGING AUDIO OR VIDEO APPEARANCES

Please make arrangement in advance if you wish to appear via LACourtConnect/Microsoft Teams by visiting www.lacourt.org to schedule a remote appearance.  Please note that LACourtConnect/Microsoft Teams offers free audio and video appearance. Counsel and parties (including self-represented litigants) are encouraged not to personally appear.  With respect to the wearing of face masks, Department D recognizes that currently, the Los Angeles Department of Public Health strongly recommends masks indoors, especially when interacting with individuals whose vaccination status is unknown; for individuals who have a health condition that puts them at higher risk for severe illness; individuals who live with someone who is at higher risk; and for individuals who are around children who are not yet eligible for vaccines.  In accordance with this guidance, it is strongly recommended that anyone personally appearing in Department D wear a face mask.  The Department D Judge and court staff will continue to wear face masks.  If no appearance is set up through LACourtConnect/Microsoft Teams, or otherwise, then the Court will assume the parties are submitting on the tentative.