Judge: Robert B. Broadbelt, Case: 22STCV34402, Date: 2023-05-11 Tentative Ruling

Tentative rulings are sometimes, but not always, posted. The purpose of posting a tentative ruling is to to help focus the argument. The posting of a tentative ruling is not an invitation for the filing of additional papers shortly before the hearing.

Case Number: 22STCV34402    Hearing Date: May 11, 2023    Dept: 53

Superior Court of California

County of Los Angeles – Central District

Department 53

MOVING PARTY:                 Defendant Western Surety Company            

RESPONDING PARTY:       Unopposed

Demurrer to Complaint

The court considered the moving papers filed in connection with this demurrer.  No opposition papers were filed.  

DISCUSSION

Plaintiff Optima Energy, Inc. (“Plaintiff”) filed this action against, inter alia, defendant Western Surety Company (“Defendant”) on October 26, 2022, alleging 23 causes of action, including 18 causes of action for breach of written contract, and causes of action for reformation of written contracts, common count: services rendered and materials provided, common count: account stated, conversion, and negligent supervision.

Defendant now moves the court for an order sustaining its demurrer to each cause of action alleged in Plaintiff’s Complaint.

The court sustains Defendant’s demurrer to Plaintiff’s first through 18th causes of action for breach of contract because they do not state facts sufficient to constitute a cause of action against Defendant since Plaintiff has not alleged that Defendant breached the subject surety or completion bonds.  (Code Civ. Proc., § 430.10, subd. (e).)

In its Complaint, Plaintiff alleges that Defendant issued one or more surety or completion bonds insuring that any obligations due from defendant PUB Construction, Inc. to Plaintiff with respect to work to be performed by Plaintiff at California State University Northridge would be paid to Plaintiff in full and in a timely manner.  (Compl., ¶ 3.)  Plaintiff further alleges that it is a third-party beneficiary of those bonds and therefore has standing to assert claims against Defendant.  (Ibid.)  However, Plaintiff has not alleged claims against Defendant for failure to pay pursuant to the subject bonds in its first through 18th causes of action, and has instead alleged breaches of, respectively, (1) the Addie Klotz Agreement; (2) the Cypress Hall Agreement;      (3) the Bayramian Hall Agreement; (4) the Chaparral Hall Agreement; (5) the Citrus Hall Agreement; (6) the Eucalyptus Hall Agreement; (7) the IAO Agreement; (8) the Jacaranda Hall Agreement; (9) the Live Oak Agreement; (10) the Magnolia Hall Agreement; (11) the Manzanita Hall Agreement, (12) the Matador Hall Agreement; (13) the Monterey Hall Agreement; (14) the Police Agreement; (15) the Redwood Hall Agreement; (16) the Sequoia Hall Agreement;       (17) the Art & Design Agreement; and (18) the Bianchi Planetarium Agreement (collectively, the “Agreements”).  (Compl., ¶¶ 14-16, 20, 26-27, 32, 37-39, 44, 48-51, 56, 60-63, 68, 72-75, 80, 84-87, 92 97-99, 104, 108-110, 116, 121-123, 128, 133-135, 140, 145-147, 152, 157-159, 164, 169-171, 176, 181-183, 188, 193-195, 200, 203-205, 212, 217-219.)

The court sustains Defendant’s demurrer to Plaintiff’s 19th cause of action for reformation of agreements because it does not state facts sufficient to constitute a cause of action against Defendant since Plaintiff bases this cause of action on the Agreements, which were entered into by and between Plaintiff and other parties, and has not based this cause of action on the surety and completion bonds issued by Defendant.  (Code Civ. Proc., § 430.10, subd. (e); Compl., ¶¶ 224, 226 [requesting the court “reform[] each Agreement so as to make it provide that the Agreement is a sub-contract agreement between Plaintiff and [defendant] PUB” and further providing that each Agreement was executed on behalf of PUB as the Prime contractor by Mr. Kim”].) 

The court sustains Defendant’s demurrer to Plaintiff’s 20th cause of action for common count: services rendered and materials provided because it does not state facts sufficient to constitute a cause of action against Defendant since Plaintiff (1) alleges that it has provided construction services to the defendants, for which Plaintiff has not been paid, but (2) has not specifically alleged that Plaintiff provided construction services for the benefit of Defendant, who is instead alleged only to have “issued one or more surety or completion bonds insuring” the payment of funds owed by defendant PUB Construction, Inc. to Plaintiff.  (Code Civ. Proc., § 430.10, subd. (e); Compl., ¶¶ 3, 228-230)

The court sustains Defendant’s demurrer to Plaintiff’s 21st cause of action for common count: account stated because it does not state facts sufficient to constitute a cause of action against Defendant since Plaintiff (1) alleges that there is an account stated for the construction services provided by Plaintiff to the defendants, but (2) has not specifically alleged that Plaintiff provided construction services for the benefit of Defendant, who is instead alleged only to have “issued one or more surety or completion bonds insuring” the payment of funds owed by defendant PUB Construction, Inc. to Plaintiff.  (Code Civ. Proc., § 430.10, subd. (e); Compl., ¶¶ 3, 233.)

The court sustains Defendant’s demurrer to Plaintiff’s 22nd cause of action for conversion because it does not state facts sufficient to constitute a cause of action against Defendant since Plaintiff alleges that it was defendant PUB Construction, Inc., and not Defendant, that (1) has failed to pay to Plaintiff the $622,058 it has received from the other defendants, and (2) took, maintained possession of, and converted Plaintiff’s funds.  (Code Civ. Proc., § 430.10, subd. (e); Compl., ¶ 238.)

The court sustains Defendant’s demurrer to Plaintiff’s 23rd cause of action for negligent supervision because it does not state facts sufficient to constitute a cause of action against Defendant since Plaintiff has not alleged facts establishing that Defendant, as the issuer of surety or completion bonds, breached a statutory duty of care to supervise Plaintiff pursuant to Labor Code section 1775.  (Code Civ. Proc., § 430.10, subd. (e); Lab. Code, § 1775, subd. (a)(1); Compl., ¶¶ 246-247.)

The burden is on the plaintiff “to articulate how it could amend its pleading to render it sufficient.”¿ (Palm Springs Villas II Homeowners Assn., Inc., supra, 248 Cal.App.4th at p. 290.)¿ To satisfy that burden, a plaintiff “must show in what manner he can amend his complaint and how that amendment will change the legal effect of his pleading.”¿ (Goodman v. Kennedy (1976) 18 Cal.3d 335, 349.)  The court finds that Plaintiff has not met its burden of showing how it could amend its causes of action for breach of the Agreements, reformation of the Agreements, common counts, conversion, and negligent supervision to render it sufficient against Defendant.  The court therefore sustains Defendant’s demurrer to Plaintiff’s first through 23rd causes of action without leave to amend. 

However, the court notes that Plaintiff may have alleged facts showing that it may be able to allege a cause of action against Defendant and the payment bond surety.  The court therefore grants Plaintiff leave to amend to allege a separate cause of action against Defendant based on any claims against the surety or completion bonds issued by Defendant. 

ORDER

The court sustains defendant Western Surety Company’s demurrer to plaintiff Optima Energy, Inc.’s first through 23rd causes of action without leave to amend.

The court grants plaintiff Optima Energy, Inc. 20 days leave to file a First Amended Complaint that alleges a cause of action against defendant Western Surety Company for a claim against the surety bonds issued by defendant Western Surety Company.

The court orders defendant Western Surety Company to give notice of this ruling.

IT IS SO ORDERED.

DATED:  May 11, 2023

_____________________________

Robert B. Broadbelt III

Judge of the Superior Court