Judge: Ronald F. Frank, Case: 20TRCV00742, Date: 2023-02-28 Tentative Ruling
Case Number: 20TRCV00742 Hearing Date: February 28, 2023 Dept: 8
Tentative Ruling¿
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HEARING DATE: February 28, 2023¿
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CASE NUMBER: 20TRCV00742
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CASE NAME: Luann Fabian
v. Robert P. Nickell, et al.
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MOVING PARTY: Cross-Complainant, Robert P. Nickell
RESPONDING PARTY: Cross-Defendants,
Luann Fabian dba Luann Development
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TRIAL DATE: September 11, 2023
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MOTION:¿ (1) Motion for Summary
Adjudication
¿ Tentative Rulings: (1) DENIED.
Triable issues of fact as to the pending MSA are raised as to whether Bruce
and Terry Huff and Dominic Rouzaud were LuAnn Development’s “employees” or
“independent contractors” per jury instruction CACI 3704 and/or 3706, whether
the Huff’s work on the remodel project did or did not require a contractor’s
license, and whether LuAnn Development was or was not “required” to maintain
unemployment insurance given the manner in which workers were utilized on the
project.
I. BACKGROUND¿¿
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A. Factual¿¿
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Plaintiff
Luann Fabian (“Plaintiff”) filed this action against Defendant Robert Nickell (“Defendant”)
on October 15, 2020, alleging causes of action for breach of contract and
common count. Plaintiff alleges that on March 8, 2018, Plaintiff and Defendant
entered into a promissory note for $3,11,276.81 with interest of 9% per annum.
Defendant breached the note by failing to pay the principal and accrued
interest. Predating this agreement, the parties entered into a Development
Contract on August 1, 2013 for a construction project at Defendant’s home.
At
the same time he answered the Complaint, Defendant filed a Cross-Complaint
alleging causes of action stemming from the 2013 development contract for (1)
breach of contract, (2) violation of Bus. & Prof. Code § 7107, (3)
violation of Bus. & Prof. Code § 7113, (4) violation of Bus. & Prof.
Code § 7028, (5) violation of Bus. & Prof. Code § 7109, (6) fraudulent
inducement, (7) unjust enrichment, and (8) declaratory relief. Defendant
alleges that Cross-Defendant violated the Development Contract by operation of
law by failing to maintain worker’s compensation insurance, was unlicensed at
the time she accepted the work in violation of Business & Professions Code
§ 7028 and purposefully decided not to disclose this fact to Nickell, nor did
she disclose that her license under a different license number (906725) had
previously been revoked or that she had previous violations of the Business
& Professions code on her record. Defendant also alleges that Plaintiff
used unlicensed workers and failed to complete the project. The eighth cause of
action for declaratory relief requests that the Court determine whether and/or
who breached the Promissory Note.
Cross-Complainant
now files a Motion for Summary Adjudication on the grounds that he claims that
the first, fourth, sixth, and seventh causes of action would be impossible for
Plaintiff to disprove the elements because she did not have workers
compensation insurance and did have employees. As such, Defendant contends that
her contractor’s license was automatically suspended. However, Cross-Defendant
asserts that at the time of entering into the contract, LuAnn Development held
a valid B License (General Building Contractor) with the Contractor State
License Board (“CSLB”), License Number 981015, issued to LuAnn’s fictitious
business name, LuAnn Development, on February 8, 2013, and it was in good
standing. (AMF 3.) Cross-Defendant also argues that during the Nickell project,
LuAnn Development had no employees and therefore LuAnn Development was not
required to obtain worker’s compensation insurance.
Cross-Defendant
claims that during the Nickell project, Dominic Rouzaud (“Dominic”) was the
superintendent/construction manager. Cross-Defendant alleges that Dominic is an
independent contractor and not an employee of LuAnn Development and that
Dominic established his own services schedule and determined what needed to be
done and how it would be done for the Nickell project, noting that LuAnn
Development did not control Dominic’s manner and means of accomplishing his
services. (AMF 5.) Cross-Defendant asserts that for the Nickell project, at
various times, upon Dominic’s request, Terry Huff (“Terry”) visited the project
on Dominic’s behalf as superintendent. Bruce Huff (“Bruce”) provided
miscellaneous services such as sweeping, trash removal, and opening and closing
up the project site. Cross-Defendant argues that these services did not require
a contractor’s license. (AMF 6.) Cross-Defendant also asserts that Terry was an
independent contractor and was not an employee of LuAnn Development. Cross-Defendant
asserts that she has submitted evidence establishing that: (1) LuAnn
Development did not have employees; (2) Terry and Bruce were independent
contractors and not employees of LuAnn Development; (3) LuAnn Development was
exempt from having workers compensation insurance since it did not have any
employees; and (4) LuAnn Development’s contractor’s license was never suspended
during the time it worked on the Nickell project.
B. Procedural¿¿
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On November 23, 2022, Defendant/Cross-Complainant,
Robert P. Nickell filed a Motion for Summary Adjudication. On February 14,
2023, Plaintiff/Cross-Defendant filed an opposition to the Motion for Summary Adjudication.
On February 21, 2023, Defendant/Cross-Complainant filed a reply brief. On
February 23, 2023, Cross-Defendant filed an objection to Cross-Complainant’s
reply brief based on Nickell’s submission of additional evidence at the reply
stage, depriving it of the opportunity to respond.
II. EVIDENTIARY OBJCTIONS
Cross-Defendant’s Objections:
Sustain: none.
Overrule: 1-8
Cross-Complainant’s
Objections:
Sustain: none, except as
discussed below in Section III.B.
Overrule: 1-4
III. ANALYSIS¿
A. Legal Standard
The function of a motion for summary judgment or
adjudication is to allow a determination as to whether an opposing party cannot
show evidentiary support for a pleading or claim and to enable an order of
summary dismissal without the need for trial. (Aguilar v. Atlantic Richfield
Co. (2001) 25 Cal.4th 826, 843.) CCP Section 437(c) “requires the trial
judge to grant summary judgment if all the evidence submitted, and ‘all
inferences reasonably deducible from the evidence’ and uncontradicted by other
inferences or evidence, show that there is no triable issue as to any material
fact and that the moving party is entitled to judgment as a matter of law.”¿ (Adler
v. Manor Healthcare Corp. (1992) 7 Cal.App.4th 1110, 1119.)¿ “The function
of the pleadings in a motion for summary judgment is to delimit the scope of
the issues; the function of the affidavits or declarations is to disclose
whether there is any triable issue of fact within the issues delimited by the
pleadings.”¿ (Juge v. County of Sacramento (1993) 12 Cal.App.4th 59, 67,
citing FPI Development, Inc. v. Nakashima (1991) 231 Cal. App. 3d 367,
381-382.)¿
As to each claim as framed by the complaint, the defendant
moving for summary judgment must satisfy the initial burden of proof by
presenting facts to negate an essential element, or to establish a defense.
(CCP § 437c(p)(2); Scalf v. D. B. Log Homes, Inc. (2005) 128 Cal.App.4th
1510, 1520. ) Courts “liberally construe the evidence in support of the party
opposing summary judgment and resolve doubts concerning the evidence in favor
of that party.”¿ (Dore v. Arnold Worldwide, Inc.¿(2006) 39 Cal.4th 384,
389.)¿
Once the defendant has met that burden, the burden shifts
to the plaintiff to show that a triable issue of one or more material facts
exists as to that cause of action or a defense thereto.¿¿¿
To establish a triable issue of material fact, the party
opposing the motion must produce substantial responsive evidence. (Sangster
v. Paetkau (1998) 68 Cal.App.4th 151, 166.)
B. Discussion
As a preliminary matter,
Cross-Defendant has filed an objection to Cross-Complainant’s reply brief.
Cross-Defendant objected to, and has moved to strike, Elliot Blunt’s
Declaration and exhibits attached in support of Cross-Complainants’ reply on
the grounds that the submission of additional evidence in support of a Section
437c motion at the reply stage is improper, is not permitted by law, and
unfairly deprives the opposing party of the time and opportunity to respond to
all of the moving party’s evidence. The Court agrees and makes its ruling
without the additional evidence, unless Cross-Complainant would like to take
its motion off calendar and re-file the motion with the additional evidence
being supplied, thereby giving the opposing party its statutory right to
address that additional evidence at the opposition phase. The Court could reserve a future MSA hearing
date if Cross-Complainant elects to take its pending motion off calendar.
Breach of Contract
To state a cause of action for breach of
contract, Plaintiff must be able to establish “(1) the existence of the
contract, (2) plaintiff’s performance or excuse for nonperformance, (3)
defendant’s breach, and (4) the resulting damages to the plaintiff.” (Oasis West Realty, LLC v. Goldman (2011)
51 Cal.4th 811, 821.)
If
a breach of contract claim “is based on alleged breach of a written contract,
the terms must be set out verbatim in the body of the complaint or a copy of
the written agreement must be attached and incorporated by reference.” (Harris v. Rudin, Richman & Appel (1999)
74 Cal.App.4th 299, 307.) In some circumstances, a plaintiff may also “plead
the legal effect of the contract rather than its precise language.” (Construction Protective Services, Inc. v.
TIG Specialty Ins. Co. (2002) 29 Cal.4th 189, 198-199.)
Cross-Complainant
asserts that Cross-Defendant cannot prevail on the first cause of action for
breach of contract because she did not disclose that her contractor’s license
was automatically suspended. Here, Cross-Complainant argues that the
construction agreement represents that LuAnn had a valid contractor’s license
and because she did not disclose that her contractor’s license was
automatically suspended for lack of workers compensation insurance, she
breached the contract before performance even began. Cross-Complainants contend
that they were damaged in the amount they paid for unlicensed work and the
amounts to correct the inadequate job LuAnn did.
In
opposition, Cross-Defendant argues that triable issues of fact exist on
Cross-Complainant’s first cause of action because LuAnn Development did not
have any employees working for LuAnn Development on the Nickell project and
services provided by Terry and Bruce as independent contractors were not
construction services that required contractors’ licenses. (AMF 4-9, 11-12.)
Instead, Cross-Defendant argues that to the extent Terry and Bruce engaged in
construction services at the Nickell project, it was through the contractors’
license of Andrews General Construction. (AMF 9.) Thus, Cross-Defendants assert
that the evidence produced by LuAnn Development confirms that LuAnn Development
was not required to have workers’ compensation insurance to maintain its
license. (AMF 4-9, 11-12.) At all times on the Nickell project, LuAnn
Development was in full compliance with the CSLB in providing general
contracting services under a valid California contractor’s license that was and
is in good standing. (AMF 3, 16.)
The
CACI Committee has provided two detailed jury instructions designed to have the
trier of fact decide a disputed issue as to whether an individual working on the
relevant project or worksite was an employee versus and independent contractor
under the so-called common law or Borello
test. (See CACI 3704, 3706; S.G. Borello
& Sons, Inc. vs Department of Industrial Relations (1989) 48
Cal.3d 341, 354-55; see also Dynamex Operations, West Inc. v. Superior Court
(2018) 4 Cal.5th 903, 934.) This
Court agrees and holds that triable issues of fact exist as to the breach of
contract cause of action. As such, the Motion for Summary Adjudication is
denied on this issue.
Violation of Business & Professions Code §
7028
Cross-Defendant
asserts that LuAnn Development did not have workers compensation insurance and
it had employees, therefore its license was automatically suspended, violating
Business & Professions Code § 7028.
As
noted above, Cross-Defendant argues that it did not have any employees working
for LuAnn Development on the Nickell project and the services provided by Terry
and Bruce as independent contractors for LuAnn Development were not
construction services that required a contractors’ license. (AMF 4-9, 11-12.)
Instead, Cross-Defendants repeat that to the extent Terry and Bruce engaged in
construction services at the Nickell project, it was through the contractors’
license of Andrews General Construction. (AMF 9.) Based on the above, this
Court denies the Motion for Summary Adjudication and finds that triable issues
of material facts as to whether LuAnn Development violated the Business and
Professions Code section 7028 and was working without a license.
Fraudulent
Inducement
“The elements of fraud,” including a cause of
action for fraudulent inducement, “are (a) a misrepresentation (false
representation, concealment, or nondisclosure); (b) scienter or knowledge of
its falsity; (c) intent to induce reliance; (d) justifiable reliance; and (e)
resulting damage.” (Hinesley v. Oakshade
Town Ctr. (2005) 135 Cal.App.4th 289, 294.) The facts constituting the
alleged fraud must be alleged factually and specifically as to every element of
fraud, as the policy of “liberal construction” of the pleadings will not
ordinarily be invoked. (Lazar v. Superior
Court (1996) 12 Cal.4th 631, 645.) To properly allege fraud against a
corporation, the plaintiffs must plead the names of the persons allegedly
making the false representations, their authority to speak, to whom they spoke,
what they said or wrote, and when it was said or written. (Tarmann v. State Farm Mut. Auto. Ins. Co. (1991) 2 Cal.App.4th 153,
157.)
Here, Cross-Complainant asserts that Nickell
contracted with LuAnn based on her assertion to him that was also part of the
written contract, that she was a licensed contractor in good standing. However,
Cross-Complainant argues that not having workers compensation insurance and
having employees meant that her license was suspended. Cross-Complainant
asserts that he would not have hired a contractor with a suspended license if
he had known this fact before. Cross-Complainant contends that he was induced
to sign the contract with false information and was damaged as a result.
Based on this conclusory argument, the Court
finds that Cross-Complainant has not carried his burden in establishing that
there are no triable issues of fact that LuAnn Development caused damages to
Cross-Complainant via fraudulent inducement. Additionally, as noted above, this
Court finds that even if Cross-Complainant has carried his burden,
Cross-Defendant has demonstrated that triable issues of material fact exist. As
such, the motion is denied as to this issue.
Unjust
Enrichment
“The elements for a claim of unjust enrichment
are receipt of a benefit and unjust retention of the benefit at the expense of
another. The theory of unjust enrichment requires one who acquires a benefit
which may not justly be retained, to return either the thing or its equivalent
to the aggrieved party so as not to be unjustly enriched.” (Lyles v. Sangadeo-Patel (2014) 225
Cal.App.4th 759, 769, quotation marks and citations omitted.) Notably,
“[u]njust enrichment is not a cause of action”; it is simply “a restitution
claim.” (Hill v. Roll International Corp.
(2011) 195 Cal.App.4th 1295, 1307; see also Melchior v. New Line Productions, Inc. (2003) 106 Cal.App.4th 779,
793 [“there is no cause of action in California for unjust enrichment”].)
Here,
Cross-Complainant claims that it is undisputed that LuAnn did not have workers
compensation insurance and it did have employees, its contractors’ license was
automatically suspended and it was not allowed to recover compensation for work
done. The Court finds that Cross-Complainant has not carried his burden in
establishing that there are no triable issues of fact that LuAnn Development
caused damages to Cross-Complainant via fraudulent inducement. Additionally, as
noted above, this Court finds that even if Cross-Complainant has carried his
burden, Cross-Defendant has demonstrated that triable issues of material fact
exist. As such, the motion is denied as to this issue.
IV. CONCLUSION¿¿
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For the foregoing reasons, Cross-Complainant’s
Motion for Summary Adjudication is DENIED.
Unless notice is waived, prevailing
party is ordered to give notice.¿¿¿¿