Judge: Ronald F. Frank, Case: 22TRCV00244, Date: 2023-06-29 Tentative Ruling
Case Number: 22TRCV00244 Hearing Date: June 29, 2023 Dept: 8
Tentative Ruling¿
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HEARING DATE: June 29, 2023¿
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CASE NUMBER: 22TRCV00244
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CASE NAME: Onni
Contracting (California), Inc. v. Solar Alliance Southweast, LLC, et al.
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MOVING PARTY: Defendant, Cross-Complainant, Solar Alliance Southeast, LLC
RESPONDING PARTY: Plaintiff,
Cross-Defendant, Onni Contracting (California), Inc.
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TRIAL SETTING DATE: September
27, 2023
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MOTION:¿ (1) Motion for Summary Judgment,
or in the alternative, Summary Adjudication
¿ Tentative Rulings: (1) ARGUE as to the First, Second, and Third
Causes of action, in light of the issues noted by the Court as to the duty to
conduct a title search and Plaintiff’s actual or constructive notice of the SCE’s
easement before Plaintiff contracted with Defendant, and GRANTED as to the
Fourth cause of action.
I. BACKGROUND¿¿
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A. Factual¿¿
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On
March 29, 2022, Plaintiff, Onni Contracting (California), Inc. (“Plaintiff”)
filed a Complaint against Defendants, Solar Alliance Southeast, LLC dba Solar
Alliance LLC, and DOES 1 through 50. The Complaint alleges causes of action for
(1) Breach of Contract; (2) Negligence; (3) Negligent Design; and (4) Express
Indemnity.
Plaintiff’s
Complaint is based on an agreement between the parties, made on November 20,
2018 (“Agreement”) to provide design and construction management services
(“DCM”) for the construction fo a rooftop and carport structure mounted solar
PV array system. Pursuant to the Agreement, the project was defined as “the
construction of a solar PV array consisting of rooftop and carport structure
mounted arrays interconnected to respective load centers, in addition to other improvements,
grading and landscaping” (“Project”) at the Subject Property. Plaintiff asserts
that the tasks Solar was to perform under the Agreement consisted of project
management and construction consulting services in connection with the Project
and fully outlined in Schedule B of the Agreement. As explicitly stated in the
Agreement’s scope of work described in Schedule B of the Agreement, the
construction of the carport structure was fully intended to be included in the
Project. Defendant Solar’s Project DCM services also included developing the
proposals, designs and engineering of the Project to allow Onni to select the
construction contractor to perform the actual construction of the Project.
Plaintiff contends, as part of its initial design and engineering of the
Project, Solar was required to complete an initial site study of the Subject
Property. Plaintiff also contends, Solar was further responsible for and liable
for any necessary changes to the design as required for permitting and utility
acceptance of the Project. Moreover, Plaintiff asserts once the Project
started, Solar was tasked with design management, including overseeing
construction and installation of the Project to ensure compliance with Solar’s
design.
Plaintiff
also notes that on November 20, 2019, it also entered into a contract with
Treepublic, Inc., (“Treepublic”) to construct the PV System and carport
structure layout as designed by Solar. Plaintiff notes that Treepublic
subcontracted the construction of the carport to Orion Carport Systems &
Construction, Inc. (“Orion”). Plaintiff contends that even in spite of this,
Solar was tasked with overseeing the work performed by Treepublic and/or its
subcontractors. Plaintiff asserts that in addition to Solar’s obligations as
DCM, as described above, Solar was also contractually obligated to indemnify
Onni pursuant to the Agreement’s Contract General Conditions in Schedule A.
Plaintiff argues that solar attempts to abscond with its indemnification
obligations by claiming that the indemnification obligation falls only on the
construction contractor. However, Plaintiff argues that pursuant to Schedule A
of the Agreement, which states in its opening line: “To the extent applicable
to the Work required to be performed by the DCM hereunder, and acknowledging
that the Construction Contractor identified to construct the project shall be
subject to these conditions . . .” the indemnification obligations in the
Agreement apply to both the construction contractor and Solar.
Plaintiff
notes that on May 23, 2019, SoCal Edison (“SCE”) sent a cease-and-desist letter
to Onni demanding that the Project be halted because it interfered with an
easement in its favor on the Subject Property. Plaintiff does not know whether
those Onni employees who communicated with Solar knew about the SCE easement or
if so, if they communicated its existence to Solar. However, Plaintiff notes in
light of SCE’s cease-and-desist letter, Onni was required to cease work on the
carport and carport-mounted PV system and repair the already demolished parking
lot on the Subject Property. Plaintiff notes it was unable to obtain a variance
to SCE’s easement and was forced to proceed with the Project without installing
the carport structure and carport-mounted solar PV array. Plaintiff posits, as
it was the responsibility of Solar to design and obtain the requisite utility
acceptance of the Project, Solar sent a notice of default to Solar on August
26, 2020. The notice demanded that Solar cure its breach by correcting its defective
designs and obtain all necessary permits and secure acceptance of the designs
by the relevant utilities.
Lastly,
Plaintiff contends that upon completion of the scaled down Project, on April
29, 2021, it sent a claim for damages to Solar and its insurance carrier
outlining Solar’s alleged responsibilities under the Agreement and its breach
thereof. Plaintiff stated that it demanded that Solar compensate it in the
amount of $323,817 for the damages it incurred as a result of Solar’s breach of
the Agreement. Further, Plaintiff’s
demand letter detailed its damages resulting from Solar’s breach as
costs associated with unusable carport materials, repairs to the Subject
Property’s parking lot, survey costs, attorney’s fees, and lost energy savings
from the scaled down solar PV system. Plaintiff asserts that had Solar
identified the SCE utility easement during its initial site study and Project
design as required under the Agreement, Onni likely would not have incurred the
above detailed damages.
Defendant
Solar now files a Motion for Summary Judgment.
B. Procedural¿¿
On April 14, 2023, Defendant
filed a Motion for Summary Judgment. On June 15, 2023, Plaintiffs filed an
opposition. On June 23, 2023, Defendants filed a reply brief. Each party also filed supporting documents
including separate statements, declaration with exhibits, and evidentiary objections
and responses thereto.
II. EVIDENTIARY OBJECTIONS
Defendant’s
Objections to Plaintiffs’ Evidence:
Overrule: all.
Sustain: none.
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
Defendant Solar brings this Motion
for Summary Judgment on the grounds that it argues Plaintiff’s claims against
it are premised on the alleged breach of an obligation that did not exist under
the express terms of the parties’ written November 20, 2018 Agreement.
Defendant also argues that it has a complete defense of impossibility,
predicated on the SCE easement that prohibited the erection of the carport,
which it contends was a condition precedent to the installation of a solar
array atop the never-built carport. As such, it argues all four (4) of
Plaintiff’s causes of action against it have not merit.
Breach of
Contract
Defendant Solar asserts that Plaintiff cannot
establish a cause of action against it for 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.) Defendant Solar argues that Plaintiff
cannot establish that there was a contractual obligation by Solar to construct
the carport. Defendant Solar argues that the undisputed evidence demonstrates
the absence of the alleged contractual obligation on which Plaintiff’s claims
are premised, under the unambiguous, plaint meaning of the terms of the
Agreement. Defendant argues the Agreement demonstrates that the construction of
the carport was a condition precedent to Solar further performing under the
Agreement as to the portion of the Project. Defendant Solar contends that Plaintiff’s
failure to ensure the carport was constructed precludes its action against
Solar for allegedly failing to perform DCM services related to the installation
of the solar PV array on the very carport.
In
opposition, Plaintiff contends that the express terms of the Agreement required
Solar to identify and account for SCE’s utility easement in its design for
utility acceptance. As noted by Plaintiff, pursuant to the Agreement, the
Project was defined as: the construction of “a solar PV array, consisting of rooftop
and carport structure mounted arrays interconnected to respective load centers,
plus other improvements, grading and landscaping as outlined in schedule B (the
“Project”) at property located at 1230 & 1240 Rosecrans Ave, Manhattan
Beach, California 90266 (the “Property”). (Complaint, Exhibit B, ¶ A.) Part of
this agreement notes that Defendant Solar, “DCM has been and is responsible for
developing the proposals, designs, and engineering of the Project (which shall
be consistent with the attached basis of design), leading to the selection of
Construction Contractor who will construct the project.” (Schedule B Agreement,
p. 13, “Overview,” ¶ 1.) Further, Schedule B further states: “DCM warrants
that, to the fullest extent permitted by law, it is responsible for the design
and engineering of the Project and is liable for necessary changes to the
design as may be required for the permitting or utility acceptance of the
Project . . .” (Plaintiff’s UMF No. 18) Additionally, the “Task Breakdown” of
Schedule B explicitly allocates responsibility to conduct a site study of the
Subject Property onto Solar. (Plaintiff’s UMF No. 16) Plaintiff further points
out that Paragraph 8 of the Agreement states: “[Solar] warrants and represents
that it has reviewed the conditions at the Project, entered the Property and
observed the condition thereof, fully apprised itself of the scope of Work and
has satisfied itself as to the condition under which the work will be
performed.” (Plaintiff’s UMF No. 11)
Plaintiff
further notes that in the agreement between it and Treepublic contained no such
requirement to conduct a site study in its Schedule B or an allocation of
liability to Treepublic for necessary changes to the design as may be required
for the permitting or utility acceptance of the Project. Based on this,
Plaintiff argues that the express terms of the Agreement show that Defendant
Solar was obligated to perform an initial site study of the Subject Property to
determine the conditions in which the Project would be carried out.
Plaintiff
specifies it does not claim that Defendant Solar failed to perform its DCM and
project management services that were required after the initial
Project design, site study, engineering, and procurement of permits and utility
acceptance. Plaintiff instead alleges that Solar breached its obligation to
identify the SCE easement in its initial site study and account for it in its
Project Design and specifications. Plaintiff further notes that the usual and
ordinary meaning of a “site study” naturally includes review and inquiry of the site/Subject
Property. Based on this, Plaintiff argues that based on the definitions of site
and study, such a study of the site/Subject Property would include a
determination of whether any barriers, such as an easement, are in place which
would render Solar’s design of the Project unfeasible. Further, this Court
notes that in the Schedule B – Scope of Work “overview” section, it notes that
“DCM warrants that, to the fullest extent permitted by law, it is responsible
for the design and engineering of the Project and is liable for necessary
changes to the design as may be required for the permitting or utility
acceptance of the Project…”
In
its reply brief, Defendant argues that Plaintiff fails to offer evidence demonstrating
it performed its obligations, including its failure to meet its obligation
under the covenant of good faith and fair dealing, under which Defendant argues
Plaintiff had a duty to disclose the material fact that easements on its
property prohibited the construction of the carport where Plaintiff contracted
to erect it.
The
key issue for the Court is whether the parties’ contract can reasonably be read
as imposing a duty on Defendant Solar to conduct a title search on Plaintiff’s
Property to determine whether Plaintiff had the right to enter into the Agreement.
There is no mention of the words “title search” in the parties’ contract. The Schedule B Agreement suggests that Defendant’s
duties were to start prior to the a definitive contractor even being hired
(e.g., “DCM has been and is responsible for developing the proposals, design
and engineering of the Project,…leading to the selection of the Construction
Contractor…”.) Such language suggests that construction of the carports were
not a condition precedent to Defendant’s contractual obligations being
triggered, but instead, Defendant was to begin its duties immediately,
alongside the Contractor’s duties in constructing the carport. But can the duty
to conduct a “site inspection” be read to also impose a duty to go off-site to Manhattan
Beach City Hall or to the County Recorder’s office and conduct a title
search? The Court finds that language is
not reasonably susceptible of the interpretation urged by Plaintiff. But other language of the parties’ agreement requires
Defendant Solar to responsible for obtaining permitting and utility acceptance
of the Project, which arguably can be read as imposing a duty to pull permits
and ascertain any impediments such as pre-existing utility company easements in
order to secure “utility acceptance.” The Court will take oral argument on this
point.
Defendant
also argues that unbeknownst to it, at the time Plaintiff entered into the
Agreement, there was an express, recorded, public utility easement on Plaintiff’s
Property held by SCE. As such, Defendant contends that Plaintiff cannot prove
any damages it purportedly sustained were caused by the conduct of anyone but
its own. The Court requests oral argument as to Plaintiff’s duty to inform
Defendant about an easement known to it, and whether there is evidence before the
Court demonstrating that Plaintiff had actual or constructive knowledge of the
easement before Defendant signed the parties’ contract. The Court will also take oral argument as to
whether Plaintiff’s knowledge of the existence of the easement would break the chain
of causation upon which Plaintiff rests its contract claim against Defendant.
Negligence and
Negligent Design
Defendant argues
that Plaintiff’s negligence and negligent design causes of action require Plaintiff
to prove the element of duty to provide DCM services for constriction of the
carport. In order to state a claim for negligence, Plaintiff must allege the
elements of (1) “the existence of a legal duty of care,” (2) “breach of that
duty,” and (3) “proximate cause resulting in an injury.” (McIntyre v. Colonies-Pacific, LLC (2014) 228 Cal.App.4th 664, 671.)
Defendant Solar argues it did not assume a duty to perform any services related
to the construction of the carport, notwithstanding Plaintiff’s allegations.
In
opposition, Plaintiff contends that under the terms of the Agreement, Defendant
Solar was under a duty to conduct an initial site study, develop the proposals,
design and engineering of the Project. Plaintiff also notes that Defendant
Solar was also responsible for obtaining permitting and utility acceptance of
the Project. Plaintiff argues that Defendant Solar failed to do so in breach of
its duty. Based on this failure, Plaintiff contends Solar’s failure to properly
study the site resulted in Solar negligently design the Project in a manner
that violated the SCE easement to the detriment of Plaintiff.
As
discussed above, the fulcrum issue is whether Solar had a duty to conduct a
title search. The Court’s tentative is
to ARGUE as to these causes of action as well.
Express
Indemnity
Here, Defendant argues that Plaintiff’s Fourth
Cause of Action for Breach of Express Indemnity lacks merit as to Defendant. “An
indemnitee seeking to recover on an agreement for indemnification must allege
the parties’ contractual relationship, the indemnitee’s performance of that
portion of the contract which gives rise to the indemnification claim, the
facts showing a loss within the meaning of the parties’ indemnification
agreement, and the amount of damages sustained.” (Four Star Electric, Inc. v. F & H Construction (1992) 7
Cal.App.4th 1375, 1380.)
Defendant argues that Plaintiff’s Complaint
alleges that Defendant Solar breached the express indemnity provision contained
in paragraph 9 of the Contract General Conditions (Schedule) incorporated into
the Agreement, which Plaintiff alleges obligated Defendant Solar to indemnify
and hold Plaintiff harmless from all claims, demands, suites, liabilities,
losses and/or property damage that may arise from the performance of the work.
However, Defendant argues that these allegations are inconsistent with the
actual agreement attached to the Complaint, which makes clear this obligation
was not one of Defendant Solar’s, but an obligation expressly assigned to the
“Contractor.”
In opposition, Plaintiff contends that under
the Agreement, Solar agreed to indemnify Onni“[t]o the fullest extent permitted
by law, the [Solar] agrees to defend, indemnify and hold harmless the Owner . .
. from any and all claims, demands, suits, liabilities, losses (including but
not limited to economic losses, expenses and reasonable attorney’s fees), and
damage for personal injury, including death or bodily injury, and/or property
damage that may arise from the performance of the Work. . .” Plaintiff argues
that the plain language of the Agreement states that Defendant Solar has the
obligation to indemnify Plaintiff with respect to the work it performed on the
Project.
In its reply brief, Defendant asserts that the
Complaint’s cause of action for express indemnity depends on replacing the term
“Contractor” with the term “Solar.” The Court agrees. After review of the
exhibits attached to the Complaint, Schedule A and B, the Court does not find
one paragraph with indemnity being linked to Defendant Solar. Instead, the
paragraph Plaintiff relies on actually states”[t]o the fullest
extent permitted by law, the Contractor agrees to defend,
indemnify an hold harmless the Owner…from any and all claims demands, suits,
liabilities, losses (including but not limited to economic losses, expenses and
reasonable attorney’s fees), and damage for personal injury, including death or
bodily injury, and/or property damage that may arise from the performance of
the Work. . .” As Plaintiff’s only evidence is a miscited quote from their own
agreement which clearly replaced “Contractor” with “[Solar]” as seen above, the
Court finds that a material disputed fact does not exist as to this issue. As
such, Defendant’s Motion for Summary Adjudication is GRANTED as to the fourth
cause of action for Express Indemnity.