Judge: Salvatore Sirna, Case: 24PSCV00200, Date: 2024-07-30 Tentative Ruling

Case Number: 24PSCV00200    Hearing Date: July 30, 2024    Dept: G

Cross-Defendant Michelle Feil’s Demurrer to the First Amended Cross-Complaint

Respondent: Cross-Complainant Andrew Feil and Oak Street Properties, LLC

TENTATIVE RULING

Cross-Defendant Michelle Feil’s Demurrer to the First Amended Cross-Complaint is OVERRULED in its entirety.

Cross-Defendant Michelle Feil is ordered to file an ANSWER to the First Amended Cross-Complaint in ten (10) days.

BACKGROUND

This is an action for breach of contract arising from a loan agreement. In April 2022, Plaintiff Cherry Blossom Childcare & Preschool, LLC (Cherry Blossom) entered into an oral agreement with Defendants Andrew Feil and Oak Street Properties, LLC (Oak Street) in which Cherry Blossom agreed to loan $75,875.00 to Andrew Feil and Oak Street for the purchase of a property in Pennsylvania. Pursuant to the terms of their agreement, Andrew Feil and Oak Street allegedly agreed to make monthly payments of $500 to Cherry Blossom and repay the rest of the loan when they flipped and resold the Pennsylvania property within two years. In January 2024, Cherry Blossom alleges Andrew Feil and Oak Street breached the agreement by failing to make a monthly payment and failing to sell the Pennsylvania property.

On January 19, 2024, Cherry Blossom filed a complaint against Andrew Feil, Oak Street, and Does 1-30, alleging the (1) breach of contract, (2) breach of the warranty of good faith and fair dealing, (3) promissory estoppel, and (4) fraud.

On March 27, 2024, Andrew Feil and Oak Street filed an answer the Complaint and a cross-complaint against Cherry Blossom, Michelle Feil, and Roes 1-10, alleging causes of action for (1) contribution and indemnity and (2) declaratory relief.

On May 28, 2024, Andrew Feil and Oak Street filed a First Amended Cross-Complaint (FACC) against the same defendants alleging the same causes of action.

On July 2, 2024, Michelle Feil filed the present demurrer. Prior to filing, Michelle Feil’s counsel attempted to meet and confer telephonically with Andrew Feil and Oak Street’s counsel and was unable to reach a resolution. (Sanchez Siqueiros Decl.)

A hearing on the demurrer is set for July 30, 2024. A case management conference is also set for September 18, 2024.

ANALYSIS

Michelle Feil demurs to Andrew Feil and Oak Street’s entire FACC. For the following reasons, the court OVERRULES the demurrer in its entirety.

Legal Standard

A party may demur to a complaint on the grounds that it “does not state facts sufficient to constitute a cause of action.” (Code Civ. Proc., § 430.10, subd. (e).) A demurrer tests whether the complaint states a cause of action. (Hahn v. Mirda (2007) 147 Cal.App.4th 740, 747 (Hahn).) When considering demurrers, courts accept all well pleaded facts as true. (Fox v. JAMDAT Mobile, Inc. (2010) 185 Cal.App.4th 1068, 1078.) 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.) “The only issue involved in a demurrer hearing is whether the complaint, as it stands, unconnected with extraneous matters, states a cause of action.” (Hahn, supra, at p. 747.)

Contribution and Indemnity (First Cause of Action)

Michelle Feil argues Andrew Feil and Oak Street’s first cause of action for contribution and indemnity fails because there are no allegations to establish Michelle Feil is jointly liable. The court disagrees.

Legal Standard

A claim for contribution requires allegations of (1) “a money judgment,” (2) “rendered jointly against two or more defendants in a tort action,” (3) “in accordance with the principles of equity,” (4) “after one tortfeasor has, by payment, discharged the joint judgment or has paid more than his pro rata share thereof,” (5) without intentional injury by the tortfeasor. (Code Civ. Proc., § 875, subd. (a)-(d).)

“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.) “To state a claim for equitable indemnity, a defendant must allege the same harm for which he may be held liable is properly attributable—at least in part—to the cross-defendant.” (Platt v. Coldwell Banker Residential Real Estate Services (1990) 217 Cal.App.3d 1439, 1445, fn.7.)

Discussion

In this case, Michelle Feil argues the FACC fails to allege how Michelle Feil, Andrew Feil, and Oak Street are jointly liable to Cherry Blossom. (Demurrer, p. 7:4-8.) Michelle Feil also argues the FACC fails to allege the existence of an express indemnity contract between the parties. (Demurrer, p. 7:10-14.)

The FACC alleges that to the extent an agreement exists as alleged in the Complaint, Michelle Feil was a party to that agreement and participated in its negotiation. (FACC, ¶ 7.) The FACC also alleges Michelle Feil is responsible for any representations at issue in the Complaint and thus is the sole or primary tortfeasor. (FAC, ¶ 7-8.) Based on these allegations, the court finds the FACC adequately alleges Michelle Feil is jointly liable.

Accordingly, Michelle Feil’s demurrer to this cause of action is OVERRULED.

Declaratory Relief (Second Cause of Action)

Michelle Feil contends Andrew Feil and Oak Street’s second cause of action for declaratory relief fails because the FACC does not allege the existence of a controversy between the parties. The court disagrees.

Legal Standard

“To qualify for declaratory relief, a party would have to demonstrate its action presented two essential elements: (1) a proper subject of declaratory relief, and (2) an actual controversy involving justiciable questions relating to the party’s rights or obligations.” (Jolley v. Chase Home Finance, LLC (2013) 213 Cal.App.4th 872, 909, quotation marks and brackets omitted.) “The courts do not issue advisory opinions about the rights and duties of the parties under particular agreements, if no actual, justiciable controversy has yet developed.” (Otay Land Co. v. Royal Indemnity Co. (2008) 169 Cal.App.4th 556, 563.)

Discussion

In this case, the FACC alleges there is an actual controversy between the parties with regards to whether Michelle Feil is required to indemnify Andrew Feil and Oak Street as a co-obligor of any such alleged agreement. (FACC, ¶ 15.) Because the FACC adequately alleges Michelle Feil was involved as a party to the alleged agreement and was responsible for any representations, the Court finds there is an actual controversy involving Michelle Feil. While Michelle Feil also contends this remedy is duplicative of Andrew Feil and Oak Street’s first cause of action, the Court notes there is a split of authority on whether a demurrer can be sustained on grounds that a cause of action is duplicitous. In Blickman Turkus, LP v. MF Downtown Sunnyvale, LLC (2008) 162 Cal.App.4th 858 (Blickman Turkus), the Sixth District Court of Appeal held a demurrer could not be sustained on grounds that it is duplicative pursuant to Code of Civil Procedure section 430.10. (Id., at p. 890.) In Palm Springs Villas II Homeowners Assn., Inc. v. Parth (2016) 248 Cal.App.4th 268 (Palm Springs Villas), the Fourth District Court of Appeal held the opposite, noting a duplicative cause of action is grounds upon which a demurrer may be sustained according to Rodrigues v. Campbell Industries (1978) 87 Cal.App.3d 494, 501 (Rodrigues). (Palm Springs Villas, supra, 248 Cal.App.4th at p. 290.)

Code of Civil Procedure section 430.10 authorizes a party to bring a demurrer on eight different grounds, none of which explicitly include grounds that a cause of action is duplicative or superfluous. In Rodrigues, the Fourth District Court of Appeal noted the cause of action at issue merely combined all the previous causes of action and did not add anything to the complaint by way or fact or theory of recovery. (Rodrigues, supra, 87 Cal.App.3d at p. 498, 501.) However, the Court finds the reasoning of Blickman Turkus more persuasive. Noting the jurisprudential maxim that “superfluity does not vitiate” (Civ. Code, § 3537), the court held “[t]his is the sort of defect that, if it justifies any judicial intervention at all, is ordinarily dealt with most economically at trial, or on a dispositive motion such as summary judgment.” (Blickman Turkus, supra, 162 Cal.App.4th at p. 890.)

Accordingly, Michelle Feil’s demurrer to this cause of action is OVERRULED.

CONCLUSION

Based on the foregoing, Michelle Feil’s demurrer to Andrew Feil and Oak Street’s FACC is OVERRULED in its entirety.

Cross-Defendant Michelle Feil is ordered to file an ANSWER to the First Amended Cross-Complaint in ten (10) days.