Judge: Shirley K. Watkins, Case: 22VECV01253, Date: 2023-01-09 Tentative Ruling

If ALL parties submit on the tentative, then no appearance is necessary unless some other matter (i.e., Case Management Conference) is on calendar. It is not necessary to call the court to request oral argument. Oral argument is permitted on all tentative rulings.

Case Number: 22VECV01253    Hearing Date: January 9, 2023    Dept: T

            [TENTATIVE] ORDER:  The Demurrer against the Second Cause of Action of the Complaint is SUSTAINED WITHOUT LEAVE TO AMEND.  The Motion to Strike is GRANTED.  Answer shall be filed within 20 days.

            The court strikes the First Amended Complaint.  When a demurrer is pending and there has been no prior amended complaint, an amended complaint may be made no later than the due date for the opposition to the demurrer unless by stipulation and order or court order.  Nine court days prior to 1/9/2023 was 12/23/2022.  The FAC was filed 12/27/2022, which is late.

1.     Introduction

Defendants Rincon Taurino Restaurant, Inc. and Adolfo O. Martinez (“Defendants”) demur to the second cause of action for negligence in the Complaint by plaintiffs Panorma Center I, LLC and Panorma Center II, LLC (“Plaintiffs”) on the grounds that Plaintiffs fail to state facts sufficient to constitute a cause of action for negligence. 

Defendants also moves to strike paragraph 1, on page 5 of the Complaint on the first cause of action (“COA”) for consequential and/or special damages as well as paragraphs 2, 3, 4, and 5 on page 5 of the Complaint on the second cause of action for general, compensatory, incidental, consequential damages; prejudgment and post-judgment interest; attorney’s fees; and for such other and further relief as this Court deems just and proper.

2.     Discussion

a.     Motion to Strike

The Court GRANTS Defendant’s motion to strike Paragraph 1 on the first cause of action for special damages on the grounds that Plaintiffs fail to allege any facts which would justify such an award.  Plaintiffs’ allegations support only general damages which flow directly and necessarily from Defendants’ alleged breach of contract because Plaintiffs claim “[a]s a direct and proximate consequence of Defendants’ breaches of the Lease, [they have] been damaged in an amount according to proof at time of trial but in no event less than $25,000.00.”  (Compl. ¶ 23.)  Plaintiffs do not allege any other facts aside from Defendants’ failure to repair damages and make necessary repairs which would support a finding of secondary or derivative losses arising from circumstances that are particular to the contract or to parties.  The only damages Plaintiffs allege are a natural result of Defendants’ alleged breach of the contract.  Thus, there are no facts to support a claim for consequential damages.

The Court GRANTS Defendant’s motion to strike Paragraph 2 through 5 on the second cause of action on the grounds that Plaintiffs fail to plead facts sufficient to support a cause of action for negligence.  There is no basis stated in the Complaint to support Plaintiffs’ requests for (2) general, compensatory, incidental, consequential, and/or special damages, in an amount to be proven at trial, but in no event less than the jurisdictional limits of this Court; (3) pre-judgment and post-judgment interest at the maximum legal rate allowed; (4) attorneys’ fees; and (5) such other and further relief as this Court may deem just and proper.  The Court notes that paragraphs 3 through 5, which in Plaintiffs’ prayer for relief applied to all causes of action, are stricken only as to Plaintiffs’ second cause of action and not the first cause of action.

b.     Demurrer

The Court finds that Plaintiffs fail to allege sufficient facts to support a cause of action for negligence.  The question is whether Plaintiffs can show that Defendants had an independent duty not arising from the contract which would support their tort action for negligence.  The Court finds they cannot.

In Erlich v. Menezes, the Supreme Court held that the homeowner-plaintiffs could not recover emotional distress damages based on their negligence claims.  (Erlich v. Menezes (1999) 21 Cal.4th 543, 548 (Erlich).)  There, the plaintiffs contracted with the defendant to build a house, but the plaintiffs alleged that the defendant’s defective construction resulted in structural damages, made them fear the house would collapse, and made them fear for their daughter’s safety.  (Id. at p. 549.)  The plaintiffs filed an action for breach of contract, fraud, negligent misrepresentation, and negligent construction.  (Id.)  The jury awarded the plaintiffs an award for emotional damages.  (Id. at p. 550.)  On appeal, the Supreme Court “consider[ed] whether a negligent breach of a contract w[ould] support an award of damages for emotional distress — either as tort damages for negligence or as consequential or special contract damages.”  (Id. at p. 551.)  The Court stated that “the duty that gives rise to tort liability is either completely independent of the contract or arises from conduct which is both intentional and intended to harm.”  (Id. at 552.)  “Whether a defendant owes a duty of care is a question of law.  Its existence depends upon the foreseeability of the risk and a weighing of policy considerations for and against imposition of liability.”  (Id.)  The Court found that there was no duty that arose independent from the parties’ contract since “foreseeability is not synonymous with duty; nor is it a substitute.”  (Id.)  “Since the [defendant’s] negligence directly caused only economic injury and property damage, and breached no duty independent of the contract,” the Court “conclude[d] the homeowners may not recover damages for emotional distress based upon breach of contract to build a house.”  (Id. at p. 889.)

Here, Plaintiffs fail to allege any facts sufficient to show that Defendants’ conduct was intentional and intended to harm Plaintiffs.  While Plaintiffs claim that Defendants breached certain lease provisions which arose from their failure to exercise reasonable care, this is insufficient to show that Defendants acted intentionally.  (Compl. ¶¶ 12, 25, 26.)  Plaintiffs also allege that “Defendants caused further damage by consistently dumping oil and grease onto the roof without installing any grease traps resulting in the grease and oil to sit on the roof causing the damage to the roof to become so severe that the only remedy is to re-do the roof surface.”  (Compl. ¶ 13.)  Although this fact shows Defendants’ intentional conduct, Plaintiffs do not claim that Defendants intentionally did this to harm Plaintiffs.  Thus, Plaintiffs fail to allege that Defendants owed a duty arising from conduct which is both intentional and intended to do harm.

Additionally, Plaintiffs fail to allege facts sufficient to give rise to tort liability that is completely independent of the contract.  Plaintiffs’ allegations show that their damages were caused by Defendants’ failure to exercise reasonable care, which arose from their contractual obligations.  Just as in Erlich, where the defendant’s “negligence directly caused only economic injury and property damage, and breached no duty independent of the contract,” (Erlich, supra, 21 Cal.4th at p. 548), here, Plaintiffs only claim economic injury and property damage and do not allege that Defendants owed a duty not arising from the contract.

The Court notes that Defendants’ references to Fragomeno v. Insurance Co. of the West (1989) 207 Cal.App.3d 822 (Fragomeno) and Wilmington Liquid Bulk Terminals, Inc. v. Somerset Marine Inc. (1997) 53 Cal.App.4th 186 (Wilmington) are misplaced given that they are disapproved by Vandenberg v. Superior Court (1999) 21 Cal.4th 815.

In Fragomeno, the court held that the plaintiffs could not maintain a cause of action for tort (invasion of the right of private occupancy) based on the defendant’s breach of contract.  (Fragomeno, supra, 207 Cal.App.3d 822.)  There, the court found that the plaintiffs’ unlawful detainer action arose from a contract between the lessee and landlord, and that there was no action by the defendants independent from the contract which could support the plaintiffs’ tort claims.  (Id.) 

In Wilmington, the court held that the plaintiffs could not maintain a claim for breach of contract, breach of covenant of good faith and fair dealing, and negligence based on the fact that the plaintiffs’ general liability policy providing coverage for “legal liability” covered only tort liability and not liability arising from breach of contract.  (Wilmington, supra, 53 Cal.App.4th 186.)  

In Vandenberg, the court held that the commercial general liability policy that provides coverage for sums the insured is “legally obligated to pay as damages” does not necessarily preclude coverage for losses pleaded as contractual damages.  (Vandenberg, supra, 21 Cal.4th 815.)  The court stated that this disapproves both Fragomeno and Wilmington.  (Id.) 

Defendants are cautioned not to cite case authority which has received negative treatment.  However, Defendants’ reliance on these cases does not change the Court’s analysis given that the holding in Vandenberg does not apply to the case at hand: the contract here does not involve limitations of liability.  Additionally, Vandenberg contemplated contractual damages, while here, the focus is on tort damages.  Although Vandenberg allows plaintiffs to recover additional damages not explicitly stated in the coverage policy, this does not change the requirement that Plaintiffs show an independent duty not arising from contract to support their negligence claim.  As discussed above, the Court finds that Plaintiffs fail to allege sufficient facts to support that Defendants had an independent duty, and thus, they fail to allege sufficient facts to support a claim for negligence.

Accordingly, the Court SUSTAINS Defendant’s demurrer as to the second cause of action.