Judge: Stephanie M. Bowick, Case: 22STCV21645, Date: 2024-11-20 Tentative Ruling
DEPARTMENT 19 LAW AND MOTION RULINGS
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Case Number: 22STCV21645 Hearing Date: November 20, 2024 Dept: 19
After full consideration of the papers and evidence filed, and inferences reasonably drawn therefrom, as well as oral argument at the hearing, Defendants American Home Improvement, Inc. and Moshe Ben-Nissan’s Demurrer to the Second Amended Complaint is SUSTAINED without leave to amend. The Motion to Strike is DENIED as Moot.
This
case arises from an alleged fraudulent scheme to defraud Plaintiff Osakemi
Beckley (“Plaintiff”) of money through home improvement work done by Defendants
American Home Improvement, Inc. (“AHI”), Moshe Ben-Nissan (“Ben-Nissan”), David
Grover (“Grover”), Golden State Finance Authority (“Golden State”), Ygrene
Energy Fund, Inc. and Ygrene Energy Fund California, LLC (collectively,
“Ygrene”), and Wesco Insurance Company (“WIC”) (collectively, “Defendants”).
The Second Amended Complaint (“SAC”) asserts the following causes of action:
1) Financial
Elder Abuse
2) Cancellation
Of Written Agreement
3) Bus.
& Prof. Code § 17200 Et Seq.
4) Public
Injunction Pursuant To Bus. & Prof. Code §17200 Et Seq.
5) Cancellation
Of Taxes
6) Intentional
Misrepresentation
7) Fraudulent
Inducement
8) Fraud
9) Recovery
Of Contractor Bond
10) Declaratory Relief
Defendants AHI and Ben-Nissan (“Moving Defendants”) demur to the SAC and move to strike irrelevant allegations.
REQUEST FOR JUDICIAL NOTICE
The court may take judicial notice of “official acts of the legislative, executive, and judicial departments of the United States and of any state of the United States,” “[r]ecords of (1) any court of this state or (2) any court of record of the United States or of any state of the United States,” and “[f]acts and propositions that are not reasonably subject to dispute and are capable of immediate and accurate determination by resort to sources of reasonably indisputable accuracy.” (Evid. Code § 452, subds. (c), (d), and (h).)¿
Moving Defendants requests judicial notice of the following:
1) Exhibit
1: Home Improvement Contract between AHI and Plaintiff, dated
10/04/2018.
2) Exhibit
2: Plaintiff’s Submission to Voluntary Arbitration with the California
Contractors State License Board re CSLB Complaint #SF 2018-11640, dated
08/19/2019.
3) Exhibit 3: Arbitration Award from the Contractors State License Board Arbitration Program in the Matter of CSLB Case No. AS2019-242, Beckley v. American Home Improvement, Inc., dated 04/21/2020.
Plaintiff does not dispute the accuracy of these documents but rather argues the RJN should be overruled because Moving Defendants failed to file a proposed order per California Rules of Court, Rule 8.252. The California Rules of Court, Rule 8.252, subdivision (a)(1) states, “To obtain judicial notice by a reviewing court under Evidence Code section 459, a party must serve and file a separate motion with a proposed order.” However, this action is before a trial court not a reviewing court, i.e., appellate court. Thus, California Rules of Court, Rule 8.252 is inapplicable in this instant action.
Moving Defendants’ request for judicial notice is GRANTED.
Demurrer
Moving Defendants demur to the SAC pursuant to Code of Civil Procedure Section 430.10, subdivision (e). Specifically, Moving Defendants argue the first, third, fourth, sixth, seventh, eighth, ninth, and eleventh causes of action are (1) barred by the doctrine of res judicata, i.e., claim preclusion and (2) fail to state sufficient facts to constitute causes of action against Moving Defendants.
Motion to Strike
Moving Defendants move to strike allegations related to the sufficiency of the work performed by them on the grounds that they were already adjudicated in the Contractors State License Board arbitration between Plaintiff and AHI (referenced at paragraphs 74-81 of the SAC).
MEET AND CONFER
Counsel for Moving Defendants complied with their statutory meet-and-confer requirements prior to filing the instant demurrer and motion to strike. (Code Civ. Proc., § 430.41(a); Code Civ. Proc., § 435.5(a); see Rothman Decl., ¶9, Ex. 2.)
Demurrer
“The primary function of a pleading is to give the other party notice so that it may prepare its case [citation], and a defect in a pleading that otherwise properly notifies a party cannot be said to affect substantial rights.” (Harris v. City of Santa Monica (2013) 56 Cal.4th 203, 240.)¿
“A¿demurrer¿tests the legal sufficiency of the
factual allegations in a complaint.” (Ivanoff v. Bank of America, N.A.¿(2017)
9 Cal.App.5th 719, 725.) The Court looks to whether “the complaint alleges
facts sufficient to state a cause of action or discloses a complete defense.” (Id.)
The Court does not “read passages from a complaint in isolation; in reviewing a
ruling on a demurrer, we read the complaint ‘as a whole and its parts in their
context.’ [Citation.]” (West v. JPMorgan Chase Bank, N.A. (2013) 214 Cal.App.4th
780, 804.) The Court “assume[s] the truth of the properly pleaded factual
allegations, facts that reasonably can be inferred from those expressly pleaded
and matters of which judicial notice has been taken.” (Harris, supra, 56
Cal.4th p. 240.) “The court does not, however, assume the truth of contentions,
deductions or conclusions of law. [Citation.]” (Durell v. Sharp Healthcare
(2010) 183 Cal.App.4th 1350, 1358.)¿
A general demurrer may be brought under Code of Civil Procedure section 430.10, subdivision (e) if insufficient facts are stated to support the cause of action asserted or under section 430.10, subdivision (a), where the court has no jurisdiction of the subject of the cause of action alleged in the pleading. All other grounds listed in Section 430.10, including uncertainty under subdivision (f), are special demurrers. Special demurrers are not allowed in limited jurisdiction courts. (Code Civ. Proc., § 92, subd. (c).)¿¿¿
¿ Leave to amend must be allowed where there is a reasonable possibility of successful amendment. (Goodman v. Kennedy (1976) 18 Cal.3d 335, 348.) The burden is on the complainant to show the Court that a pleading can be amended successfully. (Id.)¿
Res Judicata
“ ‘Res judicata’ describes the preclusive effect of a final judgment on the merits. Res judicata, or claim preclusion, prevents relitigation of the same cause of action in a second suit between the same parties or parties in privity with them. “Res judicata [claim preclusion] bars the relitigation not only of claims that were conclusively determined in the first action, but also matter that was within the scope of the action, related to the subject matter, and relevant to the issues so that it could have been raised” and includes ‘matters which were raised or could have been raised, on matters litigated or litigable.’” (Burdette v. Carrier Corp. (2008) 158 Cal.App.4th 1668, 1674-1675; accord Mark v. Spencer (2008) 166 Cal.App.4th 219, 229 [bars claims that parties had a fair opportunity to litigate].) Claim preclusion applies as a bar to splitting a cause of action for partial, later litigation, or relitigation of the same cause of action based upon on another legal theory or associated with different relief, that could have been sought in the prior action. (Noble v. Draper (2008) 160 Cal.App.4th 1, 10; Hamilton v. Asbestos Corp., Ltd. (2000) 22 Cal.4th 1127, 1146.) Its purpose is “to preserve the integrity of the judicial system, promote judicial economy, and protect litigants from harassment by vexatious litigation.” (Vandenberg v. Superior Court (1999) 21 Cal.4th 815, 829.)
Moving Defendants argue Plaintiff chose to litigate her claims arising from their alleged breach of the construction contract in the Contractors State License Board (“CSLB”) arbitration, which limits the damages available to $50,000.00 and now seeks to relitigate these claims via the SAC. As such, Moving Defendants argues the asserted against them in the SAC are barred by the doctrine of res judicata/claim preclusion. In opposition, Plaintiff contends there are multiple claims that have not been litigated at the CSLB Arbitration, thus her claims are not barred.
“The doctrine of res judicata applies not only to judicial proceedings but also to arbitration proceedings.” (Thibodeau v. Crum (1992) 4 Cal.App.4th 749, 755.) This is because “arbitrating parties are obliged, in the manner of Sutphin, to place before their arbitrator all matters within the scope of the arbitration, related to the subject matter, and relevant to the issues.” (Id.)
“ ‘The prerequisite elements for applying the doctrine to either an entire cause of action or one or more issues are the same: (1) A claim or issue raised in the present action is identical to a claim or issue litigated in a prior proceeding; (2) the prior proceeding resulted in a final judgment on the merits; and (3) the party against whom the doctrine is being asserted was a party or in privity with a party to the prior proceeding.’ [Citation.]” (Boeken v. Philip Morris USA, Inc. (2010) 48 Cal.4th 788, 797.) For purposes of res judicata, even an unconfirmed arbitral award is the equivalent to a final judgment.” (Bucur v. Ahmad (2016) 244 Cal.App.4th 175, 186.)
The SAC makes the following allegations:
“In March of 2019, Plaintiff submitted a complaint with the Contractors State License Board (CSLB) citing among many defects that the house was not completely or properly remodeled, electrical wires were not replaced, plumbing was not updated, new kitchen, bath, floorings, windows were not properly installed; and the house interior was not properly painted.” (SAC ¶74.)
“On or around April 20, 2020, Arbitrator found many wrongdoings and defects that coincided with Mr. Brigg’s findings such as the fact the kitchen floor was unleveled, the water heater was installed without permit and per code. The arbitrator did not rule on the re-roof section of the front house, missing. Cabinet hardware, missing closet rods, shelves and doors were found to be outside of the contracted scope of work.” (SAC ¶79.)
“The current lawsuit seeks remedies for work that was not arbitrated or ruled by the Arbitrator. Moreover, the Arbitrator and Arturo Camacho informed the Plaintiff that she needs to seek further remedies in civil court after the Arbitration had been adjudicated. The arbitration process took longer than normal because of the Covid pandemic. California Civil Procedure Section 1281.2 tolls an arbitration “statute of limitations” provision requiring that the arbitration of a controversy be demanded. AHI submitted a copy of the contract to the Arbitrator and the Arbitrator relied on the contract in part to make his ruling.” (SAC ¶80.)
“On June 17, 2022, plaintiff’s counsel requested arbitration via email to Ms. Guetta but AHI failed to respond in regard to the arbitration and failed to provide a copy of the contract where an applicable arbitrable clause may exist.” (SAC ¶85.)
The CSLB Arbitration Award stated in pertinent part:
“TO THE ABOVE PARTIES AT INTEREST, IN THE MATTER OF CSLB CASE NO: AS2019-242
The undersigned Arbitrator, in accordance with
California Business and Professions Code §7085, has investigated and considered
all the material facts and available information pertaining to this case and
has decided upon a final and binding
Arbitration Award as described below.”
Reading the allegations and judicially noticed matters as true, a reasonable jury could infer that the CSLB arbitrator made a finding that the claims to re-roof the front of the house; for installation of missing cabinet hardware, closet rods, shelves, and doors; and for costs to install a new forced air furnace were outside the scope of the contracted work and Moving Defendants scope of work generally. The CSLB’s findings resulted in denial of those claims.
Here, the SAC allegations do not state any facts indicating Plaintiff’s seeks relief for new claims related to the work purportedly performed by Moving Defendants. Instead, the SAC seeks remedies for claims against the same parties, which were are already ruled on during the CSLB’s arbitration. More specifically, the SAC seeks remedies for claims against Moving Defendants that were denied by the CSLB at the conclusion of arbitration and reflected in the issuance of the CSLB’s Arbitration Award. Lastly, Plaintiff fails to show that the SAC can be successfully amended to exclude the claims which were adjudicated via the CSLB’s arbitration proceeding.
Therefore, the demurrer to the first, third, fourth,
sixth, seventh, eighth, ninth, and eleventh causes of action are SUSTAINED
without leave to amend on the grounds of claim preclusion.
Motion to Strike
“Any party, within the time allowed to respond to a pleading may serve and file a notice of motion to strike the whole or any part thereof, but this time limitation shall not apply to motions specified in subdivision (e).” (Code Civ. Proc., § 435, subd. (b)(1).)
“The court may, upon a motion made pursuant to Section 435, or at any time in its discretion, and upon terms it deems proper: (a) Strike out any irrelevant, false, or improper matter inserted in any pleading.” (Code Civ. Proc., § 436, subd. (a).)
As discussed in the ruling on the demurrer, the first, third, fourth, sixth, seventh, eighth, ninth, and eleventh causes of action of the SAC are barred by claim preclusion/res judicata. Thus, the motion to strike is rendered moot.