Judge: Stephen Morgan, Case: 23AVCV00545, Date: 2023-11-28 Tentative Ruling
Case Number: 23AVCV00545 Hearing Date: November 28, 2023 Dept: A14
Background
Plaintiff
alleges that it entered into a written agreement with Defendant on April 23,
2022 for provision of services and/or goods to Defendants. Plaintiff alleges Defendant failed to pay for
those services and/or goods in breach of the parties’ agreement. Plaintiff alleges an outstanding balance of
$108,944.49.
On
May 19, 2023, Plaintiff filed this action against Defendant Natalie
Bracero. On August 18, 2023, Defendant
Bracero demurred and moved to strike the original complaint. On September 25, 2023, Defendant filed an
answer to the complaint.
On
October 4, 2023, Plaintiff filed a First Amended Complaint (“FAC”) against
Defendant Bracero alleging (1) breach of contract; (2) open book account; (3)
account stated; and (4) quantum meruit.
On
October 20, 2023, Defendant Bracero filed a demurrer to the FAC and a motion to
strike set for hearing on November 28, 2023.
On November 13, 2023, Plaintiff filed an opposition to the demurrer to
the FAC. As of November 21, 2023, no
reply has been filed. Due to the
Thanksgiving Holiday, the reply was due on November 17, 2023, 5 court days
before the hearing date of November 28, 2023.
Analysis
Standard for Demurrer –The
grounds for a demurrer must appear on the face of the pleading or from
judicially noticeable matters. (Code Civ. Proc. § 430.30(a);
Blank v. Kirwan (1985) 39 Cal.3d 311, 318.) Concerning the legal sufficiency of a
pleading, the sole issue on demurrer is whether the facts pleaded, if true,
state a valid cause of action – i.e., if the complaint pleads facts that would
entitle the plaintiff to relief. (LiMandri v. Judkins (1997) 52 Cal.App.4th 326, 339.)
A general demurrer admits the
truth of all factual, material allegations properly pled in the challenged
pleading, regardless of possible difficulties of proof. (Blank, supra, 39 Cal.3d at p. 318.) Thus, no matter how unlikely or improbable,
plaintiff’s allegations must be accepted as true for the purpose of ruling on
the demurrer. (Del E. Webb Corp. v. Structural Materials Co. (1981) 123 Cal.App.3d
593, 604.) Nevertheless, this rule
does not apply to allegations expressing mere conclusions of law, or allegations
contradicted by the exhibits to the complaint or by matters of which judicial
notice may be taken. (Vance v. Villa Park Mobilehome Estates (1995) 36 Cal.App.4th 698,
709.) A general demurrer does not
admit contentions, deductions, or conclusions of fact or law alleged in the
complaint; facts impossible in law; or allegations contrary to facts of which a
court may take judicial notice. (Blank, supra, 39 Cal.3d at p. 318.)
Pursuant to Code Civ. Proc. §430.10(e),
the party against whom a complaint has been filed may object by demurrer to the
pleading on the grounds that the pleading does not state facts sufficient to
constitute a cause of action. It is an
abuse of discretion to sustain a demurrer if there is a reasonable probability
that the defect can be cured by amendment.
(Schifando v. City of Los Angeles (2003) 31 Cal.4th 1074, 1082, as modified (Dec. 23, 2003).)
Request for Judicial Notice
– Judicial notice may not be taken of any matter, unless authorized or required
by law. (Evidence Code § 450.) “ ‘Judicial notice is the recognition and
acceptance by the court, for use by the trier of fact or by the court, of the
existence of a matter of law or fact that is relevant to an issue in the action
without requiring formal proof of the matter.’ ” (Lockley v. Law Office of
Cantrell, Green, Pekich, Cruz & McCort (2001) 91 Cal.App.4th 875,
882.) “In determining the sufficiency of
a complaint against demurrer a court will consider matters that may be
judicially noticed.” (Joslin v.
H.A.S. Ins. Brokerage (1986) 184 Cal.App.3d 369, 374.) A court may take judicial notice of something
that cannot reasonably be controverted, even if it negates an express
allegation of the pleading. (Columbia Casualty Co. v. Northwestern Nat. Ins.
Co. (1991) 231 Cal.App.3d 457, 468–469.)
This includes recorded deeds and court records. (Maryland Casualty
Co. v. Reeder (1990) 221 Cal.App.3d 961, 977; Evid. Code § 452 subd. (c)
& (d).)
Defendant asks that the Court
judicially notice website searches from the websites of the California
Secretary of State, the California State License Board, the Los Angeles County
Fictitious Name Statement website, the San Bernardino County Fictitious Name
Statement website and a newsletter from the California State License Board’s Fall
Newsletter. Defendant is not asking that
the Court merely notice the existence of these searches and the newsletter. Defendant is submitting these records to
establish the fact of Plaintiff’s nonexistence.
Defendant fails to present any authority that would allow the Court to judicially
notice the truth of search results of government websites, nor does Defendant’s
testimony that counsel ran the specific search sufficient foundation to
establish the truth or authenticity of the information contained in the
records.
Defendant also asks that the
Court take judicial notice of a newsletter that Defendant relies on as
authority for the definition of “construction.”
Defendant uses the newsletter as authority for a legal proposition, i.e.
as extrinsic evidence, which may not be presented on demurrer.
The Court declines to take
judicial notice of the website search results.
(Searles Valley Minerals Operations, Inc. v. State Bd. of
Equalization (2008) 160 Cal.App.4th 514, 519 (court declined to
take judicial notice of truth of factual content of websites operated by American
Coal Foundation and US Department of Energy; while judicial notice of their
existence was proper, no authority was provided that would allow the court to
judicially notice truth of factual content therein); Gomez v. Regents of
University of California (2021) 63, Cal.App.5th 386, 404, fn 17
(declining to judicially notice two charts from two different websites
purporting to show employment statistics pertaining to the University of
California, citing Searles).)
Meet and Confer—Defendant
met and conferred prior to filing this demurrer by telephone with Plaintiff’s
counsel. (Demurrer, Gilianians Dec.,
¶2.)
Parties’ Positions—Defendant
demurs to the entire complaint on grounds that Plaintiff is an unlicensed
contractor and the action is therefore barred pursuant to B&PC
§7031(a). Defendant argues it was
Plaintiff US Restoration LLC who performed the work. Defendant argues US Restoration LLC was
required under B&PC §7028 to be a licensed contractor. Defendant argues licensing of a different
entity or a partner of the entity would not satisfy the licensing requirements
under B&PC §§7028 and 7031(a). Defendant
argues Plaintiff’s pleading admits the action is for recovery of “construction”
work that requires licensure. Defendant
argues Plaintiff US Registration LLC is not licensed by the Contractor’s State
Licensing Board, nor is it registered with the California Secretary of State as
an LLC or any other entity. Defendant
argues Plaintiff US Registration LLC cannot cure this defect with leave to
amend.
In opposition, Plaintiff argues
it has only now ascertained the true name of the entity Plaintiff. Plaintiff contends the true name of the
entity that performed work for Defendant is A1 PM Contracting Incorporated d/b/a
US Restoration. Plaintiff argues A1 PM
Contracting Incorporated’s license number is 988429. Plaintiff attaches documents from the
Secretary of State website establishing A1 PM Contracting Incorporated’s existence
and licensure.
Business & Professions
Code §7031(a)—“Except as provided in subdivision (e), no person engaged
in the business or acting in the capacity of a contractor, may bring or
maintain any action, or recover in law or equity in any action, in any court of
this state for the collection of compensation for the performance of any act or
contract where a license is required by this chapter without alleging that he
or she was a duly licensed contractor at all times during the performance of
that act or contract regardless of the merits of the cause of action brought by
the person, except that this prohibition shall not apply to contractors who are
each individually licensed under this chapter but who fail to comply with
Section 7029.” (Bus. & Prof. Code §7031(a).)
B&PC §7031(a) precludes
actions to recover “‘compensation for the performance of any act or contract
where a contractor’s license is required,’ when brought by a person acting as a
contractor without a license…Regardless of the equities, section 7031 bars all
actions, however they are characterized, which effectively seek ‘compensation’
for illegal unlicensed contract work.
Thus, an unlicensed contractor cannot recover either for the agreed
contract price or for the reasonable value of labor and materials.” (UDC-Universal Development, L.P. v. CH2M
Hill (2010) 181 Cal.App.4th 10, 24-25.)
“Under section 7031, subdivision (a), if an individual or entity without
a required license is engaged in the contracting business or acting in the
capacity of a contractor, a license held by a different individual or entity
does not permit the unlicensed contractor to recover.” (Panterra GP, Inc. v. Superior Court of
Kern County (2022) 74 Cal.App.5th 697, 726.)
Building contractors are required
to be licensed by the State; persons not licensed during the time of their work
may not sue for compensation for their services. (Bus. & Prof.C. § 7031(a).) Absence of a license is more than an
affirmative defense. Plaintiffs must allege in the complaint that they were
properly licensed in order to maintain the action. (Bus. & Prof.C. § 7031(a); Advantec
Group, Inc. v. Edwin's Plumbing Co., Inc. (2007) 153 Cal.App.4th 621,
626-627.)
The FAC fails to allege
compliance with B&PC §7031 and Plaintiff confusingly identifies multiple
entities as the Plaintiff—The named Plaintiff in this action is “US
Construction Services LLC.” Among the
alleged fictious business names of “US Construction Services LLC” are (1) “WCS
Restoration LLC” and (2) “U.S. Restoration.”
Defendant argues on demurrer that
“Plaintiff, US Restoration, LLC” is not licensed by the California State
Licensing Board, and it is not an LLC registered with the CA Secretary of
State’s Office. (Demurrer,
11:25-26.) Defendant admits that “US
Construction Services, LLC” is registered with the Secretary of States Office
as a CA limited liability company and is licensed. (Demurrer, 12:3-12.)
Defendant does not argue that US
Construction Services LLC is unlicensed or that it does not exist. Defendant only argues that “US Restoration
LLC” does not exist and is unlicensed.
The Court declines to judicially
notice the evidence Defendant submits to establish that US Restoration LLC is
not an entity and is unlicensed.
However, the defect raised by Defendant pursuant to B&PC §7031(a) is
apparent from the face of the complaint even absent the judicially noticeable
evidence. Plaintiff does not dispute
that B&PC 7031(a) applies. Plaintiff
was required to allege that it was properly licensed in order to maintain the
action. (Bus. & Prof.C. § 7031(a); Advantec
Group, Inc. v. Edwin's Plumbing Co., Inc. (2007) 153 Cal.App.4th 621,
626-627.) The FAC does not allege that
either US Construction Services LLC or US Restoration LLC was licensed when the
work was performed.
In addition, Plaintiff’s FAC
fails to clearly allege the identity of the party that performed the work. The FAC names US Construction Services LLC as
the plaintiff. (FAC, 1:22-25.) However, Plaintiff attaches the written
contract upon which the action is based as Exhibit A to the FAC. Exhibit A identifies “US Restoration LLC” as
the contracting entity. (FAC, Ex. A.) “Facts appearing in exhibits attached to the
complaint are given precedence over inconsistent allegations in the
complaint.” (Panterra GP, Inc. v.
Superior Court of Kern County (2022) 74 Cal.App.5th 697, 727 (entity listed
on contractor agreement attached as exhibit to complaint was the entity that
performed the work for purposes of B&PC §7031(a).)
In addition, Plaintiff argues in
opposition that it has finally discovered the true name of the plaintiff. Plaintiff now contends the true plaintiff is
an entity named “A1 PM Contracting Incorporated dba US Restoration.” (Opposition, 2:8-15, Chow Dec., Ex. 2.) Plaintiff’s opposition therefore concedes the
FAC is defective.
Plaintiff has created an enormous
amount of confusion regarding the proper Plaintiff to this action. Plaintiff does not attempt to reconcile the contradictory
allegations in the FAC that the named Plaintiff is US Construction Services LLC,
while the contracting entity based on Exhibit A thereto is US Restoration
LLC. Plaintiff also does not reconcile its
newfound position that the proper Plaintiff is A1 PM Contracting Incorporated
dba US Restoration, while the contracting entity based on Exhibit A thereto is “US
Restoration LLC.” Because Exhibit
A to the FAC clearly identifies “US Restoration LLC” as the entity that
performed the work, Plaintiff must explain how A1 PM Contracting Incorporated
is the proper plaintiff given that “US Restoration LLC” was the
contracting entity. Plaintiff only
claims that “US Restoration,” not “US Restoration LLC,” is the d/b/a of
A1 PM Contracting Incorporated. In seeking
to cure these defects, Plaintiff must not run afoul of the sham pleading
doctrine.
Demurrer is SUSTAINED WITH 20
DAYS LEAVE TO AMEND. If Plaintiff
intends to file a Second Amended Complaint, Plaintiff must explain the numerous
inconsistencies raised in this ruling, including the identification of the
contracting entity in Exhibit A as US Restoration LLC versus US
Restoration, the purported d/b/a of A1 PM Contracting Incorporated.
Motion to Strike—MOOT
in light of ruling on demurrer.
Conclusion