Judge: Stephen P. Pfahler, Case: 23STCV13826, Date: 2024-12-09 Tentative Ruling


Case Number: 23STCV13826    Hearing Date: December 9, 2024    Dept: 68

Dept. 68

Date: 12-9-24

Case #23STCV13826

Trial Date: 8-11-25

 

DEMURRER

 

MOVING PARTY: Plaintiff/Cross-Defendant, Catani, LLC

RESPONDING PARTY: Defendant/Cross-Complainant, Brand Boulevard Associates, L.P.

 

RELIEF REQUESTED

Demurrer to the First Amended Cross-Complaint

·         1st Cause of Action: Indemnity

·         2nd Cause of Action: Contribution

·         3rd Cause of Action: Express Indemnity

·         4th Cause of Action: Breach of Contract

 

SUMMARY OF ACTION

On July 1, 2014, Plaintiff Catani, LLC (Catani) became the assignee to a lease for 117 E. Harvard St., Glendale. Defendant Brand Boulevard Associates, L.P. (Brand Boulevard) owns the parcel and assigned the lease. Plaintiff opened Oak & Vine Restaurant on the first floor and loft area of the premises. In 2017, renovations began for the opening of “Veranda” restaurant operating on the rooftop immediately above Oak & Vine. Defendant Elevate Venues, LLC was responsible for the operation of Veranda. Catani alleges the renovations, including improperly installed drainage and plumbing systems, caused water leakage into Oak & Vine restaurant, thereby interfering with business operations.

 

On June 15, 2023, Catani filed a complaint for 1. Negligence 2. Implied Contractual Indemnity 3. Breach Of Contract/Lease 4. Negligent Interference With Prospective Economic Relations. On August 31, 2023, Brand Boulevard answered and filed a cross-complaint for Indemnity and Contribution. On September 27, 2023, Catani answered the cross-complaint. On December 15, 2023, Elevate Venues/Veranda Venue, Inc. answered the complaint and cross-complaint of Brand Boulevard. On December 20, 2023, Elevate Venues/Veranda Venue, Inc. filed a cross-complaint Equitable Indemnity, Apportionment, Contribution, and Declaratory Relief.

 

On April 29, 2024, the court granted Brand Boulevard leave to file a first amended cross-complaint. On April 30, 2024, Brand Boulevard filed its first amended cross-complaint for Indemnity, Contribution, Express Indemnity, and Breach of Contract. Elevate Venues/Veranda Venue, Inc. answered the first amended cross-complaint of Brand Boulevard on May 29, 2024.

 

RULING: Sustained in Part/Overruled in Part.

Plaintiff/Cross-Defendant, Catani, LLC (Catani) submits a demurrer to the first amended cross-complaint of Brand Boulevard Associates, L.P. (Brand Boulevard) for Indemnity, Contribution, Express Indemnity, and Breach of Contract on grounds of failure to state sufficient facts in support of all identified causes of action. Defendant/Cross-Complainant, Brand Boulevard Associates, L.P. (Brand Boulevard) in opposition contends the subject demurrer constitutes an improper effort to prematurely adjudicate the determination of ultimate liability for the water damage. The court electronic filing system shows no reply on file at the time of the tentative ruling publication cutoff.

 

A demurrer is an objection to a pleading, the grounds for which are apparent from either the face of the complaint or a matter of which the court may take judicial notice. (Code Civ. Proc., § 430.30, subd. (a); see also Blank v. Kirwan (1985) 39 Cal.3d 311, 318.) The purpose of a demurrer is to challenge the sufficiency of a pleading “by raising questions of law.” (Postley v. Harvey (1984) 153 Cal.App.3d 280, 286.) “In the construction of a pleading, for the purpose of determining its effect, its allegations must be liberally construed, with a view to substantial justice between the parties.” (Code Civ. Proc., § 452.) The court “ ‘ “treat[s] the demurrer as admitting all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law . . . .” ’ ” (Berkley v. Dowds (2007) 152 Cal.App.4th 518, 525.) In applying these standards, the court liberally construes the complaint to determine whether a cause of action has been stated.  (Picton v. Anderson Union High School Dist. (1996) 50 Cal.App.4th 726, 733.)

 

“A demurrer for uncertainty is strictly construed, even where a complaint is in some respects uncertain, because ambiguities can be clarified under modern discovery procedures.” (Khoury v. Maly's of California, Inc. (1993) 14 Cal.App.4th 612, 616; Williams v. Beechnut Nutrition Corp. (1986) 185 Cal.App.3d 135, 139 [“[U]nder our liberal pleading rules, where the complaint contains substantive factual allegations sufficiently apprising defendant of the issues it is being asked to meet, a demurrer for uncertainty should be overruled or plaintiff given leave to amend.]

 

1st Cause of Action: Indemnity

Catani challenges the basis of any claim for indemnity due to reliance on conclusive allegations without any factual nexus to the terms of the lease itself. Brand Boulevard cites to the incurred attorney fees and expenses as a result of the action, and requirement for Catani to maintain a “liability” insurance policy under section 8.4 of the lease.

 

The operative cross-complaint lacks identification as to the basis of indemnity or facts in support. Brand Boulevard appears to rely on a claim of implied contractual indemnity. (Prince v. Pacific Gas & Electric Co. (2009) 45 Cal.4th 1151, 1157 [“indemnity implied from a contract not specifically mentioning indemnity (implied contractual indemnity”].) Said basis of indemnity is now reviewed as “a form of equitable indemnity.” (Prince v. Pacific Gas & Electric Co. (2009) 45 Cal.4th 1151, 1157 accord Bay Development, Ltd. v. Superior Court (1990) 50 Cal.3d 1012, 1029; E. L. White, Inc. v. City of Huntington Beach (1978) 21 Cal.3d 497, 507 [Indemnity “may find its source in equitable considerations brought into play either by contractual language not specifically dealing with indemnification or by the equities of the particular case”].)

 

The parties agree the lease governs the claim. Both parties cite to sections 4.2, 7.2 and 8.7 of the incorporated lease agreement. Section 4.2, Common Area Operating Expenses requires payment for a share of common area expenses, including maintenance and repair. Section 7.2 requires Lessor maintain the premises in good working order. Section 8.7, the “indemnity” section states in relevant part: “Lessee shall indemnify, protect, defend, and hold harmless ... Lessor ... from and against any and all claims, loss of rents and/or damages, liens, judgments, penalties, attorneys’ and consultants’ fees, expenses and/or liabilities arising out of, involving, or in connection with, the use and/or occupancy of the Premises by Lessee. If any action or proceeding is brought against Lessor by any of the foregoing matters, Lessee shall upon notice defense the same at Lessee’s expense ...” [First Amend Comp., Ex. 1: Assignment and Assumption of Lease and Consent of Lessor and Standard Industrial/Commercial Multi-Tenant Leave (triple net).]

 

The operative cross-complaint itself cites to section 7.2 of the lease regarding the obligation of Lessor to maintain the premises [Comp., ¶ 33], but the court agrees with Catani that the damages caused to an area outside of Lessee’s responsibility and without articulated facts undermines the claim for indemnity under the lease provisions. Lessor cannot rely on the existence of the terms, including the requirement for an insurance policy and incurrence of fees and expenses, without any underlying basis of causation for said damages claim. The court appreciates the acknowledgment of Brand Boulevard regarding the need for further discovery, and early challenge to the protective measure in pleading the subject claim pending further investigation. The court therefore sustains the demurrer with leave to amend, and declines to find an inability to not state facts sufficient to allege the claim upon further discovery. (Blank v. Kirwan, supra, 39 Cal.3d at p. 318; Williams v. Beechnut Nutrition Corp., supra, 185 Cal.App.3d at p. 139.)

 

2nd Cause of Action: Contribution

The second cause of action is pled as follows: “The Plaintiff’s damages, if any, were caused by the negligence, carelessness, laches, failure to mitigate losses and contractual breach of the Cross-Defendants, and each of them, and as such under the rules of comparative negligence, Cross-Complainant is entitled to equitable indemnity and equitable contribution for the amount of negligence attributable to Cross-Defendants, and each of them.” The opposition lacks any supporting legal citation, and relies on extrinsic factual reference. The demurrer is sustained with leave to amend.

 

3rd Cause of Action: Express Indemnity

As addressed in the first cause of action, Brand Boulevard fails to articulate facts supporting the basis of indemnity. The demurrer is sustained with leave to amend.

 

4th Cause of Action: Breach of Contract

“To state a cause of action for breach of contract, [a plaintiff] must plead the contract, his performance of the contract or excuse for nonperformance, [defendant’s] breach and the resulting damage. (Citation.) Further, the complaint must indicate on its face whether the contract is written, oral, or implied by conduct. (Citation.)” (Otworth v. Southern Pac. Transportation Co. (1985) 166 Cal.App.3d 452, 458–59.) In examining a breach of contract claim, the court is required to examine the terms, or at least the legal effect of the contract. (Blank v. Kirwan, supra, 39 Cal.3d at p. 318 [“we give the complaint a reasonable interpretation, reading it as a whole and its parts in their context”].)

 

The complaint alleges the existence of the written lease, incorporates a copy of the agreements, conclusively states a breach based on failure to comply with the terms of the lease in refusing to tender a defense, thereby causing the incurrence of damages in the form of litigation expenses. The first amended cross-complaint is proper in form, and the demurrer overruled as to this cause of action.

 

The demurrer is therefore sustained as to the first, second and third causes of action with leave to amend, and overruled as to the fourth cause of action. Brand Boulevard is given 30 days leave to amend. Brand Boulevard may NOT add any new causes of action. (Harris v. Wachovia Mortgage, FSB (2010) 185 Cal.App.4th 1018, 1023.) Any such actions will be subject to a motion to strike. If Brand Boulevard elects to forego filing an amended cross-complaint, Catani is ordered to answer the remaining cause of action within 10 days of the lapsed amendment deadline.

 

The court will concurrently conduct the OSC re: Sanctions, et al.

 

Plaintiff/Cross-Defendant, Catani, LLC (Catani) to give notice.