Judge Stephen P. Pfahler, Case Number: 23STCV21144, Date: 2024-02-29 Tentative Ruling

Judge: Stephen P. Pfahler, Case: 23STCV21144, Date: 2024-02-29 Tentative Ruling

Case Number: 23STCV21144 Hearing Date: February 29, 2024 Dept: 68

Dept. 68

Date: 2-29-24 (c/f 12-21-23)

Case 23STCV21144

Trial Date: 10-7-24

DEMURRER

MOVING PARTY: Defendants, Rio Hondo Community College District, et al.

RESPONDING PARTY: Plaintiff, Pinner Construction Co., Inc.

RELIEF REQUESTED

Demurrer to the First Amended Complaint

· 1^st Cause of Action: Breach of Contract

· 2^nd Cause of Action: Breach of Implied Warranty of the Plans and Specifications

· 4^th Cause of Action: Negligence

· 5^th Cause of Action: Recission of Contract

· 7^th Cause of Action: Vicarious Liability for Interference with Contract

· 8^th Cause of Action: Taxpayer Breach of Fiduciary Duty

· 9^th Cause of Action: Taxpayer action for Waste

· 10^th Cause of Action: Taxpayer Temporary and Permanent Injunction Injunctions Setting Aside Contracts between RHCCD and Del Terra

SUMMARY OF ACTION

On November 15, 2016, Plaintiff Pioneer Construction Co., Inc. entered into a contract with defendant Rio Hondo Community College District (Rio Hondo) for the construction of Rio Hondo College “L” Tower Project. Rio Hondo also hired defendant Del Terra Real Estate Services, Inc. dba Del Terra Group as construction manager for the project. The president of Del Terra is defendant Luis Rojas.

Plaintiff alleges the Del Terra defendants intentionally sought to delay construction in order to yield additional fees and/or cut compensation to Plaintiff. After a purported 925 day delay, Del Terra “forced” Plaintiff and the subcontractors to “accept far less than what was owed” under the contract or file for bankruptcy. Plaintiff settled for $5,243.525, thereby foregoing an additional $2,691.484 sought. Plaintiff alleges the Del Terra parties are under criminal investigation and were able to engineer the delays due to “control” of at least three seats on the Rio Hondo Community College District Board of Trustees. Defendants Marilyn Flores, Kristal Orozco, Anais Medina Diaz, Oscar Valladares, Rosaelva Lomeli, and Vicky Santana, are identified as members of said board of trustees.

On May 22, 2023, Plaintiff filed a complaint for Breach of Contract, Breach of Implied Warranty of the Plans and Specifications, Intentional Interference with Contractual Relations, International Interference with Prospective Economic Advantage, Recission of Contract, Violations of Business and Professions Code section 17200, and Vicarious Liability for Interference with Contract and Prospective Business Advantage. On September 25, 2023, Rio Hondo Community College District filed a cross-complaint against Plaintiff for Breach of Written Construction Contract, Breach of Written Settlement Agreement, Breach of Implied Covenant of Good Faith and Fair Dealing, Money Damages and Civil Penalties for Violations of California False Claims Act, Making or Using False Records of Statements to Obtain payment or Approval of False Claims; and, Conspiracy to Violate the False Claims Act.

On October 13, 2023, Plaintiff filed its first amended complaint for Breach of Contract, Breach of Implied Warranty of the Plans and Specifications, Intentional Interference with Contract, Negligence, Recission of Contract, Violations of Business and Professions Code section 17200, Vicarious Liability for Interference with Contract, Taxpayer Action for Breach of Fiduciary Duty, Taxpayer Action for Waster, Taxpayer Action for Temporary and Permanent Injunctions Setting Aside Contracts between RHCCD and Del Terra.

RULING: Sustained with Leave to Amend.

Defendants Rio Hondo Community College District (Rio Hondo), Marilyn Flores (“Flores”), Kristal Orozco (“Orozco”), Anais Medina Diaz (“Diaz”), Oscar Valladares (“Valladares”), Rosaelva Lomeli (“Lomeli”) and Vicky Santana (“Santana”) submit a demurrer to the first, second, fourth, fifth, seventh, eighth, ninth, and tenth causes of action in the first amended complaint for Breach of Contract, Breach of Implied Warranty of the Plans and Specifications, Negligence, Recission of Contract, Liability for Interference with Contract, Vicarious Liability for Interference with Contract, Taxpayer Breach of Fiduciary Duty, Taxpayer action for Waste, and Taxpayer Action for Temporary and Permanent Injunctions Setting Aside Contracts between RHCCD and Del Terra. Defendants collectively challenge the first amended complaint on grounds of a prematurely filed complaint, to wit, filed before any action was taken on the claim; the subject action alleges causes of action beyond the scope of the issues presented in the claim; the first amended complaint is time barred; Pinner cannot state claims for negligence or vicarious liability as a matter of law; Pinner lacks standing to allege the taxpayer claims; the taxpayer claims lack sufficient facts; and, the individual trustee defendants are immune from any personal liability under the Government Claims Act. Plaintiff in opposition maintains the notice and subsequent medication sufficiently apprized defendants of all claims. Plaintiff denies any time bar as the damages continue. The statute of limitations of contract is both four years, and the project remains incomplete. Plaintiff properly alleges the challenged individual causes of action. Defendants in reply reiterate the arguments in the demurrer.

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.]

Premature Filing

Defendants challenge the filing of the complaint only seven days after the submission of the claim. The argument depends on the declaration of counsel incorporating a copy of the purported claim with a received date of May 15, 2023. [Declaration of Michael Becker.] The claim is neither presented via judicial notice, nor disputed by Plaintiff. The opposition makes a single argument for substantial compliance on grounds that the prior mediation constituted a part of the claim process for purposes of timing.

“Except as provided in Sections 946.4 and 946.6, no suit for money or damages may be brought against a public entity on a cause of action for which a claim is required to be presented … until a written claim therefor has been presented to the public entity and has been acted upon by the board, or has been deemed to have been rejected by the board...” (Gov. Code, § 945.4.) “A claim relating to a cause of action for death or for injury to person or to personal property or growing crops shall be presented … not later than six months after the accrual of the cause of action.” (Gov. Code, § 911.2, subd. (a).)

“If the board fails or refuses to act on an application within the time prescribed by this section, the application shall be deemed to have been denied on the 45th day or, if the period within which the board is required to act is extended by agreement pursuant to this section, the last day of the period specified in the agreement.” (Gov. Code, § 911.6, subd. (c).)

Although the claim submitted in the declaration of Becker is not properly before the court for purposes of the demurrer, the first amended complaint itself alleges presentation of the claim on May 11, 2023. [First Amend. Comp., ¶ 28.] The complaint was filed on May 22, 2023, which is less than 45 days from the claim expiration date. The action was therefore prematurely filed. (Lowry v. Port San Luis Harbor District (2020) 56 Cal.App.5th 211, 219.) “[T]he lawsuit is precluded because it was not preceded by rejection of a claim. [Plaintiff’s] noncompliance with the Act cannot be cured by amending the complaint to allege [it] complied.” (Id. at p. 221.)

The court finds no basis of support under the “substantial compliance” and mediation notice arguments. The argument in opposition appears to conflate the scope of the claim versus prematurity of filing positions, on which the court finds unsupported or inapplicable either way. (Simms v. Bear Valley Community Healthcare District (2022) 80 Cal.App.5th 391, 400.) Arguments under substantial compliance doctrine for premature filing in fact have been expressly rejected. (Lowry v. Port San Luis Harbor District, supra, 56 Cal.App.5th at p. 218 accord DiCampli-Mintz v. County of Santa Clara (2012) 55 Cal.4th 983, 990-991.) The demurrer to the entire complaint against the Rio Hondo and trustee defendants is therefore sustained with leave to amend on this basis.

Scope of Claim

On the scope of the claims, the court declines to consider the arguments in that the actual claim is not properly before the court via judicial notice, and the court otherwise declines to make an advisory opinion on a prematurely filed complaint.

Time Barred

On the accrual of the cause of action, the court finds the argument depends on extrinsic inference regarding the accrual of the claim upon the entry into the January 15, 2021, settlement agreement. [First Amend. Comp., ¶ 22.] The argument first challenges on the claim filing deadlines, which were previously found premature. Nothing in determination of prematurity renders the claims untimely/late filed, however, under the six month to one year presentation and filing rules. Even considering the argument, the demurrer lacks address of the underlying, applicable statutes of limitations for the individual causes of action, which range as long as four years for the breach of contract claim. Thus, even on the relied upon January 15, 2021, accrual date, a potential January 21, 2025, statute of limitations cutoff has not lapsed. The demurrer also only focuses on the content of the settlement as to the identified items, but otherwise fails to address the later presented claims apparently not included in the settlement agreement, yet referenced in the operative pleading. [First Amend. Comp., ¶¶ 23-27.] For purposes of the subject demurrer, the court overrules the arguments as presented.

Standing and Sufficiency

Defendants challenge any showing of standing as a tax paying entity.

(a) An action to obtain a judgment, restraining and preventing any illegal expenditure of, waste of, or injury to, the estate, funds, or other property of a local agency, may be maintained against any officer thereof, or any agent, or other person, acting in its behalf, either by a resident therein, or by a corporation, who is assessed for and is liable to pay, or, within one year before the commencement of the action, has paid, a tax that funds the defendant local agency, including, but not limited to, the following:

(1) An income tax.

(2) A sales and use tax or transaction and use tax initially paid by a consumer to a retailer.

(3) A property tax, including a property tax paid by a tenant or lessee to a landlord or lessor pursuant to the terms of a written lease.

(4) A business license tax.

(b) This section does not affect any right of action in favor of a local agency, or any public officer; provided, that no injunction shall be granted restraining the offering for sale, sale, or issuance of any municipal bonds for public improvements or public utilities.

(c) An action brought pursuant to this section to enjoin a public improvement project shall take special precedence over all civil matters on the calendar of the court except those matters to which equal precedence on the calendar is granted by law.

(d) For purposes of this section, the following definitions apply:

(1) “Local agency” means a city, town, county, or city and county, or a district, public authority, or any other political subdivision in the state.

(2) “Resident” means a person who lives, works, owns property, or attends school in the jurisdiction of the defendant local agency.

Code Civ. Proc., § 526a

Plaintiff alleges standing as a tax paying entity. [First Amend. Comp., ¶ 1.] The court also finds the allegations substantively support the basis of the claim for purposes of the demurrer. (Davis v. Fresno Unified School Dist. (2015) 237 Cal.App.4th 261, 293-294.) The demurrer is overruled on this argument.

Government Immunity

Defendants maintain immunity. Plaintiff counters a pervasive course of conduct demonstrating a lack of considered decision.

A party seeking “governmental entity, ... must show that its employee actually reached a considered decision knowingly and deliberately encountering the risks that give rise to plaintiff's complaint. ... Accordingly, to be entitled to immunity the state must make a showing that such a policy decision, consciously balancing risks and advantages, took place. The fact that an employee normally engages in ‘discretionary activity is irrelevant if, in a given case, the employee did not render a considered decision.” (Johnson v. State (1968) 69 Cal.2d 782, 795 (footnote 8).) While the complaint lacks specific operative key language relied upon in opposition, the overall tone of the allegations allege claims of self-interest and corruption, thereby removing immunity protections. The court declines to engage in factual determinations at the demurrer stage. The argument is overruled for purposes of the subject demurrer.

4^th Cause of Action: Negligence

The court finds the basis of negligence insufficiently pled, especially given reliance on the alleged conduct of the Del Terra defendants. The demurrer is sustained.

7^th Cause of Action: Vicarious Liability for Interference with Contract

Rio Hondo, as a party to the contract, cannot be vicariously liable for interference. (Mintz v. Blue Cross of California (2009) 172 Cal.App.4th 1594, 1604 accord Applied Equipment Corp. v. Litton Saudi Arabia Ltd. (1994) 7 Cal.4th 503, 512 (footnote 4) [“The agent's immunity rule emanates from a further holding in Wise that: ‘Agents and employees of a corporation cannot conspire with their corporate principal or employer where they act in their official capacities on behalf of the corporation and not as individuals for their individual advantage’”]; Caliber Paving Company, Inc. v. Rexford Industrial Realty and Management, Inc. (2020) 54 Cal.App.5th 175, 177-178.) The demurrer is sustained.

In summary, the demurrer is sustained in its entirety, due to prematurity, as well as considered deficiencies with the fourth and seventh individual causes of action. Plaintiff is given 30 days to file an amended complaint. Plaintiff may not add any new causes of action or allegations to the previously existing claims. (Harris v. Wachovia Mortgage, FSB (2010) 185 Cal.App.4th 1018, 1023.) Any new causes of action added without leave of court may be subject to a motion to strike.

Defendants to give notice.

Dept. 68

Date: 2-29-24 (c/f 12-21-23)

Case 23STCV21144

Trial Date: 10-7-24

DEMURRER

MOVING PARTY: Defendants, Del Terra Real Estate Services, Inc., et al.

RESPONDING PARTY: Plaintiff, Pinner Construction Co., Inc.

RELIEF REQUESTED

Demurrer to the First Amended Complaint

· 3^rd Cause of Action: Intentional Interference with Contractual Relations

· 4^th Cause of Action: Negligence

· 6^th Cause of Action: Violations of Business and Professions Code section 17200

· 10^th Cause of Action: Taxpayer Temporary and Permanent Injunction Injunctions Setting Aside Contracts between RHCCD and Del Terra

Motion to Strike

SUMMARY OF ACTION

On September 1, 2022, Plaintiff filed a complaint for Breach of Contract, Breach of Implied Warranty of the Plans and Specifications, Intentional Interference with Contractual Relations, International Interference with Prospective Economic Advantage, Recission of Contract, Violations of Business and Professions Code section 17200, and Vicarious Liability for Interference with Contract and Prospective Business Advantage. On September 25, 2023, Rio Hondo Community College District filed a cross-complaint against Plaintiff for Breach of Written Construction Contract, Breach of Written Settlement Agreement, Breach of Implied Covenant of Good Faith and Fair Dealing, Money Damages and Civil Penalties for Violations of California False Claims Act, Making or Using False Records of Statements to Obtain payment or Approval of False Claims; and Conspiracy to Violate the False Claims Act.

RULING

Demurrer: Overruled in Part/Sustained with Leave to Amend in Part

Request for Judicial Notice: Granted in Part/Denied in Part

· The court takes judicial notice of the existence of the complaint in the subject action filed before the superseding operative first amended complaint.

· The court declines to take judicial notice of the November 1, 2020, agreement with Rio Hondo Community College District and the Del Terra parties, or the settlement agreement.

· The operative complaint itself lacks any copy of either agreement though the court acknowledges the allegation of the settlement agreement. The court finds the reference in no way renders the settlement agreement as part of the operative pleading. (Avery v. Integrated Healthcare Holdings, Inc. (2013) 218 Cal.App.4th 50, 69; Shaw v. Regents of University of California (1997) 58 Cal.App.4th 44, 54.)

· Nothing in the request for judicial notices establishes said items are “public documents” regardless of the identification of the documents in the operative complaint. (See Scott v. JPMorgan Chase Bank, N.A. (2013) 214 Cal.App.4th 743, 752; Maryland Casualty Co. v. Reeder (1990) 221 Cal.App.3d 961, 977; B & P Development Corp. v. City of Saratoga (1986) 185 Cal.App.3d 949, 959.)

· Even if the court takes judicial notice of the document, the court cannot take judicial notice of the document for the truth of the matter asserted. (Aixtron, Inc. v. Veeco Instruments Inc., (2020) 52 Cal.App.5th 360, 382.)

Defendants Del Terra Real Estate Services, Inc. dba Del Terra Group and Luis Rojas (Del Terra) submit a demurrer to the third, fourth, sixth, and tenth causes of action in the first amended complaint for Intentional Interference with Contract, Negligence, Violations of Business and Professions Code section 17200, and Taxpayer Action for Temporary and Permanent Injunctions Setting Aside Contracts between RHCCD and Del Terra. Defendants move on grounds of failure to state a proper basis or facts in support of the claims. Plaintiff Pioneer Construction Co., Inc. (Pinner) in opposition maintains all claims are viably pled. Del Terra in reply challenges certain allegations in the first amended complaint as constituting a “sham allegations” expressly contradicting the incorporated contract. Del Terra next maintains the lack of a valid claim due to the settlement agreement between Rio Hondo and Pinner, and finally reiterates the lacking factual and legal foundation arguments.

3^rd Cause of Action: Intentional Interference with Contractual Relations

Del Terra first challenges the interference with contractual relations cause of action on grounds that Pinner cannot state a claim, due to the agency relationship between Del Terra, Pinner and Rio Hondo. Del Terra characterizes the first amended complaint as a “sham pleading” when compared to the original complaint, whereby the relied upon request for judicial notice exposes the conflicts with the pleadings. Pinner in opposition challenges any showing of a sham pleading, specifically cites to the operative pleading regarding the denial of any action within the scope of any purported agency relationship between the parties, and otherwise denies any bar under the “stranger to the contract” requirement.

Del Terra relies on the addition of paragraph six (6) to the first amended complaint, as the basis for seeking to rescue the otherwise moribund original complaint that pled an invalid interference claim. [Comp., ¶¶ 40-49; First Amend. Comp., ¶¶ 42-51.] Paragraph six states in relevant part: “Plaintiff is informed and believes and thereon allege that each of the Defendants ... were the Authorized Agents and/or Employees and/or Servants of each of the other Defendants ... and in doing the Acts and Events complained of herein, did so within the course and scope of such agency, servitude and/or employment, except where alleged herein.”

“Where a party files an amended complaint and seeks to avoid the defects of a prior complaint either by omitting the facts that rendered the complaint defective or by pleading facts inconsistent with the allegations of prior pleadings” the pleading is considered a sham pleading. (Owens v. Kings Supermarket (1988) 198 Cal.App.3d 379, 383-384; Berman v. Bromberg (1997) 56 Cal.App.4th 936, 946 [“A pleader may not attempt to breathe life into a complaint by omitting relevant facts which made his previous complaint defective”].) A pleader is entitled to explain any inconsistencies. (Ibid; Vallejo Development Co. v. Beck Development Co. (1994) 24 Cal.App.4th 929, 946.) In comparing the complaint and first amended complaint under the sham pleading standard, the court finds no support for the argument.

While the first amended complaint indisputably adds in the additional denial of any agency relationship, the court finds the addition in no way improperly seeks to omit or improperly evade a potential legal bar presented in the original complaint. The addition adds to the legal text of the claim, and in no way removes or alters any prior allegations. Nothing in the amendment seeks to cover over a fatal flaw. The court still remains presented with the same fundamental argument regarding a “stranger” to the contract requirement regardless of any amended denial of an agency reliant argument apparently made aware to Plaintiff after service of the complaint on Del Terra. The court therefore finds no sham pleading basis of support for the demurrer.

As for the dependence on extrinsic document reference for the purpose of establishing a “stranger” to the agreement and/or lack of any agency relationship, Del Terra relies on the request for judicial notice of the previously filed complaint, the contract between Del Terra and Rio Hondo, and the purported settlement agreement between Rio Hondo and Pinner, which is referenced in the first amended complaint, but not specifically incorporated. [First Amend. Comp., ¶¶ 22, 41.] As addressed in the ruling on the request for judicial notice, the court finds no basis for taking judicial notice of the existence and content of either agreement.

Again, even if the court still considered the contract and settlement agreement via judicial notice, the court still declines to consider the content of any agreement on grounds of reference. The operative complaint itself lacks any copy of either agreement though the court acknowledges the allegation of the settlement agreement. The court finds the settlement agreement allegation in no way renders the settlement agreement part of the operative pleading. The hiring of Del Terra as construction manager also in no way renders any agreement with Rio Hondo material to the complaint. (Avery v. Integrated Healthcare Holdings, Inc. (2013) 218 Cal.App.4th 50, 69; Shaw v. Regents of University of California (1997) 58 Cal.App.4th 44, 54.)

Also again, even allowing for consideration of the language of the extrinsic agreements, the argument falls beyond the scope of the demurrer. Incorporation of the language of said agreements invites potential additional attention to terms not otherwise presented to the court. “The proper interpretation of a contract is disputable if the contract is susceptible of more than one reasonable interpretation, that is, if the contract is ambiguous. An ambiguity may appear on the face of a contract, or extrinsic evidence may reveal a latent ambiguity.” (Fremont Indemnity Co. v. Fremont General Corp. (2007) 148 Cal.App.4th 97, 114.) “A court ruling on a demurrer therefore cannot take judicial notice of the proper interpretation of a document submitted in support of the demurrer.” (Id. at p. 115.) Del Terra specifically relies on a characterization of the role of a construction manager relative to the underlying construction with Pinner and Rio Hondo, which may rely on a factually disputed interpretation by Pinner. The court declines to consider the number of requests for factual adjudication of the claims at the demurrer stage via judicial notice and inference.

As for the elements of the actual cause of action the court reviews the standard. “The elements which a plaintiff must plead to state the cause of action for intentional interference with contractual relations are (1) a valid contract between plaintiff and a third party; (2) defendant's knowledge of this contract; (3) defendant's intentional acts designed to induce a breach or disruption of the contractual relationship; (4) actual breach or disruption of the contractual relationship; and (5) resulting damage.” (Pacific Gas & Electric Co. v. Bear Stearns & Co. (1990) 50 Cal.3d 1118, 1126; Ixchel Pharma, LLC v. Biogen, Inc. (2020) 9 Cal.5th 1130, 1141; Reeves v. Hanlon (2004) 33 Cal.4th 1140, 1148.) “[T]he tort of intentional interference with performance of a contract does not require that the actor's primary purpose be disruption of the contract. ... “The fact that this interference with the other's contract was not desired and was purely incidental in character is, however, a factor to be considered in determining whether the interference is improper. If the actor is not acting criminally nor with fraud or violence or other means wrongful in themselves but is endeavoring to advance some interest of his own, the fact that he is aware that he will cause interference with the plaintiff's contract may be regarded as such a minor and incidental consequence and so far removed from the defendant's objective that as against the plaintiff the interference may be found to be not improper.’” (Quelimane Co. v. Stewart Title Guaranty Co. (1998) 19 Cal.4th 26, 56.)

Del Terra specifically concentrates on the “stranger” to the contract rule for undermining the claim. “[I]t is settled that ‘corporate agents and employees acting for and on behalf of a corporation cannot be held liable for inducing a breach of the corporation's contract.’” (Mintz v. Blue Cross of California (2009) 172 Cal.App.4th 1594, 1604 accord Applied Equipment Corp. v. Litton Saudi Arabia Ltd. (1994) 7 Cal.4th 503, 512 (footnote 4) [“The agent's immunity rule emanates from a further holding in Wise that: ‘Agents and employees of a corporation cannot conspire with their corporate principal or employer where they act in their official capacities on behalf of the corporation and not as individuals for their individual advantage’”]; Caliber Paving Company, Inc. v. Rexford Industrial Realty and Management, Inc. (2020) 54 Cal.App.5th 175, 177-178.)

The existence and basis of the rule remains clear. Again, the plain language of the operative complaint in paragraph six (6) denying any agency relationship, and refusal of the court to consider the extrinsic argument regarding the finding of an agency relationship for Del Terra in contradiction to the plain language of the operative complaint, renders this section of the demurrer overruled.

The arguments based on denial of any duty of care owed by Del Terra lacks any legal support under the elements of the claim. The argument also arguably presents potential contradictory positions based on the existence of an alleged agency relationship, but any denial of owed duties, as said agent. The court also overrules the demurrer on the release of claims argument, as previously addressed. The demurrer is overruled on this claim in its entirety.

4^th Cause of Action: Negligence

Del Terra challenges the subject claim on grounds of failure to state an independent cause of action due to the incorporation of the prior claims without any specific distinction for the negligence elements. Del Terra also contends a lack of any specifically articulated basis of duty. Plaintiff maintains the elements are stated and arises from the “derogation of their duty to administer the Project in a fair and efficient manner...”

“To state a cause of action for negligence, a plaintiff must allege (1) the defendant owed the plaintiff a duty of care, (2) the defendant breached that duty, and (3) the breach proximately caused the plaintiff's damages or injuries.” (Lueras v. BAC Home Loans Servicing, LP (2013) 221 Cal.App.4th 49, 62.) The operative complaint incorporates the prior allegations and then conclusively alleges the negligence standard without any factual context other than incorporation. [First Amend. Comp., ¶¶ 52-55.] On duty, Plaintiff cites to paragraphs 14 and 25 which state:

“PCC is informed and believes and based thereon alleges that in or about January 2018, Del Terra and Luis Rojas, and each of them, formulated a scheme to intentionally delay the Project and earn themselves hundreds of thousands – if not millions – of dollars of additional compensation. This scheme consisted of interfering with the Project’s required plan revision and submission process. The scheme was successfully carried out as the interference delayed the Project by 926 days and, as contemplated, resulted in Del Terra earning itself almost $1 million in additional compensation for its work on the Project.

“On or about September 23, 2022, Del Terra completely abandoned its most basic obligations as the Project’s construction manager by refusing to respond to PCC’s telephone calls and emails. This refusal prevented a close out of the Project, prevented processing of final change orders, and prevented release of PCC’s retention.”

The parties then engage in an extensive debate over the finding of a basis of duty. The court finds the dearth of allegations in the actual cause of action and reliance on two of the incorporated paragraphs insufficiently articulates even a minimal claim. Rather than engaging in advisory consideration of a standard, the court sustains the demurrer to the instant cause of action for purposes of allowing Pinner to fully articulate both the elements of the claim, and basis of duty against both the corporate and individual defendants. The demurrer is sustained on this cause of action.

6^th Cause of Action: Violations of Business and Professions Code section 17200

Del Terra challenges the subject claim on failure to articulate a viable claim, again due to reliance on previously incorporated claims without specific, separate articulation. Del Terra also challenges the lack of sufficient facts in support of any prospective injunctive relief and instead seeks redress of past grievances. Plaintiff counters the operative complaint properly seeks injunctive relief in order to prevent future harm.

“The UCL does not proscribe specific acts, but broadly prohibits ‘any unlawful, unfair or fraudulent business act or practice and unfair, deceptive, untrue or misleading advertising....’” [¶] “‘A private plaintiff must make a twofold showing: he or she must demonstrate injury in fact and a loss of money or property caused by unfair competition.’ (Citation.)” (Durell v. Sharp Healthcare (2010) 183 Cal.App.4th 1350, 1359.) Fact specific pleading is not required in order to allege an unfair business practice. (Quelimane Co. v. Stewart Title Guaranty Co. (1998) 19 Cal.4th 26, 46–47.

An “unlawful” practice “means any practices forbidden by law, be it civil or criminal, federal, state, or municipal, statutory, regulatory, or court-made.… ‘Unfair’ simply means any practice whose harm to the victim outweighs its benefits. (Citation.) ‘Fraudulent,’ as used in the statute, does not refer to the common law tort of fraud but only requires a showing members of the public ‘“are likely to be deceived.”’” (Saunders v. Superior Court (1994) 27 Cal.App.4th 832, 838–839.) “[A]n unfair business practice also means” the relied upon public policy provision is “tethered” to a specific regulatory provisions. (Lueras v. BAC Home Loans Servicing, LP, supra, 221 Cal.App.4th at p. 81.)

The claim depends on alleged unlawful campaign contributions for remunerative gains in the form of public contracts. The court finds the standard met with the allegations of improper influence in the award of public contracts.

Nothing in the operative complaint seeks restitution. The operative complaint presents an undisputed request for injunctive relief enjoining Del Terra from “(1) performing any further work on the Project; and (2) from making any future unlawful campaign contributions to RHCCD Board of Trustees members.” [First Amend. Comp., ¶ 67.] The request is properly pled. The “‘injunction must seek to prevent harm, not to punish the wrongdoer.’ (Citation.) Thus, the ‘injunctive remedy should not be exercised “in the absence of any evidence that the acts are likely to be repeated in the future.”’ (Citation.)” (Feitelberg v. Credit Suisse First Boston, LLC (2005) 134 Cal.App.4th 997, 1012.) For purposes of the subject demurrer, the court finds the subject injunctive relief seeking to bar the Del Terra defendants from participating in the continuing, unfinished subject project or making future contributions, sufficiently articulates the claim. The demurrer is overruled.

10^th Cause of Action: Taxpayer Temporary and Permanent Injunction Injunctions Setting Aside Contracts between RHCCD and Del Terra

Defendants again challenge the subject cause of action based on a failure to articulate a separate and factually supported claim outside mere incorporation of prior allegations. Plaintiff counters the operative complaint both articulates the claim, and Defendants improperly rely on extrinsic inference regarding the project status and settlement agreement.

The court agrees with the bar on consideration of any extrinsic reference. As for the elements of the claim, Code of Civil Procedure 526a states:

(1) An income tax.

(2) A sales and use tax or transaction and use tax initially paid by a consumer to a retailer.

(3) A property tax, including a property tax paid by a tenant or lessee to a landlord or lessor pursuant to the terms of a written lease.

(4) A business license tax.

(d) For purposes of this section, the following definitions apply:

(1) “Local agency” means a city, town, county, or city and county, or a district, public authority, or any other political subdivision in the state.

(2) “Resident” means a person who lives, works, owns property, or attends school in the jurisdiction of the defendant local agency.

Code Civ. Proc., § 526a

“The taxpayer action statute authorizes an action for an injunction against ‘any illegal expenditure of, waste of, or injury to’ public funds.” (Fiske v. Gillespie (1988) 200 Cal.App.3d 1243, 1246.) “Citizen suits may be brought without the necessity of showing a legal or special interest in the result where the issue is one of public right and the object is to procure the enforcement of a public duty.” (Connerly v. State Personnel Bd. (2001) 92 Cal.App.4th 16, 29.)

While the challenged cause of action only references the prior claims and otherwise relies on conclusions, the court finds the prior allegations, including improper contributions and undue influence in the award of public contracts, and only seeking injunctive relief, supports the claim for purposes of the subject demurrer. The new arguments in reply challenging the timing of the action are extrinsic to the framed cause of action and scope of consideration. The demurrer is overruled.

Motion to Strike: Denied.

Del Terra moves to strike the following:

Paragraph 51 and the prayer for relief as to the third cause of action for 5 "intentional interference with contract" seeking punitive damages against Del Terra and Rojas.

Paragraph 12 of the FAC, which is incorporated by reference into each of Pinner's four claims against Del Terra and Rojas (see FAC, ¶¶ 41, 52, 62 and 79), charge Del Terra and Rojas with a litany of criminal conduct that are irrelevant and immaterial to any issue in this action.

Punitive Damages

Del Terra challenges both the entire cause of action, and any recovery for punitive damages under the interference with contract claim in that the underlying allegations lack sufficient factual support. Plaintiff maintains the operative complaint sufficiently articulates the claim for punitive damages. Del Terra in reply reiterates the legal conclusions argument.

As addressed in the demurrer, the motion to strike the entire cause of action is denied. On punitive damages, Civil Code section 3294, subdivision (c) authorizes punitive damages upon a showing of malice, oppression, or fraud, which are defined as follows:

(1) “Malice” means conduct which is intended by the defendant to cause injury to the plaintiff or despicable conduct which is carried on by the defendant with a willful and conscious disregard of the rights or safety of others.

(2) “Oppression” means despicable conduct that subjects a person to cruel and unjust hardship in conscious disregard of that person’s rights.

(3) “Fraud” means an intentional misrepresentation, deceit, or concealment of a material fact known to the defendant with the intention on the part of the defendant of thereby depriving a person of property or legal rights or otherwise causing injury.

Punitive damages require more than the mere commission of a tort. (See Taylor v. Superior Court (1979) 24 Cal.3d 890, 894-95.) Specific facts must be pled in support of punitive damages. (Hillard v. A.H. Robins Co. (1983) 148 Cal.App.3d 374, 391-392.) “The mere allegation an intentional tort was committed is not sufficient to warrant an award of punitive damages. [Citation.] Not only must there be circumstances of oppression, fraud or malice, but facts must be alleged in the pleading to support such a claim. [Citation.]” (Grieves v. Superior Court (1984) 157 Cal.App.3d 159, 166, fn. Omitted [emphasis added].)

Plaintiff cites to paragraph 49 of the first amended complaint: “Del Terra, Mr. Rojas, and DOE 1, and each of them, are not the agents of RHCCD in committing the intentional and wrongful acts alleged herein that intentionally delayed the Project for their own pecuniary gain.” When read in context of the incorporated allegations regarding threats to Plaintiff for crossing Del Terra or otherwise bringing a whistleblower complaint, and the improper campaign contributions, the court finds the claim well pled for purposes of the subject motion. [First Amend. Comp., ¶¶ 15-16.]

On the second part of the motion regarding paragraph 12, Del Terra again cites to the “sham pleading” standard, and otherwise contends the allegations constitute improper defamatory material. Plaintiff maintains the allegations provide relevant historical context. The reply reiterates the arguments.

As addressed above, the court finds no basis for a sham pleading. As for the alleged litany of prior conduct, the court finds the allegations in fact contextual to the narrative of the claims and therefore not superfluous. The motion to strike is denied in its entirety.

In summary, demurrer is sustained as to the negligence cause of action, and overruled on the remainder. The motion to strike is denied in its entirety. Plaintiff is given 30 days to file an amended complaint only as to the negligence cause of action. Plaintiff may not add any new causes of action or allegations to the previously existing claims. (Harris v. Wachovia Mortgage, FSB (2010) 185 Cal.App.4th 1018, 1023.) Any new causes of action added without leave of court may be subject to a motion to strike. If Plaintiff elects to forego filing an amended pleading, the Del Terra defendants are ordered to answer the remaining complaint within 10 days of the lapse of the amendment deadline.

Defendants to give notice.