Judge: Teresa A. Beaudet, Case: 23STCV02465, Date: 2023-11-29 Tentative Ruling

Case Number: 23STCV02465    Hearing Date: January 11, 2024    Dept: 50

Superior Court of California

County of Los Angeles

Department 50

Background

Plaintiffs Star Scrap Metal Co., Inc. and Metal Depot, Inc. (jointly, “Plaintiffs”) filed this action on February 3, 2023 against Defendants The State of California, acting by and through the California Department of Transportation (“Caltrans”), as well as Malcolm Dougherty, Karla Sutiff, Carrie Bowen, Heriberto Salazar, James Marsella, Mark A. Lyles, Kelly Lin, John Njoroge, Glenn Mueller, and Scott Fridell (collectively, the “Individual Defendants”)[1]. The Complaint alleges causes of action for (1) breach of contract, (2) petition for writ of mandate pursuant to Code of Civil Procedure section 1094.5, (3) breach of implied covenant of good faith and fair dealing, and (4) tortious interference with contract.

Caltrans now moves for judgment on the Complaint on the ground that it fails to state facts sufficient to constitute a cause of action. Plaintiffs oppose.

Requests for Judicial Notice

The Court grants Caltrans’ request for judicial notice filed in support of the motion. The Court notes that copies of Sections 10.05.12.01 and 10.05.05.11 of the subject Right of Way Manual are attached as Exhibits C and D, respectively, to the Declaration of William E. Pallares. (Pallares Decl., ¶¶ 4-5, Exs. C-D.) The Court denies Caltrans’ request for judicial notice filed in support of the reply. The Court notes that “¿[t]he general rule of motion practice…is that new evidence is not permitted with reply papers.¿” (¿Jay v. Mahaffey¿(2013) 218 Cal.App.4th 1522, 1537¿.) 

The Court grants Plaintiffs’ request for judicial notice filed in support of the opposition.

Discussion

A.    Legal Standard

A motion for judgment on the pleadings has the same function as a general demurrer but is made after the time for demurrer has expired. Except as provided by ¿Code of Civil Procedure section 438¿, the rules governing demurrers apply. (¿Cloud v. Northrop Grumman Corp. (1998) 67 Cal.App.4th 995, 999¿.) A motion by a defendant can be made on the ground that the complaint (or any cause of action therein) “¿does not state facts sufficient to constitute a cause of action against that defendant.¿” (¿Code Civ. Proc., § 438, subd. (c)(1)(B)(ii)¿.) Pursuant to Code of Civil Procedure section 438, subdivision (d), “[t]he grounds for motion provided for in this section shall appear on the face of the challenged pleading or from any matter of which the court is required to take judicial notice.”

¿“¿To survive a demurrer, the complaint need only allege facts sufficient to state a cause of action; each evidentiary fact that might eventually form part of the plaintiff’s proof need not be alleged.¿” (¿C.A. v. William S. Hart Union High School Dist. (2012) 53 Cal.4th 861, 872¿.) For the purpose of testing the sufficiency of the cause of action, the demurrer admits the truth of all material facts properly pleaded. (¿Aubry v. Tri-City Hospital Dist. (1992) 2 Cal.4th 962, 966-967¿.) A demurrer “¿does not admit contentions, deductions or conclusions of fact or law.¿” (¿Daar v. Yellow Cab Co. (1967) 67 Cal.2d 695, 713¿.)

B.    Caltrans’ Supplemental Briefing and Plaintiffs’ Objection Thereto

On December 22, 2023, Caltrans filed supplemental briefing in support of Caltrans’ motion for judgment on the pleadings. As noted by Plaintiffs, Caltrans was not authorized to file any supplemental briefing.

Caltrans states that it “submits this briefing as a supplement to its Motion for Judgment on the Pleadings and Reply in order to provide the Court with an additional relevant, unpublished case that is citable pursuant to California Rules of Court (‘CRC’), Rule 8.1115(b)(1) as ‘the opinion is relevant under the doctrines of law of the case.’ Caltrans respectfully requests that this court, in its discretion, take the case Bryant v. DOT 2023 Cal. App. Unpub. LEXIS 929, into consideration and grant its motion for judgment on the pleadings.” (Caltrans’ Supplemental Brief at p. 2:3-9.)

Pursuant to California Rules of Court, rule 8.1115, subdivision (a), “[e]xcept as provided in (b), an opinion of a California Court of Appeal or superior court appellate division that is not certified for publication or ordered published must not be cited or relied on by a court or a party in any other action.” Pursuant to California Rules of Court, rule 8.1115, subdivision (b), “[a]n unpublished opinion may be cited or relied on: (1) When the opinion is relevant under the doctrines of law of the case, res judicata, or collateral estoppel; or (2) When the opinion is relevant to a criminal or disciplinary action because it states reasons for a decision affecting the same defendant or respondent in another such action.”

Caltrans argues that “[t]he Byrant case should be viewed related as it involves the same party, CalTrans, and provides a demonstration of how a trial and appellate court applied the Government Code, section 11523 statute of limitation to a similar set of facts: the writ petition against a CalTrans administrative decision.” (Caltrans’ Supplemental Brief at pp. 3:27-4:2.)

Although Caltrans contends that Byrant is “relevant under the doctrines [sic] of law of the case,” (Caltrans’ Supplemental Brief at p. 2:6), Caltrans’ supplemental brief does not appear to discuss such doctrine or apply it to the instant case. The Court notes that under the law-of-the-case doctrine, “the decision of an appellate court, stating a rule of law necessary to the decision of the case, conclusively establishes that rule and makes it determinative of the rights of the same parties in any subsequent retrial or appeal in the same case.” ((Bell v. Farmers Ins. Exchange (2004) 115 Cal.App.4th 715, 727 [internal quotations omitted].) The Court does not see how this doctrine is applicable here. Caltrans does not show that the instant case involves a “subsequent retrial or appeal in” Bryant.

Based on the foregoing, the Court does not find that Caltrans has demonstrated in its unauthorized supplemental brief that any of the exceptions set forth in California Rules of Court, rule 8.1115, subdivision (b) apply here. Thus, the Court declines to consider the Bryant case. Plaintiffs assert that the Court should “issue an order to show cause why Caltrans’ counsel should not be sanctioned and ordered to pay Plaintiffs’ reasonable fees and expenses in responding to this unauthorized Supplemental Brief for its repeated, knowing violations of California Rule of Court 8.1115.” (Plaintiffs’ Reply at p. 8:10-12.) Plaintiffs note that “persistent use of unpublished authority may be cause for sanctions.” ((People v. Williams (2009) 176 Cal.App.4th 1521, 1529.) As noted by Plaintiffs, Caltrans’ motion also cites a trial court order. (See Mot at p. 9, fn. 2, citing “Five Points v. City of Irwindale, 2023 Cal. Super. LEXIS 39459.”)

Caltrans asserts in its supplemental brief that “Defendant submits this supplemental briefing to be considered at the discretion of the Court, and will not push the Bryant case further if the Court chooses to disregard it.” (Caltrans Supplemental Brief at p. 4:16-17.) The Court does not find that the circumstances warrant that the Court set an order to show cause re: sanctions at this time, but the Court admonishes Caltrans that¿any¿future filings must comply with the California Rules of Court.  

C.    Allegations of the Complaint

In the Complaint, Plaintiffs allege, inter alia, that “Star Scrap, a scrap metal recycling business, and Metal Depot, a fabricated metal retailer, grew into successful family enterprises under the stewardship of Rose Starow (‘Ms. Starow’) and her two sons, David and Zack. The Star Parties operated on a parcel of land that [Caltrans], decided to acquire through eminent domain to widen the I-5 freeway.” (Compl., ¶ 1.) “Caltrans entered into a written settlement agreement (the ‘Interim Agreement’) with Ms. Starow and the Star Parties…” (Compl., ¶ 4.) Plaintiffs allege that “[a]s part of this express contract, Caltrans most relevantly agreed that it (a) would leaseback the Property to the Star Parties and not require any relocation until the Property was needed for use in connection with the relocation of I-5, and (b) would pay the Star Parties for the costs each of them incurred to relocate to a suitable relocation site. And to minimize costs of enforcing adequate and timely reimbursement and hold each other to ideals of good faith, the parties to the Interim Agreement agreed that the prevailing party in any proceeding to enforce those reimbursement obligations would be entitled to their actual attorneys’ and expert fees and costs, regardless of whether such fees and costs would have otherwise been recoverable under any other statute (the ‘Prevailing Party Fee Clause’).” (Compl., ¶ 5.)

Plaintiffs allege that “[p]artway into the move, the Star Parties came to Caltrans asking for what should have been routine reimbursement for contractors secured through a well-documented, competitive bidding process. The Star Parties incurred millions in debts to these contractors as a direct and foreseeable result of the relocation process, as complicated and frustrated by Caltrans’s actions, but Caltrans withheld virtually all contractual and statutory reimbursement with full knowledge and intent that doing so would make the Star Parties’ performance under these contracts more difficult, burdensome, and/or impracticable—ultimately agreeing to a payment of only $27,500.” (Compl., ¶ 8.) Plaintiffs allege that “[o]n appeal, Caltrans’s Relocation Appeals Board (the ‘Board’) was able to right some of the wrongs of Caltrans’s District 7,” and that “in April of 2022, the Star Parties finally obtained a reimbursement award of $1,765,200.89, more than 64 times the amount initially offered by Caltrans.” (Compl., ¶ 10, emphasis omitted.)

Plaintiffs allege that “[n]ow, nearly a decade after the Interim Agreement was signed, the Star Parties seek to recover the fees and costs they incurred simply to be properly reimbursed for the move.” (Compl., ¶ 11.) Plaintiffs allege that “[a]fter securing a favorable decision from the Board, the Star Parties returned to Caltrans’s District 7 in late 2021 to ask for the timely payment of such fees, citing the Prevailing Party Fee Clause. District 7 refused, breaching the Interim Agreement.” (Compl., ¶ 11.) Plaintiffs allege that “[t]he Star Parties also seek to recover the remaining reimbursement they are entitled to under federal and state relocation statutes and regulations through writ of mandate. Although the Board righted certain wrongs, it still refused to consider evidence of Caltrans’s failings and tactics and, as a result, made certain arbitrary findings expressly contrary to these statutes; implementing regulations; and Caltrans’s own administrative guidelines, the Right-of-Way Manual…” (Compl., ¶ 12.)

Plaintiffs further allege that “[t]he Star Parties also seek to recover for breach of the express and implied covenants of good faith and fair dealing. There can be no question that Caltrans’ unreasoned, retaliatory, and bad faith misconduct during the site search, eviction, relocation, and reimbursement processes frustrated the primary purpose of the Interim Agreement. The Star Parties had a straightforward settlement contract with Caltrans.” (Compl., ¶ 13.) 

D.    First Cause of Action for Breach of the Interim Agreement

In the first cause of action for breach of the Interim Agreement, Plaintiffs allege, inter alia, that “Caltrans entered into the Interim Agreement with the Star Parties on May 6, 2015.” (Compl, ¶ 124.) Plaintiffs allege that “Paragraph 17 of the Interim Agreement, the Prevailing Party Fee Clause, provides that ‘a prevailing party in any action or other proceeding to enforce, interpret or otherwise address the rights and obligations contained in this Agreement shall be entitled to recover its actually incurred attorneys’ fees and actually incurred costs (regardless of whether such fees or costs otherwise would be recoverable by statute or other rule) as well as its fees and costs incurred for consultants and experts.’” (Compl., ¶ 125.)

Plaintiffs allege that “[t]he Star Parties prevailed in proceedings to enforce, interpret or otherwise address the Star Parties’ rights and Caltrans’ obligations contained in the Interim Agreement. Such rights include the Star Parties’ rights and Caltrans’ obligations to provide reimbursement as set forth in the SMA, an exhibit to the Interim Agreement as set forth in paragraph 4 to the Interim Agreement. The Board enforced, interpreted, and addressed the Star Parties’ rights and Caltrans’ obligations in the SMA.” (Compl., ¶ 126.)

Plaintiffs allege that “Caltrans breached the Prevailing Party Fee Clause when it indicated it would refuse to pay any fees incurred by Greenberg Traurig, LLP in connection with the reimbursement claim submission process in 2016-2018 and the appeal from 2018-2022.” (Compl., ¶ 127.) Plaintiffs also allege that “Caltrans breached the Interim Agreement by failing to perform its reimbursement obligations set forth in the Interim Agreement, including as specifically set forth in the SMA.” (Compl., ¶ 128.) In addition, Plaintiffs allege that “Caltrans breached paragraph 10 of the Interim Agreement, an express covenant of good faith and fair dealing, which provides that ‘[e]ach of the Parties agrees to . . . take such additional actions as are necessary or reasonably required to effectuate the terms, conditions, provisions and intent of this Agreement’…” (Compl., ¶ 129.) 

In the motion, Caltrans asserts that the first cause of action is barred under 49 C.F.R. § 24.301, subdivision (h)(8). This provision provides, “(h) Ineligible moving and related expenses. A displaced person is not entitled to payment for:… (8) Any legal fee or other cost for preparing a claim for a relocation payment or for representing the claimant before the Agency…” (49 C.F.R. § 24.301, subd. (h)(8).) Caltrans asserts that “Plaintiffs’ claims for attorney fees are plainly barred.” (Mot. at p. 7:25-26.)

In the opposition, Plaintiffs assert that “49 C.F.R. § 24.301(h)(8) only governs eligibility of fees and costs for reimbursement under the Uniform Act as expenses related to the move itself, not whether fees and costs are recoverable under another statute, or through common law contract or tort actions.” (Opp’n at p. 14:19-22, emphasis omitted.) Plaintiffs cite to Am. Airlines v. Wolens (1995) 513 U.S. 219, 221-222, where the United States Supreme Court found that “[t]he Airline Deregulation Act of 1978 prohibits States from ‘enacting or enforcing any law . . . relating to [air carrier] rates, routes, or services.’ 49 U.S.C. App. § 1305(a)(1). This case concerns the scope of that preemptive provision, specifically, its application to a state-court suit, brought by participants in an airline’s frequent flyer program, challenging the airline’s retroactive changes in terms and conditions of the program. We hold that the ADA’s preemption prescription bars state-imposed regulation of air carriers, but allows room for court enforcement of contract terms set by the parties themselves.” The Wolens Court noted that “[w]e do not read the ADA’s preemption clause, however, to shelter airlines from suits alleging no violation of state-imposed obligations, but seeking recovery solely for the airline’s alleged breach of its own, self-imposed undertakings.” (Id. at p. 228.) The Court notes that Caltrans does not address the foregoing point or the Wolens authority in its reply.

            The Court also notes that Caltrans’ motion for judgment on the pleadings appears to assert that the entire first cause of action is barred because “Plaintiffs’ claims for attorney fees are…barred.” (See Mot. at p. 7:14-15; 7:25-26.) However, as set forth above, the first cause of action also alleges, inter alia, that “Caltrans breached the Interim Agreement by failing to perform its reimbursement obligations set forth in the Interim Agreement,” and that “Caltrans breached paragraph 10 of the Interim Agreement, an express covenant of good faith and fair dealing…” (Compl., ¶¶ 128, 129.) The Court notes that “¿a demurrer cannot rightfully be sustained to part of a cause of action or to a particular type of damage or remedy.¿” (¿Kong v. City of Hawaiian Gardens Redevelopment Agency (2002) 108 Cal.App.4th 1028, 1047¿; ¿see also PH II, Inc. v. Superior Court (1995) 33 Cal.App.4th 1680, 1682 [“A demurrer does not lie to a portion of a cause of action.”]¿.) “A motion for judgment on the pleadings is equivalent to a demurrer and is governed by the same de novo standard of review.” ((Kapsimallis v. Allstate Ins. Co. (2002) 104 Cal.App.4th 667, 672.)

            Based on the foregoing, the Court denies Caltrans’ motion as to the first cause of action.

E.     Second Cause of Action for Write of Mandate Pursuant to Code of Civil Procedure Section 1094.5

In the second cause of action, Plaintiffs allege, inter alia, that “[a]lthough the Relocation Appeals Board reversed the majority of District 7’s denials and awarded the Star Parties reimbursement over 64 times greater than the reimbursement initially offered by District 7, the Board affirmed the denial of reimbursement for other claims, including other professional service reimbursement.” (Compl., ¶ 138.) Plaintiffs allege that “[t]he denial of reimbursement for these claims was not supported by the weight of the evidence.” (Compl., ¶ 139.)

Plaintiffs further allege that “the Star Parties were also denied a fair trial, including, without limitation, because the Star Parties were arbitrarily denied the opportunity to present, and the Board arbitrarily refused to consider, evidence of District 7’s misconduct throughout the relocation and reimbursement process and its impact on the Star Parties’ ability to complete its move and obtain reimbursement for costs incurred therefor, and evidence of actual, reasonable, and necessary expenses incurred to complete the move and recoverable under the Interim Agreement after December 6, 2018.” (Compl., ¶ 140.)

In the motion, Caltrans asserts that the second cause of action is barred by Government Code section 11523. This provision provides in pertinent part as follows:

“Judicial review may be had by filing a petition for a writ of mandate in accordance with the provisions of the Code of Civil Procedure, subject, however, to the statutes relating to the particular agency. Except as otherwise provided in this section, the petition shall be filed within 30 days after the last day on which reconsideration can be ordered. The right to petition shall not be affected by the failure to seek reconsideration before the agency. On request of the petitioner for a record of the proceedings, the complete record of the proceedings, or the parts thereof as are designated by the petitioner in the request, shall be prepared by the Office of Administrative Hearings or the agency and shall be delivered to the petitioner, within 30 days after the request, which time shall be extended for good cause shown, upon the payment of the cost for the preparation of the transcript, the cost for preparation of other portions of the record and for certification thereof…If the petitioner, within 10 days after the last day on which reconsideration can be ordered, requests the agency to prepare all or any part of the record, the time within which a petition may be filed shall be extended until 30 days after its delivery to him or her…” (Gov. Code, § 11523.)

Caltrans asserts that “[a]s is stated in the Star Parties’ complaint, the RAB issued its final determination as to the Star Parties appeal of their relocation benefits on April 8, 2022.” (Mot. at p. 10:1-3.) In the Complaint, Plaintiffs allege that “[o]n April 8, 2022, the Board determined that the Star Parties should have been reimbursed for an additional $120,820, for a total of $402,840.89 in remaining reimbursement on remand,” and that “[t]he Board’s recommendation became final on April 8, 2022.” (Compl., ¶¶ 114, 116.) Caltrans asserts that “[t]he deadline for the Star Parties to file their Writ of Mandate was therefore May 8, 2022. Instead, the Star Parties waited until February 3, 2023 to file their Writ of Mandate. This is more than eight months after the deadline.” (Mot. at p. 10:5-8.)

Plaintiffs assert that Government Code section 11523 does not apply here, and that “Plaintiffs’ writ petition alleges no facts that raise any suggestion that it is untimely under the applicable three- or four-year statutes of limitations.” (Opp’n at p. 6:8-10, emphasis omitted.)

Plaintiffs note that pursuant to Government Code section 11501, subdivision (b) “[t]his chapter applies to an adjudicative proceeding of an agency created on or after July 1, 1997, unless the statutes relating to the proceeding provide otherwise.” Pursuant to Government Code section 11501, subdivision (a), “[t]his chapter applies to any agency as determined by the statutes relating to that agency.” Plaintiffs assert that “[s]ince Caltrans is an agency created in 1973…Chapter 5 of the APA (which includes the 30-day limitation period referenced in the Motion) does not apply to any of Caltrans’s adjudicative proceedings by default.” (Opp’n at p. 11:13-16, emphasis omitted.) Plaintiffs cite to Government Code section 14001, which provides that “[t]here is in the Transportation Agency a Department of Transportation. Any reference in any law or regulation to the Department of Public Works shall be deemed to refer to the Department of Transportation.” Government Code section 14001 was “[a]dded Stats 1972 ch 1253 § 15, operative July 1, 1973.” (See Gov. Code, § 14001, “History.”)

            Plaintiffs assert that “for the 30-day APA limitations period to govern the Second Cause of Action, a more specific statutory provision governing judicial review of the appeal at issue must therefore expressly state that Chapter 5 of the APA applies.” (Opp’n at p. 11:2-22; see Asimow et al., Cal. Practice Guide: Administrative Law Ch. 4-A (The Rutter Group 2023) ¶ 4:7.1, “[f]or Agencies created before July 1, 1997, Chapter 5 adjudication applies only if another statute (usually the statute creating the agency) specifically provides that it applies (Gov.C. § 11501(a)).” [emphasis in original])

Plaintiffs note that here, Caltrans acknowledges that it “acquired the Property and provided Plaintiffs relocation assistance pursuant to the federal Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1970, 42 U.S.C. §§ 4601-4655…” (Mot at p. 8:18-20.) Plaintiffs assert that “[h]ere, neither the Uniform Act, nor its implementing regulations, 49 C.F.R. part 24 et seq., nor ROW Manual Chapter 10 (which governs relocation assistance), nor the Interim Agreement, contain any reference to the APA, let alone Chapter 5 or a limitations period on judicial review.” (Opp’n at p. 13:3-5, emphasis omitted.) Plaintiffs also note that “section 1094.5 of the Code of Civil Procedure…has no ‘built-in’ period of limitations.” ((Cameron v. Cozens (1973) 30 Cal.App.3d 887, 889.)[2]

            In the reply, Caltrans argues that “Plaintiffs seek to misconstrue the statutory scheme to make their claim timely. However, when reviewing the statutory scheme, section 11523 applies to Plaintiffs cause of action for writ of mandate.” (Reply at p. 7:15-17.) Caltrans asserts that “an aggrieved party may seek judicial review of the RAB’s decision by Government Code section 7266.” (Reply at p. 10:22-23.) Caltrans notes that Government Code section 7266, subdivision (b) provides that “[a]ny person aggrieved by a determination as to eligibility for, or the amount of, a payment authorized by this chapter may have the application reviewed by the public entity or by the relocation appeals board if authorized under subdivision (a). The review of a determination by a community redevelopment agency may only be made by a relocation appeals board established pursuant to Section 33417.5 of the Health and Safety Code.” But Caltrans does not appear to point to any statutory provision stating that Government Code section 11523 applies to Plaintiffs’ second cause of action here.

As discussed, Government Code section 11501 provides that “[t]his chapter applies to any agency as determined by the statutes relating to that agency,” and that “[t]his chapter applies to an adjudicative proceeding of an agency created on or after July 1, 1997, unless the statutes relating to the proceeding provide otherwise.” (Gov. Code, § 11501, subds. (a)-(b).) Caltrans does not appear to dispute Plaintiffs’ assertion that Caltrans is an agency created in 1973. (See Asimow et al., Cal. Practice Guide: Administrative Law Ch. 4-A (The Rutter Group 2023)          ¶ 4:7.1, supra, “[f]or Agencies created before July 1, 1997, Chapter 5 adjudication applies only if another statute (usually the statute creating the agency) specifically provides that it applies (Gov.C. § 11501(a)).” [emphasis in original])

            Based on the foregoing, the Court does not find that Caltrans has demonstrated that the second cause of action is barred under Government Code section 11523. The Court thus denies the motion as to the second cause of action.

F.     Third Cause of Action for Breach of Implied Covenant of Good Faith and Fair Dealing and Fourth Cause of Action for Tortious Interference with Contract

In the third cause of action for breach of implied covenant of good faith and fair dealing, Plaintiffs allege that “[t]o the extent paragraph 10 of the Interim Agreement is not construed as an express covenant of good faith and fair dealing, the implied covenant of good faith and fair dealing became part of the Interim Agreement.” (Compl., ¶ 148.) Plaintiffs allege that “Caltrans breached the implied covenant of good faith and fair dealing by engaging in the misconduct alleged herein, including specifically in paragraph 129, and frustrating the purpose of the Interim Agreement.” (Compl., ¶ 149.)

In the fourth cause of action for tortious interference with contract, Plaintiffs allege that “[t]he Star Parties entered into valid, existing contracts with third party contractors, subcontractors, project managers, architectural planners, civil engineers, and other contracts set forth in the Star Parties’ claim submissions.” (Compl., ¶ 152.) Plaintiffs allege that “Caltrans’ and the Individual Defendants’ authorization or participation in the above-mentioned conduct was designed to induce a breach of these contracts, including because each knew with substantial certainty that their bad faith course of conduct described herein, as well as their failure to timely and adequately reimburse pursuant to the Interim Agreement, would interfere with the Star Parties’ own ability to timely and adequately perform under those contracts.” (Compl., ¶ 154.)

Caltrans asserts that the third and fourth causes of action are barred because Plaintiffs’ remedies for relocation benefits are wholly administrative. Caltrans cites to Los Angeles Unified School Dist. v. Casasola (2010) 187 Cal.App.4th 189, 204, where the Court of Appeal noted that “[t]he California Relocation Assistance Act represents a legislative recognition of the need to compensate for certain business losses which occur as a result of a condemnation action. However, such compensation is independent of the condemnation proceedings. Accordingly, the process by which a displaced property owner may seek relocation benefits is wholly administrative and the condemning entity is vested with substantial discretion in making determinations relative to such benefits and is required to engage in a fact-finding process to determine the claimant’s eligibility and the appropriate amount of benefits. Any person aggrieved by such a determination may have the application reviewed by the public entity.” (Internal quotations and citations omitted.)

Plaintiffs counter that “Caltrans cites no authority for the proposition that damages cannot be recovered through causes of action or theories sounding in contract or tort if those damages include any funds that were deemed ineligible for reimbursement as move expenses by the Board.” (Opp’n at p. 16:8-11.) Plaintiffs note that “[p]leading of alternative theories of relief on the same set of facts is, of course, quite proper…” ((Gebert v. Yank (1985) 172 Cal.App.3d 544, 554.)

Plaintiffs also assert that “[i]t is true that these causes of action seek, inter alia, some compensatory damages resulting from Caltrans misconduct that took place during the move, claims submission, and reimbursement processes. But the fact that Caltrans inadequately reimbursed Plaintiffs does not mean that the damages Plaintiffs seek that flowed from that misconduct are the denied reimbursement amounts alone. Plaintiffs plainly seek damages that would not otherwise be recoverable or even colloquially classifiable as ‘relocation benefits’ under these allegations.” (Opp’n at p. 17:7-12, emphasis omitted.) For instance, in connection with the fourth cause of action, Plaintiffs allege that they seek inter alia, “with respect to the Individual Defendants, punitive damages.” (Compl., ¶ 159.)

In addition, in the third cause of action, Plaintiffs allege that “Caltrans breached the implied covenant of good faith and fair dealing by engaging in the misconduct alleged herein, including specifically in paragraph 129, and frustrating the purpose of the Interim Agreement.” (Compl., ¶ 149.) Plaintiffs assert that the “third cause of action seeks to recover damages from, inter alia, Caltrans’s refusal to provide any meaningful claim preparation assistance in violation of the Uniform Act and its own ROW Manual guidelines, which caused Plaintiffs to incur unnecessary attorney fees and expert costs. Compl. ¶¶ 83, 86, 93, 95, 102, 103…Plaintiffs were also separately damaged by Caltrans’s bad faith delay of reimbursement, even of funds that were ultimately paid out. See, e.g., Compl. ¶ 49. The untimeliness caused additional damages in the form of a protracted and more expensive move and more costly and burdensome performance of third-party contracts, including through contractual penalties from contractors who were not timely paid. Id. ¶¶ 8, 71, 85, 92, 152, 155-156. Plaintiffs’ damages are therefore not ‘in essence’ claims for ‘additional relocation benefits.’” (Opp’n at p. 17:16-26.)

Caltrans does not address the foregoing points in the reply. Rather, Caltrans asserts new arguments for the first time in the reply with regard to the third cause of action. “¿Points raised for the first time in a reply brief will ordinarily not be considered, because such consideration would deprive the respondent of an opportunity to counter the argument.¿” (American Drug Stores, Inc. v. Stroh (1992) 10 Cal.App.4th 1446, 1453¿.) Accordingly, the Court declines to consider the points raised for the first time in Caltrans’ reply.

Based on the foregoing, the Court denies the motion as to the third and fourth causes of action.

G.    Individual Defendants

Lastly, Caltrans asserts that “[t]he Individual Defendants are not proper defendants to this action.” (Mot. at p. 11:7.) Caltrans’ arguments on this point only appear to concern the fourth cause of action for tortious interference with contract. (See Mot. at pp. 11:13-12:24.)

As an initial matter, Plaintiffs assert that Caltrans lacks standing to seek dismissal based on claims against other defendants. Plaintiffs note that pursuant to Code of Civil Procedure section 438, subdivision (c)(1)(B), “[t]he motion provided for in this section may only be made on one of the following grounds:…(B) If the moving party is a defendant, that either of the following conditions exist: (i) The court has no jurisdiction of the subject of the cause of action alleged in the complaint. (ii) The complaint does not state facts sufficient to constitute a cause of action against that defendant.” (Emphasis added.) Plaintiffs thus assert that “[a] defendant can only seek judgment on the pleaded causes of action ‘against that defendant;’ so, the Court may disregard the entirety of section E of the Motion as irrelevant.” (Opp’n at p. 18:10-12, emphasis omitted.) Caltrans does not dispute this point in the reply.

Based on the foregoing, the Court denies Caltrans’ motion as it concerns the Individual defendants. 

Conclusion

Based on the foregoing, the Court denies Caltrans’ motion for judgment on the pleadings in its entirety.  

Plaintiffs are ordered to provide notice of this order.¿ 

DATED:  January 11, 2024                            ________________________________

Hon. Teresa A. Beaudet

Judge, Los Angeles Superior Court