Judge: Teresa A. Beaudet, Case: 24STCV12691, Date: 2024-12-06 Tentative Ruling

Case Number: 24STCV12691    Hearing Date: December 6, 2024    Dept: 50

Superior Court of California

County of Los Angeles

Department 50

Background

On May 20, 2024, Plaintiff MMA (“MMA”) filed this action against Defendants Diamond City Shopping Center, LLC, Bently Real Estate LLC, and American Contractors Indemnity Company. The Complaint alleges one cause of action to “enforce claim on mechanic’s lien.”

In the Complaint, MMA alleges, inter alia, that “[o]n December 12, 2023, Plaintiff MMA secured a default judgment against defendants Bentley LLC and Diamond LLC in MMA v. Diamond City Shopping Center, LLC et al., Case No. 23PSCV01334 (L.A. Cty. Sup. Ct.) in the amount of $33,037.77 for causes of action for breach of contract, promissory estoppel, and foreclosure of a mechanic’s lien.” (Compl., ¶ 7.) “These causes of action were premised on a June 1, 2020 architectural services agreement (‘Agreement’) between Plaintiff MMA and Bently LLC and Diamond LLC to develop a property at 2539 East Garvey Avenue North, West Covina, California, 91791…” (Compl., ¶ 7.) MMA alleges that “Bently LLC secured and recorded a Mechanic’s Lien Bond (Bond No. 1000972966), for which it was the Principal. However, it never provided proper notice of the Mechanic’s Lien Bond to Plaintiff…The Surety for the Mechanic’s Lien Bond was American Contractors Indemnity Company.” (Compl., ¶¶ 8, 9.) MMA further alleges that “[b]y virtue of Bently LLC’s failure to make payments under the Agreement and a judgment against Bently LLC to foreclose upon a mechanic’s lien based on said failure, Plaintiff MMA is entitled to benefit from said Mechanic’s Lien Bond and receive payment in the principal amount of at least $33,037.77 from Defendants American Contractors Indemnity Company and DOES 1-10.” (Compl., ¶ 17.)

On June 20, 2024, Diamond City Shopping Center, LLC and Bently Real Estate LLC (jointly, “Cross-Complainants”) filed a Cross-Complaint against Cross-Defendants MMA and Hanly Malak. On July 9, 2024, Cross-Complainants filed the operative Amended Cross-Complaint against MMA, Hanly Malak, and Ken McKently, alleging causes of action for

(1) equitable relief from default, (2) breach of contract, (3) fraud and misrepresentation,

(4) promissory estoppel.

MMA now moves pursuant to Code of Civil Procedure section 425.16 for an order striking and/or dismissing the Amended Cross-Complaint and each of the causes of action contained therein. Cross-Complainants oppose.

In addition, MMA demurs to each of the causes of action of the Amended Cross-Complaint. Cross-Complainants oppose.

MMA’s Special Motion to Strike

A.    Procedural Issues

As an initial matter, in the reply in support of the motion to strike, MMA asserts that “Cross-Defendants’ opposition is late, prejudicing Cross-Defendant MMA’s ability to prepare a comprehensive reply.” (Reply at p. 2:2-3.) MMA asserts that the Court should “disregard the untimely Opposition…” (Reply at p. 2:6.)

MMA’s special motion to strike was originally noticed for hearing on November 21, 2024.[1] Pursuant to Code of Civil Procedure section 1005, subdivision (b), “[a]ll papers opposing a motion so noticed shall be filed with the court and a copy served on each party at least nine court days, and all reply papers at least five court days before the hearing.” In addition, “[a]ny period of notice, or any right or duty to do any act or make any response within any period or on a date certain after the service of the document, which time period or date is prescribed by statute or rule of court, shall be extended after service by electronic means by two court days…” (Code Civ. Proc., § 1010.6, subd. (a)(3)(B).)

Nine court days prior to the original November 21, 2024 hearing date is November 7, 2024. Two court days prior to November 7, 2024 is November 5, 2024.

However, the proof of service attached to Cross-Complainants’ opposition brief indicates that the opposition was served by e-mail on November 14, 2024. The proofs of service attached to the declarations in support of the opposition also indicate that such declarations were served on November 14, 2024 by, inter alia, e-mail.[2] The Court notes that November 14, 2024 is only five court days before the November 21, 2024 hearing. Pursuant to Code of Civil Procedure section 1005, subdivision (b), any reply papers in support of the motion were due on November 14, 2024 (five court days before the hearing). On November 14, 2024, the same day the opposition was filed and served, MMA filed and served a reply in support of the special motion to strike.

In Cross-Complainants’ opposition to the motion to strike, Cross-Complainants assert that they are “filing this brief late due [sic] medical emergency of counsel requiring hospitalization on November 7 and 8, 2024.” (Opp’n at p. 8:23-25.) In her supporting declaration filed on November 14, 2024, Cross-Complainants’ counsel states that “I was required to be hospitalized on November 7 and again on November 8, 2024, due to complications that I am experiencing from a spinal surgery I underwent on January 7, 2024…” (Feldman Decl., ¶ 3.)

            MMA asserts that “[t]he untimely service of the Opposition has prejudiced Cross-Defendant MMA, including because…MMA is left with barely one (1) day to consider the arguments in the Opposition and prepare an adequate Reply…” (Reply at p. 3:20-23.) The Court agrees with MMA that Cross-Complainants’ untimely service of the opposition is prejudicial to MMA.

In light of the foregoing, the Court continues the hearing on MMA’s special motion to strike, as set forth in the “Conclusion” section of this Order.   

MMA’s Demurrer

A.    Request for Judicial Notice

The Court grants MMA’s request for judicial notice in support of the demurrer.

B.     Legal Standard

A demurrer can be used only to challenge defects that appear on the face of the pleading under attack or from matters outside the pleading that are judicially noticeable. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.) “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.)  

A pleading is uncertain if it is ambiguous or unintelligible. (¿Code Civ. Proc., § 430.10, subd. (f)¿.) A demurrer for uncertainty may lie if the failure to label the parties and claims renders the complaint so confusing defendant cannot tell what he or she is supposed to respond to.¿ (Williams v. Beechnut Nutrition Corp. (1986) 185 Cal.App.3d 135, 139, fn. 2¿.) However, “¿[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¿.)[3]

C.     Allegations of the Amended Cross-Complaint

In the Amended Cross-Complaint, Cross-Complainants allege that “[o]n or about July 1, 2020, Cross-Complainant BENTLY REAL ESTATE, LLCC and Cross-Defendants MMA and MALAK entered into a services contract (‘Agreement’) where Cross-Defendants agreed to provide architectural services for the development of a shopping mall on the Property.” (Amended Cross-Compl., ¶ 8.) “In exchange, Cross-Complainant BENTLY REAL ESTATE LLC agreed to a number of flat fees and hourly rates, and to pay monthly invoices from Cross-Defendants throughout the various stages of development. The Agreement also provided that either party could terminate the contract for the other’s failure to substantially comply with the Agreement as long as there was seven days’ notice.” (Ibid., ¶ 9.)

“Cross-Defendants performed unsatisfactory work, and prepared improper blueprints and drawings for the project, and falsely claimed that all drawings had been approved by Cross-Complainants.” (Amended Cross-Compl., ¶ 10.) In addition, “Cross-Defendant MMA’s final plans included deliverables that were above and beyond those set forth in Exhibit E of the Agreement which per the lease required Tenant approval before proceeding.” (Ibid., ¶ 11.) “MMA has been overpaid for the deliverables it was to provide as they applied payments made by Cross-Complainants to change orders which were never approved by the Tenant.” (Ibid., ¶ 14.)

“On or about January 15, 2023, Cross-Defendants provided notice to Cross-Complainant BENTLY REAL ESTATE LLC that the Agreement would be terminated on January 22, 2023.” (Amended Cross-Compl., ¶ 15.) “Cross-Complainants allege, on information and belief, that Cross-Defendant MMA terminated the Agreement in January 2023 because it was aware it had failed to provide all of the deliverables and that it had made numerous mistakes and included many add-ons that were never approved by the Tenant.” (Ibid., ¶ 17.) “Thereafter…MMA filed a Mechanic’s Lien (Reference Number 20230067337) on the Property on February 1, 2023,” and “then filed a lawsuit to foreclose on the mechanics lien (23PSCV01334).” (Ibid., ¶¶ 18, 19.) “On November 20, 2023, Cross-Complainants gave proper notice on that [sic] a properly recorded mechanics lien release bond was filed, and provided a copy thereof, and instructed MMA’s counsel to remove their mechanics lien on the property.” (Ibid., ¶ 20.) “As of this date, MMA has failed to do so.” (Ibid., ¶ 21.)

D.    Res Judicata

As set forth above, the Amended Cross-Complaint alleges, inter alia, that “Cross-Defendant MMA filed a Mechanic’s Lien (Reference Number 20230067337) on the Property on February 1, 2023,” and “then filed a lawsuit to foreclose on the mechanics lien (23PSCV01334).” (Amended Cross-Compl., ¶¶ 18, 19.) MMA appears to refer to Case No. 23PSCV01334 as the “Pomona Action.” In the first cause of action of the Amended Cross-Complaint for equitable relief from default, Cross-Complainants allege, inter alia, that “Cross-Defendant MMA…instituted a Complaint in the Los Angeles Superior Court, Pomona District (Case No. 23PSCV0134), claiming that Cross-Complainants had breached the Agreement, and seeking foreclosure of the mechanic’s lien it now seeks to enforce in this action, and further asking for promissory estoppel as to Cross-Complainants valid defenses to the Complaint.” (Amended Cross-Compl., ¶ 25.)

In the demurrer, MMA cites to Boeken v. Philip Morris USA, Inc. (2010) 48 Cal.4th 788, 797, where the California Supreme Court noted that “[a]s generally understood, [t]he doctrine of res judicata gives certain conclusive effect to a former judgment in subsequent litigation involving the same controversy. The doctrine has a double aspect. In its primary aspect, commonly known as claim preclusion, it operates as a bar to the maintenance of a second suit between the same parties on the same cause of action. In its secondary aspect, commonly known as collateral estoppel, [t]he prior judgment…operates in a second suit…based on a different cause of action…as an estoppel or conclusive adjudication as to such issues in the second action as were actually litigated and determined in the first action. The prerequisite elements for applying the doctrine to either an entire cause of action or one or more issues are the same: (1) A claim or issue raised in the present action is identical to a claim or issue litigated in a prior proceeding; (2) the prior proceeding resulted in a final judgment on the merits; and (3) the party against whom the doctrine is being asserted was a party or in privity with a party to the prior proceeding.” (Internal quotations and references to [Citation.] omitted, emphasis in original.)

In the instant demurrer, MMA argues that “[e]ach of the causes of action in the Amended Cross-Complaint stems from the same transactional nucleus of facts asserted—or that could have been asserted—in the Pomona Action. Despite the labels placed upon the causes of action, Cross-Complainants are simply re-casting the same relief they sought—and which was denied—in the Pomona Action, i.e., setting aside the Default Judgment.” (Demurrer at p. 13:21-25 [emphasis omitted].) This argument appears to concede that claim preclusion is not applicable here, which “operates as a bar to the maintenance of a second suit between the same parties on the same cause of action.” (Boeken v. Philip Morris USA, Inc., supra, 48 Cal.4th at p. 797 [internal quotations omitted].) The Court does not find that MMA has shown that the instant action and Case No. 23PSCV01334 (or the “Pomona Action”) are between the same parties on the same cause of action.

MMA also does not appear to show that “collateral estoppel” is applicable here. As discussed above, the Boeken Court noted that the secondary aspect of the doctrine of res judicata, commonly known as collateral estoppel, “operates in a second suit…based on a different cause of action…as an estoppel or conclusive adjudication as to such issues in the second action as were actually litigated and determined in the first action.” (Boeken v. Philip Morris USA, Inc., supra, 48 Cal.4th at p. 797 [internal quotations omitted].) MMA does not appear to provide any analysis showing that the issues in the instant action were actually litigated and determined in the Pomona Action.[4]

E.     Certificate of Merit

Next, MMA argues that “Cross-Complainants failed to file a certificate of merit as to MMA as required by Code of Civil Procedure [section] 411.35.” (Demurrer at p. 16:9-10.) MMA asserts that each of the causes of action of the Amended Cross-Complaint are subject to demurrer on this ground. (See Demurrer, p. 2-4.) Code of Civil Procedure section 411.35, subdivision (a), which provides as follows:

“In every action, including a cross-complaint for damages or indemnity, arising out of the professional negligence of a person holding a valid architect’s certificate issued pursuant to Chapter 3 (commencing with Section 5500) of Division 3 of the Business and Professions Code, or of a person holding a valid registration as a professional engineer issued pursuant to Chapter 7 (commencing with Section 6700) of Division 3 of the Business and Professions Code, or a person holding a valid land surveyor’s license issued pursuant to Chapter 15 (commencing with Section 8700) of Division 3 of the Business and Professions Code on or before the date of service of the complaint or cross-complaint on any defendant or cross-defendant, the attorney for the plaintiff or cross-complainant shall file and serve the certificate specified by subdivision (b).”

Pursuant to Code of Civil Procedure section 411.35, subdivision (g), “[t]he failure to file a certificate in accordance with this section shall be grounds for a demurrer pursuant to Section 430.10 or a motion to strike pursuant to Section 435.”

As set forth above, the Amended Cross-Complaint alleges that “[o]n or about July 1, 2020, Cross-Complainant BENTLY REAL ESTATE, LLCC and Cross-Defendants MMA and MALAK entered into a services contract (‘Agreement’) where Cross-Defendants agreed to provide architectural services for the development of a shopping mall on the Property.” (Amended Cross-Compl., ¶ 8.) Cross-Complainants allege, inter alia, that “Cross-Defendants performed unsatisfactory work, and prepared improper blueprints and drawings for the project, and falsely claimed that all drawings had been approved by Cross-Complainants.” (Amended Cross-Compl., ¶ 10.) Cross-Complainants repeatedly allege that MMA provided “substandard” performance and services under the subject Agreement. (Amended Cross-Compl., ¶¶ 24, 44, 48, 52.)

In the opposition, Cross-Complainants assert that “a Certificate of Merit was not filed before service on MMA because it was not required, as this is not a Cross-Complaint for professional negligence or equitable indemnity.” (Opp’n at p. 8:5-7.) But Cross-Complainants do not address the allegations of the Amended Cross-Complaint cited by MMA. As discussed, the Amended Cross-Complaint alleges, inter alia, that “Cross-Defendants performed unsatisfactory work, and prepared improper blueprints and drawings for the project, and falsely claimed that all drawings had been approved by Cross-Complainants.” (Amended Cross-Compl., ¶ 10.) Cross-Complainants repeatedly allege that MMA provided “substandard” performance and services under the subject Agreement. (Amended Cross-Compl., ¶¶ 24, 44, 48, 52.)

In addition, Cross-Complainants do not cite to legal authority demonstrating that a plaintiff must allege a cause of action for professional negligence or equitable indemnity in order for the requirements of Code of Civil Procedure section 411.35, subdivision (a) to apply. As set forth above, this provision provides in pertinent part that “[i]n every action, including a cross-complaint for damages or indemnity, arising out of the professional negligence of a person holding a valid architect’s certificate issued pursuant to Chapter 3 (commencing with Section 5500) of Division 3 of the Business and Professions Code…on or before the date of service of the complaint or cross-complaint on any defendant or cross-defendant, the attorney for the plaintiff or cross-complainant shall file and serve the certificate specified by subdivision (b).”

(Code Civ. Proc., § 411.35, subd. (a), emphasis added.)

            Based on the foregoing, the Court sustains MMA’s demurrer to each of the causes of action of the Amended Cross-Complaint, with leave to amend.[5]

Conclusion

In light of the untimely service of Cross-Complainants’ opposition papers, the Court continues the hearing on MMA’s special motion to strike to ____________, 2025, at 2:00 p.m. in Dept. 50. On or before ________________, MMA may file and serve a new reply brief that will supersede the previously filed reply. Courtesy copies of any new reply brief shall be delivered to Dept. 50.

In addition, based on the foregoing, the Court sustains MMA’s demurrer to each of the causes of action of the Amended Cross-Complaint, with leave to amend. The Court orders Cross-Complainants to file and serve an amended cross-complaint, if any, within 20 days of the date of this order. If no amended cross-complaint is filed within 20 days, the Court orders the MMA to file and serve a proposed judgment of dismissal within 30 days of the date of this order.¿ 

MMA is ordered to give notice of this order. 

DATED:  December 6, 2024                         

________________________________

Hon. Teresa A. Beaudet

Judge, Los Angeles Superior Court