Judge Theresa M. Traber, Case 21STCV20175 2023-02-01 Tentative Ruling

Judge: Theresa M. Traber, Case: 21STCV20175, Date: 2023-02-01 Tentative Ruling

Case Number: 21STCV20175 Hearing Date: February 1, 2023 Dept: 47

Tentative Ruling

Judge Theresa M. Traber, Department 47

HEARING DATE: February 1, 2023 TRIAL DATE: Not set.

CASE: Nabors Corporate Services, Inc. v. City of Long Beach, et al.

CASE NO.: 21STCV20175

(1) DEMURRER TO SECOND AMENDED COMPLAINT

(2) DEMURRER TO SECOND AMENDED COMPLAINT

MOVING PARTY: (1) Defendant City of Long Beach; (2) Defendants California Resources Long Beach, Inc. and Tidelands Oil Production Company, LLC

RESPONDING PARTY(S): (1)-(2) Plaintiff Nabors Corporate Services, Inc.

CASE HISTORY:

· 05/08/21: Complaint filed.

· 03/24/22: First Amended Complaint filed.

· 08/03/22: Second Amended Complaint filed.

STATEMENT OF MATERIAL FACTS AND/OR PROCEEDINGS:

Plaintiff was subcontracted certain work to be performed for Defendant City of Long Beach. Defendants, including the contractors, did not inform Plaintiff that the work was subject to prevailing wage laws. When Plaintiff and Defendants were sued by individuals who worked on the project (as a class action), Defendants refused to indemnify Plaintiff. Plaintiff seeks recovery under Labor Code section 1781 and through quantum meruit, as well as declaratory relief.

Defendants City of Long Beach, California Resources Long Beach, Inc., and Tidelands Oil Production Company demur to the complaint in two separate demurrers.

TENTATIVE RULING:

Defendant City of Long Beach’s demurrer is SUSTAINED without leave to amend.

Defendants California Resources Long Beach, Inc., and Tidelands Oil Production Company’s (jointly “Tidelands”) demurrer is SUSTAINED without leave to amend.

DISCUSSION:

Demurrer by City of Long Beach

Defendant City of Long Beach (“the City”) demurs to the Second Amended Complaint in its entirety on the ground that it fails to state facts sufficient to constitute a cause of action as to the City with respect to both causes of action alleged against it.

Legal Standard

A demurrer tests whether the complaint states a cause of action. (Hahn v. Mirda (2007) 147 Cal.App.4th 740, 747.) When considering demurrers, courts read the allegations liberally and in context. (Taylor v. City of Los Angeles Dept. of Water and Power (2006) 144 Cal.App.4th 1216, 1228.) In a demurrer proceeding, the defects must be apparent on the face of the pleading or via proper judicial notice. (Donabedian v. Mercury Ins. Co. (2004) 116 Cal.App.4th 968, 994.) “A demurrer tests the pleadings alone and not the evidence or other extrinsic matters. Therefore, it lies only where the defects appear on the face of the pleading or are judicially noticed.” (SKF Farms v. Superior Court (1984) 153 Cal.App.3d 902, 905.) “The only issue involved in a demurrer hearing is whether the complaint, as it stands, unconnected with extraneous matters, states a cause of action.” (Hahn, supra, 147 Cal.App.4th at p. 747.) The ultimate facts alleged in the complaint must be deemed true, as well as all facts that may be implied or inferred from those expressly alleged. (Marshall v. Gibson, Dunn & Crutcher (1995) 37 Cal.App.4th 1397, 1403; see also Shields v. County of San Diego (1984) 155 Cal.App.3d 103, 133 [stating, “[o]n demurrer, pleadings are read liberally and allegations contained therein are assumed to be true”].) “This rule of liberal construction means that the reviewing court draws inferences favorable to the plaintiff, not the defendant.” (Perez v. Golden Empire Transit Dist. (2012) 209 Cal.App.4th 1228, 1238.)

Meet and Confer

Before filing a demurrer, the demurring party shall meet and confer in person or by telephone with the party who has filed the pleading subject to the demurrer and file a declaration detailing their meet and confer efforts. (Code Civ. Proc., § 430.41(a).) However, an insufficient meet and confer process is not grounds to overrule or sustain a demurrer. (Code Civ. Proc., § 430.41(a)(4).)

Defendant has provided a declaration which states that defense counsel met and conferred with Plaintiff’s counsel telephonically concerning the substance of the demurrer on September 13, 2022, and that the parties were unable to resolve the objections raised by this demurrer. (Declaration of A. Patricia Ursea ISO Demurrer ¶ 2.) The Court therefore finds that the City has satisfied its statutory meet and confer obligations.

First Cause of Action (Quantum Meruit)

Defendant demurs to the first cause of action for quantum meruit on the grounds that quantum meruit is not available against a public entity and the claim is time barred, and therefore fails to state a cause of action. (Code Civ. Proc. § 430.10(e).)

Defendant contends that the first cause of action for quantum meruit is essentially unchanged from the First Amended Complaint, and therefore fails to state a cause of action against the City as a matter of law. Plaintiff, in opposition, asserts essentially the same arguments raised in the opposition to the City’s demurrer to the First Amended Complaint, arguing that Labor Code section 1781 imposes a mandatory duty on the City, and that Plaintiff is entitled to relief pursuant to that section under a quasi-contract theory even if no enforceable contract exists. (SAC ¶ 26.) This argument was considered and rejected in the Court’s August 1, 2022 ruling on the City’s demurrer to the First Amended Complaint. In that decision, the Court stated:

Labor Code section 1781 is a provision entitling a contractor to recover costs on work that is classified by the decision of an agency, the DIR, or a court as a public work. There is no mandatory duty in that provision. Furthermore, even if there were, Plaintiff has not properly pled such a claim, as Government Code section 815.6 creates statutory liability, not liability at common law. If Plaintiff wished to invoke the provisions of the Government Code to pierce governmental immunity, it should have so pled. (See Cerna v. City of Oakland (2008) 161 Cal.App.4th 1340, 1349.)

(August 1, 2022 Ruling on Matter Taken Under Submission p. 11.) Plaintiff is not entitled to relitigate this issue here. Plaintiff does not identify any other basis for its quantum meruit claim against the City.

The Court therefore finds that Plaintiff has failed to state facts sufficient to constitute a cause of action for quantum meruit because Plaintiff has not alleged a valid basis for waiver of governmental immunity to quantum meruit claims, nor has Plaintiff alleged a statutory basis to maintain its quantum meruit claim.

As the Court has found that Plaintiff has failed to state facts sufficient to constitute a cause of action for quantum meruit based on governmental immunity, the Court does not address the issue of whether the statute of limitations has lapsed.

Accordingly, Defendant’s demurrer to the first cause of action is SUSTAINED.

Second Cause of Action (Declaratory Relief)

Defendant demurs to the second cause of action for declaratory relief on the ground that it fails to state a cause of action against it. (Code Civ. Proc. § 430.10(e).)

The parties agree that this cause of action survives or fails with the first cause of action for quantum meruit. As the Court has sustained Defendant’s demurrer to the first cause of action for the reasons stated above, this cause of action likewise fails.

Accordingly, Defendant’s demurrer to the second cause of action is SUSTAINED.

Leave to Amend

When a demurrer is sustained, the Court determines whether there is a reasonable possibility that the defect can be cured by amendment. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318). When a plaintiff “has pleaded the general set of facts upon which his cause of action is based,” the court should give the plaintiff an opportunity to amend his complaint, since plaintiff should not “be deprived of his right to maintain his action on the ground that his pleadings were defective for lack of particulars.” (Reed v. Norman (1957) 152 Cal.App.2d 892, 900.) Accordingly, California law imposes the burden on the plaintiffs to demonstrate the manner in which they can amend their pleadings to state their claims against a defendant. (Goodman v. Kennedy (1976) 18 Cal.3d 335, 349.) “Denial of leave to amend constitutes an abuse of discretion unless the complaint shows on its face it is incapable of amendment. [Citation.] Liberality in permitting amendment is the rule, if a fair opportunity to correct any defect has not been given." (Angie M. v. Superior Court (1995) 37 Cal.App.4th 1217, 1227.)

Here, although Plaintiff requests leave to amend, Plaintiff has not demonstrated how it might amend the complaint to cure the defect in this cause of action. When the Court previously granted leave to amend as to these claims against the City, the Court did so for the express purpose of permitting Plaintiff to explore and allege “a valid statutory basis for a quasi-contractual theory of recovery.” (August 1, 2022 Ruling p. 12.) Instead, Plaintiff asserted the same theory rejected in the August 1 ruling, making no substantive changes to the surviving causes of action. The Court is not inclined to permit leave to amend a second time on these facts. Plaintiff had a fair opportunity to correct the defects in the complaint. That opportunity was squandered.

Conclusion

Accordingly, Defendant City of Long Beach’s demurrer to the Second Amended Complaint is SUSTAINED without leave to amend.

Demurrer by California Resources Long Beach, Inc. and Tidelands Oil Production Co.

Defendants California Resources Long Beach, Inc., and Tidelands Oil Production Company demur to the First Amended Complaint as to both causes of action.

Meet and Confer

Defendant have provided a declaration which states that defense counsel met and conferred with Plaintiff’s counsel telephonically concerning the substance of the demurrer on September 13, 2022, and that the parties were unable to resolve the objections raised by this demurrer. (Declaration of Hayward J. Kaiser ISO Demurrer ¶ 2.) The Court therefore finds that Defendants have satisfied its statutory meet and confer obligations.

Tidelands’ Request for Judicial Notice

Tidelands requests judicial notice of (1) the Court’s June 20, 2022 Minute Order; (2) a redline comparison of the First Amended Complaint with the Second Amended Complaint, and (3) a November 8, 2013 letter by Plaintiff’s counsel to Division of Labor Standard Enforcement re Case Nos. 4036616-120.

Tidelands’ request No. 1. is GRANTED pursuant to Evidence Code section 452(d) (court records). However, as to the remainder of Tidelands’ requests, the Court’s ruling does not rely on these documents. Requests Nos. 2 and 3 are therefore DENIED. (Gbur v. Cohen (1979) 93 Cal.App.3d 296, 301 (“[J]udicial notice . . . is always confined to those matters which are relevant to the issue at hand.”].)

First Cause of Action (Quantum Meruit)

Tidelands demurs to the second cause of action for quantum meruit on the ground that it fails to state a cause of action. (Code Civ. Proc. § 430.10(e).) Tidelands argues two bases for this contention: first, that the claim fails as a matter of law because Plaintiff alleges the existence of binding contracts; and second, because the claim is time barred.

First, Tidelands contends that Plaintiff again fails to state a cause of action because quantum meruit is unavailable when there is an express contract.

As a matter of law, a quasi-contract action for unjust enrichment does not lie where, as here, express binding agreements exist and define the parties’ rights. “When parties have an actual contract covering a subject, a court cannot — not even under the guise of equity jurisprudence — substitute the court’s own concepts of fairness regarding that subject in place of the parties’ own contract.”

(Cal. Med. Ass’n v. Aetna U.S. Healthcare of Cal., (2001) 94 Cal.App.4th 151, 172.) A plaintiff may pursue a quantum meruit claim in the alternative, but to do so, the plaintiff must allege both the existence of an enforceable agreement and, in the alternative, the absence of an enforceable agreement. (See Klein v. Chevron USA (2012) 202 Cal.App.4th 1342, 1389-90.)

Tidelands contends that Plaintiff’s claim fails because Plaintiff has alleged the existence of an enforceable contract without alleging the absence of a contract in the alternative. As Tidelands correctly observes, the Second Amended Complaint is substantively unchanged from the First Amended Complaint, and repeatedly alleges a contractual relationship between the parties. (SAC ¶¶ 9-10, 25-29.) As in the opposition to the First Amended Complaint, Plaintiff does not dispute this fact in opposition but contends that it may pursue a quantum meruit claim for extra work outside the scope of the contract, and the prevailing wages constitute extra work sufficient to maintain this claim. The Court rejected this argument in its June 20, 2022 ruling on the corresponding demurrer to the First Amended Complaint, stating:

Plaintiff is correct that a quantum meruit claim lies when extra work is performed outside the scope of a written contract. (See, e.g., Benson Elec. Co. v. Hale Bros. Associates, Inc. (1966) 246 Cal.App.2d 686, 697.) However, as Tidelands points out in its reply, “[e]xtra work . . . means work arising outside of and independent of the contract—something not required in its performance, not contemplated by the parties, and not controlled by the contract.” (C.F. Bolster Co. v. J.C. Boespflug Const. Co. (1959) 167 Cal.App.2d 143, 151-52.) Plaintiff does not allege any extra work performed . . . . Plaintiff merely alleges that it is entitled to extra pay for the same work that was actually performed.

(June 20, 2022 Minute Order pp. 4-5.) Plaintiff is not entitled to relitigate this issue here.

The Court finds that Plaintiff has failed to state facts sufficient to constitute a cause of action for quantum meruit because Plaintiff has alleged the existence of an enforceable contract, which precludes a claim for quantum meruit.

As the Court has found that a separate basis exists to sustain the demurrer, the Court does not reach the issue of whether the second cause of action is time-barred.

Accordingly, Defendants’ demurrer to the first cause of action is SUSTAINED.

Second Cause of Action (Declaratory Relief)

Tidelands demurs to the Second cause of action for declaratory relief on the ground that it fails to state a cause of action against them. (Code Civ. Proc. § 430.10(e).)

The parties agree that this cause of action survives or fails with the first cause of action for quantum meruit. As the Court has sustained Defendants’ demurrer to the first cause of action for the reasons stated above, this cause of action likewise fails.

Accordingly, Defendants’ demurrer is SUSTAINED as to the second cause of action for declaratory relief.

Leave to Amend

Here, although Plaintiff requests leave to amend, Plaintiff has not demonstrated how it might amend the complaint to cure the defect in this cause of action. Further, when previously presented with the opportunity to amend the complaint, Plaintiff chose to assert the same invalid causes of action with no substantive changes. The Court is therefore not inclined to permit leave to amend a second time on this issue.

Conclusion

Accordingly, the Tidelands Defendants’ demurrer to the Second Amended Complaint is SUSTAINED in its entirety without leave to amend.

CONCLUSION:

Accordingly, Defendant City of Long Beach’s demurrer is SUSTAINED without leave to amend.

Defendants Tidelands’ demurrer is SUSTAINED without leave to amend.

Moving parties to give notice.

IT IS SO ORDERED.

Dated: February 1, 2023 ___________________________________

Theresa M. Traber

Judge of the Superior Court