Judge: Theresa M. Traber, Case: 22STCV37059, Date: 2023-12-20 Tentative Ruling
Case Number: 22STCV37059 Hearing Date: December 20, 2023 Dept: 47
Tentative Ruling
Judge Theresa M. Traber, Department 47
HEARING DATE: December 20, 2023 TRIAL DATE: NOT
SET
CASE: Titanium Power Group Inc. v. Evergreen
Smart Energy Inc., et al.
CASE NO.: 22STCV37059 
DEMURRER
TO FIRST AMENDED COMPLAINT
MOVING PARTY: Defendants Evergreen Smart Energy, Inc. and David Suh
RESPONDING PARTY(S): Plaintiff Titanium
Power Group Inc.
CASE
HISTORY:
·
11/23/22: Complaint filed.
·
08/01/23: First Amended Complaint filed.
STATEMENT
OF MATERIAL FACTS AND/OR PROCEEDINGS:
This is a contractor dispute. Plaintiff alleges that it subcontracted
with Defendants to install toilets in certain properties that were subject to a
rebate under the Southern California Water Smart Program. Plaintiff claims that
Defendants failed to obtain customer consent to install those fixtures and did
not perform the subcontracted work adequately.
Defendants demur to the first
through seventh causes of action in the First Amended Complaint.
TENTATIVE RULING:
Defendants’ Demurrer to the First
Amended Complaint is SUSTAINED with leave to amend as to the fourth cause of
action and otherwise OVERRULED.
Plaintiff
shall have 20 days leave to amend the Complaint.
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DISCUSSION:
Defendants demur to the first
through seventh causes of action in the First Amended Complaint.
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).)
The Declaration of David Prince,
counsel for Defendants, states that he spoke telephonically with Plaintiff’s
counsel at length on an unspecified date. (Declaration of David L. Prince ISO
Demurrer ¶ 2.) The parties were unable to reach a resolution on the issues
presented here. (Id. ¶¶ 2-3.) The Court finds that Defendants have
satisfied the statutory meet and confer requirements.
First Cause of Action: Breach of Written Contract
Defendants
demur to the first cause of action for breach of written contract for failure
to state facts sufficient to constitute a cause of action.
To state a cause of action for
breach of contract, a plaintiff must plead the contract, the plaintiff’s
performance of the contract or excuse for nonperformance, Defendant’s breach,
and finally the resulting damage. (Otworth v. Southern Pac. Transportation
Co. (1985) 166 Cal.App.3d 452, 458.) Further, the complaint must indicate
whether the contract is written, oral, or implied by conduct. (Code Civ.Proc. §
430.10(g).) General allegations stating that defendants violated a contract are
insufficient, and plaintiffs must state facts showing a breach. (Levy v.
State Farm Mutual Automobile Ins. Co. (2007) 150 Cal.App.4th 1, 5-6.) For
breach of a written contract, the essential terms must be set out verbatim in
the body of the complaint or a copy of the written instrument must be attached
and incorporated by reference. (Otworth v. Southern Pac. Transportation Co.,
supra, 166 Cal.App.3d at 459.) However, a plaintiff may plead the legal
effect of the contract rather than its precise language. (Construction
Protective Services, Inc. v. Tig Specialty Insurance (2002) 29 Cal.4th 189,
198-99.)
In their moving papers, Defendants
contend that Plaintiff’s first cause of action is insufficiently pled because the
written contracts at issue are not attached nor are their essential terms set
out verbatim. As set forth above and stated by Plaintiff in opposition, it is
sufficient to plead the legal effect of the contract rather than its precise
language. The First Amended Complaint alleges that Defendants agreed to furnish
labor and materials necessary to install certain plumbing products, for which
Defendant Suh would obtain consent from those customers to install the
products. (FAC ¶ 12.) Plaintiff alleges that, in return, Plaintiff would pay
Defendants a flat fee for their work. (FAC ¶ 13.) Defendants assert in reply
that these allegations are insufficient. The Court disagrees. Construed in the
light most favorable to the non-moving party, as required on a demurrer, the
First Amended Complaint sets forth the essential obligations of each party. Nor
is the Court persuaded by Defendants’ assertion that Plaintiff has contradicted
itself by separately pleading the existence of written contracts with respect
to this cause of action and oral contracts with respect to the second cause of
action. (FAC ¶¶ 24, 29.) Alternative allegations of an oral contract are not
relevant to assessing the validity of a claim for breach of a written contract,
or vice versa. Plaintiff has therefore stated facts sufficient to constitute a
cause of action.
Accordingly, Defendants’ Demurrer
to the first cause of action is OVERRULED.
Second Cause of Action: Breach of Oral Contract
Defendants
demur to the second cause of action for breach of oral contract for failure to
state facts sufficient to constitute a cause of action.
Defendants
first argue that the oral contracts are insufficiently pled for the same
reasons stated with respect to the first cause of action. For the reasons
stated above, the Court rejects those arguments.
Defendants
next contend that this cause of action is defective because Plaintiff does not
allege when the breaches occurred. Defendants cite no authority requiring this
information. As the moving party, Defendants bear the burden of demonstrating
that the First Amended Complaint is insufficient. Defendants have failed to do
so in this respect.
Defendants
also contend that the oral contracts alleged are unenforceable because they
could not be performed in one year in violation of the Statute of Frauds, as
codified in Civil Code section 1624. Defendants offer no basis for the
conclusion that it was not possible for the contracts to be performed within
one year of their formation, either in their moving papers or their reply
brief.
Accordingly,
Defendants’ Demurrer to the second cause of action is OVERRULED.
Third Cause of Action: Common Counts
The parties
agree that the third cause of action for common counts survives or fails with
the first two causes of action. Accordingly, Defendants’ Demurrer to the third
cause of action is OVERRULED.
Fourth Cause of Action: Negligence
Defendants
demur to the fourth cause of action for negligence for failure to state facts
sufficient to constitute a cause of action.
To prevail on a claim of
negligence, a plaintiff must prove (1) a duty of the defendant to use due care,
(2) a breach of that duty, and (3) that the breach was the cause of the
resulting injury. (See, e.g., Ladd v. County of San Mateo (1996) 12
Cal.4th 913, 917-18.)
Defendants argue that Plaintiff’s fourth
cause of action is deficient because the alleged duty is not independent, but
arises out of Defendants’ contractual obligations, and is therefore merely a
breach of contract claim. Indeed, the general rule is that negligent performance
of a contract—i.e., the failure to perform the express terms—is a breach of
contract claim. (See, e.g., Wilmington Liquid Bulk Terminals Inc. v. Somerset
Marine Inc. (1997) 53 Cal.App.4th 186, 195.)
Plaintiff argues in opposition that
the fourth cause of action is adequately pled because “[a] contract to perform
services gives rise to a duty of care which requires that such services be performed
in a competent and reasonable manner [and a] failure to do so may be both a
breach of contract and a tort.” North American Chemical Co. v. Superior
Court (1997) 59 Cal.App.4th 764, 774.) Since the contracts at issue were
contracts to perform services, Plaintiff argues that the First Amended
Complaint sets forth an independent duty. Not so. The California Supreme Court limited
the rule stated in North American Chemical, holding that “conduct
amounting to a breach of contract becomes tortious only when it also violates a
duty independent of the contract arising from principles of tort law.” (Erlich
v. Menezes (1999) 21 Cal.4th 543, 551.) The Erlich Court found that
mere negligent breach of a contract is not sufficient to meet this standard. (Id.
at 552.) As the high court explained, “[g]enerally, outside the insurance
context, a tortious breach of contract ... may be found when (1) the breach is
accompanied by a traditional common law tort, such as fraud or conversion; (2)
the means used to breach the contract are tortious, involving deceit or undue
coercion or; (3) one party intentionally breaches the contract intending or
knowing that such a breach will cause severe, unmitigable harm in the form of
mental anguish, personal hardship, or substantial consequential damages.” (Erlich
v. Menezes (1999) 21 Cal.4th 543, 553-54 [internal quotations and citations
omitted].) Plaintiff does not attempt to show any of these factors, nor that
the duty arises from any principle of tort law. Plaintiff has thus failed to
demonstrate that this cause of action is sufficiently pled.
Accordingly, Defendants’ Demurrer
to the fourth cause of action is SUSTAINED.
Fifth Cause of Action: Negligent Interference with
Contractual Relations
Defendants
demur to the fifth cause of action for failure to state facts sufficient to
constitute a cause of action. Defendants contend that this claim is defective
because there is no cause of action for negligent interference with a contract.
(See Davis v. Nadrich (2009) 174 Cal.App.4th 1, 9.) Plaintiff concedes
that no such claim exists, but states that this cause of action was mistitled,
and should have been identified as a claim for negligent interference with prospective
economic advantage.
Defendants
assert in reply that, even if properly titled, the claim for negligent
interference with contractual relations fails for the same reasons as the
negligence cause of action. As this argument was not identified in Defendants’
notice of demurrer, the Court refuses to consider this contention. (See
Demurrer p.2:22-25.)
As the sole
defect identified in the Notice of Demurrer has been explained as a technical
error rather than a substantive defect, Defendants’ demurrer to the fifth cause
of action is OVERRULED.
Sixth Cause of Action: Breach of Express Warranty
The parties
agree that this cause of action survives or fails with the contract claims in
the first two causes of action. Accordingly, Defendants’ demurrer to the sixth
cause of action is OVERRULED.
Seventh Cause of Action: Breach of Implied Warranty
The parties
agree that this cause of action survives or fails with the contract claims in
the first two causes of action. Accordingly, Defendants’ demurrer to the
seventh cause of action is OVERRULED.
//
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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 how 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,
Plaintiff has not demonstrated how the fourth cause of action might be amended
to cure the defects identified by Defendants. As this is the first instance in
which the sufficiency of the pleadings has been fully litigated, the Court will
exercise its discretion to permit Plaintiff leave to amend the complaint to
allege an independent duty which might sustain a claim for negligence.
CONCLUSION:
Accordingly,
Defendants’ Demurrer to the First Amended Complaint is SUSTAINED with leave to
amend as to the fourth cause of action and otherwise OVERRULED.
Plaintiff
shall have 20 days leave to amend the Complaint.
Moving
Parties to give notice.
IT IS SO ORDERED.
Dated: December 20,
2023 ___________________________________
Theresa
M. Traber
Judge
of the Superior Court
Any party may submit on the
tentative ruling by contacting the courtroom via email at Smcdept47@lacourt.org by no later than 4:00 p.m. the day
before the hearing. All interested parties must be copied on the email. It
should be noted that if you submit on a tentative ruling the court will still
conduct a hearing if any party appears. By submitting on the tentative you
have, in essence, waived your right to be present at the hearing, and you
should be aware that the court may not adopt the tentative, and may issue an
order which modifies the tentative ruling in whole or in part.