Judge: Upinder S. Kalra, Case: 22STCV02427, Date: 2022-07-29 Tentative Ruling

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Case Number: 22STCV02427    Hearing Date: July 29, 2022    Dept: 51

Tentative Ruling

Judge Upinder S. Kalra, Department 51

HEARING DATE:   July 29, 2022                                     

CASE NAME:            Timed Out, LLC, v. Chippewa dba Much and House Public Relations and Marketing Management

CASE NO.:                22STCV02427

DEFENDANT’S DEMURRER WITHOUT MOTION TO STRIKE

MOVING PARTY: Defendant Chippewa

RESPONDING PARTY(S): Plaintiff Timed Out, LLC

REQUESTED RELIEF:

1.       An order sustaining the complaint as to both causes of action: (1) Implied Contractual Indemnity and (2) Equitable Indemnity or Contribution

TENTATIVE RULING:

1.      Demurrer as to the First Cause of Action is OVERRULED

2.      Demurrer as to the Second Cause of Action is OVERRULED

3.      Request for Judicial Notice is GRANTED.

STATEMENT OF MATERIAL FACTS AND/OR PROCEEDINGS:

Plaintiff Timed Out LLC (“Plaintiff”) filed a complaint against Defendant Chippewa dba Much and House Public Relations and Marketing Management (“Defendant”) on January 20, 2022. The complaint alleged two causes of action: (1) Implied Contractual Indemnity and (2) Equitable Indemnity or Contribution. The complaint alleges that Defendant entered into a contract with non-party Prisma to perform marketing services. Prisma then posted pictures of Models without their consent and Defendant failed to inform Prisma of this lack of consent. Plaintiff filed a complaint against Prisma, which then filed a Cross-Complaint against Defendant for indemnity and contribution. Prisma and Plaintiff later entered into a settlement agreement, where Prisma assigned claims against Chippewa to Plaintiff, which included indemnity and contribution.

On March 17, 2022, the parties proposed a stipulation to stay the case pending the resolution of a related case and appeal, which was DENIED.

This current Demurrer was filed on April 11, 2022. Plaintiff’s opposition was filed on July 15, 2022. Defendant’s reply was filed on July 22, 2022.

LEGAL STANDARD

A demurrer for sufficiency 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. (Wilson v. Transit Authority of City of Sacramento (1962) 199 Cal.App.2d 716, 720-21.) 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 pleading alone, and not on the evidence or facts alleged.” (E-Fab, Inc. v. Accountants, Inc. Servs. (2007) 153 Cal.App.4th 1308, 1315.) As such, the court assumes the truth of the complaint’s properly pleaded or implied factual allegations. (Id.) However, it does not accept as true deductions, contentions, or conclusions of law or fact.  (Stonehouse Homes LLC v. City of Sierra Madre (2008) 167 Cal.App.4th 531, 538.) 

Service:

The Defendant has submitted two separate proofs of service for each motion, indicating that the documents were served on Plaintiff’s counsel via email. The proof of service attached to the Plaintiff’s opposition indicates the documents were served on Defendant’s counsel via emai.

Meet and Confer:

A meet and confer declaration is required for a Demurrer. Defendant’s notice of lodgment contains Exhibit 7, which is the meet and confer letter sent to Plaintiff regarding the Complaint. (Notice of Lodgment, Ex. 7). While Plaintiff argues that the meet and confer expanded the arguments, the letter is satisfactory. The Defendant contends that each of the two causes of action fail because the Defendant was dismissed and not a party. Therefore, the meet and confer is satisfactory.  

Judicial Notice:

The Court may take judicial notice of the existence of the records, but not the truth of matters asserted in such records. (Sosinsky v. Grant (1992) 6 Cal.App.4th 1548, 1565). As a result, although the court may take judicial notice that the documents exists, the Court may not take judicial notice of the truth of the facts in the documents.

            Additionally, Evidence Code only allows the Court to take judicial notice of certain types of documents. The court may take judicial notice of “official acts of the legislative, executive, and judicial departments of the United States and of any state of the United States,” “[r]ecords of (1) any court of this state or (2) any court of record of the United States or of any state of the United States,” and “[f]acts and propositions that are not reasonably subject to dispute and are capable of immediate and accurate determination by resort to sources of reasonably indisputable accuracy.” (Evid. Code § 452, subds. (c), (d), and (h).) The Evidence Code does not allow the Court to take judicial notice of discovery responses or parts of cases, such as depositions.

The Defendant requests the court take judicial notice of the following:

1.      Appellant’s Opening Brief in Timed Out, LLC v. Prisma Entertainment, LLC v. Chippewa dba Much and House Public Relations and Marketing Management, Case No. B309391 (appeal of Los Angeles County Superior Court Case No BC663581, which is the underlying action referenced in Timed Out’s complaint)

2.      Appellant’s Appendix of Exhibits Volume 1 in Timed Out, LLC v. Prisma Entertainment, LLC v. Chippewa dba Much and House Public Relations and Marketing Management, Case No. B309391 (appeal of Los Angeles County Superior Court Case No BC663581, which is the underlying action referenced in Timed Out’s complaint)

3.      Appellant’s Appendix of Exhibits Volume 2 in Timed Out, LLC v. Prisma Entertainment, LLC v. Chippewa dba Much and House Public Relations and Marketing Management, Case No. B309391 (appeal of Los Angeles County Superior Court Case No BC663581, which is the underlying action referenced in Timed Out’s complaint)

4.      Appellant’s Appendix of Exhibits Volume 3 in Timed Out, LLC v. Prisma Entertainment, LLC v. Chippewa dba Much and House Public Relations and Marketing Management, Case No. B309391 (appeal of Los Angeles County Superior Court Case No BC663581, which is the underlying action referenced in Timed Out’s complaint)

5.      Appellant’s Appendix of Exhibits Volume 4 in Timed Out, LLC v. Prisma Entertainment, LLC v. Chippewa dba Much and House Public Relations and Marketing Management, Case No. B309391 (appeal of Los Angeles County Superior Court Case No BC663581, which is the underlying action referenced in Timed Out’s complaint)

The request for Judicial Notice is DENIED.

ANALYSIS:

Defendant demurs to the entire complaint, the two causes of action for implied contractual indemnity and equitable indemnity.

1.      Implied Contractual Indemnity

In general, “indemnity” refers to the obligation resting on one party to make good a loss or damage another party has incurred. (Rossmoor Sanitation, Inc. v. Pylon, Inc. (1975) 13 Cal.3d 622, 628.) Under current California law, there are only two basic types of indemnity: express indemnity and equitable indemnity. (See Bay Development, Ltd. v. Superior Court (1990) 50 Cal.3d 1012, 1029–1030 & fn. 10.) Joint and several liability in the context of equitable indemnity extends beyond the term “joint tortfeasor” and may apply to acts that are concurrent or successive, joint or several, as long as they create a detriment caused by several actors. (Western Steamship Lines, Inc. v. San Pedro Peninsula Hospital (1994) 8 Cal.4th 100, 114.) On matters of substantive law, the traditional equitable indemnity doctrine is wholly derivative and subject to whatever immunities or other limitations on liability would otherwise be available against the injured party. (Western Steamship, supra, 8 Cal.4th at p. 115.) 

“Implied contractual indemnity is a form of equitable indemnity arising from equitable considerations either by contractual language not specifically dealing with indemnification or by the equities of the specific matter. [Citations.]” (Sehulster Tunnels/Pre-Con v. Traylor Brothers, Inc./Obayashi Corporation (2003) 111 Cal.App.4th 1328, 1350.) It “is applied to contract parties and is designed to apportion loss among contract parties based on the concept that one who enters a contract agrees to perform the work carefully and to discharge foreseeable damages resulting from the breach.” (Ibid.) An action for implied contractual indemnity “is grounded upon the indemnitor's breach of duty owing to the indemnitee to properly perform its contractual duties.” (West v. Superior Court (1994) 27 Cal.App.4th 1625, 1633).

Defendant contends that the complaint does not contain any allegations that a contract between Plaintiff Timed Out or Prisma and the Defendant existed that supports this cause of action. Specifically, Defendant argues that the complaint does not allege that there was a breach of contract by Defendant. Plaintiff contends that the Complaint properly alleges that Defendant failed under its agreement with Prisma to use reasonable care and this failure resulted in harm to Prisma, as liability for Prisma arose from the Defendant’s failure to obtain consent prior to posting Model photos.  

A demurrer looks at the face of the pleadings and accepts all facts as true. “The demurrer tests the pleading alone and not the evidence or other extrinsic matters which do not appear on the face of the pleading or cannot be properly inferred from the factual allegations of the complaint…This principle means that if the pleading sufficiently states a cause of action the demurrer cannot be granted on the basis of a showing of extrinsic matters by inference from attached exhibits, affidavits or otherwise except those matters which are subject to judicial notice.” (Executive Landscape Corp. v. San Vicente Country Villas IV Assn. (1983) 145 Cal.App.3d 496, 499).

“Taking judicial notice of a document is not the same as accepting the truth of its contents or accepting a particular interpretation of its meaning. [Citation.] On a demurrer[,] a court's function is limited to testing the legal sufficiency of the complaint. [Citation.] ‘A demurrer is simply not the appropriate procedure for determining the truth of disputed facts.’ [Citation.] The hearing on demurrer may not be turned into a contested evidentiary hearing through the guise of having the court take judicial notice of documents whose truthfulness or proper interpretation are disputable.” (Panterra GP, Inc. v. Superior Court of Kern County (2022) 74 Cal.App.5th 697, review denied (May 11, 2022)).

Here, looking at the face of the complaint, the facts are sufficient to constitute a cause of action for implied contractual indemnity. The complaint alleges that the Defendant and Prisma were in a contractual agreement. (Complaint ¶ 26). Defendant failed to use reasonable care which resulted in Prisma being a party to a lawsuit. This was constituted a failure to perform its contractual duties. (Complaint ¶ 28). As a result of this lawsuit, the Prisma had to incur significant fees. (Complaint ¶ 29). The Defendant’s argument concerning failure to be a party to the contract would require the Court to make a decision based on facts and extrinsic evidence.

Therefore, the Demurrer as to the First Cause of Action is OVERRULED.

2.      Equitable Indemnity or Contribution

A cause of action for equitable indemnity requires the following elements: “(1) a showing of fault on the part of the indemnitor and (2) resulting damages to the indemnitee for which the indemnitor is ... equitably responsible.” (C.W. Howe Partners Inc. v. Mooradian (2019) 43 Cal.App.5th 688, 700).

Although the body of law defining and applying principles of equitable indemnity has not fully gelled but is still evolving, one thing is clear: The doctrine applies only among defendants who are jointly and severally liable to the plaintiff. As plaintiff maintains, joint and several liability in the context of equitable indemnity is fairly expansive. We agree it is not limited to ‘the old common term ‘joint tortfeasor’ … .’ It can apply to acts that are concurrent or successive, joint or several, as long as they create a detriment caused by several actors. One factor is necessary, however.  With limited exception, there must be some basis for tort liability against the proposed indemnitor. Generally, it is based on a duty owed to the underlying plaintiff, although vicarious liability and strict liability also may sustain application of equitable indemnity. In addition, implied contractual indemnity between the indemnitor and the indemnitee can provide a basis for equitable indemnity.”  (BFGC Architects Planners, Inc. v. Forcum/Mackey Construction, Inc. (2004) 119 Cal. App. 4th 848, 852 (citations omitted).) 

Defendant argues that this cause of action fails because Plaintiff does not claim “that it has suffered a loss through Prisma’s payment to Timed Out related to this incident, because there has been no such payment.” (Motion 14: 11-13). Further, the Complaint does not contain any factual allegations about any wrongful acts committed by Defendant; rather, Plaintiff asserts conclusory legal allegations about Defendant’s liability based on Prisma’s liability. (Motion 14: 20-23). Plaintiff contends that the Complaint sufficiently pleads that Defendant committed wrongful acts that then subjected Prisma to liability. Even though the Complaint does plead that there was a payment of $20,000 by Prisma, pleading that a payment accrued is unnecessary.

            The Complaint sufficiently pleads a cause of action for equitable indemnity. The first element is satisfied as the Complaint alleges that the Defendant failed to act with reasonable care when posting the pictures of the Models without their consent. (¶ 7, 8, 34). Second, contrary to the Defendant’s contention, the Complaint sufficiently pleads that Prisma paid $20,000 of the judgment. (Complaint ¶ 29, 33). Again, as stated above, the court accepts all facts as true; accepting the fact that Prisma paid the payment as true, the second cause of action is satisfied.

While the Defendant argues that contribution is not satisfied, this claim was included with the claim for equitable indemnity. “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.’” (American Tel. & Tel. Co. v. California Bank (1943) 59 Cal.App.2d 46, 53). The pleading satisfies the cause of action for equitable indemnity and in light of the liberal construction of the pleadings, Defendant’s argument fails.

Therefore, the Demurrer as to the Second Cause of Action is OVERRULED.

Conclusion:

            For the foregoing reasons, the Court decides the pending motion as follows:

1.      Demurrer as to the First Cause of Action is OVERRULED

2.      Demurrer as to the Second Cause of Action is OVERRULED

3.      Request for Judicial Notice is GRANTED.

Defendant to file an Answer only within 30 days notice of this ruling.

Moving party is to give notice.

IT IS SO ORDERED.

Dated:             July 29, 2022                          __________________________________                                                                                                                Upinder S. Kalra

                                                                                    Judge of the Superior Court