Judge: Wesley L. Hsu, Case: 20PSCV00849, Date: 2023-04-11 Tentative Ruling
Case Number: 20PSCV00849 Hearing Date: April 11, 2023 Dept: L
Defendants
Lanterprise, Inc. dba Lanterprise Corporation dba Lanterprise Construction’s,
Waiming Li’s and Weiheng Zhen’s Motion for Judgment on the Pleadings is GRANTED.
Background
Plaintiff Miller
Liu (“Plaintiff”) alleges as follows: In or about September 2018, Plaintiff engaged
in discussions with Waiming Li (“Li”) and Weiheng Zhen (“Zhen”), whereby Li’s
construction company, Lanterprise, Inc. dba Lanterprise Corporation dba
Lanterprise Constriction (“Lanterprise”), would build an ADU for Plaintiff in Plaintiff’s
backyard. Plaintiff advised Li and Zhen that he intended to move into the ADU
and wanted the ADU to have a separate and independent water, gas and electric
meters. The parties thereafter entered into a contract and Plaintiff paid
$170,000.00 towards the $180,000.00 projected costs as construction progressed.
On August 15, 2019, Li prepared a change order, which set forth additional
costs of $21,965.00 for items related to gas and water connections and meters.
Li and Zhen refused to finish construction of the ADU when Plaintiff disputed
paying the $21,965.00. Plaintiff has obtained a written quote of $41,705.44 to
finish the construction. As Plaintiff was inspecting the ADU, he discovered
that Li and/or Zhen sabotaged some of the construction before leaving the
premises, including drilling a hole in one of the new metal water pipes and removing
a previously installed electrical breaker that had passed inspection and
replacing it with an inexpensive one which failed inspection by the building
inspector in a subsequent inspection.
On December
7, 2020, Plaintiff filed a complaint, asserting causes of action against Lanterprise,
Li, Zhen and Does 1-20 for:
1. Breach of Written Agreement
2. Intentional Destruction of Property
The Final
Status Conference is set for April 11, 2013. Trial is set for April 25, 2023.
Legal
Standard
The rules
governing demurrers are generally applicable to a motion for judgment on the
pleadings. (Cloud v. Northrop Grumman
Corp. (1998) 67 Cal.App.4th 995, 999; Code Civ. Proc., § 438,
subd. (d) [“The grounds for motion. . . shall appear on the face of the
challenged pleading or from any matter of which the court is required to take
judicial notice. Where the motion is based on a matter of which the court may
take judicial notice. . ., the matter shall be specified in the notice of
motion, or in the supporting points and authorities, except as the court may
otherwise permit”].)
A motion by a
plaintiff may only be made on the grounds “that the complaint states facts
sufficient to constitute a cause or causes of action against the defendant and
the answer does not state facts sufficient to constitute a defense to the
complaint.” (Code Civ. Proc., § 438, subd. (c)(1)(A).) A motion by a defendant
may only be made on the grounds that (1) “[t]he court has no jurisdiction of
the subject of the cause of action alleged in the complaint” or (2) “[t]he
complaint
does not state facts sufficient to constitute a cause of action against that
defendant.” (Code Civ. Proc., § 438, subd. (c).)
Although a
nonstatutory motion “may be made at any time either prior to the trial or at
the trial itself” (Stoops v. Abbassi
(2002) 100 Cal.App.4th 644, 650 [quotation marks and citation
omitted]), a statutory motion cannot be made after entry of a pretrial
conference order or 30 days before the initial trial date, whichever is later,
unless the court otherwise permits. (Code Civ. Proc., § 438, subd. (e).)
Discussion
Lanterprise, Li and Zhen
(hereinafter, “Defendants”) move the court for an order granting them judgment
on the pleadings, on the basis that M. Liu’s action herein is barred by Code of
Civil Procedure § 426.30.
The motion originally
came on calendar for hearing on March 23, 2023 and was taken under submission;
later that day, the court issued a ruling on submitted matter which provided,
in relevant part, as follows:
“Defendants’
Motion for Judgment on the Pleadings came before the Court
for
hearing on March 23, 2023. The Court posted a tentative ruling denying
the
motion on March 22, 2023. On March 23, 2023, counsel for Plaintiff
informed
the clerk that Plaintiff was submitting on the tentative and elected
not
to remain present for the case to be called. The Court heard oral argument
from
Defendant’s counsel, however. Defendant’s counsel has persuaded the
Court
that Judge Hernandez’s prior rulings do not preclude the Court from
considering
the Defendants’ Motion for Judgment on the Pleadings. Rather,
both
prior rulings on this issue were procedural rulings based on procedural
defects
that Defendants have cured. Thus, the Court believes this Motion can
be
considered on the merits. Consequently, the Court sets oral argument on the
merits
of the motion for April 11, 2023, at 10:00, concurrent to the Final Status
Conference. . . “
The court now proceeds
to rule on the merits of the motion, as follows:
Request for Judicial
Notice
The court rules on
Defendants’ Request for Judicial Notice (“RJN”) as follows: Granted as to
Exhibit A (i.e., complaint filed February 21, 2020 in case styled Lanterprise
v. Liu, Case No. 20PSCV00146 [hereinafter, “Case No. 20PSCV00146”]);
Granted as to Exhibit B (i.e., request for entry of default filed April 27,
2020 in Case No. 20PSCV00146); Granted as to Exhibit C (i.e., July 15, 2020
minute order in Case No. 20PSCV00146); Granted as to Exhibit D (i.e., November
9, 2020 minute order in Case No. 20PSCV00146) and Granted as to Exhibit E
(i.e., default judgment filed January 12, 2021 in Case No. 20PSCV00146.)
Merits
Again, Defendants claim
that M. Liu’s action herein is barred by Code of Civil Procedure § 426.30.
Code
of Civil Procedure § 426.30, subdivision (a), provides that “if a party against whom a complaint has been filed and
served fails to allege in a cross-complaint any related cause of action which
(at the time of serving his answer to the complaint) he has against the
plaintiff, such party may not thereafter in any other action assert against the
plaintiff the related cause of action not pleaded. Subdivision (b)
provides that “[t]his section does not apply if either of the following are
established: (1) The court in which the action is pending does not have
jurisdiction to render a personal judgment against the person who failed to
plead the related cause of action. (2) The person who failed to plead the
related cause of action did not file an answer to the complaint against him.”
Section
426.10 defines a “related cause of action” as “a cause of action which arises
out of the same transaction, occurrence, or
series of transactions or occurrences as the cause of action which the
plaintiff alleges in his complaint.”
“[S]ection 426.30 does
not operate to bar issues previously litigated; rather, it applies to related
causes of action which were not litigated in a prior action between the parties
. . . Since section 426.30 bars claims which the party failed to assert by cross-complaint
in a previous action arising from the same occurrence, it necessarily bars
issues which were never litigated and never
actually decided. Thus, the scope and effect of
section 426.30 is analogous to that of res judicata rather than collateral
estoppel.” (Hulsey v. Koehler (1990) 218 Cal.App.3d 1150, 1157.)
“The doctrine of res judicata is intended to
prevent multiple litigation causing vexation and expense to the parties and
wasted effort and expense in judicial administration by precluding parties from
relitigating issues they could have raised in a prior action concerning the
same controversy.” (Id. at 1157 [citations omitted].) “The most
important criterion in determining that two suits concern the same controversy
is whether they both arose from the same transactional nucleus of facts. If so,
the judgment in the first action is deemed to adjudicate for purposes of the
second action every matter which was urged, and every matter which might have
been urged, in support of the cause of action or claim in litigation. In sum,
res judicata precludes parties from splitting a cause of action into a series
of suits in piecemeal litigation, since it operates as a bar not only when the
grounds for recovery in the second action are identical to those pleaded in the
first but also where a different theory or request for relief is asserted.” (Id.)
“Section 426.30 serves the same purpose as the doctrine of res judicata by
requiring the settlement in a single action of all conflicting claims between
the parties arising from the same transaction.” (Id.)
Also, “a default judgment conclusively
establishes, between the parties so far as subsequent proceedings on a
different cause of action are concerned, the truth of all
material allegations contained in the complaint in the first action, and
every fact necessary to uphold the default judgment.” (Mitchell v. Jones
(1959) 172 Cal.App.2d 580, 586-587; Fitzgerald v. Herzer (1947) 78
Cal.App.2d 127, 131-132 [“A judgment by default is as conclusive as to the
issues tendered by the complaint as if it had been rendered after answer filed
and trial had on allegations denied by the answer. Such a judgment is res
judicata as to all issues aptly pleaded in the complaint and defendant is
estopped from denying in a subsequent action any allegations contained in the
former complaint”].)
On February 21, 2020, Lanterprise filed a
complaint in Case No. 20PSCV00146 for (1) Breach of Contract and (2) Common
Counts against M. Liu and M. Liu’s wife, Natalie Liu (“Natalie”) based on
allegations that they failed to pay Lanterprise for the work Lanterprise
performed constructing an Accessory Dwelling Unit (“ADU”) on their property
located at 1926 Paso Real Ave. in Rowland Heights. (RJN, Exh. A.) On April 27,
2020, M. Liu’s default was entered in Case No. 20PSCV00146. On July 15, 2020,
the court in Case No. 20PSCV00146 denied M. Liu’s and Natalie’s motion to set
aside entry of default. (Id., Exh. C.) On November 9, 2020, the court in
se No. 20PSCV00146 denied M. Liu’s and Natalie’s motion for reconsideration. (Id.,
Exh. D.) On December 7, 2020, M. Liu filed the instant action for (1) Breach of
Written Agreement and (2) Intentional Destruction of Property against
Lanterprise, Li and Zhen, alleging therein that Lanterprise refused to finish
construction of the ADU until it was paid additional monies identified in an
August 15, 2019 charge order. M. Liu further alleged therein that Waiming Li
(“Li”), Lanterprise’s owner and Chief Executive Officer, and/or Weiheng Zhen
(“Zhen”), Lanterprise’s construction manager, “sabotaged” some of the items of
construction.
On January 12, 2021, default judgment was filed
against M. Liu in Case No. 20PSCV00146. (Id., Exh. E.)
Both Case No. 20PSCV00146 and the instant case
arise from the same occurrence. M. Liu does not argue with Lanterprise’s
statement that the record in Case No. 20PSCV00146 shows no appeal. While M. Liu
argues that Li and Zhen were not parties to Case No. 20PSCV00146, he overlooks
the fact that Li and Zhen are parties in privity with Lanterprise.
The motion is granted.