Safe Nation Found. v. Wildlife Heritage Found.

On or about January 20, 2026, Defendant demurred as to the First (Breach of Contract), Second (Breach of Implied Covenant of Good Faith and Fair Dealing), Third (Intentional Interference with a Prospective Economic Advantage), Fourth (Unfair

Competition), Fifth (Declaratory Relief), and Sixth (Injunctive Relief) causes of action on the grounds that the First Amended Complaint (“FAC”) fails to state sufficient facts in support of these causes of action. Defendant also filed a Motion to Strike portions of the FAC, including Paragraph 68 of the FAC, and Paragraph 2 of the Prayer for Relief seeking punitive damages. Plaintiff opposes both the Demurrer and Motion to Strike.

Objections

The court notes that after Defendant filed its Reply, Plaintiff filed a limited objection to new arguments raised for the first time in the reply brief in support of the Demurrer, and a limited objection to new arguments and factual premises raised for the first time in the reply brief. The objections are sustained. To the extent Defendant’s reply asserts a new theory that the FAC fails to plead mutual assent or consideration, the court does not rely on that argument in ruling on the Demurrer. Similarly, the court does not rely on factual characterizations asserted for the first time in the reply on the Motion to Strike concerning the capacity in which the proposed release was requested.

Legal Background

A demurrer tests the pleadings alone and not the evidence or other extrinsic matters, therefore, a demurrer analysis considers only those defects which appear on the face of the pleading or are judicially noticed. (SKF Farms v. Superior Court (1984) 153 Cal.App.3d 902, 905.) When considering demurrers, courts assume the truth of the facts alleged in the pleading, as well as those that are judicially noticeable, and read the allegations liberally and in context. (Schifando v. City of Los Angeles (2003) 31 Cal.4th 1074, 1081; Howard Jarvis Taxpayers Assn. v. City of La Habra (2001) 25 Cal.4th 809, 814.)

When a written contract is attached to and incorporated into a complaint, a general demurrer admits not only the contents of the instrument, but also any pleaded meaning to which the instrument is reasonably susceptible. (Aragon-Haas v. Family Security Ins. Services, Inc. (1991) 231 Cal.App.3d 232, 239; Barroso v. Ocwen Loan Servicing, LLC (2012) 208 Cal.App.4th 1001, 1008 (noting that “a court will construe the language of the contract on its face to determine whether, as a matter of law, the contract is reasonably subject to a construction sufficient to sustain a cause of action for breach.”)) Courts can resolve unambiguous contract interpretation issues on demurrer as questions of law, but they cannot determine a document’s meaning through judicial notice alone and must accept reasonable plaintiff interpretations of ambiguous language. (Ibid.)

The rule on demurrer is “a variation on the well-recognized theme that is solely a judicial function to interpret a written instrument unless the interpretation turns upon the credibility of extrinsic evidence.” (Id. at 1008-1009.) Where a pleaded instrument is “susceptible of more than one construction as to its nature or as to the purpose intended by the parties to be attained by it, the construction of the party pleading it should be accepted, if such construction is reasonable” when considering whether a pleading attacked by general demurrer. (Connell v. Zaid (1969) 268 Cal.App.2d 788, 794.) Courts

must accept as correct plaintiff’s allegations as to the meaning of an agreement, so long as the pleading does not place a clearly erroneous construction upon the provisions of the contract. (Aragon-Haas, supra, 231 Cal.App.3d at p. 238.)

While leave to amend may be granted to cure any defects in the pleading, the burden rests upon the plaintiff of “proving that an amendment would cure the defect.” (Schifando, supra, 31 Cal.4th at p. 1081; Blank v. Kirwan (1985) 39 Cal.3d 311, 318.)

Discussion

The Conservation Easement broadly regulates groundwater rights and groundwaterrelated interests, prohibits abandonment, relinquishment, or changes in groundwater use without Defendant’s consent, requires groundwater rights to remain appurtenant to the Easement Area, and grants the Defendant’s “sole discretion” regarding approval determinations. (FAC at Ex. A, ¶¶ 2(b), 4(b), and 14(k).) The SGMA groundwater allocations appear to be a relatively recent regulatory mechanism not expressly addressed in the Conservation Easement. Accordingly, the court cannot conclude at this stage of the pleadings that the Conservation Easement application to the SGMA allocations is entirely unambiguous as a matter of law. Therefore the Court rules as follows:

As to the First Cause of Action for Breach of Contract, Plaintiff alleges the Defendant breached the Conservation Easement by unreasonably delaying approval of the groundwater-allocation transfers and imposing conditions allegedly unrelated to conservation purposes despite favorable expert findings. (FAC ¶¶ 39-49.) The court finds that the FAC does not adequately identify a specific enforceable provision of the Conservation Easement that the Defendant violated. The Conservation Easement appears to expressly grant Defendant broad discretionary approval authority, and California law generally prohibits implying duties that negate express discretionary rights. (See Third Story Music, Inc. v. Waits (1995) 41 Cal.App.4th 798, 808; Wolf v. Walt Disney Pictures & Television (2008) 162 Cal.App.4th 1107, 1120-1121.) The court sustains the demurer as the First Cause of Action with leave to amend.

As to the Second Cause of Action for Breach of Implied Covenant, Plaintiff alleges Defendant exercised discretionary approval authority in bad faith and for reasons unrelated to the conservation objectives set forth in the Conservation Easement. (FAC ¶¶ 50-59.) The court finds that the implied covenant cannot contradict express grants of discretion. (Guz v. Bechtel Nat. Inc. (2000) 24 Cal.4th 317, 349-350.) The Conservation Easement clearly states that Defendant may “withhold approval in its sole discretion[.]” (Conservation Easement ¶ 14(k).) The court sustains the demurrer as to the Second Cause of Action with leave to amend.

As to the Third Cause of Action for Intentional Interference with a Prospective Economic Advantage, Plaintiff alleges Defendant intentionally interfered with anticipated groundwater-allocation sales by withholding approval and imposing commercially destructive conditions that caused prospective transactions to collapse. (FAC ¶¶ 60-68.) Plaintiff fails to adequately plead independently wrongful conduct

separate from Defendant’s exercise of discretion under the Conservation Easement. While Plaintiff cites to Kendall v. Ernest Pestana, Inc. (1985) 40 Cal.3d 488, Plaintiff identifies no authority that extends Kendall to conservation easements expressly granting discretionary approval rights. The court sustains the demurrer as to the Third Cause of Action with leave to amend.

As to the Fourth Cause of Action for Unfair Competition, Plaintiff alleges Defendant engaged in unlawful and unfair business practices by obstructing SGMA-authorized groundwater-allocation transfer through arbitrary delay and burdensome approval conditions. (FAC ¶¶ 69-75.) This claim is largely derivative of the contract and interference claims. Further, the FAC does not presently allege conduct sufficient to constitute “unlawful” or “unfair” business practices under Business and Professions Code section 17200.

Allegations of delay and commercially burdensome conditions, without more, do not rise to conduct deemed “immoral, unethical, oppressive, unscrupulous, or substantially injurious” sufficient to constitute an unfair business practice. (Paulus v. Bob Lynch Ford, Inc. (2006) 139 Cal.App.4th 659, 680.) The court sustains the demurrer as to the Fourth Cause of Action with leave to amend.

As to the Fifth Cause of Action for Declaratory Relief- Code of Civil Procedure § 1060, Plaintiff seeks a declaration regarding whether SGMA groundwater allocations fall within the Conservation Easement and whether the Defendant’s approval authority is constrained by conservation-based purposes or other limitations. (FAC ¶¶ 76-82.) The FAC adequately pleads an actual controversy concerning whether SGMA groundwater allocations fall within the Conservation Easement and whether the Defendant’s approval authority is constrained by conservation-based purposes or other limitations.

At this stage, the court cannot conclude that the Conservation Easement application to SGMA groundwater allocations is so clear as to foreclose declaratory relief as a matter of law. The court overrules the demurrer as to the Fifth Cause of Action and finds that it is properly pled under the Code of Civil Procedure section 1060.

As to the Sixth Cause of Action for Injunctive Relief, Plaintiff seeks injunctive relief preventing Defendant from interfering with the proposed groundwater-allocation transfers. (FAC ¶¶ 83-90.) Injunctive relief is a remedy, not an independent cause of action. (Granny Purps, Inc. v. County of Santa Cruz (2020) 53 Cal.App.5th 1, 9.) Plaintiff appears to concede the same. While Plaintiff may seek injunctive relief through the prayer and any surviving substantive claims, the court sustains the demurrer as to the Sixth Cause of Action without leave to amend.

Based on the foregoing, the court sustains the demurrer as to the First, Second, Third, and Fourth Causes of Action with leave to amend, sustains the demurrer as to the Sixth Cause of Action without leave to amend, and overrules the demurrer as to the Fifth Cause of Action. Plaintiff shall file and serve any amended complaint on or before June 26, 2026.

Motion to Strike

Defendant also asks the Court to strike portions of the FAC seeking punitive damages.

A complaint including a request for punitive damages must include allegations showing that the plaintiff is entitled to an award of punitive damages. (Caluson v. Superior Court (1998) 67 Cal.App.4th 1253, 1255.) A claim for punitive damages cannot be pleaded generally and allegations that a defendant acted with “oppression, fraud and malice” toward plaintiff are insufficient legal conclusions to show that plaintiff is entitled to an award of punitive damages. (Brousseau v. Jarrett (1977) 73 Cal.App.3d 864, 872.) Specific factual allegations are required to support a claim for punitive damages. (Id.) Civil Code section 3294 authorizes a plaintiff to obtain an award of punitive damages when there is clear and convincing evidence that the defendant engaged in malice, oppression, or fraud.

The challenged punitive damages allegations appear to be associated with the Third Cause of Action for Intentional Interference with a Prospective Economic Advantage, and to a lesser extent, the Fourth Cause of Action under the Unfair Competition Law. Both of these claims are rely on allegations that Defendant intentionally obstructed Plaintiff’s proposed SGMA groundwater-allocation transfers through delay, burdensome conditions, and alleged improper conduct unrelated to conservation purposes. Given the court’s ruling on the demurrer as to the Third and Fourth Causes of Action with leave to amend, the court declines to reach the merits of whether the FAC presently alleges facts sufficient to support punitive damages as the operative pleading will be superseded by amendment. Therefore, the Motion to Strike is denied as moot at this time.

14. S-CV-0056209 Reddy, Catherine v. Dismukes, Bret

If oral argument is requested, it will be heard in Department 42 by the Honorable Trisha J. Hirashima.

Defendants are advised the notice of motion must include notice of the court’s tentative ruling procedures. (Local Rule 20.2.3(C).)

Motion to Strike Punitive Damages

Defendants move to strike the prayer for punitive damages from plaintiff’s complaint. No opposition has been filed.

To support punitive damages, plaintiff must allege ultimate facts supporting a finding of oppression, fraud, or malice on defendant’s behalf. (Civ. Code, § 3294, subd. (a).) “‘Malice’ means conduct which is intended by the defendant to cause injury to the plaintiff or despicable conduct which is carried on by the defendant with a willful and conscious disregard of the rights or safety of others.” (Id. at subd. (c)(1).) “‘Oppression’ means despicable conduct that subjects a person to cruel and unjust hardship in conscious disregard of that person’s rights.” (Id. at subd. (c)(2).) “‘Fraud’ means an intentional misrepresentation, deceit, or concealment of a material fact known to the defendant with the intention on the part of the defendant of thereby depriving a person of property or legal rights or otherwise causing injury.” (Id. at subd. (c)(3).) Here, a careful review of

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