Helena Agri-Enterprises, LLC vs Eagle Field, LLC, et al.

The general demurrer to the second, third, and fourth causes of action based on Civil Code section 8500 barring the action is OVERRULED.

Section 8500’s exclusivity provision governs rights with respect to any fund for payment of construction costs. The demurrer analysis turns on whether each cause of action is, in substance, a claim to the construction fund itself or a claim for personal liability arising from the lender’s independent wrongful conduct.

Section 8500 does not bar Boyer’s second cause of action. The fraudulent inducement cause of action is grounded in MDL’s alleged independent wrongful conduct and not that of administering the construction loan fund. Boyer alleges MDL itself made oral and written representations to pay, that the representations were false and made without intent to perform, that Boyer relied on the representations, that due to the justifiable reliance Boyer was damaged, and that Boyer prays for judgment against MDL itself.

As to the third cause of action, the comparative indemnity and declaratory relief claim by Boyer against MDL seeks a declaration that MDL must bear a proportionate share of the Boyer's liability to the subcontractors. This is not, on its face, a claim to the construction fund. It is a claim for MDL's personal liability arising from MDL's alleged role in causing the subcontractor payment disputes. Any resulting judgment would be satisfied by MDL itself.

The fourth cause of action is similarly not barred by section 8500. By incorporating the prior allegations, and reading the complaint as a whole, Boyer has sufficiently alleged that MDL's enrichment flows not from the administration of the construction fund, but from MDL’s alleged fraudulent inducement of Boyer's performance. As the second cause of action is not barred by section 8500, neither is the fourth cause of action.

The general demurrer to the second cause of action for failure to state facts sufficient to state a cause of action is SUSTAINED WITH LEAVE TO AMEND.

Although the first amended third party complaint is sufficient to withstand a challenge based on Civil Code section 8500, the second cause of action does not state facts sufficient to state a cause of action.

As Boyer has stated that the defect can be cured on amendment and has provided information that they can allege the who, what, when, where, and how that is missing, leave to amend is granted.

Boyer is to file an amended third party complaint within ten (10) days of this court’s order.

25CV-04105 Helena Agri-Enterprises, LLC vs Eagle Field, LLC, et al.