Logan & Logan Construction Inc. v. RRCZ Investments LLC

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2024- special demurrer for uncertainty is OVERRULED. (Code Civ. 01430488 Proc. §430.10, subd. (f).)

General Legal Standard on Demurrer

In ruling on a demurrer, a court must accept as true all allegations of fact contained in the complaint. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.) A demurrer challenges only the legal sufficiency of the affected pleading, not the truth of the factual allegations in the pleading or the pleader’s ability to prove those allegations. (Cundiff v. GTE Cal., Inc. (2002) 101 Cal.App.4th 1395, 1404-05.)

Questions of fact cannot be decided on demurrer. (Berryman v. Merit Prop. Mgmt., Inc. (2007) 152 Cal.App.4th 1544, 1556.) Because a demurrer tests only the sufficiency of the complaint, a court will not consider facts that have not been alleged in the complaint unless they may be reasonably inferred from the matters alleged or are proper subjects of judicial notice. (Hall v. Great W. Bank (1991) 231 Cal.App.3d 713, 718 fn.7.)

Although courts should take a liberal view of inartfully drawn complaints, (see Code Civ. Proc., § 452), it remains essential that a complaint set forth the actionable facts relied upon with sufficient precision to inform the defendant of what plaintiff is complaining, and what remedies are being sought. (Leek v. Cooper (2011) 194 Cal.App.4th 399, 413.) Bare conclusions of law devoid of any facts are insufficient to withstand demurrer. (Schmid v. City and County of San Francisco (2021) 60 Cal.App.5th 470, 481; see Code Civ. Proc., § 425.10, subd. (a).)

Special Demurrer for Uncertainty

Demurrers for uncertainty are disfavored. The Court will only sustain a demurrer for uncertainty if it is so poorly drafted that Defendant cannot reasonably respond. Khoury v. Maly’s of California Inc. (1993) 14 Cal.App.4th 612, 616. Here, the Cross-Complaint is not so uncertain that Cross-Defendant is unable to intelligently respond. Any purported uncertainty in the FACC is a matter to be resolved through discovery.

Cause of Action No. 1--Equitable/Implied Indemnity

Cross-Defendant argues that this cause of action is premature as there has yet to be a determination of liability or a judgment against Cross-Complainant upon which a claim on indemnity may be based.

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In the context of a construction defect claim, equitable indemnity “is designed to do equity among defendants. Under the equitable indemnity doctrine, defendants are entitled to seek apportionment of loss between the wrongdoers in proportion to their relative culpability ... to avoid the unfairness, under joint and several liability theory, of holding one defendant liable for the plaintiff’s entire loss while allowing another responsible defendant to escape...” (Gem Developers v. Hallcraft Homes of San Diego, Inc. (1989) Cal.App.3d 419, 426-427.)

“A defendant/indemnitee may in an action for indemnity seek apportionment of the loss on any theory that was available to the plaintiff upon which the plaintiff would have been successful.” (Id. at 430.)

“[A] defendant may pursue a comparative equitable indemnity claim against other tortfeasors either (1) by filing a cross- complaint in the original tort action or (2) by filing a separate indemnity action after paying more than its proportionate share of the damages through the satisfaction of a judgment or through a payment in settlement.” (Evangelatos v. Superior Court (1988) 44 Cal.3d 1188, 1197–1198.)

Here, Cross-Complainant seeks to pursue an implied/equitable indemnity claim in a separate action from the underlying claims asserted by purchasers of one of the subject properties. However, Cross-Defendant has not alleged it has paid any damages to the plaintiff in that action, neither through satisfaction of a judgment or pursuant to a settlement agreement. Thus, the claim for equitable indemnity must be brought as a cross-complaint in the original action or Cross- Complainant must wait until the underlying matter has resolved to seek indemnification through a separate proceeding.

Accordingly, Cross-Complainant’s cause of action for indemnification is premature and subject to demurrer unless it is asserted as part of a cross-complaint in the underlying action brought against Cross-Complainant by the purchasers of the subject property. Since the claim is not ripe, the demurrer is SUSTAINED.

Cause of Action No. 2--Promissory Fraud

To plead a legally sufficient cause of action for fraud, the pleader must allege (1) a misrepresentation; (2) the defendant’s knowledge of the falsity of the misrepresentation; (3) intent to induce plaintiff’s reliance on the misrepresentation; (4) actual reliance upon the

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misrepresentation; (5) causation; and (6) resulting damages. (Robinson Helicopter Co., Inc. v. Dana Corp. (2005) 35 Cal.4th 979, 990.)

Additionally, fraud must be pleaded specifically to withstand a general demurrer. Thus, to state a legally sufficient cause of action for fraud, a plaintiff must plead specific facts that “show how, when, where, to whom, and by what means the representations were tendered.” (Hamilton v. Greenwich Investors XXVI, LLC (2011) 195 Cal.App.4th 1602, 1614.) When alleging fraud against a corporate defendant, the level of specificity is even higher. Namely, a plaintiff must “allege the names of the persons who made the allegedly fraudulent representations, their authority to speak, to whom they spoke, what they said or wrote, and when it was said or written.” (Lazar v. Superior Court (1996) 12 Cal.4th 631, 645.)

“’Promissory fraud’ is a subspecies of the action for fraud and deceit. A promise to do something necessarily implies the intention to perform; hence, where a promise is made without such intention, there is an implied misrepresentation of fact that may be actionable fraud.” (Lazar, supra. 12 Cal.4th at 638.) A cause of action for promissory fraud must be pleaded with specificity. (Beckwith v. Dahl (2012) 205 Cal.App.4th 1039 [applying heightened specificity requirement for pleading false promise].)

Here, Cross-Defendant demurs to this cause of action because it is not pleaded with sufficient particularity. The FACC alleges Cross-Defendant’s present intent not to perform at the time of making the promise in purely conclusory terms. No facts are alleged as a basis for the claim that Cross-Defendant made a promise without any intent to perform. All the FACC does is point to alleged breaches of the promise to promptly complete the work contemplated by the contract. This is not sufficient to state a cause of action for promissory fraud. The demurrer to this cause of action is SUSTAINED.

Cause of Action No. 3--Intentional Interference with Contractual Relationship

The elements of a cause of action for intentional interference with contractual relations are: (1) a valid contract between the complainant and a third party; (2) the defendant’s knowledge of the contract; (3) intentional conduct on the part of the defendant that was intended to or would necessarily result in a breach or disruption of the contractual relationship; (4) an actual breach or disruption of the contractual

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relationship; and (5) resulting damages. (See Quelimane Co. v. Stewart Title Guaranty Co. (1998) 19 Cal.4th 26, 55.)

Cross-Defendant argues that this cause of action fails because (1) the Cross-Defendant is not alleged to be a stranger to the contractual relationship that was allegedly disrupted and (2) the FACC does not allege the element of intent.

The demurrer is OVERRULED. The FACC alleges an intentional disruption of Cross-Complainant’s contracts with third party buyers of the subject properties. There is no indication in the allegations of the FACC that Cross-Defendant was a party to such transactions.

Leave to Amend

Leave to amend shall be granted after a demurrer is sustained if there is “a reasonable possibility of an amendment that would cure the complaint's legal defect or defects.” (Yvanova v. New Century Mortgage Corp. (2016) 62 Cal.4th 919, 924.)

Here, there is a reasonable possibility that the defects identified in the Second Cause of Action could be cured through amendment. Accordingly, Cross-Complainant may, within 20 days of this ruling, file a Second Amended Cross- Complaint to attempt to address the factual deficiencies in its causes of action for Promissory Fraud.

With respect to the First Cause of Action for Indemnity, it does not appear that there is a reasonable possibility Cross- Complainant could allege it has paid more than its proportionate share of the damages sought against it in the Alley action, as no judgment has been rendered in that action and the action has not settled. If Cross-Complainant seeks to assert its indemnity claims against Cross-Defendant prior to the resolution of the Alley lawsuit, Cross-Complainant must file a cross-complaint in the original action. Since the indemnity claims are premature unless raised via cross-action in the original action, there is no reasonable possibility that an amendment could cure the defect. Should circumstances change with respect to a resolution of the Alley matter, Cross- Complainant may elect to seek leave to amend the Cross- Complaint to include indemnity claims.

Motion to Strike

Cross-Defendant’s Motion to Strike Portions of the First Amended Cross-Complaint is GRANTED. (Code Civ. Proc. §§ 435, 436.)

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A claim for punitive damages must be supported by specific factual allegations. The mere conclusory characterization of a defendant’s conduct as “intentional, willful and fraudulent is a patently insufficient statement of ‘oppression, fraud, or malice, express or implied, within the meaning of Civil Code section 3294.’” (Brousseau v. Jarrett (1977) 73 Cal.App.3d 864, 872.)

Claims for punitive damages “must include specific factual allegations showing that defendant's conduct was oppressive, fraudulent, or malicious ... [p]unitive damages may not be pleaded generally.” (Today's IV, Inc. v. Los Angeles County Metropolitan Transportation Authority (2022) 83 Cal.App.5th 1137, 1193.)

Here, the FACC only asserts conclusory labels to support the claim for punitive damages. Cross-Complainant shall include specific facts that justify a claim for punitive damages if it elects to file a Second Amended Cross-Complaint.

Cross-Defendant shall provide notice of this ruling.

58. The People Defendant Experian Data Corp.’s motion to bifurcate issues at of the State trial is DENIED. (Code Civ. Proc., §§ 597, 598, 1048, subd. of California (b).) v. Experian Moving party has not presented sufficient evidence, as Data Corp. opposed to argument, showing that trying its statute of 2019- limitations defense first, will further convenience, avoid 01047183 prejudice, or be conducive to expedition and economy. (Code Civ. Proc., §§ 597, 598, 1048, subd. (b); see also Gilman v. Dalby (2021) 61 Cal.App.5th 923, 940 [“statements in motions are not evidence”].)

Plaintiff shall give notice of this ruling.

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60. Zamarron v. Motion for Leave to Amend State of California Plaintiffs Esmeralda Zamarron and Alejandro Flores Jr.’s motion for leave to file first amended complaint is GRANTED. 2023- (See Code Civ. Proc., § 473, subd. (a)(1); Atkinson v. Elk 01369253 Corp. (2003) 109 Cal.App.4th 739, 761; Kittredge Sports Co. v. Superior Court (1989) 213 Cal.App.3d 1045, 1048; accord, S.C. v. Doe 1 (2025) 115 Cal.App.5th 365, 383.)

Plaintiffs are ORDERED to separately file the proposed first amended complaint (Navarro Decl. at Ex. A) within two court