M.A. STEINER CONSTRUCTION, INC., A CALIFORNIA CORPORATION vs HONEY LAKE VALLEY RESOURCE CONSERVATION DISTRICT, A LOCAL AGENCY, et al.

A Stipulation and Appointment of Official Reporter Pro Tempore (CV/E-206) is required to be signed by each party, the private court reporter, and the Judge prior to the hearing, if not using a reporter from the Court’s Approved Official Reporter Pro Tempore list.

26CV000157: M.A. STEINER CONSTRUCTION, INC., A CALIFORNIA CORPORATION vs HONEY LAKE VALLEY RESOURCE CONSERVATION DISTRICT, A LOCAL AGENCY, et al. 06/25/2026 Hearing on Demurrer in Department 16D

Once the form is signed it must be filed with the clerk. If a litigant has been granted a fee waiver and requests a court reporter, the party must submit a Request for Court Reporter by a Party with a Fee Waiver (CV/E-211) and it must be filed with the clerk at least 10 days prior to the hearing or at the time the proceeding is scheduled if less than 10 days away. Once approved, the clerk will forward the form to the Court Reporter’s Office and an official reporter will be provided.

*** NOTICE: EFFECTIVE APRIL 13, 2026, THIS DEPARTMENT HAS MOVED TO THE TANI G. CANTIL-SAKAUYE COURTHOUSE LOCATED AT 500 G. ST. SACRAMENTO, CA. ALL MOTIONS NOTICED FOR DEPARTMENT 53 WILL BE HEARD IN DEPARTMENT 16D OF THE NEW COURTHOUSE. ALL PAPERS FOR THIS DEPARTMENT MUST BE FILED AT THIS NEW LOCATION AND WILL NOT BE ACCEPTED AT THE HALL OF JUSTICE. ALL HEARINGS WILL TAKE PLACE AT THIS NEW LOCATION. PARTIES MAY CONTINUE TO APPEAR REMOTELY IN DEPARTMENT 16D UNLESS SPECIFICALLY ORDERED OTHERWISE. ***

TENTATIVE RULING: Defendant California Department of Water Resources’ demurrer to Plaintiff M.A. Steiner Construction, Inc.’s complaint is sustained with leave to amend.

Defendant’s unopposed request for judicial notice is granted for the limited purposes permitted for judicial notice. (See, Evid. Code §451, subd. (a); §452, sub. (b)-(d); see also, Johnson & Johnson v. Superior Court (2011) 192 Cal.App.4th 757, 768 [court may take judicial notice of the existence of court documents but not to the truth of the statements contained therein]; Kilroy v. State of California (2004) 119 Cal.App.4th 140, 145-148; Sosinsky v. Grant (1992) 6 Cal.App.4th 1548, 1569-70.)

The Court considered Plaintiff’s opposition which was filed and served one Court day late. Defendant was able to file a complete reply.

In this action, Plaintiff alleges various causes of action against non-demurring defendants Honey Lake Valley Resource Conservation District (“HLVRCD”), J-U-B Engineers, Inc. and Ben Volk, P.E. Plaintiff alleges that it was a awarded a contract by HLVRCD for the Old Channel Irrigation Realignment and Piping Project in Susanville. Plaintiff alleges that the non-demurring defendants underestimated the amount of dewatering needed to perform the construction work. Plaintiff alleges that it attempted to find solutions to the unforeseen issues. Plaintiff alleges that when it sent pay applications, HLVRCD and Volk delayed payment and required Plaintiff to revise the pay applications in a manner that was inconsistent with the contract. Plaintiff alleges that Volk assured it that disputed items would be resolved, but HLVRCD and Volk denied all of

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

26CV000157: M.A. STEINER CONSTRUCTION, INC., A CALIFORNIA CORPORATION vs HONEY LAKE VALLEY RESOURCE CONSERVATION DISTRICT, A LOCAL AGENCY, et al. 06/25/2026 Hearing on Demurrer in Department 16D

Plaintiff’s claims based on false allegations.

As to Defendant, Plaintiff alleges a single cause of action for intentional interference with contract. Defendant now demurs to this cause of action.

A demurrer “tests the pleadings alone and not the evidence or other extrinsic matters.” (SKF Farms v. Superior Court (1984) 153 Cal.App.3d 902, 905.) The purpose of a demurrer is to test the legal sufficiency of a claim. (Donabedian v. Mercury Ins. Co. (2004) 116 Cal. App. 4th 968, 994.) For the purpose of determining the effect of a complaint, its allegations are liberally construed, with a view toward substantial justice. (CCP § 452; Amarel v. Connell (1988) 202 Cal.App.3d 137, 140-141; Quelimane Co. v.

Stewart Title Guaranty Co. (1998) 19 Cal.4th 26, 43, fn. 7.) The Court treats the demurrer as admitting all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law, and considers matters which may be judicially noticed. (Blank v. Kirwan (1985) 39 Cal.3d at 318; Poseidon Development, Inc. v. Woodland Lane Estates, LLC (2007) 152 Cal.App.4th 1106, 1111-1112.) A general demurrer does not admit contentions, deductions, or conclusions of fact or law alleged in the complaint; facts impossible in law; or allegations contrary to facts of which a court may take judicial notice. (Blank, supra, 39 Cal. 3d at 318, William S.

Hart Union High School Dist. v. Regional Planning Com. (1991) 226 Cal. App. 3d 1612, 1616 fn.2.) Extrinsic evidence may not properly be considered on demurrer or on a motion to strike. (Ion Equipment Corp. v. Nelson (1980) 110 Cal. App. 3d 868, 881; Hibernia Savings & Loan Soc. v. Thornton (1897) 117 Cal. 481, 482.)

A demurrer may be sustained only if the complaint lacks any sufficient allegations to entitle the plaintiff to relief. (Financial Corp. of America v. Wilburn (1987) 189 Cal. App. 3d 764, 778.) “Plaintiff need only plead facts showing that he may be entitled to some relief . . ., we are not concerned with plaintiff's possible inability or difficulty in proving the allegations of the complaint.” (Highlanders, Inc. v. Olsan (1978) 77 Cal. App. 3d 690, 696-697.) “[Courts] are required to construe the complaint liberally to determine whether a cause of action has been stated, given the assumed truth of the facts pleaded.” (Picton v.

Anderson Union High School Dist. (1996) 50 Cal. App. 4th 726.) A demurrer admits the truth of all material facts properly pled and the sole issue raised by a general demurrer is whether the facts pled state a valid cause of action - not whether they are true. (Serrano v. Priest (1971) 5 Cal. 3d 584, 591.)

Fourth Cause of Action (Intentional Interference With Contract)

Defendant’s demurrer is sustained with leave to amend for failure to state facts sufficient to constitute a cause of action.

Plaintiff generally alleges that Defendant, and others, instructed HLVRCD to deny Plaintiff’s pay applications despite knowing that this would constitute a breach of the contract between

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

26CV000157: M.A. STEINER CONSTRUCTION, INC., A CALIFORNIA CORPORATION vs HONEY LAKE VALLEY RESOURCE CONSERVATION DISTRICT, A LOCAL AGENCY, et al. 06/25/2026 Hearing on Demurrer in Department 16D

HLVRCD and Plaintiff. (Comp. ¶¶ 60-64.)

Defendant first demurs to this cause of action on the basis that a public entity is immune from liability for common law torts.

Government Code § 815(a) provides that public entities are immune from liability unless such liability is expressly provided for by statute or constitution. Numerous decisions confirm that Government Code § 815 abolishes common law liability for public entities. (Miklosy v. Regents of University of California (2008) 44 Cal. 4th 876, 899; Eastburn v. Regional Fire Protection Authority (2003) 31 Cal.4th 1175, 1179; Zelig v. County of Los Angeles (2002) 27 Cal.4th 1112, 1127-1128.) In order to state a cause of action for government tort liability, ”every fact essential to the existence of a statutory liability must be pleaded with particularity, including the existence of a statutory duty. [citations omitted] Since the duty of a governmental agency can only be created by statute or [enactment,’ the statute or ‘enactment’ claimed to establish the duty must at the very least be identified.’” (Zuniga v.

Housing Authority (1995) 41 Cal.App.4th 82, 96.) There is “no such thing as common law tort liability for public entities” in California. (County of Santa Clara v. Superior Court (2023) 14 Cal.5th 1034, 1046.)

As correctly pointed out by Defendant, Plaintiff fails to identify any basis for statutory liability in the fourth cause of action. (FAC ¶¶ 59-64.) In opposition, Plaintiff asserts that Government Code § 815.2 supplies the statutory basis for Defendant’s liability. It is true that a public entity can be liable for injury caused by its employees pursuant to Government Code § 815.2. However, Plaintiff has not identified section 815.2 as a basis for liability in the body of the fourth cause of action, much less alleged that any employee of Defendant engaged in any specific conduct.

Defendant’s demurrer to the fourth cause of action is sustained on the basis that Plaintiff has not alleged a statutory basis for Defendant’s liability.

To the extent that Defendant demurs to the fourth cause of action on the basis that it was not a “stranger to the contract,” the demurrer is overruled. Defendant cites to case law stating that the intentional interference with contract cause of action applies to those “who have no legitimate interest in the scope or course of the contract’s performance.” (Applied Equipment Corp. v. Litton Saudi Arabia Ltd. (1994) 7 Cal.4th 503, 514.) Defendant also cites case law which it asserts holds that the tort is inapplicable where the subject contract calls for a party’s performance even if that party is not a signatory. (PM Group, Inc. v.

Stewart (2007) 154 Cal.App.4th 55, 65.) However, as pointed out in reply, more recent cases have held that Applied Equipment, did not, as Defendant attempts to argue here, immunize a non-party to a contract from liability from the tort of interference with contract if that non-party had some social or economic interest in the contract. (Caliber Paving Co., Inc. v. Rexford Industrial Realty & Management, Inc. (2020) 54 Cal.App.5th 175, 181-183.) Caliber made clear that “[t]he Supreme

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

26CV000157: M.A. STEINER CONSTRUCTION, INC., A CALIFORNIA CORPORATION vs HONEY LAKE VALLEY RESOURCE CONSERVATION DISTRICT, A LOCAL AGENCY, et al. 06/25/2026 Hearing on Demurrer in Department 16D

Court never addressed whether a tort claim for interference with contract could be made against a noncontracting party claiming to have a social or economic interest in the contractual relationship. Cases are not authority for propositions not considered. The context of Applied Equipment leaves no doubt the Supreme Court did not intend to restrict tort liability for interfering with contractual relations to noncontracting parties with no social or economic interest in the contract. As we have mentioned, the court placed emphasis on the words ‘noncontracting parties’ and “‘stranger to a contract’” in identifying who may be liable for interference with contract. (Applied Equipment, supra, 7 Cal.4th at p. 513.)

None of the authorities cited in Applied Equipment uses the phrase ‘outsiders who have no legitimate social or economic interest in the contractual relationship’ (see Woods v. Fox Broadcasting Sub., Inc. (2005) 129 Cal.App.4th 344, 352–353 [28 Cal. Rptr. 3d 463] (Woods)), and no California Supreme Court opinion since Applied Equipment has used that phrase.” (Id. at 182-183.) Further, Caliber distinguished PM Group, Inc. and stated “[t]o the extent PM Group holds a noncontracting party with an alleged economic interest in the contract cannot be liable for intentional interference with contract, we respectfully disagree with that case and decline to follow it.” (Id. at 186.)

Caliber also cited to numerous appellate cases which have declined to follow PM Group, Inc. (Id.) This Court finds that Caliber is persuasive and consistent with respect to its interpretation of the Supreme Court’s holding in Applied Equipment. That is, the Court rejects Defendant’s argument that because it has an economic interest in the contract between HVLRCD and Plaintiff that it is immune from liability for the tort of intentional interference with contract. Instead, “a defendant who is not a party to the contract or an agent of a party to the contract is not immune from liability for intentional interference with contract by virtue of having an economic or social interest in the contract.” (Id. at 187.)

The demurrer on this basis is overruled.

The Court also overrules the demurrer on the basis that Defendant is immune pursuant to Government Code § 818.8. Government Code § 818.8 provides that “a public entity is not liable for an injury caused by misrepresentation by an employee of the public entity, whether or not such misrepresentation be negligent or intentional.” This immunity applies to all types of fraud, including concealment. (Janis v. California State Lottery Com. (1998) 68 Cal.App.4th 824, 827- 830.) While Defendant argues that the cause of action is premised on allegations that Defendant misrepresented what would and would not be reimbursed, there are no allegations in the complaint that Defendant made any misrepresentation.

Rather, the fourth cause of action is premised on allegations that Defendant interfered with Plaintiff’s contract with HVLRCD by instructing HVLRCD to deny Plaintiff’s applications for payment in breach of the contract. (Comp. ¶ 61.) Indeed, the very case cited by Defendant to support the proposition that § 818.8 applies involved a scenario where the plaintiff claims used the terms “fraud” or “fraudulently”. The appellate court found that given that the plaintiff repeatedly used those terms until the trial court struck them from the pleadings “reveals that the very essence of these claims was misrepresentation.

Plaintiff cannot now represent that those tort claims were based on conduct

SUPERIOR COURT OF CALIFORNIA COUNTY OF SACRAMENTO

26CV000157: M.A. STEINER CONSTRUCTION, INC., A CALIFORNIA CORPORATION vs HONEY LAKE VALLEY RESOURCE CONSERVATION DISTRICT, A LOCAL AGENCY, et al. 06/25/2026 Hearing on Demurrer in Department 16D

other than misrepresentation simply because the trial court has excised that language from the complaint.” (Lundeen Coatings Corp. v. Dep’t of Water & Power (1991) 232 Cal.App.3d 816, 833 [emphasis in original].) While Defendant may interpret the complaint in such a way that Defendant’s representations are at the base of the dispute, any defect premised on Government Code § 818.8 is not revealed from the face of the pleading.

In sum, Defendant’s demurrer to the fourth cause of action is sustained on the sole basis that Plaintiff failed to identify a statutory basis for liability. It is overruled on all other grounds.

Where the demurrer was sustained, it is sustained with leave to amend. “If the plaintiff has not had an opportunity to amend the complaint in response to the demurrer, leave to amend is liberally allowed as a matter of fairness, unless the complaint shows on its face that it is incapable of amendment.” (City of Stockton v. Superior Court (2007) 42 Cal.4th 730, 747.) Leave to amend is granted as this is Defendant’s first challenge to the complaint on which the Court has ruled and Plaintiff requested leave.

Where leave was granted, Plaintiff may file and serve an amended complaint no later than July 9, 2026. Defendant shall file and serve a response within 30 days thereafter, 35 days if the amended complaint is served by mail as modified by the CCP 430.41 extension if necessary.

This minute order is effective immediately. No formal order pursuant to CRC Rule 3.1312 or other notice is required.