Fire Insurance Exchange v. HDS IP Holdings, LLC, et al.

fees calculation; - File an updated request for court Judgment form CIV-100 reflecting the updated attorneys' fees calculation; and - File an updated declaration reflecting the updated attorneys' fees calculation. This hearing is Continued until October 10, 2026, for Plaintiff to file the remainder of the default judgment packet.

Ruling Fire Insurance Exchange v. HDS IP Holdings, LLC, et al., Case no. 26SMCV00287 Red-White's Demurrer with Motion to Strike Hearing Date: September 9, 2026 Background This is a subrogation action. Plaintiff Fire Insurance Exchange ("Fire Insurance") sues Defendants HDS IP Holding, LLC ("HDS") and Red-White Valve Corp. ("Red-White") for strict products liability. Fire Insurance alleges that HDS sold, distributed, or installed a water valve that Red-White designed or manufactured and which was part of a tankless water heater system on Fire Insurance's insured's property located at 1814 Penmar Ave., Venice, CA. (First Amended Complaint ("FAC"), P.P. 2, 4-5.)

Fire Insurance alleges that a design or manufacturing defect in the valve and/or the water heater caused a flood at Fire Insurance's insured's property on November 28, 2023. (FAC, P. 13.) On January 22, 2026, Fire Insurance filed the initial complaint. On March 11, 2026, Fire Insurance filed the operative First Amended Complaint. On June 1, 2026, HDS answered. On June 10, 2026, Red-White filed this demurrer and motion to strike. On August 25, 2026, Fire Insurance filed opposition. On September 1, 2026, Red-White replied.

Arguments Red-White demurs to the entire FAC, arguing that it fails to state a claim for strict products liability because it does not identify which Red-White product allegedly failed or how it failed. (Demurrer, p. 5.) Red-White also argues that Fire Insurance's products liability claim fails because it does not clearly identify what theory of products liability it is pursuing. (Id. at pp. 6-7.) Finally, Red-White argues that the complaint is uncertain. (Id. at p. 7.)

In opposition, Fire Insurance argues that its allegation that the "tankless water heater with accompanying valves" failed is sufficient to meet the pleading standard. (Opposition, p. 3.) Fire Insurance argues that it pleads multiple theories of product liability in the alternative and that the complaint is not uncertain. (Ibid.) In reply, Red-White argues that Fire Insurance has sued it without knowing what Red-White is alleged to have done. (Reply, p. 1.) Red-White argues that the complaint is conclusory and that it does not adequately identify the Red-White product alleged to have failed. (Id. at p. 2.)

Demurrer In a demurrer proceeding, the defects in the complaint must be apparent on the face of the pleading or via proper judicial notice. (Donabedian v. Mercury Ins. Co. (2004) 116 Cal.App.4th 968, 994.) "A demurrer tests the pleading alone, and not the evidence or facts alleged." (E-Fab, Inc. v. Accountants, Inc. Servs. (2007) 153 Cal.App.4th 1308, 1315.) As such, the court assumes the truth of the complaint's properly pleaded or implied factual allegations. (Ibid.) The only issue a demurrer is concerned with is whether the complaint, as it stands, states a cause of action. (Hahn v.

Mirda (2007) 147 Cal.App.4th 740, 747.) Where a demurrer is sustained, leave to amend must be allowed where there is a reasonable possibility of successful amendment. (Goodman v. Kennedy (1976) 18 Cal.3d 335, 348.) The burden is on the plaintiff to show the court that a pleading can be amended successfully. (Id.; Lewis v. YouTube, LLC (2015) 244 Cal.App.4th 118, 226.) However, "[i]f there is any reasonable possibility that the plaintiff can state a good cause of action, it is error to sustain a demurrer without leave to amend." (Youngman v.

Nevada Irrigation Dist. (1969) 70 Cal.2d 240, 245). Before filing a demurrer, parties must meet and confer in person or by phone. (Code Civ. Proc. Sec. 430.41.)

Discussion

Procedural Issues Red-White and Fire Insurance met and conferred by email between May 19, 2026 and May 26, 2026, but did not meet and confer in person or by phone. Though the parties' meet and confer does not satisfy the statutory requirements for filing a demurrer, failure to meet and confer is not grounds for overruling the demurrer. (Code Civ. Proc. Sec. 430.41.) Strict Products Liability A complaint states a claim for strict products liability where it claims (1) a defect in the manufacture or design of a product or a failure to warn; (2) causation; and (3) injury. (County of Santa Clara v. Atlantic Richfield Co. (2006) 137 Cal.App.4th 292, 318 [elements

of strict liability]. See also Arriaga v. CitiCapital Commercial Corp. (2008) 167 Cal.App.4th 1527, 1534-1535 [potentially liable parties include manufacturers marketing products while knowing they are used without inspection for defects causing injuries, retailers, lessors, distributors, licensors, and anyone identifiable as "'an integral part of the overall producing and marketing enterprise'...."].) Red-White cites Bockrath v. Aldrich Chemical Co. (" Bockrath ") for the proposition that a products liability complaint must allege the specific product that failed.

Bockrath was a multiple myeloma case in which the plaintiff sued fifty-five defendants and failed to properly plead that each product was a substantial factor in causing his cancer. (Blockrath v. Aldrich Chemical Co.,Inc. (1999) 21 Cal.4th 71, 80.) Bockrath also re-affirms that plaintiffs "may, and should, allege the foregoing facts succinctly, and may do so in a conclusory fashion of their knowledge of the precise cause of injury is limited." (Bockrath, supra, 21 Cal4th at 80.) Bockrath 's specificity holding is that a complaint must name a specific manufacturer, not a specific product, and if the manufacturer is unknown, the plaintiff should name a DOE defendant. (Id. at p. 81.)

Here, the FAC alleges that Red-White manufactured or designed the defective valve on a water heater installed at Fire Insurance's insured's property which failed, causing the flooding. (FAC, P.P. 5, 9-12.) These allegations are sufficiently specific to state a claim for products liability. They provide Red-White with sufficient notice of what product failed, and how. Though Fire Insurance does not allege what Red-White product failed in particular, but that information is likely to come out in discovery.

Enough information, including the type of product and the insured's address, is plead for the parties to ascertain what product failed. As to Red-White's contention that Fire Insurance's FAC fails to state a claim because it does not allege what type of strict products liability it seeks, Fire Insurance clearly claims both manufacturing defect and design defect. (See FAC, P.P. 10-12.) Fire Insurance is allowed to pursue both a manufacturing defect and a design defect theory in the alternative, as plead.

Since the FAC states a claim for products liability, it is not uncertain. Red-White's Demurrer is OVERRULED. Motion to Strike Red-White moves to strike (1) Page 3, paragraph 7 in its entirety; (2) page 3 paragraph 9, "designed, manufactured, distributed and sold tankless water heaters with accompanying valves."; (3) Page 3, paragraph 10 "Defendant's tankless water heater and its accompanying valves."; (4) Page 5, paragraph 12 "design, manufacture and sell its tankless water heaters and valves."

Fire

Insurance did not file a separate opposition to this motion. However, given the passages Red-White seeks to strike, Fire Insurance's opposition to the demurrer could also be construed as an opposition to the motion to strike because Red-White seeks to strike the substance of Fire Insurance's allegations. Any party, within the time allowed to respond to a pleading may serve and file a notice of motion to strike the whole or any part thereof. (CCP, Sec. 435(b)(1); CRC, rule 3.1322(b).) The court may, upon a motion or at any time in its discretion and upon terms it deems proper: (1) strike out any irrelevant, false, or improper matter inserted in any pleading; or (2) strike out all or any part of any pleading not drawn or filed in conformity with the laws of California, a court rule, or an order of the court. (CCP, Sec. 436(a)-(b); Stafford v.

Shultz (1954) 42 Cal.2d 767, 782 ["Matter in a pleading which is not essential to the claim is surplusage; probative facts are surplusage and may be stricken out or disregarded"].)¿¿¿¿¿ "Where the defect raised by a motion to strike or by demurrer is reasonably capable of cure, leave to amend is routinely and liberally granted to give the plaintiff a chance to cure the defect in question." (CLD Construction, Inc. v. City of San Ramon (2004) 120 Cal.App.4th 1141, 1146.) The burden is on the complainant to show the Court that a pleading can be amended successfully. (Goodman v.

Kennedy (1976) 18 Cal.3d 335, 348.)¿¿¿¿ Red-White argues that paragraph 7 should be stricken because it contains boilerplate agency allegations without factual support. (Motion to Strike, p. 6.) Red-White argues that the "tankless water heater allegations in paragraphs 9, 10, and 12 should be stricken because Plaintiffs only allege that Red-White makes valves, not water heaters. (Id. at p. 7.) Red-White seeks to strike allegations that apply to all Defendants because Red-White asserts that they do not apply to Red-White.

Fire Insurance has sued a number of Doe defendants, any of whom could be added to the complaint as the manufacturer of the water heater at issue or an alter ego of either of the named defendants or of a doe defendant. Fire Insurance is allowed to plead broadly, and Motions to Strike should not be used to line-edit a complaint. (See PH II, Inc. v. Superior Court (1995), 33 Cal.App.4th 1680, 1683 ["such use of the motion to strike should be cautious and sparing. We have no intention of creating a procedural 'line item veto' for the civil defendant."].)

Red-White's Motion to Strike is DENIED.

Conclusion

Red-White's Demurrer is OVERRULED. Red-White's Motion to Strike is DENIED. | Home -->