Turiello v. Piping Systems Engineering Inc.

The parties satisfied the meet-and-confer requirement of Code of Civil Procedure section 430.41 through a telephonic conference on December 2, 2025. (Declaration of Katharine McCallum (“McCallum Decl.”), ¶¶ 2–4.)

II. Request for Judicial Notice

PSE asks the Court to take judicial notice of the FAC filed by plaintiffs on August 26, 2025. (RJN, Ex. A.) The existence and filing of the FAC, and the fact of the allegations it contains, are proper subjects of judicial notice as records of this court. (Evid. Code, § 452, subd. (d) [permitting judicial notice of court records]; Stepan v. Garcia (1974) 43 Cal.App.3d 497, 500 [court may take judicial notice of its own file].) The request is GRANTED to that extent. Nevertheless, the Court does not take judicial notice of the truth of any statements or allegations within the FAC. (People v.

Woodell (1998) 17 Cal.4th 448, 455 [a court “cannot take judicial notice of the truth of hearsay statements in decisions or court files, including pleadings, affidavits, testimony, or statements of fact”].) The FAC is plaintiffs’ pleading, not HII’s; its characterization of PSE’s role is not a judicial admission by HII and is not an incontrovertible fact. The Court therefore does not rely on the FAC to disprove HII’s allegations. Accordingly, PSE’s request for judicial notice of the FAC is GRANTED, subject to limitations set forth above.

III.

Analysis

PSE demurs on the grounds of failure to state facts sufficient to constitute a cause of action (Code Civ. Proc., § 430.10, subd. (e)), to the Third (breach of implied warranty of merchantability), Sixth (strict products liability – design defect), and Seventh (strict products liability – failure to warn) causes of action of HI’s cross-complaint. A demurrer tests the legal sufficiency of the challenged pleading. (John’s Grill, Inc. v. The Hartford Financial Services Group, Inc. (2024) 16 Cal.5th 1003, 1008.) The court treats the demurrer as admitting all material facts properly pleaded, and reads the pleading as a whole, giving the allegations a reasonable interpretation and drawing inferences in the pleader’s favor. (Ibid.)

A. Question of Law

HII’s central argument is that PSE’s demurrer impermissibly rests on a single “unalleged fact” (that PSE’s role was limited to engineering services) and that whether a defendant’s role is predominantly service-oriented is a factual inquiry unsuited to demurrer. (Opposition, pp. 2:3–4, 3:9–27, 4:27–5:15.) HII points to Hernandezcueva v. E.F. Brady Co., Inc. (2015) 243 Cal.App.4th 249, 262, in arguing that the Court must engage in “fact-sensitive inquiry” to determine whether PSE’s role was primarily service-oriented. (Opposition, p. 6:8– 10.)

In reply, PSE contends that the law is well-settled, and that resolution of its demurrer does not require a fact-intensive investigation. (Reply, pp. 2:23–3:24.) The Court agrees with HII that whether a mixed transaction is predominantly one for goods or for services can, on a developed evidentiary record, present questions of fact. Nevertheless, that principle cannot save a pleading whose own specific allegations describe only professional services. The question presented by this demurrer is a legal one: whether the facts alleged by HII in its cross-complaint describe a transaction to which the implied warranty of merchantability and strict products liability attach.

For the reasons stated below, the Court finds that they do not as currently alleged.

B. Third Cause of Action: Breach of Implied Warranty of Merchantability

The implied warranty of merchantability arises from the sale of goods (Com. Code, § 2314), and the warranty/strict-liability doctrines do not apply “where the primary objective of a transaction is to obtain services.” (Allied Properties v. John A. Blume & Associates (1972) 25 Cal.App.3d 848, 855.) California has long distinguished the sale of goods from the rendition of professional services, holding that “those who sell their services for the guidance of others ... are not liable in the absence of negligence or intentional misconduct.” (Gagne v.

Bertran (1954) 43 Cal.2d 481, 487.) An engineering services agreement falls on the services side of that line. In opposition, HII points to a line of cases dealing with labor and materials: Aced v. Hobbs-Sesack Plumbing Co. (1961) 55 Cal.2d 573 (plumbing subcontractor furnishing a radiant heating system) and Pollard v. Saxe & Yolles Dev. Co. (1974) 12 Cal.3d 374 (buildervendor of new construction). (Opposition, p. 7:2–16.) In reply, PSE argues those authorities are inapplicable to the facts pleaded. (Reply, pp. 3:25–4:18.)

Here, the Court agrees with PSE. Aced concerned a tradesperson who furnished both labor and a physical installed system, and Pollard concerned builders and sellers who transferred a completed physical structure. Even crediting HII’s allegation that PSE provided “goods and services,” a transaction that mixes the two is tested by its predominant purpose. (Cross-Complaint, ¶ 23 [“Cross- Defendants PSE and ROES 101 through 200, inclusive, were in the business of providing goods and services for the design, engineering, and development of FARS, including, providing storage pressure systems, making high-pressure breathing air calculations, determining number of storage tanks, and other design and engineering parameter”]; Allied Properties, supra, 25 Cal.App.3d at p. 855]warranty/strict-liability doctrines do not apply “where the primary objective of a transaction is to obtain services”].)

Here, the Cross-Complaint describes PSE’s involvement as making breathing-air calculations, sizing tanks and pumps, selecting piping, and setting “design and engineering parameters.” (Cross-Complaint, ¶¶ 23, 40.) Thus, the Cross-Complaint’s own allegations, as currently pleaded, establish that the predominant purpose was the provision of professional services, with any tangible deliverables (drawings, specifications, calculations) being the instruments of that service rather than goods sold. As presently pleaded, the Third cause of action does not allege a sale of goods to which an implied warranty of merchantability attaches.

Accordingly, the demurrer to Third cause of action is SUSTAINED.

C. Sixth and Seventh Causes of Action: Strict Products Liability

Strict products liability extends to those who participate in placing a defective product into the stream of commerce, i.e., “manufacturers, distributors, and retailers.” (O’Neil v. Crane Co. (2012) 53 Cal.4th 335, 348–349, 362.) It does not reach those whose role is the provision of professional services. In Stuart v. Crestview Mutual Water Co. (1973) 34 Cal.App.3d 802, 811, the court found “no basis for holding the engineers on a strict liability theory” because they “rendered a professional service” and were “in no sense analogous to manufacturers who place products on the market.”

Likewise, Romine v. Johnson Controls, Inc. (2014) 224 Cal.App.4th 990, 1008, held that “engineers who do not participate in bringing a product to market and simply design a product are not subject to strict products liability,” and may be liable, if at all, only for negligence. HII’s strict-liability theories depend on the conclusory allegation that PSE is a “manufacturer, mass producer, distributor, and/or seller” that “placed [its] products within the stream of commerce.” (Cross-Complaint, ¶ 48).

For the reasons stated above, that allegation is not entitled to a presumption of truth and is controlled by the Cross-Complaint’s specific allegations that PSE “designed and engineered” the FARS storage pressure systems and supplied calculations, specifications, and design parameters. (Id. at ¶¶ 40, 42–44, 51). Those allegations specifically describe a design-only role that Stuart and Romine hold to be outside strict products liability. The further allegation that HII “relied upon the calculations, systems, specifications, and literature” of PSE (id. at ¶¶ 42–44, 51), reinforces this conclusion because reliance on professional engineering work product is not the marketing or distribution of a product.

HII’s reliance on Hernandezcueva is misplaced at the pleading stage. There, the Court of Appeal reviewed the evidentiary record – after a trial – to determine whether a subcontractor’s product sales were merely incidental to its services. (Hernandezcueva, supra, 243 Cal.App.4th at pp. 256, 262–263.) The Hernandezcueva court confirmed the rule that a defendant whose role is “primarily service-oriented” is not subject to strict liability. As discussed above, HII’s own specific allegations bring PSE within this well-settled rule.

Accordingly, the demurrer to Sixth and Seventh causes of action is SUSTAINED.

D. Leave to Amend

PSE asks the court to sustain its demurrer without leave to amend, arguing that no amendment can transform an engineer into a product seller. (CITE) The Court declines to do so at this stage. Leave to amend should be granted where there is a reasonable possibility that the defect can be cured. (County of Santa Clara v. Superior Court (2023) 14 Cal.5th 1034, 1041; Aubry v. Tri-City Hospital Dist. (1992) 2 Cal.4th 962, 967.)

Accordingly, PSE’s request that the demurrer be sustained without leave to amend is DENIED. The demurrer to the Third, Sixth, and Seventh causes of action is SUSTAINED with 20 days’ leave to amend.

V.

Conclusion

For the reasons stated, the demurrer to the Third (breach of the implied warranty of merchantability), Sixth (strict products liability – design defect), and Seventh (strict products liability – failure to warn) causes of action on the ground of state facts sufficient to constitute a cause of action (Code Civ. Proc., § 430.10, subd. (e)) is SUSTAINED with 20 days’ leave to amend. PSE’s request that the demurrer be sustained without leave to amend is DENIED. PSE shall prepare the order in accordance with California Rules of Court, rule 3.1312. - oo0oo -

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