Case Number: BC617507 Hearing Date: March 01, 2018 Dept: 47

Lucas Brothers Construction, Inc. v. Takashi Nakamura, et al.

DEMURRER TO SECOND AMENDED COMPLAINT

MOVING PARTY: Defendant Timothy Kazuya Sakamoto

RESPONDING PARTY(S): Plaintiff Lucas Brothers Construction, Inc.

STATEMENT OF MATERIAL FACTS AND/OR PROCEEDINGS:

Plaintiff seeks to recover for construction performed on Defendants’ property and to foreclose on a mechanic’s lien.

Defendants filed a cross-complaint alleging that Plaintiff’s construction activities were deficient and Defendants refused to remedy these defects.

Defendant Timothy Kazuya Sakamoto demurs to the second amended complaint.

TENTATIVE RULING:

Defendant Timothy Kazuya Sakamoto’s demurrer to the second amended complaint is SUSTAINED without leave to amend as to the third, fifth, sixth and seventh causes of action. Plaintiffs’ request for leave to amend to add a cause of action for fraud (concealment) is DENIED.

In that no causes of action remain pending against Defendant Sakamoto, he is hereby ordered dismissed with prejudice. Defendant is to prepare and submit an order of dismissal.

DISCUSSION:

Demurrer

Request For Judicial Notice

Defendant requests that the Court take judicial notice of the following (1) Second Amended Complaint; (2) Certificate of Merit (Exh. 11 to 2AC); (3) Complaint. Requests Nos. 1-3 are GRANTED per Evid. Code § 452(d)(court records).

Meet and Confer

The Declaration of Anthony D. Platt reflects that the meet and confer requirement set forth in CCP § 430.41 was satisfied.

Analysis:

1. Entire Second Amended Complaint

Defendant architect Sakamoto[1] demurs to the entire 2AC on the ground that the Certificate of Merit filed with in the 2AC is untimely and does not relate back.

CCP § 411.35 provides:

(a) In every action, . . . , arising out of the professional negligence of a person holding a valid architect’s certificate issued pursuant to Chapter 3 (commencing with Section 5500) of Division 3 of the Business and Professions Code, . . . on or before the date of service of the complaint or cross-complaint on any defendant or cross-defendant, the attorney for the plaintiff or cross-complainant shall file and serve the certificate specified by subdivision (b).

(b) A certificate shall be executed by the attorney for the plaintiff or cross-complainant declaring one of the following:

(1) That the attorney has reviewed the facts of the case, that the attorney has consulted with and received an opinion from at least one architect, professional engineer, or land surveyor who is licensed to practice and practices in this state or any other state, or who teaches at an accredited college or university and is licensed to practice in this state or any other state, in the same discipline as the defendant or cross-defendant and who the attorney reasonably believes is knowledgeable in the relevant issues involved in the particular action, and that the attorney has concluded on the basis of this review and consultation that there is reasonable and meritorious cause for the filing of this action. The person consulted may not be a party to the litigation. The person consulted shall render his or her opinion that the named defendant or cross-defendant was negligent or was not negligent in the performance of the applicable professional services.

(2) That the attorney was unable to obtain the consultation required by paragraph (1) because a statute of limitations would impair the action and that the certificate required by paragraph (1) could not be obtained before the impairment of the action. If a certificate is executed pursuant to this paragraph, the certificate required by paragraph (1) shall be filed within 60 days after filing the complaint.

(3) That the attorney was unable to obtain the consultation required by paragraph (1) because the attorney had made three separate good faith attempts with three separate architects, professional engineers, or land surveyors to obtain this consultation and none of those contacted would agree to the consultation.

(c) Where a certificate is required pursuant to this section, only one certificate shall be filed, notwithstanding that multiple defendants have been named in the complaint or may be named at a later time.

(d) Where the attorney intends to rely solely on the doctrine of “res ipsa loquitur,” as defined in Section 646 of the Evidence Code, or exclusively on a failure to inform of the consequences of a procedure, or both, this section shall be inapplicable. The attorney shall certify upon filing of the complaint that the attorney is solely relying on the doctrines of “res ipsa loquitur” or failure to inform of the consequences of a procedure or both, and for that reason is not filing a certificate required by this section.

(e) For purposes of this section, and subject to Section 912 of the Evidence Code, an attorney who submits a certificate as required by paragraph (1) or (2) of subdivision (b) has a privilege to refuse to disclose the identity of the architect, professional engineer, or land surveyor consulted and the contents of the consultation. The privilege shall also be held by the architect, professional engineer, or land surveyor so consulted. If, however, the attorney makes a claim under paragraph (3) of subdivision (b) that he or she was unable to obtain the required consultation with the architect, professional engineer, or land surveyor, the court may require the attorney to divulge the names of architects, professional engineers, or land surveyors refusing the consultation.

(f) A violation of this section may constitute unprofessional conduct and be grounds for discipline against the attorney, except that the failure to file the certificate required by paragraph (1) of subdivision (b), within 60 days after filing the complaint and certificate provided for by paragraph (2) of subdivision (b), shall not be grounds for discipline against the attorney.

(g) The failure to file a certificate in accordance with this section shall be grounds for a demurrer pursuant to Section 430.10 or a motion to strike pursuant to Section 435.

(h) Upon the favorable conclusion of the litigation with respect to any party for whom a certificate of merit was filed or for whom a certificate of merit should have been filed pursuant to this section, the trial court may, upon the motion of a party or upon the court’s own motion, verify compliance with this section, by requiring the attorney for the plaintiff or cross-complainant who was required by subdivision (b) to execute the certificate to reveal the name, address, and telephone number of the person or persons consulted with pursuant to subdivision (b) that were relied upon by the attorney in preparation of the certificate of merit. The name, address, and telephone number shall be disclosed to the trial judge in an in-camera proceeding at which the moving party shall not be present. If the trial judge finds there has been a failure to comply with this section, the court may order a party, a party’s attorney, or both, to pay any reasonable expenses, including attorney’s fees, incurred by another party as a result of the failure to comply with this section.

(i) For purposes of this section, “action” includes a complaint or cross-complaint for equitable indemnity arising out of the rendition of professional services whether or not the complaint or cross-complaint specifically asserts or utilizes the terms “professional negligence” or “negligence.”

(Bold emphasis and underlining added.)

The filing of a certificate of merit does not relate back if it was filed more than 60 days after the original complaint was filed, even assuming an excuse declaration was timely filed. Curtis Engineering Corp. v. Superior Court (2017) 16 Cal.App.5th 542, 544-45.

Here, the original Complaint was filed on April 19, 2016 without a CCP § 411.35 certificate of merit having been filed and served; Defendant Sakamoto was not named as a defendant in the original Complaint. The first amended complaint was filed on October 10, 2017, whereby Defendant Sakamoto was named as a defendant. A CCP § 411.35 certificate of merit was not filed and served before the 1AC was filed and served. It was not until the 2AC was filed on November 17, 2017 that a certificate of merit was filed as Exhibit 11 to the 2AC. However, on or before the date of service of any complaint, Plaintiff’s counsel never filed the excuse certificate set forth in CCP § 411.35(b)(2) stating that counsel was unable to obtain the consultation required because a certificate could no be obtained before the expiration of the statute of limitations. As such, the 60 day extension to file a certificate of merit after the filing of the complaint provided in CCP § 411.35(b)(2) does not apply. Because the first time Defendant Sakamoto was named as a defendant in this action was by virtue of the 1AC filed on October 10, 2017—and Plaintiff did not file and serve the certificate of merit on or before October 10, 2017, Plaintiff failed to comply with CCP § 411.35(a). Moreover, as Curtis Engineering holds, the filing of the certificate of merit does not relate back to the filing of the original pleading. Nor does the certificate of merit filed on November 17, 2017 as Exhibit 11 to the 2AC indicate per CCP § 411.35(d) that the attorney intends to rely solely on the doctrine of res ipsa loquitur or on a failure to inform of the consequences of a procedure, or both, so as to render CCP § 411.35 inapplicable.

The statute of limitations for the negligence-based causes of action against Defendant Sakamoto (fifth, sixth and seventh) is the two-year statute of limitations in CCP § 339(1).

The Code of Civil Procedure imposes a two-year statute of limitations on actions for a claim of professional negligence that begins to run at the time that the injury is discovered or should reasonably be discovered. (Code Civ. Proc., § 339, subd. (1).) “The two-year statute of limitations under section 339, subdivision (1) commences ‘when (1) the aggrieved party discovers the negligent conduct causing the loss or damage and (2) the aggrieved party has suffered actual injury as a result of the negligent conduct.’ (Apple Valley Unified School Dist. v. Vavrinek, Trine, Day & Co. (2002) 98 Cal.App.4th 934, 942 [120 Cal. Rptr. 2d 629] (Apple Valley), citing [International Engine Parts, Inc. v. Feddersen & Co. (1995)] 9 Cal.4th [606,] 613–614 [38 Cal. Rptr. 2d 150, 888 P.2d 1279].) The first component involves the discovery rule, under which ‘the statute of limitations begins to run when the plaintiff suspects or should suspect that her [or his] injury was caused by wrongdoing, that someone has done something wrong to her [or him]. … [Citation.] A plaintiff need not be aware of specific “facts” necessary to establish the claim … . So long as a suspicion exists, it is clear that the plaintiff must go find the facts; she [or he] cannot wait for the facts to find her [or him].’ (Jolly v. Eli Lilly & Co. [(1988)] 44 Cal.3d [1103,] 1110–1111 [245 Cal. Rptr. 658, 751 P.2d 923], fn. omitted.)” (Sahadi v. Scheaffer, supra, 155 Cal.App.4th at p. 715.)

The statute of limitations for negligence claims incorporates the discovery rule. Thus, the first amended complaint’s negligence claim was timely to the extent that the Henleys reasonably discovered the negligence by Lyon & Associates no more than two years prior to the filing of their negligence claim.

William L. Lyon & Associates, Inc. v. Superior Court (2012) 204 Cal.App.4th 1294, 1313 (bold emphasis added).

A cause of action for professional negligence is generally governed by the two-year statute of limitations under Code of Civil Procedure section 339, subdivision 1 for an “action upon a contract, obligation or liability not founded upon an instrument of writing.” (See Slavin v. Trout (1993) 18 Cal.App.4th 1536, 1539 [23 Cal. Rptr. 2d 219]; Rylaarsdam, supra, ¶ 4:1520.) In trial court proceedings, plaintiff argued that the four-year residual statute of limitations under Code of Civil Procedure section 343 for “[a]n action for relief not hereinbefore provided for” in the code applied. This is incorrect. The shorter two-year statute of limitations of Code of Civil Procedure section 339, subdivision 1 has been consistently applied to a range of professional negligence actions from those against accountants to those against real estate appraisers. (See Rylaarsdam, supra, ¶¶ 4:1525 to 4:1529 [collecting cases].) It is that statute of limitations that applies here, to the alleged professional negligence of a real estate agent and broker. Plaintiff’s professional negligence cause of action was initiated in July 2008, more than two years (indeed, more than three years) after the cause of action accrued in November 2004. The negligence cause of action is time-barred.

Thomson v. Canyon (2011) 198 Cal.App.4th 594, 606.

Here, the 2AC alleges that Plaintiffs that on September 29, 2015 a Stop Work Order was issued by the Rolling Hills Community Association of Rancho Palos Verdes (“RHCA”) on September 29, 2015 and by Los Angeles County on October 6, 2015, when the property was red-tagged and the fence was locked, halting further work on the project. 2AC, ¶¶ 24, 47. Thus, as of October 5, 2015, Plaintiffs knew or should have reasonably discovered Defendant Sakamoto’s alleged negligence in his role as architect. The two-year statute of limitations expired on October 6, 2017. Because the CCP § 411.35 certificate of merit was not filed and served by October 6, 2017—and does not related back to the filing of the original complaint or the 1AC—Plaintiffs’ negligence-based causes of action against demurring Defendant architect Sakamoto are barred by the statute of limitations. In this regard, dismissal is the appropriate remedy:

Sutherland did not file an excuse certificate under section 411.35(b)(2) stating that he could not obtain the required consultation before the statute of limitations impaired his action. Even if Sutherland had filed an excuse certificate under section 411.35(b)(2), the subsequent certificate of merit under section 411.35(b)(1) was required to have been filed no later than 60 days after filing the complaint. In other words, assuming that an excuse certificate was filed under subdivision (b)(2) on the very last day in which the statute of limitations expired, a plaintiff has two years and an additional 60 days to file a certificate of merit.

Here, more than 60 days after filing his original complaint Sutherland filed an amended complaint that included a certificate of merit. Application of the relation-back doctrine in this situation would render meaningless the statutory requirement that the certificate of merit be filed “within 60 days after filing the complaint.” (§ 411.35(b)(2).) Moreover, applying the relation-back doctrine in this situation would mean a plaintiff has virtually an unlimited amount of time to obtain the necessary consultation as long as the plaintiff files the certificate of merit with an amended complaint that relates back to the original complaint. This cannot be what the Legislature intended.

Citing Price v. Dames & Moore (2001) 92 Cal.App.4th 355 [112 Cal. Rptr. 2d 65], Sutherland asserts that his failure to file the required certificate of merit with the original complaint can be cured by filing the required certificate of merit with an amended complaint. In Price, however, the plaintiff filed a certificate of merit within the statute of limitations period. (Id. at pp. 358, 361–362.) Although the certificate was defective, because the plaintiff signed it rather than an attorney as required by section 411.35(a), the appellate court held that the trial court should have allowed leave to amend because the defect was curable. (Price, at pp. 360–361.) The Price court did not hold that a failure to timely file a certificate of merit within the statutory deadlines may be cured by leave to amend.

. . . [*550] . . .

The fact pattern before us is similar to that in Doyle. Sutherland never filed an excuse certificate regarding the reason for his late filed certificate of merit and he failed to file a certificate of merit within 60 days of filing the original complaint. The proper ruling in this situation is to enter a judgment of dismissal because the required certificate of merit was not filed within the statute of limitations period, or within 60 days after filing the original complaint.

. . .

Finally, although the plain language of section 411.35 supports dismissal of the complaint, we find support for this result in the legislative history of section 411.35. When first introduced, the Legislative Counsel’s Digest stated that “[t]he bill would provide that if consultation with an architect, professional engineer, or land surveyor could not be obtained because of a statute of limitations problem, the attorney may file such certificate stating such problem and would be required to file such certificate involving such a consultation within 60 days after filing or the complaint shall be dismissed.” (Legis. Counsel’s Dig., Assem. Bill No. 357 (1979–1980 Reg. Sess.) 4 Stats. 1979, Summary Dig., p. 295This sentence is repeated in the Legislative Counsel’s Digest accompanying the chaptered bill enacting section 411.35. (Legis. Counsel’s Dig., Assem. Bill No. 357, 4 Stats. 1979, Summary Dig., ch. 973, p. 295.) This statement supports our conclusion that the Legislature intended to give plaintiffs a limited period of time to obtain the necessary consultation and the failure to obtain the consultation within that time period would result in dismissal of the complaint.

Sutherland failed to file the required certificate of merit within the statute of limitations period or within the 60-day period set forth in section 411.35(b)(2). Because there is no possibility of curing this defect, the demurrer must be sustained without leave to amend.

Curtis Engineering Corp. v. Superior Court (2017) 16 Cal.App.5th 542, 548-51 (bold emphasis added).

Accordingly, the demurrer to the fifth, sixth and seventh causes of action against Defendant Sakamoto is SUSTAINED without leave to amend.

2. Third Cause of Action (Breach of Implied Warranty of Correctness of Plans)

As to the remaining cause of action for breach of implied warranty of correctness of plans, demurring Defendant Sakamoto is alleged to be the architect involved in the subject project commissioned by the Nakamura Defendants. See 2AC, ¶¶ 1, 12.

However, Plaintiff has not pled that there is privity of contract between Plaintiff and demurring Defendant Sakamoto, which is generally required for an implied warranty, unless an exception applies:

An implied warranty arises in a contract and therefore generally cannot arise without a contract between the plaintiff and the defendant. “The general rule is that privity of contract is required in an action for breach of either express or implied warranty and that there is no privity between the original seller and a subsequent purchaser who is in no way a party to the original sale. [Citations.]” (Burr v. Sherwin Williams Co. (1954) 42 Cal.2d 682, 695 [268 P.2d 1041] [noting exceptions that are inapplicable here].) “‘It is settled law in California that privity between the parties is a necessary element to recovery on a breach of an implied warranty of fitness for the buyer’s use, with exceptions not applicable here. [Citation.]’ [Citation.]” (Huang v. Garner (1984) 157 Cal.App.3d 404, 419 [203 Cal. Rptr. 800], disapproved on another ground in Aas supra, 24 Cal.4th at p. 649.)

Burch v. Superior Court (2014) 223 Cal.App.4th 1411, 1423.

“There are, of course, multiple court-created exceptions to the general rule of privity. [Citation.] For example, exceptions to the privity requirement have been found in cases involving foodstuffs, drugs and pesticides, [and] substances marketed with the knowledge the purchaser may not be the ultimate consumer of the product [citations]. The strict requirement of privity has also been excused when an inherently dangerous instrumentality causes harm to a buyer’s employee. [Citations.] Whether these cases are viewed as expanding the doctrine of privity or relieving a plaintiff of the obligation to demonstrate privity in favor of the emerging tort doctrine of strict liability [citations], the result is the same.” (Jones v. ConocoPhillips, supra, 198 Cal.App.4th at p. 1201.)

Chavez v. Glock, Inc. (2012) 207 Cal.App.4th 1283, 1315.

Plaintiff has not alleged facts which give rise to an exception to the privity requirement.

More fundamentally, however, it appears that a claim for breach of the implied warranty of correctness of plans is only recognized in the public contract context:

Part of Thompson’s breach of contract claim was that City had breached the implied warranty of correctness by providing plans and specifications that did not include dimensions for certain structural steel members. This alleged omission caused the metal fabricator to request clarification and, according to Thompson, City’s failure to promptly provide the clarification caused a four-month delay in completing the project.

Courts have recognized a cause of action in contract against a public entity based upon the theory that “the furnishing of misleading plans and specifications by the public body constitutes a breach of an implied warranty of their correctness.” (Souza & McCue Constr. Co. v. Superior Court (1962) 57 Cal.2d 508, 510–511 [20 Cal. Rptr. 634, 370 P.2d 338].) “A contractor of public works who, acting reasonably, is misled by incorrect plans and specifications issued by the public authorities as the basis for bids and who, as a result, submits a bid which is lower than he would have otherwise made may recover in a contract action for extra work or expenses necessitated by the conditions being other than as represented.” (Id. at p. 510.) In order to recover on such an action, the contractor must prove that the agency affirmatively misrepresented, or actively concealed, material facts which rendered the bid documents misleading, and that the contractor reasonably relied on such misrepresentations in preparing its bid. (Jasper Construction, Inc. v. Foothill Junior College Dist. (1979) 91 Cal. App. 3d 1, 10 [153 Cal. Rptr. 767].) Affirmative misrepresentation or concealment is required to avoid burdening public entities “with liability where the contractor underbids due to lack of diligence in examining specifications and plans which are themselves accurate.” (Ibid.)

Thompson Pacific Construction, Inc. v. City of Sunnyvale (2007) 155 Cal.App.4th 525, 551 (bold emphasis added).

Accordingly, the demurrer to the third cause of action is SUSTAINED without leave to amend.

Plaintiffs’ request for leave to amend to add an additional cause of action for fraud (concealment) is DENIED.

In that no causes of action remain against Defendant Timothy Kazuya Sakamoto, he is hereby ordered dismissed from this action with prejudice. Defendant is to prepare and submit an order of dismissal.

Moving Party to give notice, unless waived.

IT IS SO ORDERED.

Dated: March 1, 2018 ___________________________________

Randolph M. Hammock

Judge of the Superior Court