Case Name: Kenneth J. Cortez v. Santa Clara Valley Transportation Authority
Case No: 18CV326470

I. Background

Plaintiff Kenneth Cortez (“Plaintiff”) brings this action against Santa Clara Valley Transportation Authority (“VTA”) for damages to his business associated with a public transportation project.

According to the allegations of the operative complaint, Plaintiff previously owned K&M Automotive (“K&M”) located on Alum Rock Avenue in San Jose. (Complaint, ¶ 1.) In 2012, VTA approved a public transportation project which by design and necessity impacted access and ingress to K&M. (Id. at ¶ 5.) The project was scheduled to begin in early 2014, and end by late 2015. (Id. at ¶ 7.)

Prior to starting the project, VTA filed a complaint in eminent domain against various defendants, including Plaintiff, in case number 12CV237430. (Complaint, ¶ 8.) VTA sought condemnation of a small strip of land fronting Alum Rock Avenue, and a temporary construction easement for two years. (Id. at 9.) However, Plaintiff was not properly served with the complaint. (Id. at 11.) He did not challenge the eminent domain complaint because he believed construction would only take two years as represented, and he would be compensated for his financial losses associated with the project’s interference. (Id. at 12.)

In 2015, VTA terminated the project contractors due to performance issues, and retained a new contractor, causing a two-year delay. (Complaint, ¶ 14.) Later that year, Plaintiff applied for and received a one-time payment of $50,000, and VTA assured him his acceptance of the payment would not affect his ability to seek further compensation for additional damages. (Id. at 16.)

During the project construction, K&M’s revenue declined from $703,727 in 2011, to $438,126 in 2016. (Complaint, ¶¶ 13, 17.) In August of 2017, Plaintiff had to shutter K&M, whose revenues for the year were only $226,715. (Id. at 17.) VTA completed the project in July, 2017. (Ibid.)

Accordingly, Plaintiff brings the complaint seeking damages to compensate him for lost revenue and interest as well as cost of suit.

Presently before the Court is VTA’s demurrer and request for judicial notice in support.

II. Request for Judicial Notice

Judicial notice may be taken of any matter authorized or required by law. (Fremont Indemnity Co. v. Fremont General Corp. (2007) 148 Cal.App.4th 97, 113, citing Evidence Code §§ 451 & 452.) A matter is subject to judicial notice only if it is reasonably beyond dispute. (Ibid.) Furthermore, any matter judicially noticed must be relevant to a material issue. (People ex rel. Lockyer v. Shamrock Foods Co. (2000) 24 Cal.4th 415, 422, fn. 2.)

VTA requests judicial notice of six matters: (1) VTA’s Complaint in Eminent Domain in Santa Clara Superior Court Case No. 12CV237430 (Exhibit B); (2) the proof of service on Plaintiff in Case No. 12CV237430 (Exhibit C); (3) the entry of default against Plaintiff in Case No. 12CV237430 (Exhibit D); (4) a judgment entered in favor of VTA against Plaintiff in Case No. 12CV237430 (Exhibit E); (5) the “fact that Mr. Cortez never moved to set aside his default in the Eminent Domain action;” and (6) the “fact that Mr. Cortez never moved to set aside the judgment in the Eminent Domain Action.”

VTA makes its request pursuant to “Sections 452 and 453 of the Evidence Code” but does not specify the subdivision under which judicial notice is sought. The Court presumes that the request for judicial notice of Exhibits B, C, D, and E is made pursuant to Evidence Code section 452, subdivision (d) which allows a court to take judicial notice of “records of any courts of this state.” Pursuant to this section, a court can only take judicial notice of the truth of facts asserted in documents such as orders, findings of fact, conclusions of law, and judgments. (In re Tanya F. (1980) 111 Cal.App.3d 436, 440.) As VTA seeks judicial notice of these in its arguments regarding res judicata, they are relevant to its demurrer. Consequently, as court records, the request as to Exhibits B, C, D, and E is granted.

VTA’s also seeks judicial notice the fact that Plaintiff never moved to set aside default, and the fact he never moved to set aside the judgment. Since facts that are not reasonably subject to dispute and are capable of immediate determination are a proper subject for judicial notice, the Court also grants the request as to these matters. (See Ev. Code, § 452, subd. (h).)

III. Demurrer

VTA demurs to the complaint on the ground of failure to state sufficient facts pursuant to Code of Civil Procedure section 430.10, subdivision (e) . It also demurs on the ground of uncertainty pursuant to section 430.10, subdivision (f).

A. Legal Standard

A demurrer tests the legal sufficiency of a pleading, but not the truth of a plaintiff’s allegations or the accuracy with which he or she describes the defendant’s conduct. (Align Technology, Inc. v. Tran (2009) 179 Cal.App.4th 949, 958; citing Committee on Children’s Television Inc. v. General Foods Corp. (1983) 35 Cal.3d 197, 213.) The demurrer is treated as admitting all material facts, properly pleaded, but not contentions, deductions or conclusions of law. (Ibid.)

B. Failure to State Sufficient Facts

1. Failure to State A Cause of Action

VTA argues that because no cause of action is alleged, the Complaint fails to state sufficient facts to constitute a cause of action.

In order to plead a cause of action, the complaint must contain a “statement of the facts constituting the cause of action, in ordinary and concise language.” (§ 425.10, subd. (a); Perkins v. Superior Court (1981) 117 Cal.App.3d 1, 6.)

While Plaintiff has set forth a statement of facts and alleged economic harm to K&M, there is no corresponding cause of action named or alleged against which the sufficiency of the facts can be measured. Therefore, the demurrer must be sustained.

Consequently, the demurrer to the Complaint on the ground of failure to state sufficient facts is SUSTAINED, with 10 days leave to amend after service of the signed order.

2. Res Judicata

VTA also demurs on the ground of failure to allege sufficient facts because it appears barred by res judicata due to the default judgment entered against Plaintiff in the Complaint in Eminent Domain.

Res judicata is a defense which describes the preclusive effect of a prior final judgment on the merits. (Planning & Conservation League v. Castaic Lake Water Agency (2009) 180 Cal.App.4th 210, 226.) Where facts on the face of the pleading show that the action is barred by res judicata, the court may sustain a general demurrer for failure to state sufficient facts. (See Id. at 225.)

While VTA seeks judicial notice of matters in support of this argument, its fails to adequately address the requisite elements of res judicata and their application to the facts. (See, e.g. Brinton v. Bakers Pension Services, Inc. (1999) 76 Cal.App.4th 550, 556 [stating the elements of issue or claim preclusion as: (1) a claim or issue raised in the present action is identical to a claim or issue litigated in a prior proceeding; (2) the prior proceeding resulted in a final judgment on the merits; and (3) the party against whom the doctrine is being asserted was a party or in privity with a party to the prior proceeding].)

The only element addressed is that of “final judgment” which VTA argues was entered, and the Court takes judicial notice of this. However, without addressing the other elements, it goes on to merely argue that the prior Complaint in Eminent Domain was the “vehicle through which” Plaintiff could “recover any alleged business losses.” (Def. Mem. of Pts. & Auth., p. 6 l 18-20.)

Furthermore, in considering the face of the complaint and matters judicially noticed, it is unclear that the claim here is “identical” and therefore precluded by the judgment in the eminent domain case. The construction easement was scheduled to begin in 2013 and end in 2015. (Complaint, ¶ 7; RJN Complaint in Eminent Domain, Exhibit B.) Even assuming he received notice of the complaint, Plaintiff was on notice for this time period only. He also alleges he believed VTA’s representations that the construction would only take two years, but there were unexpected delays. (Id. at 12.) The easement effectively continued until August 2017 to the ongoing detriment of his business. (Id. at ¶¶ 13, 17.) So while it is possible that res judicata bars claims from 2013 to 2015, the facts as alleged and matters judicially noticed do not necessarily show that claims outside that period are barred. VTA also offers no substantive argument in support, therefore, the demurrer on the basis of res judicata cannot be sustained.

Consequently, the demurrer to the Complaint on the ground of failure to state sufficient facts because the claim is barred by res judicata is OVERRULED.

3. Uncertainty

VTA also argues that the Complaint fails as it is uncertain.

A demurrer for uncertainty will lie where a pleading is uncertain, ambiguous or unintelligible. (§ 430.10, subd. (f).) “Demurrers based on uncertainty are disfavored, and are granted only if the pleading is so incomprehensible that a defendant cannot reasonably respond.” (Lickiss v. Financial Industry Regulatory Authority (2012) 208 Cal.App.4th 1125, 1135.) However, “where the complaint contains substantive factual allegations sufficiently apprising defendant of the issues it is being asked to meet, a demurrer for uncertainty should be overruled or the plaintiff should be given leave to amend. (Williams v. Beechnut Nutrition Corp. (1986) 185 Cal.App.3d 135, 139, fn. 2.) “It is not what a paper is named, but what it is that fixes its character.” (Ibid.)

Though the complaint fails to allege any causes of action, it is not fundamentally unintelligible or ambiguous such that it could not be cured by leave to amend. It does contain substantive factual allegations to give VTA a sense of the issues it is being asked to meet. The Court further observes that VTA was able to recognize that the complaint offers facts similar to those in the Complaint in Eminent Domain, so the argument of ambiguity or unintelligibility necessarily must fail.

Consequently, the demurrer on the ground of uncertainty is OVERRULED.

The Court will prepare the order.