2013-00148105-CU-PO

Alterra America Insurance vs. Ca Dept of Transportation

Nature of Proceeding: Hearing on Demurrer

Filed By: Berestka Jr., Ronald F.

Demurrer of Defendant Richard Szetela (erroneously sued as D&D Pilot Car Services)
is SUSTAINED, with leave to amend.
Plaintiff Alterra American Insurance Co.’s Second Amended Complaint In Subrogation
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sets forth four causes of action: the 1 for dangerous condition, the 2 for Gov. Code
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§ 830.8; the 3 for breach of contract; and the 4 for negligence. Only the 3 and 4
causes of action are alleged against moving party. Szetela demurs only to the 3rd
cause of action.

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Demurrer to the 3 for breach of contract is sustained with leave to amend.
Defendant demurs on the grounds of uncertainty, failure to state facts sufficient to
constitute a cause of action, and on the grounds that the pleading fails to allege
whether the contract was oral or written. C.C.P., sec. 430.010(e), (f) and (g).

Defendant was hired by plaintiff’s insured, Duffy Holdings, Inc. (Duffy). Plaintiff
alleges that Duffy and Defendant entered a written contract attached as Exhibit 3 to
the SAC.

The SAC alleges that Defendant was hired to provide a pilot car to ensure that the load
carried by Duffy (a UE compression filter skid) would safely make it to its destination in
Desert Springs, California. The pilot car allegedly failed to notify Duffy of a low
clearance, resulting in the vehicle and the equipment hitting a low bridge overpass.

In this subrogation action, defendant is sued for both negligence and breach of
contract. Defendant challenges only the contract claim. Defendant admits that it was
hired by Duffy to provide a pilot car. However, defendant challenges the breach of
contract claim because the contract attached to the SAC, which plaintiff represents to
be the applicable written contract, does not contain all the terms of the parties’
agreement to haul the load to Desert Springs.

Plaintiff alleges that the written contract attached to the SAC as Exhibit 3 would apply
to all jobs done by Defendants D& D Pilot Car and Richard Szetela. Though that
contract references an Exhibit “A”, there was never an Exhibit “A” attached to that
contract. No Exhibit “A” ever existed to the contract. (SAC, para. 28)

The fact that moving party signed Exhibit 3 to the SAC does not satisfy the
requirement that all terms of the written contract be contained in the contract. The
plaintiff admits there never was an Exhibit A to the contract. Plaintiff’s SAC attaches
Exhibits 4 and 5, a work order and invoice for a prior pilot car agreement between
plaintiff and defendant and Exhibits 6 and 7, which plaintiff alleges relate to the
contract at issue here.

Demurring defendant asserts that as Exhibit 3 reflects on its face that its terms are
limited to the specific “work/route set forth in Exhibit A” attached to that document, and
the plaintiff admits that there is no Exhibit A, the scope of work of the contract is
undefined, and no one can ascertain what work is covered by Exhibit 3.

The Exhibits 4-5, and 6-7, reflecting work actually performed by Defendant for Duffy,
are not included in Exhibit 3 by its terms.

Exhibit 3 is not a “master contract” as asserted by plaintiff as the document itself
contains contrary terms. As Exhibit 3 is dated April 2, 2012, four and half months
before the piloting job at issue here, therefore Court cannot assume that the incident
which was the subject of this suit was contemplated to be included in that document.
Since the written contract attached to the SAC does not contain the terms of the
contract as alleged in the pleading, the written contract controls and the contradictory
allegations are ignored. Barnett v Fireman’s Fund Ins. Co (2001) 90 Cal.App.4th 500,
505.

As before, it cannot be ascertained from the SAC whether the contract was oral or
written. C.C.P., sec. 430.010 (g). Since the subrogated insurer stands in the shoes of
its insured, the insurer has no greater rights against the third party than did its insured
and is subject to all defenses the third party could have asserted against the insured.

Plaintiff may have leave to file a Third Amended Complaint on or before Monday, May
12, 2014. The responsive pleading shall be filed and served within 10 days thereafter
(15 days if service is by mail).

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