2014-00169551-CU-CD

Borrego Solar Systems, Inc. vs. Campbell Certified, Inc.

Nature of Proceeding: Motion for Judgment on the Pleadings

Filed By: Buscemi, Michael R.

Defendant Mark Campbell’s Motion for Judgment on the Pleadings is granted, with leave to amend.

Plaintiffs allege that defendants failed to properly design and construct seven (7) solar carport projects in California. Plaintiffs sued Campbell Certified Inc. as well as moving party Mark Campbell as an owner and employee of the steel subcontractor, Campbell Certified, Inc. (hereafter, “Campbell Certified”). The FAC alleges the following causes of action against Mark Campbell: Negligence, Equitable Indemnity, Declaratory Relief, and Subrogation. (See FAC, ROA No. 193) Plaintiffs’ allege Mark Campbell is responsible for and/or committed the breaches of duty by Campbell Certified. The FAC alleges that Mr. Campbell acted as an officer and employee of Campbell Certified at all times. The FAC alleges that “Defendant Mark Campbell is responsible for and/or committed the breaches of duty by Campbell Certified described above.” (FAC ¶ 68) These allegations alone are insufficient to allege individual liability for the negligent acts of the corporation because they do not allege independent wrongful conduct of Mark Campbell apart from his position as an officer and owner of the company. Directors and/or officers of a corporation do not incur personal liability for torts of the corporation merely by reason of their official position, unless they personally participate in the wrong. United States Liability Ins. Co. v. Haidinger-Hayes, Inc. (1970) 1 Cal.3d 586, 594-595. (emphasis added)

However, if the allegations are that Mark Campbell did not merely make a corporate policy decision which was carried out by someone else but rather personally participated in and directed the negligent construction of the project, he may be held personally liable. Michaelis v. Benavides (1988) 61 Cal.App.4th 681, 685-87. In that case, the individual associated with the entity contractor personally bid for appellants’ job and he personally negotiated with appellants for completion of the job. He personally made the decisions to use cheaper materials and construction methods which allegedly resulted in the patio’s and driveway’s

structural inadequacies […] [T]he distinguishing features in Haidinger-Hayes which absolved the defendant corporate officer of personal liability-the breach of duty to the corporation alone, the non-tortious personal conduct, and the absence of physical damage-do not exist here.” Id. Therefore , if the allegations show the corporate officer’s personal tortious conduct, which conduct breached a duty of care to a third party and caused the third party to suffer physical damage to his property, individual liability exists .See also Frances T. v. Village Green Association Owners (1986) 42 Cal.3d 490, 505.

Defendants contend that liability against Mark Campbell cannot be established absent alter ego allegations. However, as explained above, alter ego liability is not required to allege liability against moving party individually and is therefore is not dispositive to whether a cause of action is stated in the FAC.

The Court finds that the current allegations of the FAC as to Mark Campbell, individually, are insufficient. He is merely lumped together not only with the allegations against the corporation but with allegations against other contractors.

A defendant may bring a motion for judgment on the pleadings on the same grounds as a general demurrer, but the motion may be made after the time for filing the demurrer has expired. (Code of Civ. Proc. § 438.) Like a general demurrer, a “motion for judgment on the pleadings” tests the sufficiency of the complaint to state a cause of action. (Miller v. Campbell, Warburton, Fitzsimmons, Smith, Mendel & Pastore (2008) 162 Cal.App.4th 1331; See also International Assn. of Firefighters Local Union 230 v. City of San Jose (2011) 195 Cal.App.4th 1179, rehearing denied, review denied.) A defendant may thus bring a motion for judgment on the pleadings if the complaint does

not state facts sufficient to constitute a cause of action against that defendant. (Code of Civ. Proc. § 438(c)(B)(ii).) “A motion for judgment on the pleadings may be made at any time either prior to the trial or at the trial itself” (Stoops v. Abbassi (2002) 100 Cal.App.4th 644, 650.)

In opposition, plaintiff contends defendant has never challenged the pleadings over the last three years and is doing so at this late date merely to secure a continuance of the trial. However, the trial date has already been continued from March 19, 2018 to August 20, 2018. Therefore, there is no prejudice on allowing leave to amend. Plaintiff contends it has alleged sufficient facts hold Mr. Campbell liable not because he is Campbell’s RMO but rather because he was personally, actively negligent in directing and/or personally performing the wrongful acts and negligent work. However, there are no allegations in the FAC that he personally performed the wrongful acts and negligent work separate from the acts of the corporation.

CCP section 438, subdivision (e) states: “No motion may be made pursuant to this section if a pretrial conference order has been entered pursuant to Section 575, or within 30 days of the date the action is initially set for trial, whichever is later, unless the court permits otherwise.” Although the motion is technically untimely under CCP 438, the motion is construed as a common law motion for judgment on the pleadings and is therefore being ruled upon. In ruling on a common law motion for judgment on the pleadings made by a defendant, a trial court determines what has been called a pure question of law (Donohue v. State of California (1986) 178 Cal. App. 3d 795, 802.) The court generally confines itself to the complaint and accepts as true all material facts alleged therein. (E.g., Colberg, Inc. v. State of California ex rel. Dept. Pub. Wks. (1967) 67 Cal. 2d 408, 412.) In ruling on the motion, the Court undertakes essentially the same task that it would undertake in ruling on a general demurrer. Indeed, a common law motion for judgment on the pleadings “ha[s] the purpose and effect of a general demurrer.” (Kortmeyer v. California Ins. Guarantee Assn. (1992) 9 Cal. App. 4th 1285, 1293; see Colberg, Inc. v. State of California ex rel. Dept. Pub. Wks., supra, 67 Cal. 2d at pp. 411-412.)

Plaintiff may file a Second Amended Complaint on or before March 23, 2018. Response to be filed and served within 30 days of service of the SAC, 35 days if served by mail.

Discovery is to be reopened only on the issue of the new allegations in the SAC.