Case Number: BC715080 Hearing Date: September 06, 2019 Dept: 4A

Demurrer without Motion to Strike

Having considered the demurring, opposing and reply papers, and the supplemental declaration filed on August 13, 2019, the Court rules as follows.

BACKGROUND

On July 23, 2018, Plaintiff Dekel Zelig (“Plaintiff”) filed a complaint against Defendant Southern California Environmental, Inc. alleging negligence and premises liability for an automobile-dumpster collision that occurred on March 2, 2018.

On April 3, 2019, Defendant/Cross-Complainant Southern California Environmental, Inc. filed a cross-complaint against Cross-Defendant Maxi Serve Restoration and Construction for equitable indemnity, express indemnity, breach of contract, contribution, and declaratory relief.

On June 28, 2019, Cross-Defendant Maxi Serve Restoration and Construction filed a demurrer to the cross-complaint on the grounds that it failed to state sufficient facts to constitute a cause of action and the contract allegedly breached was not indicated to be an oral or written contract pursuant to California Code of Civil Procedure section 430.10.

On August 1, 2019, the Court continued the hearing on Cross-Defendant Maxi Serve Restoration and Construction’s demurrer to September 6, 2019 due to its failure to submit a satisfactory meet and confer declaration.

Trial is set for January 23, 2020.

PARTY’S REQUEST

Cross-Defendant Maxi Serve Restoration and Construction (“Demurring Party”) requests that the Court sustain its demurrer to Defendant/Cross-Complainant Southern California Environmental, Inc.’s (“Opposing Party”) cross-complaint because: (1) it fails to allege that there was a valid contract between the parties, (2) Moving Party is not a joint tortfeasor, (3) the equitable indemnity claim is unripe, and (4) there is no basis for liability against Moving Party.

LEGAL STANDARD

Meet and Confer

Before filing a demurrer, the demurring party is required to meet and confer with the party who filed the pleading demurred to in person or by telephone for the purposes of determining whether an agreement can be reached through a filing of an amended pleading that would resolve the objections to be raised in the demurrer. (See Code of Civ. Proc. § 430.41.)

Demurrer

A demurrer for sufficiency tests whether the complaint states a cause of action. (Hahn v. Mirda (2007) 147 Cal.App.4th 740, 747.) When considering demurrers, courts read the allegations liberally and in context. (Taylor v. City of Los Angeles Dept. of Water and Power (2006) 144 Cal.App.4th 1216, 1228.) In a demurrer proceeding, the defects must be apparent on the face of the pleading or via proper judicial notice. (Donabedian v. Mercury Ins. Co. (2004) 116 Cal.App.4th 968, 994.) “A demurrer tests the pleadings alone and not the evidence or other extrinsic matters. Therefore, it lies only where the defects appear on the face of the pleading or are judicially noticed.” (SKF Farms v. Superior Court (1984) 153 Cal.App.3d 902, 905.) “The only issue involved in a demurrer hearing is whether the complaint, as it stands, unconnected with extraneous matters, states a cause of action.” (Hahn, supra, 147 Cal.App.4th at p. 747.)

DISCUSSION

Meet and Confer

The Court finds Demurring Party’s supplemental meet and confer declaration satisfies the requirements of California Code of Civil Procedure section 430.41. (Gillespie Supp. Decl., ¶ 6.) The parties were unable to resolve the disputes relating to the objections within Demurring Party’s demurrer. (Gillespie Supp. Decl., ¶ 7.)

Demurrer

Demurring Party objects to Opposing Party’s second cause of action for express indemnity and third cause of action for breach of contract on the grounds that the alleged contract is not an enforceable contract against Demurring Party and that these causes of action are uncertain. Demurring Party objects to Opposing Party’s first cause of action for equitable indemnity on the grounds that Demurring Party is not a joint tortfeasor and that this cause of action is not ripe for adjudication. Demurring Party objects to Opposing Party’s fourth cause of action for contribution and fifth cause of action for declaratory relief on the ground that both of these causes of action are derivative of Opposing Party’s other causes of action, which are insufficiently pled for the reasons stated above.

Express Indemnity and Breach of Contract

“[T]he elements of a cause of action for breach of contract are (1) the existence of the contract, (2) plaintiff’s performance or excuse for nonperformance, (3) defendant’s breach, and (4) the resulting damages to the plaintiff.” (Thrifty Payless, Inc. v. The Americana at Brand, LLC (2013) 218 Cal.App.4th 1230, 1244.)

“An invoice is a mere detailed statement of the nature, quantity and cost or price of the things invoiced,” and “standing alone, is not a contract.” (India Paint & Lacquer Co. v. United Steel Products Corp. (1954) 123 Cal.App.2d 587, 608 [citations omitted].) This is because such documents are more appropriately described as “a note or memorandum of a contract” as opposed to a contract in writing. (Id. at p. 606 [citations omitted].) An invoice documenting a delivery transaction is not a contract unless the parties intended it to be a contract. (Id. at p. 607.) The Court in India Paint found that the warranties applicable to a sales transaction could not be disclaimed through the language of a subsequent invoice because the buyer did not assent to the disclaimer and was not charged with knowledge of it. (Id. at pp. 608-609.)

The cross-complaint alleges Opposing Party entered into an agreement to deliver a dumpster to Demurring Party. (Cross-Compl., ¶¶ 16-17, Exh. B.) Demurring Party agreed to indemnify and hold Opposing Party harmless against any and all liability and claim, demand, damage, cost, and expense. (Compl., ¶ 18.) Opposing Party performed all conditions precedent. (Compl., ¶ 20.) Demurring Party has refused to indemnify, release, and hold harmless Opposing Party. (Compl., ¶ 22.) Opposing Party has suffered damages as a result. (Compl., ¶ 23.)

Demurring Party argues that the delivery receipt on which Opposing Party seems to base its express indemnity and breach of contract claims is not a valid contract because it is merely an informal receipt for the delivery of the subject dumpster. (Demurrer, pp. 5:3-6:16.) Demurring Party also argues that Opposing Party did not assent to the indemnification clause because it is located on the back of the invoice, is unsigned, and contains no language indicating it is a binding contract. (Ibid.)

Demurring Party also argues the express indemnity and breach of contract causes of action are uncertain because the terms of the contract are not specifically pled and Demurring Party failed to attach the contract. (Demurrer, pp. 6:25-7:10.)

The Court cannot find that the subject contract between Demurring Party and Opposing Party is a mere delivery receipt or invoice that was not agreed to by the parties. In ruling on a demurrer, the Court must concentrate solely on the allegations in the cross-complaint and matters subject to judicial notice. The cross-complaint does not allege that the contract at issue was a delivery receipt, invoice, note or memorandum of a contract. Instead, the cross-complaint simply states that the Opposing Party “entered into an agreement with Maxi Serve to deliver a dumpster at the subject property” and that, “[t]o accept the dumpster, Maxi Serve was required to accept, among other things, and as illustrated in Exhibit ‘B’, that Cross-Defendant Maxi Serve will indemnify and hold harmless Cross-Complainant against any and all liability and claim, demand, damage, cost and expense.” (Cross-Compl., ¶¶ 16, 18.) Unlike the facts in India Paint, there is no allegation in the complaint that the alleged contract was a subsequent invoice containing an additional term. Rather, the complaint plainly alleges that Opposing Party agreed to deliver the dumpster to Demurring Party and Demurring Party agreed to indemnify and hold Opposing Party harmless.

Further, Demurring Party’s contention that Opposing Party did not assent to the indemnification clause is without merit. The complaint alleges that Demurring Party agreed to indemnify Opposing Party. The complaint is reasonably read to mean that the indemnification clause was an agreed upon term. (Cross-Compl., ¶¶ 16, 18.)

That being said, the Court finds the express indemnity and breach of contract causes of action are uncertain because they do not clearly state whether the claims are grounded on an oral or written contract. Paragraph 18 states: “To accept the dumpster, Maxi Serve was required to accept, among other things, and as illustrated in Exhibit “B”, that Cross-Defendant Maxi Serve will indemnify and hold harmless Cross-Complainant against any and all liability and claim, demand, damage, cost, and expense.” (Emphasis added.) Paragraph 19 states: “Pursuant to the writing attached as Exhibit “B” entered between Cross-Complainant and Cross-Defendant Maxi Serve, the Agreement provides in pertinent part: ‘Customer agrees to hold harmless and indemnify Contractor (SCE). . . . (Emphasis added.) Paragraph 18 may be reasonably read to mean that the alleged contract between the parties included an indemnification provision which was merely “illustrated in Exhibit B.” Paragraph 19, on the other hand, conveys a different meaning, that is, that the writing attached as Exhibit B constitute the contract on which Opposing Party is basing the breach of contract and express indemnity causes of action. These allegations give rise to a number of ambiguities, including whether the claims are based on one or two agreements, whether there was an oral agreement with an indemnification clause, and whether there was any agreement to indemnify apart from the language on the back of the delivery invoice. Because it is unclear from the cross-complaint whether the contract or contracts relied on are oral or written, the cross-complaint violates the requirement in California Code of Civil Procedure section 430.10, subdivision (g).

Accordingly, the Court finds that the breach of contract and express indemnity causes of action are uncertain and that the demurrer should be sustained on this basis.

Equitable Indemnity

Equitable indemnity “. . . applies only among defendants who are jointly and severally liable to the plaintiff.” (BFGC Architects Planners, Inc. v. Forcum/Mackey Construction, Inc. (2004) 119 Cal.App.4th 848, 852.) Facts must be alleged indicating a defendant is jointly and severally liable to the plaintiff in order for a pleading to survive a demurrer. (See id. at pp. 852-853.)

Opposing Party’s complaint does not allege any facts asserting that Demurring Party is jointly and severally liable to Plaintiff. Opposing Party argues in its opposition that Demurring Party is jointly liable for Plaintiff’s injuries because of its ownership and control of the property where Plaintiff was injured. (Opposition, p. 8:12-8:18.) But the complaint does not allege this.

Demurring Party also argues the equitable indemnity clause is unripe because Opposing Party has not made a payment on a judgment or settlement in this matter. This argument is unpersuasive because the complaint does not allege these facts. Rather, the complaint states Opposing Party has incurred and continues to incur costs and expenses, including but not limited to, litigation costs, attorney’s fees, consultant fees, and costs to defend against Plaintiff’s complaint for damages. (Compl., ¶¶ 9-10.) As such, the equitable indemnity cause of action, if accompanied with sufficient facts alleging Demurring Party’s joint and several liability to plaintiff, would be ripe.

In sum, the equitable indemnity cause of action fails to state facts sufficient to constitute a cause of action because it does not allege facts demonstrating Demurring Party’s joint and several liability but the opposition to the demurrer shows that such facts can be alleged in an amended cross-complaint.

Contribution and Declaratory Relief

Demurring Party argues Opposing Party’s claims for contribution and declaratory relief fail to state valid causes of action because they are derivative of the equitable indemnity, express indemnity, and breach of contract causes of action. (Demurrer, p. 8:14-8:18.) Opposing Party agrees as to the derivative nature of its contribution and declaratory relief causes of action. (Opposition, p. 9:16-9:19.) Indeed, Opposing Party’s contribution cause of action is based on Opposing Party’s contentions that Demurring Party must indemnify Opposing Party. (See Compl., ¶¶ 30-32.) Additionally, Opposing Party’s declaratory relief cause of action is based on the alleged controversy that consists of the indemnity and breach of contract causes of action. (Compl., ¶¶ 33-35.) As such, the demurrer lies as to these causes of action, for the reasons discussed above with respect to the underlying causes of action on which the contribution and declaratory relief claims are grounded.

CONCLUSION

The demurrer is SUSTAINED.

The Court grants Opposing Party 30 days’ leave to amend its cross-complaint.

Demurring Party is ordered to give notice of this ruling.