Case Name: J.T. Associates LLC v. Fairfield Development, LP, et al.
Case No.: 2015-1-CV-281811

Demurrer by Defendants Fairfield Development, L.P., Fairfield Investment Company LLC, and Fairfield Residential Company to the First Amended Complaint of Plaintiff J.T. Associates LLC

Factual and Procedural Background

This is a negligence action. Plaintiff J.T. Associates LLC (“Plaintiff”) purchased real property located at 210 Baypointe Parkway in San Jose, California. Plaintiff alleges that defendants Fairfield Development, L.P., Fairfield Investment Company LLC and Fairfield Residential Company (collectively, “Defendants”) engaged in construction activity in the vicinity of Plaintiff’s property. Plaintiff claims that Defendants excavated, built, constructed, developed, impacted and interacted with property adjacent to Plaintiff’s property resulting in damages. This conduct included, but is not limited to, removal of lateral and subjacent support to Plaintiff’s property in violation of Civil Code Section 832. (See First Amended Complaint [“FAC”] at p. 4.)

On June 15, 2015, Plaintiff filed a Judicial Council Form Complaint against Defendants setting forth a single claim for negligence.

On September 11, 2015, Plaintiff filed a Judicial Council Form FAC, now the operative pleading, against Defendants alleging a claim for negligence. The FAC also alleges a claim for breach of contract against defendant Hartford Casualty Insurance Company (“Hartford”) for refusing to extend first party insurance coverage for damages to the insured building.

Currently before the Court is the demurrer to the FAC by Defendants on the ground that the negligence cause of action fails to state a claim. (Code Civ. Proc., § 430.10, subd. (e).) Defendants filed a request for judicial notice in conjunction with the demurrer. Plaintiff filed written opposition. Defendants filed reply papers.

Demurrer to the FAC

Request for Judicial Notice

Defendants seek judicial notice of the FAC in this action under Evidence Code section 452, subdivision (d). That section allows the court to take judicial notice of records of the superior court. As there is no opposition, the request for judicial notice is GRANTED.

Legal Standard

“In reviewing the sufficiency of a complaint against a general demurer, we are guided by long settled rules. ‘We treat the demurrer as admitting all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law. We also consider matters which may be judicially noticed.’” (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.) “A demurrer tests only the legal sufficiency of the pleading. It admits the truth of all material factual allegations in the complaint; the question of plaintiff’s ability to prove these allegations, or the possible difficulty in making such proof does not concern the reviewing court.” (Committee on Children’s Television, Inc. v. General Foods Corp. (1983) 35 Cal.3d 197, 213–214.)

“The reviewing court gives the complaint a reasonable interpretation, and treats the demurrer as admitting all material facts properly pleaded. The court does not, however, assume the truth of contentions, deductions or conclusions of law. … [I]t is error for a trial court to sustain a demurrer when the plaintiff has stated a cause of action under any possible legal theory. And it is an abuse of discretion to sustain a demurrer without leave to amend if the plaintiff shows there is a reasonable possibility any defect identified by the defendant can be cured by amendment.” (Gregory v. Albertson’s, Inc. (2002) 104 Cal.App.4th 845, 850.)

First Cause of Action: Negligence

Defendants contend that the negligence cause of action is barred by the three-year statute of limitations under Code of Civil Procedure section 338, subdivision (b). As factual issues exist with respect to documents attached to the FAC, Plaintiff argues that the Court cannot determine the statute of limitations issue at the pleading stage.

“Statute of limitations is the collective term applied to acts or parts of acts that prescribe the periods beyond which a plaintiff may not bring a cause of action.” (V.C. v. Los Angeles Unified School Dist. (2006) 139 Cal.App.4th 499, 509.) “A plaintiff must bring a claim within the limitations period after accrual of the cause of action. In other words, statutes of limitation do not begin to run until a cause of action accrues. Generally speaking, a cause of action accrues at the time when the cause of action is complete with all of its elements.” (Id. at pp. 509-510 [internal citations and quotation marks omitted].)
“A demurrer based on a statute of limitations will not lie where the action may be, but is not necessarily, barred. In order for the bar…to be raised by demurrer, the defect must clearly and affirmatively appear on the face of the complaint; it is not enough that the complaint shows that the action may be barred.” (Committee for Green Foothills v. Santa Clara County Bd. of Supervisors (2010) 48 Cal.4th 32, 42 [citation omitted].)

“[T]he nature of the right sued upon … determines the applicability of the statute of limitations.” (Jefferson v. J.E. French Co. (1960) 54 Cal.2d 717, 718.) “The operative statute of limitations for the negligence cause of action is the three-year period applicable to an “action for…injury to real property.” (Landale-Cameron Court, Inc. v. Ahonen (2007) 155 Cal.App.4th 1401, 1407.)

As an initial matter, Plaintiff’s first cause of action appears to be a claim based on negligence, nuisance and a violation of Civil Code Section 832. (See FAC at p. 4.) However, as the opposition points out, the demurrer based on statute of limitations is addressed only to negligence. To the extent that the claim is based on nuisance or a violation of Civil Code Section 832, the moving papers do not address the statute of limitations with respect to these claims. Since a party may not demur to a portion of a cause of action, the demurrer on this ground fails. (See Pointe San Diego Residential Community, L.P. v. Procopio, Cory, Hargreaves & Savitch, LLP (2011) 195 Cal.App.4th 265, 274 [“A demurrer challenges a cause of action and cannot be used to attack a portion of a cause of action.”]; see also Sheehan v. San Francisco 49ers, Ltd. (2009) 45 Cal.4th 992, 996 [general demurrer may be upheld only if the complaint fails to state a cause of action under any possible legal theory].) Nevertheless, the Court will briefly address Defendants’ argument with respect to negligence.

Defendants argue that the three-year statute of limitations has expired on Plaintiff’s claim for negligence. In support, Defendants refer to Exhibit C attached to the FAC, which includes correspondence with Plaintiff’s insurance carrier. In discussing Hartford’s insurance claim, the correspondence provides the following in relevant part: “As Hartford is well aware, in or about 2011 the building sustained substantial movement, damage, cracking and coincident impact to its structural integrity as a result of nearby/neighboring construction activity.” (See Exhibit C to FAC.) Based on this excerpt, Defendants assert that Plaintiff was on notice of its claim for damages as early as 2011 but did not file this action until 2015, beyond the three-year limitations period. (See Landale-Cameron Court, Inc. v. Ahonen, supra, 155 Cal.App.4th at p. 1407 [three-year period begins to run when the plaintiff suspects or should suspect that the injury was caused by wrongdoing, and that someone has done something wrong to the plaintiff].) However, as the opposition points out, Exhibit C also includes the Upp Geotechnology Report (“Upp Report”) which provides a preliminary evaluation of the building on Plaintiff’s property. According to the Upp Report, in 2012, “[e]mployees and building owners began to notice slab cracking and wall separations in the subject building.” (See Exhibit C to FAC.) The Upp Report is consistent with allegations in the FAC where Plaintiff claims that it began suffering damages in August 2012. (See FAC at p. 4.) Thus, if the Court were to credit the allegations of the FAC along with the Upp Report, as it must on demurrer, then the claim would be timely as it was filed in June 2015. Therefore, given the competing documents attached to the FAC, the Court cannot resolve the statute of limitations issue as a matter of law on demurrer. (See Fox v. Ethicon Endo-Surgery, Inc. (2005) 35 Cal.4th 797, 810 [“Resolution of the statute of limitations issue is normally a question of fact.”]; see also Flores v. Kmart Corp. (2012) 202 Cal.App.4th 1316, 1325 [inappropriate at the demurrer stage to resolve the factual issue involved].)

Accordingly, the demurrer to the first cause of action on the ground that it fails to state a claim is OVERRULED