Case Name: Kelly Sallin, et al. v. David Edwards, et al.
Case No.: 1-14-CV-269220

In this action for construction defects, Plaintiffs Kelly Sallin and Aymeric Sallin (“Plaintiffs”) allege that defendants David Edwards (“Edwards”) and Earth Bound Homes, Inc. (“Earth Bound,” collectively with Edwards, “Defendants”) failed to construct improvements to Plaintiffs’ residence in accordance with approved plans and in a workmanlike manner. On August 11, 2014, Plaintiffs filed suit for (1) negligence (against both Defendants); (2) breach of contract (against Edwards); (3) breach of express and implied warranties (against both Defendants); (4) fraud (against Edwards); and (5) breach of fiduciary duty (against Edwards). On November 12, 2014, the Court (Hon. Carol Overton) sustained Defendants’ demurrer to the fifth cause of action with leave to amend. Plaintiffs filed a first amended complaint (the “FAC”) on November 21, 2014, in which they assert the same claims as in their original complaint.

Defendants again demur to the fifth cause of action for breach of fiduciary duty on the grounds that it is uncertain (Code Civ. Proc., § 430.10, subd. (f)) and fails to state a cause of action (Code Civ. Proc., § 430.10, subd. (e)).

I. Uncertainty

As an initial matter, Defendants’ demurrer on the ground of uncertainty is OVERRULED. Uncertainty is a disfavored ground for demurrer and a demurrer on this ground is typically sustained only where the pleading is so unintelligible that the defendant cannot reasonably respond. (See Khoury v. Maly’s of California, Inc. (1993) 14 Cal.App.4th 612, 616 [“A demurrer for uncertainty is strictly construed, even where a complaint is in some respects uncertain, because ambiguities can be clarified under modern discovery procedures.”].) Here, the fifth cause of action is alleged clearly enough to enable a response.

II. Failure to State a Claim

Defendants contend that the fifth cause of action fails to state a claim because Plaintiffs fail to allege facts supporting the existence of a fiduciary relationship between the parties or a breach of the duties arising from any such relationship.

Plaintiffs contend that they have alleged a fiduciary relationship arising from Edwards’s agreement to act as their agent in dealings with subcontractors and permitting authorities. (See Duffy v. Cavalier (1989) 215 Cal.App.3d 1517, 1531 [an agent is a fiduciary of his or her principal]; FAC, ¶¶ 35 [parties’ contract provided that Edwards shall “be solely responsible for and have control over construction means, methods, techniques, safety, sequences and procedures and shall coordinate all portions of the Project”], 36 [Plaintiffs shall communicate with subcontractors solely through Edwards], 38 [Edwards responsible for obtaining any modification to Plaintiffs’ permit necessary to complete the project in compliance with applicable laws].) While Defendants vigorously dispute that Edwards’s status as a general contractor created a fiduciary relationship or that the parties’ relative knowledge and experience in construction gave rise to a confidential relationship, they do not challenge in substance Plaintiffs’ assertion that the parties’ contract made Edwards Plaintiffs’ agent with corresponding fiduciary duties. (See Mot., pp. 5-6.)

Agency results from an agreement that one person shall act on behalf of another and subject to his or her control. (Van’t Rood v. County of Santa Clara (2003) 113 Cal.App.4th 549, 571.) Control is “the essential characteristic” of agency. (Id., quoting Edwards v. Freeman (1949) 34 Cal.2d 589, 592.) Here, while the parties arguably agreed that Edwards would manage subcontractors on Plaintiffs’ behalf, their agreement specifically provided that Plaintiffs did not retain control over Edwards’ performance of this function. (FAC, ¶¶ 35-36.) Thus, Plaintiffs’ allegations do not support the conclusion that Edwards acted as their agent with respect to subcontractors.

However, Plaintiffs do allege that Edwards agreed to obtain any necessary modifications to Plaintiffs’ permit from a third party agency. (FAC, ¶ 38.) Edwards was to be reimbursed for the costs and expenses associated with doing so, “provided the estimated amount of such costs and expenses have been approved in advance by Owner.” (Id.) Thus, Plaintiffs have alleged that Edwards was to act on their behalf and subject to their control with respect to the permitting process, supporting the existence of an agency relationship. Contrary to Defendants’ conclusory argument on this point (see Mot., pp. 5-6), Plaintiffs also allege that Edwards breached his duties regarding permitting (Kelly v. Steinberg (1957) 148 Cal.App.2d 211, 217 [agent owes principal a duty to exercise reasonable skill and ordinary diligence in his employment]; FAC, ¶¶ 37 [Edwards constructed improvements in violation of Woodside building permits and ordinances and canceled a required site inspection], 39 [Edwards moved earth at the project in violation of Woodside building permit requirements and misrepresented that he had obtained approval from Woodside to begin work on excavating a basement].)

In light of the above, the demurrer for failure to state a claim is OVERRULED.