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This case was last updated from Los Angeles County Superior Courts on 08/14/2019 at 07:43:01 (UTC).

CITY OF GLENDALE VS KENNEDY/JENKS CONSULTANTS INC ET AL

Case Summary

On 11/09/2016 CITY OF GLENDALE filed a Contract - Professional Negligence lawsuit against KENNEDY/JENKS CONSULTANTS INC. This case was filed in Los Angeles County Superior Courts, Stanley Mosk Courthouse located in Los Angeles, California. The case status is Pending - Other Pending.

Case Details Parties Documents Dockets

 

Case Details

  • Case Number:

    ****0137

  • Filing Date:

    11/09/2016

  • Case Status:

    Pending - Other Pending

  • Case Type:

    Contract - Professional Negligence

  • Court:

    Los Angeles County Superior Courts

  • Courthouse:

    Stanley Mosk Courthouse

  • County, State:

    Los Angeles, California

 

Party Details

Plaintiffs and Petitioners

GLENDALE CITY OF

FUGRO CONSULTANTS INC.

Defendants, Respondents and Cross Plaintiffs

KENNEDY/JENKS CONSULTANTS INC

FUGRO CONSULTANTS INC

DOES 1-50

KENNEDY-JENKS CONSULTANTS INC.

Defendants, Respondents and Cross Defendants

FUGRO CONSULTANTS INC

STAHELI TRENCHLESS CONSULTANTS INC.

Attorney/Law Firm Details

Cross Defendant and Plaintiff Attorneys

MURPHY COLIN THOMAS

GARCIA MICHAEL J. CITY ATTORNEY

KASDAN SIMONDS RILEY & VAUGHAN LLP

GRUNAU BRITTANY L

JOHNSON MATTHEW

Plaintiff and Petitioner Attorneys

GARCIA MICHAEL J. CITY ATTORNEY

KASDAN SIMONDS RILEY & VAUGHAN LLP

Defendant Attorneys

HOFFMAN DANIEL DAVID

ERIKSEN DAVID A. ESQ.

ERICKSEN DAVID ALAN

 

Court Documents

NOTICE OF ASSOCIATION OF COUNSEL

6/29/2018: NOTICE OF ASSOCIATION OF COUNSEL

NOTICE OF ENTRY OF ORDER

7/11/2018: NOTICE OF ENTRY OF ORDER

PLAINTIFF'S STATUS CONFERENCE STATEMENT

8/2/2018: PLAINTIFF'S STATUS CONFERENCE STATEMENT

KENNEDY/JENKS' STATUS CONFERENCE STATEMENT

8/7/2018: KENNEDY/JENKS' STATUS CONFERENCE STATEMENT

Minute Order

10/3/2018: Minute Order

Substitution of Attorney

11/19/2018: Substitution of Attorney

Notice of Related Case

11/29/2018: Notice of Related Case

Certificate of Mailing for

12/11/2018: Certificate of Mailing for

Minute Order

3/15/2019: Minute Order

Answer

4/24/2019: Answer

Certificate of Mailing for

5/8/2019: Certificate of Mailing for

NOTICE OF CASE MANAGEMENT CONFERENCE

11/21/2016: NOTICE OF CASE MANAGEMENT CONFERENCE

PROOF OF SERVICE SUMMONS

12/2/2016: PROOF OF SERVICE SUMMONS

NOTICE OF CASE MANAGEMENT CONFERENCE AND ORDER TO SHOW CAUSE HEARING RE: PROOF OF SERVICE

12/8/2016: NOTICE OF CASE MANAGEMENT CONFERENCE AND ORDER TO SHOW CAUSE HEARING RE: PROOF OF SERVICE

CIVIL DEPOSIT

3/1/2017: CIVIL DEPOSIT

CASE MANAGEMENT STATEMENT

8/8/2017: CASE MANAGEMENT STATEMENT

CASE MANAGEMENT STATEMENT

8/14/2017: CASE MANAGEMENT STATEMENT

NOTICE OF RULING

8/25/2017: NOTICE OF RULING

60 More Documents Available

 

Docket Entries

  • 03/10/2020
  • Hearingat 09:30 AM in Department 40 at 111 North Hill Street, Los Angeles, CA 90012; Jury Trial

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  • 02/27/2020
  • Hearingat 08:30 AM in Department 40 at 111 North Hill Street, Los Angeles, CA 90012; Final Status Conference

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  • 12/10/2019
  • Hearingat 08:30 AM in Department 40 at 111 North Hill Street, Los Angeles, CA 90012; Hearing on Demurrer - without Motion to Strike

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  • 12/05/2019
  • Hearingat 08:30 AM in Department 40 at 111 North Hill Street, Los Angeles, CA 90012; Status Conference

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  • 07/15/2019
  • Docketat 08:30 AM in Department 40; Hearing on Motion to be Admitted Pro Hac Vice - Not Held - Vacated by Court

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  • 07/01/2019
  • DocketRequest for Judicial Notice; Filed by Kennedy-Jenks Consultants, Inc. (Defendant)

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  • 07/01/2019
  • DocketDeclaration (In Support of Demurrer); Filed by Kennedy-Jenks Consultants, Inc. (Defendant)

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  • 07/01/2019
  • DocketDemurrer - without Motion to Strike; Filed by Kennedy-Jenks Consultants, Inc. (Defendant)

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  • 05/08/2019
  • Docketat 08:30 AM in Department 40; Order to Show Cause Re: Failure to File Proof of Service (as to defendant Staher) - Held

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  • 05/08/2019
  • DocketNotice (of order granting pro hac vice applications); Filed by Fugro Consultants, Inc (Defendant)

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123 More Docket Entries
  • 12/01/2016
  • DocketProof of Service (not Summons and Complaint); Filed by Glendale, City of (Plaintiff)

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  • 11/21/2016
  • DocketORDER TO SHOW CAUSE HEARING

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  • 11/21/2016
  • DocketORDER TO SHOW CAUSE HEARING

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  • 11/21/2016
  • DocketNotice of Case Management Conference; Filed by Clerk

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  • 11/21/2016
  • DocketNOTICE OF CASE MANAGEMENT CONFERENCE

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  • 11/21/2016
  • DocketOSC-Failure to File Proof of Serv; Filed by Clerk

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  • 11/21/2016
  • DocketNOTICE OF CASE MANAGEMENT CONFERENCE

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  • 11/09/2016
  • DocketComplaint; Filed by Glendale, City of (Plaintiff)

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  • 11/09/2016
  • DocketCOMPLAINT FOR DAMAGES FOR: 1. PROFESSIONAL NEGLIGENCE; ETC

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  • 11/09/2016
  • DocketSUMMONS

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Tentative Rulings

Case Number: BC640137    Hearing Date: July 02, 2020    Dept: 40

Parties/Counsel Are Strongly Encouraged to Appear Telephonically

The Number of Persons Permitted In the Courtroom is Extremely Limited

Facial Masks/Coverings Are Mandatory for Courthouse/Courtroom Entry

MOVING PARTY: Defendant/Cross-Defendant Staheli Trenchless Consultants

OPPOSITION: Plaintiff City of Glendale (Fugro)

In 2011, the City of Glendale hired Kennedy/Jenks Consultants, Inc., (“Kennedy/Jenks”) to provide engineering design services for the construction of new sewer pipelines. That same year, Kennedy/Jenks hired Fugro Consultants, Inc., (“Fugro”) a geotechnical firm, to analyze the subsurface soil conditions for the project. It was alleged that Fugro’s soil reports underestimated the number of boulders and cobbles in the soil. Glendale alleged that Kennedy/Jenks and Fugro violated their duties to it by failing to identify the large number of boulders and cobbles in the soil.

The presence of the boulders and cobbles increased construction costs.

In 2016, Glendale filed a complaint against Kennedy/Jenks and Fugro. Fugro filed a cross-complaint against Kennedy/Jenks. Glendale and Fugros’ cases were consolidated.

In 2019, Glendale settled with Fugro and assigned its rights in this action to Fugro.

In December 2019, Glendale filed a FAC withdrawing its allegations against Fugro and adding Staheli Trenchless Consultants (“Staheli”) as a defendant. Kennedy/Jenks had hired Staheli to provide civil engineering services for the project.

Glendale’s FAC alleges the following causes of action against Staheli:

  1. Professional Negligence;

  2. Breach of Written Contract.

On January 30, 2020, Staheli brings this demurrer and motion to strike.

Judicial Notice: Staheli requests judicial notice of Glendale’s original 2016 complaint, Glendale’s FAC, and Change Order No. 1.

Of course the Court will take judicial notice of the original complaint but the Court will not take judicial notice of the Change Order.

Glendale requests judicial notice of the following categories of documents: pleadings, contracts, deposition transcripts, and discovery documents.

The Court will take judicial notice of the pleadings in this matter and the underlying contracts pursuant to sections 452(d) and (h). The Court will not take judicial notice of deposition transcripts and discovery documents.

The latter document categories are not relevant to the demurer and motion to strike.

First Cause of Action, Professional Negligence: OVERRULED

Staheli argues that the demurrer to the negligence claim should be sustained because the claim is barred by the statute of limitations and by the economic loss rule.

  1. Statute of Limitations: OVERRULED

Staheli argues that the negligence claim is barred by the statute of limitations. The statute of limitations for a professional negligence claim is two-years. (CCP § 339(1).) Staheli states that Glendale filed its original complaint in 2016 and did not name Staheli as a defendant till the filing of the December 2019 FAC, which is beyond the two-year statute of limitations.

The Court will overrule the demurrer on this ground. A demurrer will lie to a cause of action where it appears clearly and affirmatively from the face of the complaint that that particular claim is barred by the statute of limitations. Green Foothills v. Santa Clara County Bd. of Supervisors (2010) 48 Cal.4th 32, 42. “Under the discovery rule, the statute of limitations begins to run when the plaintiff suspects or should suspect that her injury was caused by wrongdoing, that someone has done something wrong to her. . . . A plaintiff need not be aware of the specific ‘facts’ necessary to establish the claim; that is a process contemplated by pretrial discovery. . . . So long as a suspicion exists, it is clear that the plaintiff must go find the facts; she cannot wait for the facts to find her.” Jolly v. Eli Lilly & Co. (1988) 44 Cal.3d 1103, 1110-1111. Here, Glendale states that they discovered Staheli’s liability at a deposition that occurred on March 27, 2018, which is within the two-year statute of limitations for the claim. (Glendale Ex. 17.) Resolution of the statute of limitations issue is normally a question of fact. E-Fab, Inc. v. Accountants, Inc. Services (2007) 153 Cal.App.4th 1308, 1320.

  1. Economic Loss Rule: OVERRULED

Staheli also argues the negligence claim is barred by the economic loss rule. In Aas v. Superior Court (2000) 24 Cal.4th 627, 643, the California Supreme Court held that in the area of construction defect litigation, where defective products or negligent services have caused neither property damage nor personal injury, and have merely diminished the value of the building, this loss is primarily the domain of contract and warranty law or the law of fraud, rather than of negligence or strict liability. The Aas court’s holding was based on the “economic loss rule,” which states that “[i]n actions for negligence, a manufacturer’s liability is limited to damages for physical injuries; no recovery is allowed for economic loss alone. (Aas, supra, 24 Cal.4th at p. 636.)

Staheli argues that Glendale is only suing for economic losses, i.e., additional construction costs.

Conversely, Glendale cites to Cooper v. Jevne (1976) 56 Cal.App.3d 860, in which plaintiffs, purchasers of condominium units, alleged that the architects of a condominium project had a duty to exercise ordinary care to avoid reasonably foreseeable injury to them. The plaintiffs further alleged that the architects were negligent in performing their duty and that they should have foreseen that the plaintiffs would suffer damages as a result. (Id. at p. 867.) The Court of Appeal reversed the demurrer and held that “the architects’ duty of reasonable care in the performance of their professional services is logically owed to those who purchased the allegedly defectively designed and built condominiums.” (Id. at p. 869.) Glendale argues that this matter is similar to Cooper in that Staheli was under a duty to exercise ordinary care to avoid reasonably foreseeable injury to Glendale and that it was foreseeable that they would suffer monetary damages if Staheli failed to perform that professional duty.

In reply Staheli argues that the California Supreme Court inn Aas criticized the Cooper decision. Staheli is correct, the Supreme Court did point out that Cooper’s conclusion regarding the economic loss rule and professional negligence claims was dictum. (Aas, supra, 24 Cal.4th at pp. 647-648.)

But Glendale also argues that the economic loss rule does not apply because it has a special relationship with Staheli. The test for determining the existence of a special relationship is a matter of public policy and involves the balancing of various factors, including “(1) the extent to which the transaction was intended to affect the plaintiff, (2) the foreseeability of harm to the plaintiff, (3) the degree of certainty that the plaintiff suffered injury, (4) the closeness of the connection between the defendant’s conduct and the injury suffered, (5) the moral blame attached to the defendant’s conduct, and (6) the policy of preventing future harm.” J’Aire Corporation v. Gregory (1979) 24 Cal.3d 799, 804.

The Court finds that for the purposes of a demurer Glendale has sufficiently alleged the existence of a special relationship, which is an exception to the economic loss rule.

The Kennedy/Jenks agreement was to benefit Glendale and Staheli knew that Glendale would suffer economically from any negligence in its performance of its professional services.

Second Cause of Action, Breach of Contract: OVERRULED

Staheli argues that the demurrer to the breach of contract claim should be sustained because it is barred by the statute of limitations and there was no contract between Staheli and Glendale.

  1. Statute of Limitations

Staheli argues that the claim is barred by the statute of limitations. The statute of limitations for a breach of contract claim is four years. (CCP § 337.) Staheli states that the FAC alleges that Glendale was aware of the cobbles since December 2015. (FAC, ¶ 18.) Staheli cites to the Change Order which states that the contractor “first notified the CITY on November 6, 2015 via letter 'Notice of Differing Site Conditions — Discovery of Cobble During Subsurface Investigation.” (Staheli Ex. C.)

The Court will overrule the demurrer on this ground. The Court agrees with Glendale’s argument that the Change Order is extrinsic evidence and that for the purposes of the demurrer the Court’s scope is limited to the face of the FAC. The FAC does not indicate that the claim is time barred.

  1. Lack of a Contractual Relationship

The 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.” Oasis West Realty, LLC v. Goldman (2011) 51 Cal.4th 811, 821.

Staheli argues that the contract was not valid as to Glendale because the agreement between Glendale and Kennedy/Jenks contained a clause that prohibited Kennedy/Jenks from delegating its duties to another party without a written authorization from Glendale. Staheli states there was no written authorization from Glendale for Kennedy/Jenks to enter into the contract with Staheli. Staheli contends that the contract is void as to Glendale. Staheli states that Glendale knew the contract Kennedy/Jenks entered into with its subconsultants were void because it did not originally sue Fugro as a third party beneficiary to the Fugro-Kennedy/Jenks contract, and instead sued it for breaching the separate contract between Glendale and Fugro.

The Court will overrule the demurrer on this ground. The parties have a factual dispute over whether Glendale authorized Staheli’s role on the project. (Glendale’s Opp'n, p 14.) However, Glendale has sufficiently alleged that is a third party beneficiary to the Kennedy/Jenks-Staheli contract. (FAC, ¶ 13.) Accordingly, the demurrer on this ground is OVERRULED.

Motion to Strike: DENIED

Staheli moves to strike Glendale’s request for attorneys’ fees.

Standard: The court may, upon a motion, or at any time in its discretion, and upon terms it deems proper, strike any irrelevant, false, or improper matter inserted in any pleading. (CCP § 436(a).) The court may also strike all or any part of any pleading not drawn or filed in conformity with the laws of this state, a court rule, or an order of the court. CCP § 436(b).

Analysis: Glendale alleges that Kennedy/Jenks-Staheli subcontract authorizes it to recover its attorneys’ fees. The subcontract in relevant part states:

“11. LITIGATION….Should litigation or arbitration occur between the parties, all reasonable litigation or arbitration expenses, collection expenses, witness fees, court costs, and attorney’s fees incurred by the prevailing party shall be paid by the nonprevailing party to the prevailing party. Consultant and Client [Glendale] shall be entitled to recover all reasonable litigation or arbitration expenses, collection expenses, witness fees, court costs, and attorney’s fees to enforce the indemnity provisions in paragraph 8.” (Johnson Decl., Ex. 2, ¶ 11.)

Section 12 of the Additional Terms and Conditions in the Subcontract also states:

“12.0 INDEMNITY

12.1. To the maximum extent permitted by law- including, but not limited to, California Civil Code Sections 2778 and 2782.8- CONSULTANT, its employees, agents, Subconsultants, and persons whom CONSULTANT employs or hires (individually and collectively, "CONSULTANT INDEMNITOR") shall indemnify, defend, and hold harmless CITY, its officers, agents, representatives and employees (individually and collectively, "CITY INDEMNITEE") from and against a "liability" [as defined in Subparagraph (A) below], or an "expense" [as defined in Subparagraph (B) below], or both, that arise out of, pertain to, or relate to the negligence, recklessness, or willful misconduct of a CONSULTANT INDEMNITOR:

(A) "liability" means claims, suits, actions, causes of action, proceedings, judgments, decrees, awards, settlements, liens, losses, damages, injuries, or liability of any kind, whether the liability is:

(1) [Not Applicable];

(2) In contract or in tort; or

(3) For bodily injury (including accidental death), personal injury, advertising injury, or property damage.”

Glendale states that it is a third party beneficiary to the contract and can recover its attorneys’ fees. Glendale states that Civil Code section 1717 makes reciprocal any provision awarding attorney's fees and that “[t]wo situations may entitle a nonsignatory party to attorney fees. First is where the nonsignatory party stands in the shoes of a party to the contract. Second is where the nonsignatory party is a third party beneficiary of the contract.” Cargill, Inc. v. Souza (2011) 201 Cal. App. 4th 962, 966.

Staheli responds by stating that a third party beneficiary can only recover attorneys’ fees if the contract contains a provision authorizing the third party to recover those fees. Staheli cites to Sessions Payroll Management, Inc. v. Noble Construction Co. (2000) 84 Cal.App.4th 671. In Sessions Payroll, Nobel the general contractor, entered into a written agreement with Mackey Drywall, a drywall subcontractor. The agreement between them contained an attorneys’ fee provision. (Id. at p. 675.) Mackey then made an oral agreement with Sessions Payroll, who would distribute the workers’ payroll. Sessions paid Mackey’s workers, but Mackey failed to pay them. The trial court granted Nobel’s demurrer to Sessions’ complaint and awarded them attorneys’ fees. The Court of Appeal reversed and held that Nobel could only recover its fees from Sessions if Sessions could have recovered its fees against Nobel. The court found that there was “no indication that Mackey and Noble intended to benefit Sessions by including it within their contractual attorney fee clause” and that “the contract expressly disclaims that it creates any rights or confers any benefits on third parties.” (Id. at p. 680.)

The Court will deny the motion to strike the attorneys’ fees. In Sessions Payroll, the agreement specifically stated that “this Agreement shall not create any rights of or confer benefits upon, third parties.” Here, the agreement does not contain such language. In fact, the agreement states that Staheli is to indemnify Glendale for all damages whether they sound in contract or tort.

Conclusion: Staheli’s demurrer is OVERRULED and the motion to strike is DENIED.

Case Number: BC640137    Hearing Date: June 22, 2020    Dept: 40

   

Parties/Counsel Are Strongly Encouraged to Appear Telephonically

The Number of Persons Permitted In the Courtroom is Extremely Limited

Facial Masks/Coverings Are Mandatory for Courthouse/Courtroom Entry

MOVING PARTY: Defendant/Cross-Defendant/Cross-Complainant Kennedy/Jenks Consultants, Inc.

OPPOSITION: Plaintiff Fugro Consultants, Inc., as assignee for City of Glendale

In 2016, Glendale filed a complaint against Kennedy/Jenks and Fugro. Fugro filed a cross-complaint against Kennedy/Jenks. Glendale’s and Fugros’ cases were consolidated. In 2019, Glendale settled with Fugro and assigned its rights in this action to Fugro.

In December 2019, Glendale filed their First Amended Complaint (“FAC”) against Kennedy/Jenks alleging causes of action for:

  1. Professional Negligence

  2. Breach of Written Contract

The FAC also added Staheli as a defendant.

On January 27, 2020, Kennedy/Jenks filed this opposed motion requesting that Glendale’s FAC be stricken.

The Court considered the moving papers, opposition, and reply and rules as follows.

Judicial Notice: Kennedy/Jenks requests judicial notice of (1) portions of Glendale’s 2016 complaint, (2) portions of Glendale’s December 2019 First Amended Complaint, (3) Change Order No. 1 between Glendale and the General Contract Mladen Buntich Construction Co., Inc., (4) portions of Change Order No. 2, (5) portions of Change Order No. 5, and (6) portions of Fugro’s Responses to Kenney/Jenks’ Separate Statement in support of it Motion for Summary Adjudication.

Glendale requests judicial notice of the following exhibits: (1) Glendale’s Ex Parte Application for Leave to Amend, (2) Order granting Glendale’s Ex Parte Application for Leave to Amend, (3) Glendale’s Motion for Leave to File an Amended Complaint, (4) Glendale’s 2016 original complaint, (5) Glendale’s First Amended Complaint, (6) Transcript of the December 10, 2019 Hearing on Glendale’s Motion for Leave to Amend, (7) Professional Services Agreement between Glendale and Kennedy/Jenks, (8) the August 19, 2019 deposition of Laura Wetter, (9) the August 20, 2019 deposition of Kim Staheli, (10) a December 12, 2012-December 17, 2012 email chain, (11) Kennedy/Jenks’s July 22, 2013 Preliminary Design Supplement, (12) Kennedy/Jenks’s January 11, 2013 Preliminary Design Supplement, (13) a June 5-6, 2013 email string, (14) the July 19, 2019 deposition of J. Gantney, (15) the April 30, 2018 deposition of Jasmina Zigic, and (16) the January 9, 2020 deposition of Kennedy/Jenks’s designated Person Most Qualified, Allen Shewey.

The Court WILL TAKE JUDICIAL NOTICE of the parties’ exhibits pursuant to Evidence Code § 452 (d) and (h), official court records and facts not reasonably subject to dispute. However, the Court will not take judicial notice of the deposition transcripts and email chains. At most the Court could take notice of the existence of such documents but not the contents therein. Therefore, they are not relevant for this motion.

Objections: Kennedy/Jenks objects to several of Glendale’s exhibits. The objections are SUSTAINED AS TO ALL DEPOSITION TRANSCRIPTS AND THE EMAIL CHAINS. The objections are OVERRULED as to the Professional Services Agreement, and the Preliminary Design Supplements.

Meet and Confer: The Court finds that Kennedy/Jenks’s counsel attempted in good faith to meet and confer with opposing counsel. (Hoffman Decl., ¶¶ 2-4.)

Standard: Under Code of Civil Procedure section 436, a court may strike out any irrelevant, false, or improper matter inserted into any pleading or strike out all or part of any pleading not drawn or filed in conformity with the laws of this state, a court rule, or an order of the court. (Code Civ. Proc., § 436.) The grounds for a motion to strike must appear on the face of the challenged pleading or from matters of which the court may take judicial notice. (Code Civ. Proc., § 437, subd. (a).) In ruling on a motion to strike, the court reads the pleading as a whole, all parts in their context, and assuming the truth of all well-pleaded allegations. Turman v. Turning Point of Central California, Inc. (2010) 191 Cal.App.4th 53, 63.

Sham Pleading: Kennedy/Jenks argues that Glendale’s FAC is a sham pleading and should be stricken. The sham pleading doctrine prohibits a plaintiff from amending a complaint to omit harmful allegations from prior pleadings, without explanation. Deveny v. Entropin, Inc. (2006) 139 Cal.App.4th 408, 425. Under the sham pleading doctrine, “[a] plaintiff may not avoid a demurrer by pleading facts or positions in an amended complaint that contradict facts pleaded in the original complaint, or by suppressing facts which prove the pleaded facts false.” Cantu v. Resolution Trust Corporation (1992) 4 Cal.App.4th 857, 877-878. Where an amended complaint omits harmful allegations without explanation, the Court may take judicial notice of the prior pleadings and disregard any inconsistent allegations in the amended pleading. Hahn v. Mirda (2007) 147 Cal. App. 4th 740, 751. The sham pleading doctrine is not intended to prevent honest complainants from correcting erroneous allegations or to prevent correction of ambiguous facts. (Ibid.) Instead, it is intended to enable courts “‘to prevent an abuse of process.’” Amid v. Hawthorne Community Medical Group, Inc. (1989) 212 Cal.App.3d 1383, 1390-1391.

Kennedy/Jenks alleges that Fugro, as Glendale’s assignee, filed the FAC which removed allegations against Fugro in the original complaint. Kennedy/Jenks contends that in the original 2016 complaint Glendale alleged that its damages were caused by Fugro’s inaccurate soil analyses. (Complaint, ¶¶ 19, 22.) Glendale’s only issue with Kennedy/Jenks was that they hired Fugro and relied on their soil reports. Kennedy/Jenks argues that the Change Orders state that the reason for changes in the project was because the cobbles and boulders were not reported in Fugro’s analyses. (Hoffman Decl., Exs. 3, 4, and 5.) Specifically, the Change Orders state that the reasons for the changes were that “[t]he Contractor…encountered cobbles and boulders during the shafts’ excavation and utility potholing, which were not reported in the geotechnical investigation performed by Fugro Consultants.” Kennedy/Jenks states that the FAC has completely changed Glendale’s claims. Now the FAC alleges that Kennedy/Jenks and Staheli caused Glendale’s damages because they had knowledge of the cobbles before Fugro issued its report.

Kennedy/Jenks cites to Owens v. Kings Supermarket (1988) 198 Cal.App.3d 379, in which the Court of Appeal sustained a demurrer. In Owens, the plaintiff’s first two pleadings alleged that he was injured in the public street adjacent to the premises of defendant, a supermarket. (Id. at p. 382.) However, the trial court rejected plaintiff’s theory of liability. Plaintiff then filed a second amended complaint in which he now alleged that he was injured on defendant’s premises. The trial court disregarded the new allegation. The Court of Appeal held that the trial court was correct in disregarding the new allegation because plaintiff “offered no explanation for this inconsistency to the court below or on appeal. The conclusion is inescapable that this amendment was made solely for the purposes of avoiding a demurrer.” (Id. at p. 384.) Kennedy/Jenks argues that in this case, like in Owens, there is no explanation for Glendale’s new allegations. Kennedy/Jenks also argues that the new allegation cannot arise from the discovery process because Glendale had the information available to it when it filed the original complaint.

Glendale argues that there were two valid reason to amend the complaint (1) the settlement with Fugro (2) and the additional discovery that has occurred since the filing of the 2016 complaint. Glendale states that it was necessary to clean up the pleadings because of the settlement with Fugro. Glendale also states that the extensive discovery conducted by the parties led them to refine and clarify their claims against Kennedy/Jenks and to add Staheli. Glendale cites to Callahan v. City and County of San Francisco (1967) 249 Cal.App.2d 696. In Callahan, a plaintiff sued the City of San Francisco for negligently maintaining its roads after the car she was a passenger in careened into a lake, paralyzing her. In the prior complaint, which was only against the driver of vehicle she was a passenger in, plaintiff alleged that the driver engaged in willful misconduct. In the operative complaint, plaintiff dropped the willful misconduct allegation. (Id. at p. 698.) The trial court relied on the previous allegation to sustain the City’s demurrer. The Court of Appeal reversed and held that the sham pleading doctrine did not apply because the earlier allegation was "but an allegation of a conclusion" on a question that was "essentially a question of fact." (Id. at pp. 699-700.) "It would be unfair to give the city the benefit, at the pleading stage, of assuming that these generic allegations against another may be taken as proved." (Id. at p. 700.)

The Court finds that the sham pleading doctrine does not apply.

Owens is not applicable because in that matter the plaintiff clearly contradicted his earlier allegation, i.e., the allegation that the accident occurred in an adjacent street was changed to an allegation that the accident occurred on defendant’s premises, in order to avoid a demurrer. Here, Glendale does not directly contradict itself but rather states a new theory of liability based on Kennedy/Jenks’s purported knowledge about the cobbles. Kennedy/Jenks argues that Glendale sought to avoid a motion for summary adjudication and other dispositive motions. However, the FAC did not affect Kennedy/Jenks’s motion for summary adjudication against Fugro, as that motion revolved around contractual interpretation.

Also unlike in Owens, Glendale has provided two explanations for the changes in their pleadings, the settlement and purported new discovery. Here, the case is closer to Callahan in that the allegation against Fugro was an unproven conclusory allegation.

Finally, the Court finds that Kennedy/Jenks’s reliance on the Change Orders is misplaced. Although, the Court may take judicial notice of the change orders, it cannot take judicial notice of the factual proposition contained within them, i.e., that Fugro was solely responsible for the changes. Therefore, the contents of the Change Orders are not dispositive for the instant motion.

Accordingly, the motion to strike is DENIED.
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