Tentative Rulings
Case Number: EC063852 Hearing Date: March 19, 2021 Dept: D
TENTATIVE RULING
Calendar: 12
Date: 3/19/2021 Trial date: None Set
Case Number: EC063852
Case Name: Temianka, et al v. Hefner, et al.
MOTION FOR SUMMARY ADJUDICATION
[CCP § 437c; CRC 3.1350 et seq.]
Moving Party: Defendant Building Inc. Construction dba Building Construction Group
Responding Party: Plaintiffs Daniel Temianka and Zeinab Dabbah, individually and as Trustees
Relief Requested:
Summary adjudication in favor of Defendant Building Inc. Construction dba Building Construction Group on the second and seventh causes of action set forth in the Complaint filed by plaintiffs.
CAUSES OF ACTION: from Third Amended Complaint
1) Rescission (SWH Contracts)
2) Rescission (BCG Contract)
3) Fraud (SWH Contracts)
4) Fraud (BCG Contract)
5) Breach of Fiduciary Duty
6) Professional Negligence
7) Violation of Business and Professions Codes
8) Breach of Contract (SWH Contracts)
9) Breach of Contract (BCG Contract)
10) Breach of Third Party Beneficiary Contracts
11) Negligence
12) Intentional Misrepresentation
13) Negligent Misrepresentation
14) Conversion
15) Trespass to Chattels
SUMMARY OF COMPLAINT:
These consolidated actions arise out of a remodeling project entered into for improvements to a residence in La Canada owned by Daniel Temianka and Zeinab Dabbah, individually and as trustees of the Daniel Temianka and Zeinab Dabbah Family Trust.
The complaints in the related actions have been deemed the cross-complaints. In those cross-complaints, defendants and cross-complainants Building Inc. Construction and other parties, including William Hefner Architect, Inc. allege that they provided services on the project for which they have not been paid.
ANALYSIS:
Burdens of Proof
Under CCP § 437c(p)(2) a defendant “has met his or her burden of showing that a cause of action has no merit if the party has shown that one or more elements of the cause of action, even if not separately pleaded, cannot be established, or that there is a complete defense to the cause of action. Once the defendant... has met
that burden, the burden shifts to the plaintiff... to show that a triable issue of one or more material facts exists as to the cause of action or a defense thereto.”
CCP § 437c(f)(1) provides that “A motion for summary adjudication shall be granted only if it completely disposes of a cause of action, an affirmative defense, a claim for damages, or an issue of duty.”
Defendant Building Inc. Construction dba Building Construction Group (“BCG”) seeks summary adjudication of two of the causes of action asserted against it, arguing that plaintiffs will be unable to establish one or more elements of those causes of action.
Issue No. 1: Defendant BCG is Entitled to Summary Adjudication in its Favor on the Second Cause of Action Seeking Rescission of the BCG Contract
With respect to rescission of a contract, Civil Code §1689 provides, in pertinent part:
“(b) A party to a contract may rescind the contract in the following cases:
(1) If the consent of the party rescinding, or of any party jointly contracting with him, was given by mistake, or obtained through duress, menace, fraud, or undue influence, exercised by or with the connivance of the party as to whom he rescinds, or of any other party to the contract jointly interested with such party; or
(2) If the consideration for the obligation of the rescinding party fails, in whole or in part, through the fault of the party as to whom he rescinds.”
Defendant BCG indicates that plaintiffs claim in their complaint that they are entitled to rescind the contract with BCG on the basis of mistake or fraud, but that they will be unable to establish that any mistake alleged in this matter was material.
The argument is that the alleged material fact here, that the architect Hefner actually owned the contractor BCG, but concealed that relationship from plaintiffs when the contracts were entered, was not in fact material, because plaintiff Dr. Dabbah was determined to have Hefner, whom Dr. Dabbah described as “a world-famous architect,” design her dream home, and acted swiftly to obtain a contract with the builder that had built Hefner’s home, even before plans were drawn up and without interviewing an alternative general contractor, based on a referral from Hefner and the knowledge that BCG had been the builder on Hefner’s own home. [UMF Nos. 9, 10, 13, 19-31]. The argument is that the relationship between BCG and Hefner was not material to plaintiff, otherwise she would have asked.
This appears insufficient to meet any initial burden of establishing that BCG is entitled to summary adjudication on this issue. Whether a fact is material would ordinarily raise an issue of fact to be determined by the trier of fact. The moving papers here rely on argument and evidence which would support a competing reasonable inference that BCG and Hefner, at the time they arranged for the general contractor on the project to be BCG, did not affirmatively disclose that Hefner owned and controlled the general contractor, which fact could well have been material. Under the statute discussed by defendant BCG in connection with the seventh cause of action, Business and Professions Code section 7159, joint control by a contractor is an issue which is mentioned, strongly suggesting that the kind of joint control between a contractor and an architect would likewise be viewed as material.
Business and Professions Code section 7159 requires in connection with a home improvement contract by a contractor, “(7) If the contract provides for a contractor to furnish joint control, the contractor shall not have any financial or other interest in the joint control.”
This statute recognizes a concern with disclosure of the type of joint involvement which is alleged and conceded here, and could be considered material. Under CCP § 437c(c) “summary judgment shall not be
granted by the court based on inferences reasonably deducible from the evidence if contradicted by other inferences or evidence that raise a triable issue as to any material fact;” see also Hepp v. Lockheed-California Co. (1978) 86 Cal.App.3d 714, 718. The motion on this ground will accordingly be denied.
Even if the burden had shifted to plaintiffs to raise triable issues of material fact, the opposition argues that an architect was required to make disclosure of the interest in the general contracting company pursuant to Civil Code section 1770(a)(3), which provides, “(a) The following unfair methods of competition and unfair or deceptive practices undertaken by any person in a transaction intended to result or that results in the sale or lease of goods or services to any consumer are unlawful….(3) Misrepresenting the affiliation, connection, or association with, or certification by, another.”
Plaintiffs specifically rely on 16 Code of Regulations section 160, pertaining to the professional conduct in the practice of architecture, which states, in pertinent part:
“(c) Conflict of Interest:… (2) If an architect has any business association or financial interest which is substantial enough to influence his or her judgment in connection with the performance of professional services, the architect shall fully disclose in writing to his or her client(s) or employer(s) the nature of the business association or financial interest. If the client(s) or employer(s) object(s) to such association or financial interest, the architect shall either terminate such association or interest or offer to give up the project or employment.”
There is no dispute that Hefner had a business association with and financial interest in BCG, and a disclosure in writing was not made here.
Plaintiffs submit the declaration of plaintiff Dr. Dabbah, in which she states that plaintiffs did not know that Hefner owned and controlled BCG, that there was nothing in the paperwork or on the BCG website she checked at the time that would have suggested this was the case, and that had plaintiffs known of this level of connection they would not have entered the contract with BCG because they would have recognized the potential for conflicts, and would expect their architect to be free from such conflicts to advocate for plaintiffs in the event of a disagreement or problem with the contractor. Specifically, Dr. Dabbah states:
“We approved the work having no knowledge that HEFNER owned BCG, the company that was being paid to cut holes to permit Ashley Vance to conduct the structural evaluation in the house. We understood and believed that Scott Harris was the owner of BCG. The BCG Website that I accessed excludes any mention of William Hefner (Exhibit “2”).
10. On December 24, 2012, I entered into the proposed AIA form Cost-Plus Remodeling Agreement with BCG (“BCG Agreement”). This Agreement was attached as Exhibit 146 to the Deposition of William Hefner. BCG drafted the original Contract in its entirety and is identified as Exhibit “4” to this Declaration. Dr. Temianka and I only made minor changes including removal of some insurance language and modifying the wording pertaining to site supervision for clarification. All other language in the contract is that of BCG. When the contract was signed by me, there had been no written or verbal disclosure by either William Hefner or Scott Harris that William Hefner had any ownership interest in BCG or that Scott Harris was effectively his employee. BCG did not sign the contract, and we never received a signed copy of the Agreement. This contract did not therefore disclose Hefner as the company owner. In deposition on January 17, 2017 William Hefner testified on pages 104 lines 12-15 that he did not provide the statutorily required written disclosure of his ownership of BCG. In the same deposition on pages 64-65 William Hefner testified that at the time the contracts were signed he was the 100% owner of SWH and a 95% owner of BCG. Scott Harris was a 5% owner of BCG (Exhibit “5”).
Had I known that William Hefner had an ownership interest in BCG we would have understood that there would be conflicts between HEFNER, SWH and BCG and we would not have agreed to or signed the SWH Architectural Agreement or the BCG General Contracting Agreement. I would have insisted that we retain an independent General Contractor to work directly with us. Had I learned at the outset of our project that HEFNER had not disclosed his ownership interest in BCG we would not have trusted HEFNER, would have viewed his failure to disclose this information as a breach of ethics and would have retained a different Architect.
12. At no time prior to the execution of any agreement or commencement of construction was it disclosed in writing or otherwise to Dr. Temianka or I, by HEFNER, or anyone else in his employ, or by Scott Harris or anyone else related to HEFNER, SWH or BCG that HEFNER was the 95% owner with a financial interest in BCG, and that Scott Harris was a 5% minority owner and essentially the front man for the company.
13. At no time did HEFNER provide Dr. Temianka and I with oral or written notice that he owned any interest, let alone a 95% majority interest, in BCG. We were never provided with a conflict waiver request, nor would Dr. Temianka or I have agreed to sign such a waiver document had it been proffered. We expected HEFNER to provide us with all the services required in the SWH contract and would have immediately recognized the inherent conflict created by HEFNER if he was serving as the owner of both SWH and BCG.
20. Had I been aware of HEFNER’s controlling ownership of both the SWH and BCG companies, his false representations, and the concealed material facts, I would have never agreed to enter into the Architectural Agreement or the Design Services Agreement with SWH or the construction agreement with BCG.”
[Ex. 1, Dabbah Decl., paras. 8, 10, 12, 13, 20].
This is sufficient to support a reasonable inference that the omission was material, and an explanation why that would be so. The opposition also argues that the failure to disclose the ownership interest of the Hefner in BCG also permitted BCG to proceed on the project under an illegal “cost plus” contractual scheme and illegal advance money collection scheme that allowed Hefner to maximize his profits through both BCG and SWH, which would also appear to have materiality in this instance.
Triable issues of fact have been raised, and the motion is denied.
Defendant BCG also makes a brief argument that plaintiffs should be estopped from asserting the right to rescind, as they became aware of the connection between the parties in 2013, but delayed in halting the project. This argument appears primarily made to support the argument that the connection was not material, and would also be a question of fact, when the facts here are in dispute. To the extent estoppel is argued, this would be a defense, each element of which defendant would be obligated to establish, which has not been done here. Under Civil Code section 1693, for example, “When relief based upon rescission is claimed in an action or proceeding, such relief shall not be denied because of delay in giving notice of rescission unless such delay has been substantially prejudicial to the other party.” There is no attempt here to establish prejudice to defendant. The motion is denied.
Issue No. 2: Defendant BCG is Entitled to Summary Adjudication in its Favor on the Seventh Cause of Action Seeking Damages for Violations of the Business and Professions Code
Defendant BCG argues that it is entitled to summary adjudication of the seventh cause of action on the ground the statutory provisions alleged in the pleading do not exist, and that even if the reference is intended to be to another section of the Business and Professions Code, the violations claimed by plaintiffs do not give rise to claim for damages, which is not available under the statute, and, in any case, none of the alleged violations caused plaintiffs any damages.
With respect to the pleading stating the incorrect statutory sections, it does appear that some of the numerous statutory violations alleged refer to Business & Professions Code section 7159.5, when the section which was intended to be alleged based on the description of the violation was in fact Business & Professions Code section 7159. However, a brief review of the Third Amended Complaint shows that among the violations alleged in the seventh cause of action is an allegation that defendants violated Business and Professions Code section 7030 (b), which statute appears to be appropriately pleaded, and is not addressed in the moving papers. [See TAC, para. 237].
This gives rise to a situation where the argument, since it is not addressed to all alleged theories of recovery, would not dispose of the entire cause of action. As noted above, CCP § 437c(f)(1) provides that “A motion for summary adjudication shall be granted only if it completely disposes of a cause of action, an affirmative defense, a claim for damages, or an issue of duty.”
The argument does not dispose of the entire cause of action, as there are unaddressed allegations. The reply, in fact argues that some of the statutory references to Business & Professions Code section 7159.5 are proper. Regardless, there is reference to section 7030, an unaddressed theory, and the motion on this ground is denied.
With respect to the unavailability of damages under Business & Professions Code section 7159, the argument is that the Business and Professions Code section 7159 is typically invoked by a party defending against a contractor attempting to enforce a non-conforming contract, and does not permit the recovery of damages, but expressly provides only for discipline or for statutory misdemeanor penalties.
The Home Improvement Act is codified at Business and Professions Code section 7150 et seq. Business and Professions Code section 7159 requires, in pertinent part:
“(d) A home improvement contract and any changes to the contract shall be in writing and signed by the parties to the contract prior to the commencement of any work covered by the contract or any applicable change order...”
The section also requires that the writing comply with specific requirements, including the designation of the name, registration number of the salesperson, and specific warnings and designations, including the contract price, finance charge, description of the project, and a specified detailed mechanic’s lien warning.
Defendant argues that, regardless of the facts in this matter that the contract did not fully comply with the Home Improvement Act, section 7159 does not provide the homeowner with a damages remedy. Plaintiff relies on Asdourian v. Araj (1985) 38 Cal.3d 276, in which the California Supreme Court interpreted section 7159 not as a regulatory statute rendering an agreement made in violation of it as void ab initio, but recognized that contracts violating this section may be nevertheless enforced by a contractor in order to, “avoid unjust enrichment to a defendant and disproportionately harsh penalty upon the plaintiff.” Asdourian, at 291.
This authority, and particularly the passage cited in the moving papers and then quoted in the reply, actually recognizes that statutory violations can give rise to a contract which could be considered voidable, and that a violation could give rise to entitlement on the part of the homeowners to remedies, as the Court addressed a situation where the action at issue was brought by the contractor, not the homeowner, and in which the Court relied heavily on the policies underlying the statute and stated:
:“First, the policy of section 7159 is to encourage written contracts for home improvements in order to protect unsophisticated consumers. (See Calwood Structures, supra, 105 Cal.App.3d at p. 522.) However, defendants are not members of the group primarily in need of the statute's protection. In this context, the misdemeanor penalties provided in the statute should be sufficient. It will not defeat the statutory policy to allow plaintiff to recover for the reasonable value of the work performed"
Asdourian, at 293, emphasis added.
The Court also observed that the contract at issue, while not “malum in se,” so as to be void ab initio, could nevertheless be subject to being determined to be void: “Rather, the contracts were malum prohibitum, and hence only voidable depending on the factual context and the public policies involved.” Asdourian, at 292, italics in the original.
This argument again fails to meet any initial burden of establishing that plaintiffs will be unable to establish an element of this cause of action, as under Asdourian, plaintiffs could establish entitlement to statutory misdemeanor penalties, regardless of the availability or unavailability of damages, and could rely on the alleged violations to give rise to a voidable contract. The prayer of the TAC seeks broad remedies. The court is not authorized on summary judgment to determine that plaintiffs are not entitled to pursue damages where this does not dispose of an entire cause of action, or dispose of a claim for punitive damages. Under CCP §437c (f)(1) “ a party may move for summary adjudication as to ... one or more claims for damages ... if that party contends ... that there is no merit to a claim for damages as specified in Section 3294 of the Civil Code...”
Section 3294 of the Civil Code specifically addresses only punitive damages:
“(a) In an action for the breach of an obligation not arising from contract, where it is proven by clear and convincing evidence that the defendant has been guilty of oppression, fraud, or malice, the plaintiff, in addition to the actual damages, may recover damages for the sake of example and by way of punishing the defendant.”
The Second District has accordingly held that this portion of the summary adjudication statute applies only to punitive damage claims and that the statute does not permit summary adjudication of other claims for damages which do not dispose of an entire cause of action. DeCastro West Chodorow & Burns, Inc. v. Superior Court (1996) 47 Cal.App.4th 410. CCP §437c permits summary adjudication of other issues, but only under specified circumstances, including submitting a stipulation and obtaining advance permission of the court, which has not been obtained here.
Moreover, as noted above, the cause of action also alleges that defendants violated Business and Professions Code section 7030 (b), which statute is not addressed in the moving papers at all, including any argument concerning why that statute does not provide an actionable claim by the homeowner for a violation, or why that violation did not give rise to damages. [See TAC, para. 237]. The motion accordingly is denied.
RULING:
CCP 437c(g): Material facts which do or do not create a triable issue of controversy:
Motion of Defendant Building Inc. Construction dba Building Construction Group Seeking Summary Adjudication on Second and Seventh Causes of Action in Third Amended Complaint is DENIED.
Issue No. 1: Defendant BCG is Entitled to Summary Adjudication in its Favor on the Second Cause of Action Seeking Rescission of the BCG Contract
Motion is DENIED.
Defendant BCG has failed to meet its initial burden of establishing that plaintiffs will be unable to establish the cause of action. Defendant argues that the failure to disclose that defendant William Hefner had an interest in defendant BCG, was not material. However, the showing submitted would support a competing reasonable inference that the failure of the architect to disclose a substantial ownership interest and control over the construction company it had referred to plaintiffs to engage as the general contractor constituted the omission of a material fact with respect to potential conflicts of interest and control. See CCP § 437c(c) (“summary judgment shall not be granted by the court based on inferences reasonably deducible from the evidence if contradicted by other inferences or evidence that raise a triable issue as to any material fact.”); see also Hepp v. Lockheed-California Co. (1978) 86 Cal.App.3d 714, 718.
Even if the burden had shifted to plaintiffs to raise triable issues of material fact, plaintiffs in opposition submit evidence supporting a reasonable inference that the failure to disclose that BCG was owned by Hefner was a material omission, that the failure to make that disclosure in writing violated statutory and regulatory law, and that if such a disclosure had been made, plaintiffs would not have entered into the BCG contract. See Civil Code section 1770(a)(3); 16 Code of Regulations section 160(c)(2); Response to UMF No. 39, and evidence cited, Additional Facts, and evidence cited; Ex. 1, Dabbah Decl., paras. 8, 10, 12, 13, 20. Triable issues of fact have accordingly been raised.
Issue No. 2: Defendant BCG is Entitled to Summary Adjudication in its Favor on the Seventh Cause of Action Seeking Damages for Violations of the Business and Professions Code
Motion is DENIED.
The motion does not dispose of an entire cause of action, as required under CCP § 437c(f)(1) (“A motion for summary adjudication shall be granted only if it completely disposes of a cause of action, an affirmative defense, a claim for damages, or an issue of duty.”) The motion does not address all allegations included in the Third Amended Complaint with respect to statutory violations, so does not establish that one or more elements of the cause of action cannot be established on all grounds alleged. In addition, to the extent the argument is that Business & Professions Code section 7195 does not permit a claim for damages on the part of the homeowner, the argument does not address all violations, and is not addressed to the only claim for damages which can be summarily adjudicated, in effect, a claim for punitive damages. See CCP §437c (f)(1); Civil Code § 3294 (a); DeCastro West Chodorow & Burns, Inc. v. Superior Court (2nd Dist. 1996) 47 Cal.App.4th 410. Moreover, the case authority relied upon by the moving papers recognizes the availability of remedies to a homeowners for alleged violations of Business & Professions Code section 7195. See Asdourian v. Araj (1985) 38 Cal.3d 276, 293.
GIVEN THE CORONAVIRUS CRISIS, AND TO PROMOTE APPROPRIATE SOCIAL DISTANCING, UNTIL FURTHER ORDERED, DEPARTMENT D IS ENCOURAGING AUDIO OR VIDEO APPEARANCES
Please make arrangements in advance if you wish to appear via LACourtConnect by visiting www.lacourt.org, and scheduling a remote appearance. Please note that LACourtConnect offers an audio-only appearance option at a current cost of $15.00 and a video appearance option at a cost of $23.00. Counsel and parties (including self-represented litigants) are encouraged not to personally appear, unless they have obtained advance permission of the Court. Anyone who appears in person for the hearing will be required to comply with strict social distancing measures, including, but not limited to, assigned seating, capacity limitations in the courtroom, designated waiting areas, and strictly enforced spacing in line to communicate with court staff. If no appearance is set up through LACourtConnect, or otherwise, then the Court will assume the parties are submitting on the tentative.
Case Number: EC063852 Hearing Date: December 18, 2020 Dept: D
TENTATIVE RULING
Calendar: 15
Date: 12/18/2020 Trial
date: None Set
Case
Number: EC063852
Case
Name: Temianka, et al v. Hefner, et al.
MOTION FOR SUMMARY ADJUDICATION
[CCP § 437c; CRC 3.1350 et seq.]
Relief Requested:
Summary adjudication
in favor of Defendants William Hefner Architect, Inc.
dba Studio William Hefner and William Hefner, on the first, sixth and
eighth causes of action and as to the applicability of limitations of remedies
provision
Moving Party: Defendants William Hefner
Architect, Inc. dba Studio William Hefner and
William Hefner
Responding Party: Plaintiffs Daniel Temianka and Zeinab Dabbah,
individually and as Trustees
CAUSES OF ACTION: from Third Amended Complaint
1) Rescission (SWH Contracts)
2) Rescission (BCG
Contract)
3) Fraud (SWH Contracts)
4) Fraud (BCG Contract)
5) Breach of
Fiduciary Duty
6) Professional Negligence
7) Violation of
Business and Professions Codes
8) Breach of
Contract (SWH Contracts)
9) Breach of Contract (BCG Contract)
10) Breach of Third Party Beneficiary Contracts
11) Negligence
12) Intentional Misrepresentation
13) Negligent Misrepresentation
14) Conversion
15) Trespass to Chattels
SUMMARY OF
COMPLAINT:
These consolidated actions arise
out of a remodeling project entered into for improvements to a residence in La
Canada owned by Daniel Temianka and Zeinab Dabbah, individually and as trustees
of the Daniel Temianka and Zeinab Dabbah Family Trust.
The complaints in the related
actions have been deemed the cross-complaints. In those cross-complaint, defendants and cross-complainants Building
Inc. Construction and other parties, including William Hefner Architect, Inc.
allege that they provided services on the project for which they have not been
paid.
RULING:
CCP 437c(g): Material facts which do or do not create a triable issue of controversy:
Defendant William Hefner Architect, Inc. dba Studio William
Hefner and William Hefner’s Motion for Summary Adjudication of Causes of Action
and Issue of Damages is DENIED.
Issue No. 1: Summary Adjudication as to the First Cause of Action for Rescission as
to Hefner and SWH
Motion is DENIED.
The parties agree this cause of action is based on Civil
Code §1689, which provides, in pertinent part:
“(b) A party to a contract may
rescind the contract in the following cases:
(1) If the consent of the party
rescinding, or of any party jointly contracting with him, was given by mistake,
or obtained through duress, menace, fraud, or undue influence, exercised by or
with the connivance of the party as to whom he rescinds, or of any other party
to the contract jointly interested with such party.”
Defendants argue that plaintiffs cannot establish that at
the time the parties entered into the Architectural Agreement with SWH, consent
to that contract was given by mistake or obtained through fraud, but that the
purported irregularity here, the alleged failure to disclose that defendant
William Hefner had an interest in BCG, was not material to the Architectural
Agreement. The argument is that the
Architectural Agreement was only for architectural services to be provided by
defendants and does not include any construction work or general contracting
services, or make any reference to BCG, and that plaintiff’s BCG contract was
not signed until almost three weeks after the Architectural Agreement was
executed, so that at the time of the execution of the Architectural Agreement,
there was no reason for defendants to include Hefner’s ownership interest in
BCG within the Architectural Agreement. The showing submitted fails to meet defendants’ initial burden of
establishing the argument made, as the documents relied upon are not properly
authenticated, and have been objected to on that ground, and, in any case, the showing
would support a competing reasonable inference that the failure to disclose an
interest in the construction company defendants then intended to recommend to
do construction work constituted the omission of a material fact with respect
to what appropriate contract terms for the architectural services would
be. See CCP § 437c(c) (“summary judgment shall not be granted by the court based
on inferences reasonably deducible from the evidence if contradicted by other
inferences or evidence that raise a triable issue as to any material fact.”);
see also Hepp v. Lockheed-California Co. (1978) 86 Cal.App.3d 714, 718.
In any case, even if the burden had shifted to plaintiffs to
raise triable issues of material fact, plaintiffs in opposition argue that this
argument fails to dispose of the entire cause of action for rescission, which
seeks to rescind not only the Architectural Agreement, but the Design Services
Agreement entered into on May 21, 2013, after plaintiffs, at the recommendation
of defendants, had entered into the BCG Agreement in December of 2012. [See Third
Amended Complaint, paras. 27-31, 83, 84; UMF Nos. 10, 11]. The motion does not address this agreement,
and defendants have failed to meet their initial burden on this ground as
well.
Plaintiffs in opposition have also submitted evidence
supporting a reasonable inference that the failure to disclose the interest in
BCG was a material omission, and that based on the potential conflict of
interest, plaintiffs would not have entered into the Architectural Agreement in
the first instance, as well as that defendants independently engaged in fraud
by false promises, in effect, promising the provision of services defendants
did not at the time intend to provide, and were, in fact, not provided. [Response to UMF Nos. 3, 9, 10, and evidence
cited]. Triable issues of fact have
accordingly been raised.
Issue No. 2: Summary Adjudication as to the Sixth Cause of
Action for Professional Negligence as against Hefner and SWH
Motion is DENIED.
Defendants argue that plaintiff will be unable to establish
this cause of action because they cannot establish the essential element of
damages to support a professional negligence claim, as they have no evidence to
prove actual loss or damage resulting from the allege professional
negligence. Specifically, defendants
argue that the measure of damages for alleged defective construction is the
lesser of (1) the cost to repair the property, or (2) diminution in value of
the property under Heninger v. Dunn (1980) 101 Cal.App.3d 858, 862, and
that the cost of repair is beyond the competence of a layperson so that expert
opinion is required. See Miller v.
Los Angeles County Flood Control Dist. (1973) 8 Cal.3d 689, 703-702. Defendants argue that plaintiffs designated three experts, and the only
one of which was qualified to opine as to the cost of repair was their general
contracting expert, Fowler, who testified at deposition that he did not obtain
bids for repair or completion of the project. [UMF No. 27].
Plaintiffs in opposition have submitted further testimony
from their recognized expert Mr. Fowler, which shows the expert has since
conducted detailed work to prove the cost to repair the property and support a
claim of recoverable damages. [Response
to UMF No. 27, and evidence cited; Fowler Decl., paras, 4, 6, 9-12, 15]. While the motion and reply argue that this
subsequent opinion testimony is improper under Kennemur v. State of California
(1982) 133 Cal.App.3d 907, a review of the deposition transcript relied upon in
the moving papers fails to show that the expert was asked the critical question
of whether he had expressed all opinions intended to be offered at the time of
trial. [See Exhibits submitted by
defendants, Ex. A7, Fowler Deposition].
In addition, plaintiffs submit evidence on this matter from
the construction contractor who performed repairs, charged for them and was
paid by plaintiffs for the repairs, was identified as a non-retained expert and
who appears to have sufficient experience in such construction matters to
qualify as an expert. [Response to UMF Nos. 27, 31, and evidence cited; Fowler
Decl., para. 15; Golenberg Depo., pp. 16, 45, 51-61, 75, 76, 81-98, 174].
Triable issues of fact remain.
Issue No. 3: Summary Adjudication as to the Eighth Cause of Action for Breach of
Contract as against Hefner and SWH
Motion is DENIED.
Defendants argue that because plaintiffs cannot establish
the essential element of damages, they cannot establish each element of their
breach of contract claim, based on the same argument asserted as to Issue 2,
above. As discussed above, triable
issues of fact have been raised with respect to plaintiffs’ ability to prove
damages under defendants’ theory. The
motion on this issue accordingly also is denied.
Issue No. 4: Summary Adjudication as to the issue of applicability and enforceability
of the Limitation of Remedies provision within the contract entered into by and
between Plaintiffs and Defendants.
Motion is DENIED.
The motion does not dispose of an entire cause of action, as
required under CCP § 437c(f)(1) (“A
motion for summary adjudication shall be granted only if it completely disposes
of a cause of action, an affirmative defense, a claim for damages, or an issue
of duty.”) To the extent the argument
appears to be that the adjudication disposes of an issue of “damages,” under
CCP §437c (f)(1) “ a party may move for summary adjudication as to ... one or
more claims for damages ... if that party contends ... that there is no merit
to a claim for damages as specified in Section 3294 of the Civil Code...”
Section 3294 of the Civil Code
specifically addresses only punitive damages:
“(a) In an action for the breach of an
obligation not arising from contract, where it is proven by clear and convincing
evidence that the defendant has been guilty of oppression, fraud, or malice,
the plaintiff, in addition to the actual damages, may recover damages for the
sake of example and by way of punishing the defendant.”
The Second District has accordingly held that this portion
of the summary adjudication statute applies only to punitive damage claims and
that the statute does not permit summary adjudication of other claims for
damages which do not dispose of an entire cause of action. DeCastro West Chodorow & Burns, Inc.
v. Superior Court (1996) 47 Cal.App.4th 410. CCP §437c permits summary adjudication of
other issues, but only under specified circumstances, including submitting a
stipulation and obtaining advance permission of the court, which has not been
obtained here.
In addition, the argument by defendants is that the
Architect Agreement and Design Services Agreement include an enforceable
limitation with respect to damages being limited to the total invoiced dollar
value of the services provided and paid by client, not to exceed the amount of
defendant SWH’s available insurance policies. Again, no properly authenticated
copies of the subject Agreements are submitted with the moving papers to
establish the existence of such provisions, and objections have been asserted
on this ground, so that defendants have failed to meet their initial burden on
this motion.
In addition, plaintiffs have submitted evidence raising
triable issues of material fact with respect to the validity of such a
provision under circumstances involving alleged intentional tortious/fraudulent
conduct. [Response to UMF No. 33, and
evidence cited]. See Civil Code section 1668
(“All
contracts which have for their object, directly or indirectly, to exempt anyone
from responsibility for his own fraud, or willful injury to the person or
property of another, or violation of law, whether willful or negligent, are
against the policy of the law.”)
Plaintiffs’ Objections to Evidence Submitted by Defendants
in Support of Defendants’ Motion for Summary Adjudication are SUSTAINED. The Court notes, however, that plaintiffs in
opposition purport to rely on some of the unauthenticated documents, which
plaintiffs themselves evidently at least partly authenticate.
Defendants William Hefner Architect, Inc. dba Studio William
Hefner’s and William Hefner’s Objections to Plaintiff’s Evidence in Support of
Opposition to Motion for Summary Adjudication:
Objections are OVERRULED. The Court notes it has limited consideration
of evidence of damages in connection with the professional negligence cause of
action to cost to repair or diminution in value.
GIVEN THE CORONAVIRUS CRISIS, AND TO PROMOTE APPROPRIATE SOCIAL
DISTANCING, UNTIL FURTHER ORDERED, DEPARTMENT D IS ENCOURAGING AUDIO OR VIDEO
APPEARANCES
Please make arrangements in advance if you wish to appear
via LACourtConnect by visiting www.lacourt.org, and scheduling a
remote appearance. Please note that
LACourtConnect offers an audio-only appearance option at a current cost of
$15.00 and a video appearance option at a cost of $23.00. Counsel and parties (including
self-represented litigants) are encouraged not to personally appear, unless
they have obtained advance permission of the Court. Anyone who appears in person for the hearing
will be required to comply with strict social distancing measures, including,
but not limited to, assigned seating, capacity limitations in the courtroom,
designated waiting areas, and strictly enforced spacing in line to communicate
with court staff. If no appearance is
set up through LACourtConnect, or otherwise, then the Court will assume the
parties are submitting on the tentative.
