Opinion
NOT TO BE PUBLISHED
APPEAL from a judgment of the Superior Court of San Diego County Super. Ct. No. 37-2007-00064125-CU-BC-CTL, William R. Nevitt, Jr., Judge.
McDONALD, J.
Plaintiff Nomil, Inc. (Nomil) appeals a judgment entered after the trial court granted defendant Manuel R. Contreras's motion for nonsuit in Nomil's negligent construction and breach of contract action against M.R. Contreras Construction, Inc., (Corporation) and Contreras. On appeal, Nomil contends the trial court erred by concluding Contreras was not personally liable, as Corporation's responsible managing employee or otherwise, for the negligent construction of its project.
FACTUAL AND PROCEDURAL BACKGROUND
On or about March 28, 2006, Nomil entered into a written agreement with Corporation for construction of a commercial building for Nomil in San Ysidro.
On March 27, 2007, Nomil filed the instant action against Corporation, Contreras, and Corporation's bonding company (American Contractors Indemnity Company), alleging causes of action for breach of contract, constructive fraud, negligence, and recovery on the license bond. On August 10, Nomil filed the operative second amended complaint, alleging the same causes of action and adding the project's surveyor (Victor Rodriguez-Fernandez) as a defendant. That complaint's negligence cause of action alleged that Contreras and Corporation "negligently, carelessly, tortiously, and wrongfully failed to use reasonable care in the analysis for, and actual construction of, [Nomil's] Project" and "were under a duty to exercise ordinary care as superintendent/qualifying individual and contractor to avoid reasonably foreseeable injury to [Nomil], and knew, or should have foreseen with reasonable certainty[,] that [Nomil] would suffer the monetary damages set forth herein if [they] failed to perform their duties to cause [Nomil's] Project to be completed in a proper and workmanlike manner and fashion."
In December 2008, a bench trial was conducted. After Nomil concluded its case, Contreras moved for a nonsuit on the two causes of action against him. After hearing arguments of counsel and considering the evidence, the trial court granted Contreras's motion for nonsuit.
On conclusion of the trial, the court found Corporation liable on Nomil's negligence and breach of contract causes of action. The court entered judgment for Contreras and against Nomil and for Nomil against Corporation, awarding Nomil an aggregate of $169,235 in damages. Nomil timely filed a notice of appeal.
DISCUSSION
I
Nonsuit Standard of Review
Code of Civil Procedure section 581c allows a defendant to move for a nonsuit following presentation of the plaintiff's case. A trial court's ruling on a motion for nonsuit is "reviewed for the existence of substantial evidence." (OCM Principal Opportunities Fund, L.P. v. CIBC World Markets Corp. (2007) 157 Cal.App.4th 835, 845.) "[T]he body of evidence pertinent to nonsuit is that identified in the plaintiff's opening statement or case-in-chief." (Ibid.) "A motion for nonsuit allows a defendant to test the sufficiency of the plaintiff's evidence before presenting his or her case.... A trial court must not grant a motion for nonsuit if the evidence presented by the plaintiff would support a jury verdict in the plaintiff's favor. [Citations.] [¶] 'In determining whether plaintiff's evidence is sufficient, the court may not weigh the evidence or consider the credibility of witnesses. Instead, the evidence most favorable to plaintiff must be accepted as true and conflicting evidence must be disregarded. The court must give "to the plaintiff['s] evidence all the value to which it is legally entitled,... indulging every legitimate inference which may be drawn from the evidence in plaintiff['s] favor...." ' [Citations.]" (Carson v. Facilities Development Co. (1984) 36 Cal.3d 830, 838-839.) Substantial evidence is not synonymous with any evidence, but must be reasonable, credible, and of solid value. (OCM Principal Opportunities Fund, L.P., at p. 845.)
Code of Civil Procedure section 581c, subdivision (a), provides: "Only after, and not before, the plaintiff has completed his or her opening statement, or after the presentation of his or her evidence in a trial by jury, the defendant, without waiving his or her right to offer evidence in the event the motion is not granted, may move for a judgment of nonsuit."
"In an appeal from a judgment of nonsuit, the reviewing court is guided by the same rule requiring evaluation of the evidence in the light most favorable to the plaintiff. 'The judgment of the trial court cannot be sustained unless interpreting the evidence most favorably to plaintiff's case and most strongly against the defendant and resolving all presumptions, inferences and doubts in favor of the plaintiff a judgment for the defendant is required as a matter of law.' [Citations.]" (Carson v. Facilities Development Co., supra, 36 Cal.3d at p. 839.) A judgment of nonsuit "must not be reversed if plaintiff's proof raises nothing more than speculation, suspicion, or conjecture." (Ibid.)
II
Nonsuit for Contreras
Nomil contends the trial court erred by granting Contreras's motion for nonsuit because there was substantial evidence to support a finding he was personally liable for negligence based either on his position as Corporation's registered managing employee or his own conduct during construction of Nomil's project.
A
Business and Professions Code section 7068, subdivision (b)(3), provides that a corporation applying for a contractor's license "shall qualify by the appearance of a responsible managing officer or responsible managing employee who is qualified for the same license classification as the classification being applied for." "A responsible managing employee... shall mean an individual who is a bona fide employee of the applicant and is actively engaged in the classification of work for which that responsible managing employee is the qualifying person in behalf of the applicant." (§ 7068, subd. (c).) Section 7068.1 provides:
All further statutory references are to the Business and Professions Code.
"The person qualifying on behalf of... [a] firm [e.g., corporation] under paragraph... (3) of subdivision (b) of Section 7068 shall be responsible for exercising that direct supervision and control of his or her employer's or principal's construction operations as is necessary to secure full compliance with the provisions of this chapter and the rules and regulations of the board relating to the construction operations...."
Contrary to Nomil's assertion, the fact that Contreras was Corporation's responsible managing employee (RME), or qualifying individual, for the Corporation's contractor's license does not necessarily make him personally liable for all negligent or defective construction work performed by the Corporation or its employees. One court stated that although section 7068.1 "render[s] a responsible managing employee strictly liable to disciplinary proceedings when his principal acts wrongly" (Swickheimer v. King (1971) 22 Cal.App.3d 220, 224-225), "the fact that [section 7068.1] constitute[s] a valid exercise of the police power does not render [section 7068.1] applicable in a civil action for damages. [Section 7068.1 is] regulatory and disciplinary in nature, and [it was] clearly not intended to alter the rules governing civil liability." (Id. at p. 225.)
Nomil does not cite any apposite case supporting its assertion. Rather, the sole case cited by Nomil, Michaelis v. Benavides (1998) 61 Cal.App.4th 681, supports our conclusion. In Michaelis, defendant Anthony Benavides was the only person with the corporate contractor who held a contractor's cement license. (Id. at p. 683.) He also was its president, director, and 50 percent shareholder. (Ibid.) He "personally bid for [plaintiffs'] cement job. He personally made the construction decisions for the patio and driveway. His brother... provided the manual labor." (Ibid.) At the hearing on Benavides's motion for nonsuit, he stipulated that he was negligent in constructing the plaintiffs' patio and driveway. (Ibid.) Michaelis noted the parties stipulated, for purposes of Benavides's nonsuit motion, that he "was individually negligent in building [plaintiffs] a patio and driveway. This acknowledges that a breach of duty owed to [plaintiffs] as third parties was violated, rather than merely a breach of duty [he] owed to [his corporation]." (Id. at p. 686.) The court further stated: "In addition, [plaintiffs] alleged facts indicating [Benavides] may be personally liable for the negligent act by his direct participation and decisionmaking in the construction of the patio and driveway. These allegations, together with the parties' stipulation, prevent [Benavides] from using the corporate veil to shield himself from personal liability." (Ibid.) Benavides "personally made the decisions to use cheaper materials and construction methods which allegedly resulted in the patio's and driveway's structural inadequacies." (Ibid.) Accordingly, Michaelis concluded: "The instant circumstances involve a corporate officer's personal tortious conduct, which conduct breached a duty of care to a third party and caused the third party to suffer physical damage to his property." (Id. at p. 687.) It stated: "The corporate fiction was never intended to insulate officers from liability for their own tortious conduct." (Id. at p. 688.) Therefore, the Michaelis court reversed the trial court's judgment of nonsuit for Benavides. (Ibid.)
Based on the facts and circumstances in Michaelis, the RME, qualifying licensee, officer, director, and shareholder of the defendant corporation in that case was not entitled to nonsuit because he was personally involved in the substandard construction work. Michaelis does not support Nomil's suggested legal principle that an RME is necessarily personally liable for all negligent construction work performed by a corporate contractor or its employees. Rather, we presume Michaelis supports Contreras's position that an RME, qualifying licensee, officer, director, or shareholder of a corporate contractor cannot be liable for negligent construction work unless he or she personally breaches a legal duty owed to a plaintiff by personally participating in the negligent work or authorizing or directing that the negligent work be done. (Cf. United States Liab. Ins. Co. v. Haidinger-Hayes, Inc. (1970) 1 Cal.3d 586, 595.)
"It is well settled that corporate directors cannot be held vicariously liable for the corporation's torts in which they do not participate. Their liability, if any, stems from their own tortious conduct, not from their status as directors or officers of the enterprise. [Citation.] '[A]n officer or director will not be liable for torts in which he does not personally participate, of which he has no knowledge, or to which he has not consented.... While the corporation itself may be liable for such acts, the individual officer or director will be immune unless he authorizes, directs, or in some meaningful sense actively participates in the wrongful conduct.' [Citation.] [¶] Directors are jointly liable with the corporation and may be joined as defendants if they personally directed or participated in the tortious conduct. [Citations.] [¶] Directors are liable to third persons injured by their own tortious conduct regardless of whether they acted on behalf of the corporation and regardless of whether the corporation is also liable. [Citations.]" (Frances T. v. Village Green Owners Assn. (1986) 42 Cal.3d 490, 503-504.) Personal liability of an officer or director does not depend on the doctrine of " 'piercing the corporate veil,'... but rather on the officer or director's personal participation or specific authorization of the tortious act. [Citation.]" (Id. at p. 504, italics added.) "Corporate director or officer status neither immunizes a person from personal liability for tortious conduct nor subjects him or her to vicarious liability for such acts." (PMC, Inc. v. Kadisha (2000) 78 Cal.App.4th 1368, 1379.)
We conclude that Contreras's position as the RME, qualifying licensee, officer, director, or shareholder of Corporation does not, by itself, make him vicariously liable for negligent construction work performed by the Corporation or its employees. Nomil has not carried its appellate burden to persuade us to conclude otherwise.
B
Assuming arguendo that an RME or qualifying licensee for a corporate contractor, like an officer or director of a corporation, can be held personally liable for his or her own negligent work, or personal authorization or direction of negligent work, we conclude there is insufficient evidence in the record in this case to support a finding that Contreras personally performed negligent work, or personally authorized or directed the performance of negligent work, on Nomil's project. The evidence does not support a reasonable inference that Contreras inspected the project during its negligent construction by Corporation's employees. Based on Nomil's supporting citation to the record, the evidence shows Contreras testified he only visited the construction site "a couple of times" during the one and one-half week period it took to pour the concrete slab. Furthermore, Contreras cites other portions of the record showing he did not direct or supervise the negligent construction work of Nomil's project. Rather, the evidence shows Jerry Lozano acted as Corporation's on-site supervisor of the day-to-day construction work performed on Nomil's project.
Aaron Limon Vargas, Nomil's vice-president, testified that he visited the project three to four times a week and, although he saw Contreras there, he only occasionally spoke with him. Rather, Limon regularly spoke with Lozano, who Limon understood was Corporation's project manager supervising the construction of the project on a daily basis. Contreras testified Lozano was Corporation's superintendent who was at the jobsite daily and whose full-time job was to oversee its 10 employees working on Nomil's project. Contreras testified that Corporation had about 15 other construction projects with which he was involved during Nomil's project. At the time of Nomil's project, Corporation had a total of about 55 employees. Contreras testified he was not involved in the day-to-day oversight of Corporation's construction activities on Nomil's project. Also, he was not sure who made the decision on Nomil's project to use 3/8-inch pea gravel instead of 3/4-inch aggregate.
Based on the evidence in the record at the time of Contreras's motion for nonsuit, there is insufficient evidence to support a finding that Contreras was personally negligent in performing or supervising construction work on Nomil's project, or that he personally authorized or directed that negligent construction work be done by Corporation or its employees. Accordingly, there is no basis on which Contreras can be found personally liable for the negligent construction of Nomil's project. Therefore, the trial court correctly granted Contreras's motion for nonsuit.
Because Nomil does not challenge on appeal the trial court's additional conclusion that the evidence could not support Nomil's cause of action against Contreras for constructive fraud, we need not address the evidence or applicable law regarding that cause of action.
DISPOSITION
The judgment is affirmed. Contreras is entitled to costs on appeal.
WE CONCUR: HUFFMAN, Acting P. J. HALLER, J.