Memorandum Points and Authorities

Cal. Super. - 6th Dist.September 13, 2017

Electronically Filed by Superior Court of CA, County of Santa Clara, on 9/7/2018 10:39 AM Reviewed By: L. Quach-Marcellana Case #17CV315810 Envelope: 1919468 17CV315810 Santa Clara - Civil MCNAMARA, NEY, BEATTY, SLATTERY, BORGES & AMBACHER LLP ATTORNEYS AT LAW 639 KENTUCKY STREET, FAIRFIELD, CA 94533-5530 TELEPHONE: (707) 427-3998 \DOOQQUI-b 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Table 0f Contents I. INTRODUCTION/SUMMARY OF ARGUMENT ..................................................................... 2 II. ALLEGATIONS IN THE COMPLAINT ................................................................................ 2-5 III. ALLEGATIONS IN THE CROSS-COMPLAINT ................................................................ 5-7 A. Plaintiff’s Cross-Coimplaint is Properly Subject t0 Demurrer ............................. 5-7 IV. LEGAL ANALYSIS ........................................................................................................... 7-13 A. First Cause 0f Action of the Cross-Complaint ...................................................... 7-9 B. Second Cause 0f Action of the Cross~Complaint ............................................... 9~10 C. First and Second Causes of Action 0f Cross-Complaint Are Improperly Plead .................................................................................................................. 10-13 D. The Demurrer Should Be Sustained Without Leave t0 Amend .............................. 13 V. CONCLUSION .......................................................................................................................... 13 MCNAMARA, NEY, BEATTY, SLATTERY, BORGES & AMBACHER LLP ATTORNEYS AT LAW 639 KENTUCKY STREET, FAIRFIELDA, CA 94533-5530 TELEPHONE: (707) 427-3998 .p COOQO‘xLIl 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Table of Authorities Barnett v. Fireman ’s Fund Ins. C0. (2001) 90 Ca1.App.4‘“ 500 ............................................................................ 6 Bates v. Daley' s (1935) 5 Ca1.App.2d 95 .............................................................................. 11 Blank v. Kirwan (1985) 39 Cal. 3d 311 ................................................................................ 5 Cansino v. Bank ofAmerica (2014) 224 Cal.App. 4‘“ 1462 ........................................................................ 6 Cantu v. Resolution Trust Corp. (1992) 4 Ca1.App, 4‘1‘ 857 ............................................................................. 7 Del E. Webb Corporation v. Structural Materials C0. (1981) 123 Cal.App.3d 593 .......................................................................... 6 Donahue v. Apple, Inc. (N.D.Cal. 2012) 871 F.Supp.2d 913 ........................................................... 10, 11 Fontenot v. Wells Fargo Bank, NA. (201 1) 198 Ca1.App.4‘“ 256 .......................................................................... 6 Gautier v. General Tel. C0. (1965) 234 Cal. App. 2d. 302 ................................................................... 10, 11 George v. Automobile Club ofSouthern Calif (201 1) 201 Cal.App.4‘h 1112 ......................................................................... 6 Guardian North Bay, Ina, v. Sup.Ct. (Meyers) (2001) 94 Cal.AppA‘“ 963 ............................................................................ 5 Hawkins v. Oakland Title Ins. & Guaranty C0. (1958) 165 Ca1.App.2d 116, 122 .................................................................... 5 Hays v. Temple (1937) 23 Cal.App.2d 690 ........................................................................... 10 Hills Trans. C0. v. Southwest Forest Industries (1968) 266 Cal.App.2d 702 ................................................................ 10, 11, 12 Larson v. UHS ofRancho Springs, Inc. (2014) 230 Cal.AppAt“ 336 ........................................................................... 7 ii MCNAMARA. NEY, BEATTY, SLATTERY, BORGES & AMBACHER LLP ATTORNEYS AT LAW 639 KENTUCKY STREET, FAIRFIELD, CA 94533-5530 TELEPHONE: (707) 427-3998 OOOQO 10 11 12 13 14 15 16 17 18 19 2O 21 22 23 24 25 26 27 28 Lockton v. 0 ’Rourke (2010) 184 Cal.App. 4th 1051 ....................................................................... 7 Lortz v. Connell (1969) 273 Cal.App.2d 286 ........................................................... 10 Low v Linkedln C0rp., 900 F. Supp. 2d 1010 ........................................................ 10, 11 McKell v. Washington Mutual, Inc. (2006) 142 Cal.App.4th 1457 ................................................................... 7, 11 Moran v. Prime Healthcare Mgmt., Inc. (2016) 3 Cal.App.5th 1131 ........................................................................... 6 0tw0rth v. Southern Pac.Transp0r_tati0n C0. (1985) 166 Cal.App.3d 452 ................................................................. 2, 10, 12 Owens v. Kings Supermarket (1988) 198 Cal.App.3d 379 ............................................................................ 7 Rakestraw v. Cal. Physicians’ Service (2000) 81 Cal.App.4th 39 ............................................................................. 5 Title Ins. C0. v. Cornerica Bank (1994) 27 Cal.App.4th 800............................................................................ 5 Vaccaro v. Kaiman (1998) 63 Cal.App.4th 761 ............................................................................ 13 Code of Civil Procedure §430.10 (e), (t) .................................................................... 5 Code of Civil Procedure §430.10 (g) ................................................................. 2, 5, 10 Code Civil Procedure §430.3O (a) ............................................................................ 6 Weil & Brown, Cal. Prac. Guide: CiV. Pro. Before Trial (The Rutter Group 201 1) ‘][ 7:49 and 7:9 .......................................................................................... 5 Wei] & Brown, Cal. Prac. Guide: Civ. Pro. Before Trial (The Rutter Group 201 1) ‘][ Civil Procedure Before Trial, Attacking the Pleadings, 7: 16 .................................. 6 5 Witkin, Cal. Proc. Pleading, § 518-519 ................................................................. 11 5 Witkin, Cal. Proc. Pleading, § 595 and 609 ............................................................ 12 iii MCNAMARA, NEY, BEATTY, SLATTERY, BORGES & AMBACHER LLP ATTORNEYS AT LAW 639 KENTUCKY STREET, FAIRFIELD, CA 945335530 TELEPHONE: (707) 427-3998 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Defendant ASSOCIA NORTHERN CALIFORNIA, INC, a California corporation, submits its Memorandum of Points and Authorities in Support of its Demurrer to the Cross- Complaint 0f San Jose Creekside Association; I. INTRODUCTION/SUMMARY OF ARGUMENT The Cross-Complaint contains two (2) causes 0f action against Associa 0f Northern California, Inc., one for breach of contract and the other for gross negligence and/or willful misconduct in executing an alleged, yet undescribed, contract, between the parties. Code of Civil Procedure § 430.10, subd. (g) provides that the party against whom a cross-complaint has been filed may object by demurrer t0 the pleading 0n the grounds that “[i]n an action found upon a contract, it cannot be ascertained from the pleading whether the contract is written, is oral, 0r is implied by conduct”. The Cross-Complaint is subject to this deficiency. The Cross-Complaint is also subject to demurrer because it is uncertain and fails t0 state causes 0f action. The purported contract is not attached to the Cross-Complaint; nor are the material terms of the purported contract plead. (See, (Otworth v. Southern Pac.Transp0rtati0n C0. (1985) 166 Cal.App.3d 452, 458-459 [212 Cal.Rptr. 743]) The promotional materials attached t0 the Cross-Complaint obviously do not constitute a contract. There are n0 certain allegations regarding who are the parties to the contract, what are the material terms 0f the contract, who breached the contract, how it was breached, and when. It cannot even be determined with certainty whether Associa is being sued for breach of contract with regard to the contract originally executed by Massingham (which the HOA has denied as being executed by the parties, Paragraph 13 of Cross-Complaint), 0r on a different contract. There are n0 specific allegations about how and why Associa was grossly negligent 0r engaged in willful misconduct in its performance of the alleged contract. II. ALLEGATIONS IN THE COMPLAINT The Complaint in this action was filed 0n September 13, 2017. The plaintiffs in the action are Stephen and Andrea Bartlinski and Gerald and Susan DeYoung, owners 0f property located at 1001 Villa Maria Court, San Jose, California. The Complaint alleges that Unit 1001 is part 0f the common interest development known as the San Jose Creekside Villas, which is managed by tha 2 MEMORANDUM OF POINTS AND AUTHORITYS IN SUPPORT OF DEMURRER TO CROSS-COMPLAINT MCNAMARA, NEY, BEATTY, SLATTERY, BORGES & AMBACHER LLP ATTORNEYS AT LAW 639 KENTUCKY STREET. FAIRFIELD, CA 94533-5530 TELEPHONE: (707) 4273998 \OOOflOUl-bww 10 11 12 13 14 15 16 17 18 19 2O 21 22 23 24 25 26 27 28 San Jose Creekside Villa Homeowner’s Association, a California nonprofit corporation. (Hereafter sometimes “HOA”) The Complaint alleges that in the late 1990’s several properties in the development, including units 1004, 1005, 1009, 1021, 1025, 1063, 1067, 1070, 1074, 1078, and 1082 0f Villa Maria Court experienced significant foundation movement and resulting damages. According t0 the Complaint, Section 6.3(b)(3) of the CC&R’s provide that the HOA is responsible for repairs and raplacement of the foundation of the condominium units. According to the Complaint, the HOA undertook repairs t0 these units. In October 2002, the HOA, through its retained engineer and contractor, installed helix support piers, grade beams and performed other structural stabilization work. The Complaint further alleges that despite the fact repairs had been made, by 2011 the foundation of the property begin to evidence further movement and resulting damage. The HOA commissioned a soils engineering report from Alan Kropp & Associates and a structural engineering report from Quilici Engineers, Inc. According t0 the Complaint, both reports recommended that the HOA install under pinning below the foundations on the property. The Quilici Report advised that this work should be done as soon as possible t0 mitigate any further foundation movement and unaccounted for stresses. According to the Complaint, despite these recommendations, the HOA failed t0 perform these repairs t0 the property. By 2014, the structural damage to the foundations continued t0 worsen. By January 2014, the plaintiffs experienced a significant leak from the master bedroom into the kitchen. It was determined that the plumbing pipes had completely separated due to the structural movement of the foundation. Plaintiffs were unable t0 use the bathroom for several months until the pipes were reconnected. In 2014, plaintiffs provided further notice to the HOA 0f the continuing damage t0 the foundation. Plaintiffs made demand to the HOA to immediately investigate the condition, to repair the foundation and t0 repair all resulting interior damage. According to the Complaint, the HOA, hired an engineer to investigate the foundation issues. The engineer issued at least two reports. The last report was issued 0n May 5, 2014. The engineer wrote that the items/work recommended by them in 2011 had not been done, and determined that structural framing elements 0n the property continued t0 experience additional 3 MEMORANDUM OF POINTS AND AUTHORITYS IN SUPPORT OF DEMURRER TO CROSS-COMPLAINT MCNAMARA, NEY‘ BEATTY, SLATTERY, BORGES & AMBACHER LLP ATTORNEYS AT LAW 639 KENTUCKY STREET. FAIRFIELD. CA 94533-5530 (707) 427-3998 TELEPHONE: 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 stress due t0 deformities as a result 0f the foundation movement. The engineer also informed the HOA that the stress could cause detrimental effects on the nonstructural partitions, bearing walls and associated flooring and roof truss framing on the property. The engineer recommended mitigating further fofindation movement and unaccounted for building stresses by performing a complete building underpinning and building re-leveling. The Complaint alleges that despite being repeatedly informed 0f the gravity 0f the ongoing structural issues with the property, the HOA failed to fully disclose the structural issues t0 the residents of the condominium complex and, instead of authorizing an emergency assessment to cover the repair costs, the HOA held a special assassment vote of the residents to approve the assessments t0 cover the repair costs. The members did not approve the special assessment and the HOA did not seek an emergency assessment. Allegedly, as a result 0f the HOA failing t0 disclose the extent 0f the problems with the property to its residents and the failure to authorize an emergency assessment to pay for the repairs, the HOA did not obtain funding t0 pay for the repairs t0 the property until October 2015. By February 2015 the property became uninhabitable due t0 the fact that the foundation issues had caused such significant interior cracking and interior wall and floor movement. On September 22, 2015, for safety reasons, the gas lines were turned off t0 plaintiffs’ property. As alleged in the Complaint, 0n October 23, 2015, the HOA finally agreed that an emergency assessment was required t0 effectuate the repairs to plaintiffs’ property and to the neighboring units negatively affected by the foundation issues. Notwithstanding the passage 0f the emergency assessment, plaintiffs allege in the Complaint that they are informed and believe the HOA does not currently have adequate funds to pay for structural repairs, which according t0 plaintiffs, the HOA is contractually obligated to perform. The HOA still has not repaired any 0f the structural defects and plaintiffs’ property remains uninhabitable. The Complaint contains Causes 0f Action against the HOA for Breach 0f Fiduciary Duty, Negligence, Breach 0f the CC&R’s and Declaratory Relief and Specific Performance. As to the HOA, the Complaint seeks damages to repair the negative soils/foundation conditions, damages t0 repair the units themselves, attorney’s fees and punitive damages, and seeks to have an order 4 MEMORANDUM OF POINTS AND AUTHORITYS IN SUPPORT OF DEMURRER TO CROSS-COMPLAINT MCNAMARA, NEY, BEATTY, SLATTERY, BORGES & AMBACHER LLP ATTORNEYS AT LAW 639 KENTUCKY STREET. FAIRFXELD, CA 94533-5530 TELEPHONE: (707) 427-3998 .p \DWQQU} 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 issued requiring the HOA t0 repair the soil/foundation issues and t0 complete repairs to the units. The Complaint alleges a single cause 0f action against Associa Northern California, Inc., for negligence. The Complaint lacks any specification as to how Associa Northern California, Inc., was allegedly negligent. III. ALLEGATIONS IN THE CROSS-COMPLAINT After obtaining leave 0f Court t0 do so, San Jose Creekside Homeowner’s Association filed a Cross-Complaint against Associa, and plaintiffs Stephen and Andrea Bartlinski. The Cross- Complaint asserts only two causes 0f action against moving party, Associa. The First Cause 0f Action asserted against Associa is for breach of contract. The Second Cause 0f Action is for negligence. The allegations contained within each cause 0f action, and why a demurrer is appropriately sustained t0 each cause 0f action, are discussed below. A. Plaintiffs’ Cross-Complaint Is Properlv Subiect t0 Demurrer A demurrer tests the legal sufficiency 0f the factual allegation in the complaint. (Title Ins. C0. v. C0merica Bank (1994) 27 Ca1.App.4th 800, 807.) Pursuant t0 Code 0f Civil Procedure 430.10 (e), (f) and (g), a cross-complaint, 0r any cause 0f action therein, is subject to demurrer if it does not state facts sufficient t0 constitute a cause of action, the pleading in uncertain 0r in an action founded upon contract, it cannot be ascertained from the pleading whether the contract is written, is oral, 0r is implied by conduct. In order t0 state sufficient facts, the complaint must contain some statement 0f facts, which, without the aid 0f other conjectured facts not stated, shows a complete cause of action.” (Rakestraw v. Cal. Physicians’ Service (2000) 81 Cal.App.4th 39, 43; Hawkins v. Oakland Title Ins. & Guaranty C0. (1958) 165 Cal.App.2d 116, 122.) A general demurrer may also lie because the complaint alleges [00 littlewit can be used where the complaint is incomplete, or plaintiff has failed to allege some ultimate fact required to state a cause of action. (Guardian North Bay, Inca, v. Sup.Ct. (Meyers) (2001) 94 Cal.App.4th 963, 971-972 [114 Cal. Rpt. 2d 748,754]); Weil & Brown, Cal. Prac. Guide: Civ. Pro. Before Trial (The Rutter Group 2011) ‘11 7:49 and 7:9) Therefore, When a demurrer is sustained, the court has determined that the complaint fails t0 state facts sufficient to constitute a cause 0f action. (Blank v. Kirwan (1985) 39 Cal. 3d 311, 318.) 5 MEMORANDUM OF POINTS AND AUTHORITYS IN SUPPORT OF DEMURRER TO CROSS-COMPLAINT MCNAMARA, NEY, BEATTY, SLATTERY, BORGES & AMBACHER LLP ATTORNEYS AT LAW 639 KENTUCKY STREET, FAIRFIELD, CA 94533-5530 TELEPHONE: (707) 427-3998 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 For purposes 0f this demurrer, the Court may use material which appears on the face 0f the complaint or which is judicially noticeable. (Code Civ. Proc. § 430.30, subd. (a)) As noted in Fontenot v. Wells Fargo Bank, N.A. (2011) 198 Cal.App.4th 256, 264-65, With regard to the ruling on a demurrer, “Judicial notice is the recognition and acceptance by the court, for use by the trier 0f fact 0r by the court, of the existence 0f a matter 0f law 0r fact that is relevant to an issue in the action without requiring formal proof of the matter.” (citations omitted) When ruling on a demurrer, “[a] court may take judicial notice 0f something that cannot reasonably be controverted, even if it negates an express allegation 0f the pleading.” The court may take judicial notice 0f admissions or inconsistent statements made by plaintiff in earlier pleadings. Similarly, the court may take judicial notice 0f plaintiff’s discovery responses. (Weil & Brown, Cal. Prac. Guide: Civ. Pro. Before Trial (The Rutter Group 201 1) (fl Civil Procedure Before Trial, Attacking the Pleadings, 7: 16) The actual contents 0f the exhibits are accepted as true but the pleader’s allegations 0f the legal effect 0f the exhibits are treated as surplusage in determining whether a demurrer is appropriately sustained. As noted in Barnett v. Fireman’s Fund Ins. C0. (2001) 9O Cal.App.4th 500, 505 [108 Cal.. Rptr. 2d 657, 659], “we rely 0n and accept as true the contents of the exhibits and treat as surplusage the pleader’s allegations as t0 the legal effect of the exhibits”. In George v. Automobile Club ofSouthem Calif (201 1) 201 Cal.App.4th 1112, 1130 [135 Cal. Rptr. 480, 492, “trial court was not required t0 credit plaintiff’s allegation that extrinsic evidence ‘renders the insurance contract at issue here ambiguous” where language 0f policy attached t0 the complaint 9”shows otherwise . Facts appearing in exhibits attached to the complaint are given precedence over inconsistent allegations in the complaint. (Moran v. Prime Healthcare Mgmt., Inc. (2016) 3 Cal.App.5th 1131, 1145~114 [ 208 CR3d 303, 314). It is well established law that the allegations of a complaint are not accepted as true if they contradict 0r are inconsistent with facts judicially noticed by the Court. (Cansino v. Bank 0f America (2014) 224 Cal.App. 4th 1462, 1474 (169 Ca1.Rptr.3d 619, 629-630) As noted in Del E. Webb Corporation v. Structural Materials C0. (1981) 123 Cal.App.3d 593, 604 [176 CalRptr. 824, 830, “Thus, a pleading valid 0n its face may nevertheless be subject t0 demurrer When 6 MEMORANDUM OF POINTS AND AUTHORITYS IN SUPPORT OF DEMURRER TO CROSS-COMPLAINT MCNAMARA, NEY, BEATTY, SLATTERY, BORGES & AMBACHER LLP ATTORNEYS AT LAW 639 KENTUCKY STREET, FAIRFIELD, CA 94533-5530 TELEPHONE: (707) 427-3998 \OOOQQUiah 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 matters judicially noticed by the court render the complaint meritless”. (See also, Larson v. UHS 0f Rancho Springs, Inc. (2014) 230 Cal.App.4th 336, 344 [179 Cal.Rptr. 3d 161, 166]) Allegations in the earlier pleading are “read into” the complaint, and allegations inconsistent therewith are treated as a sham and disregarded. (Owens v. Kings Supermarket (1988) 198 Ca1.App.3d 379, 384 [243 Cal.Rptr. 627, 630]; Lockton v. O’Rourke (2010) 184 Cal.App. 4th 105 1, 1061, 109 Cal.Rptr.3d 392, 399) A plaintiff may not avoid a demurrer by suppressing facts which prove the pleaded facts are false. (McKell v. Washington Mutual, Inc. (2006) 142 Cal.App.4th 1457, 1491 [49 Cal.Rptr.3d 227]; Cantu v. Resalution Trust Corp. (1992) 4 Cal.App, 4th 857, 877 [6 Ca1.Rptr. 2d 151]) IV. LEGAL ANALYSIS A. First Cause of Action Of The Cross-Complaint In the general allegations preceding the First Cause of Action, the HOA alleges that in 2002, the HOA had t0 undertake substantial repairs t0 the foundations 0f the units at the San Jose Creekside Villa development. The general allegations d0 not state which of the 28 units underwent foundation repairs. (Paragraph 6) It is further alleged in the general allegations that in 2002 the HOA undertook substantial repairs including the installation 0f helical support piers, grade beams and other structural stabilization work t0 shore up foundations that were shifting. However, by 2011, the foundations 0f the affected properties began t0 experience further foundation movement and damage. The HOA hired Associa, who was acting as its management company, to separately act as its project manager to resolve these issues. (Paragraph 7) The general allegations contain n0 date when Associa was allegedly hired, d0 not state whether there was an oral 0r written contract, d0 not state the terms 0f the hiring 0r any facts. It is further alleged in the general allegations that Associa as project manager presented an ESR bid which was not feasible because it would cost $3,000,000. Repairs at that cost would result in assessments against the homeowners in the amount 0f $100,000 per unit With the outcome that there would be foreclosures and bankruptcies 0f the assessed unit owners. Further, because the Banlinski/DeYoung and Pedoza unit was worth less than the $3,000,000 repair cost, the solution was notfeasible. “The HOA requested (emphasis added) its property manager to 7 MEMORANDUM OF POINTS AND AUTHORITYS IN SUPPORT OF DEMURRER TO CROSS-COMPLAINT MCNAMARA, NEY, BEATTY, SLATTERY, BORGES & AMBACHER LLP ATTORNFYS AT LAW 639 KENTUCKY STREET, FAIRFIELD, CA 94533-5530 (707) 427-3998 TELEPHONE: \lONUl-hUJN 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 obtain competitive bids and alternative solutions.” (Paragraph 8) Allegedly the HOA requested other bids which were not procured by Associa. (Paragraphs 9-1 1) There is no allegation in the Cross-complaint that Associa guaranteed, or that it was actually possible, to procure bids t0 fix the foundation problems that (1) the homeowners would approve, and, (2) that the homeowners could afford without bankruptcies and foreclosures. The Cross-Complainant alleges in its First Cause of Action that it entered into a contract with Associa on 0r about August 0f 2015. (Paragraph 14, lines 12-13) It is not alleged in the Cause of Action whether the “contract” was oral or written. It is simply alleged that “Associa proposed that the HOA enter into a new contract to retain its services t0 act as project manager in addition t0 the every day management services which it was already providing. Associa represented that, for an extra price, it would advise the HOA 0n how best to handle the foundation movement, prepare a preliminary project plan, provide resolution-oriented guidance on project variables, manage the necessary repairs, obtain a number of repair bids, enforce procedures and protocols for project success, create a project budget, use its resources t0 find a variety 0f qualified contractors, manage vendor in adherence t0 contract requirements, and generally oversee the project” (Paragraph 14, lines 2-9) It is further alleged in the First Cause of Action that “Associa supplied written materials to the HOA documenting these promises”, attached as exhibit B. When exhibit B is examined, it is clear that is nothing more than thrae (3) pages 0f promotional materials regarding what services Associa could provide depending upon whether a contract was executed for the provision 0f some particular services. It is clear that the three (3) pages of documents attached t0 the Cross- Complaint do not constitute a contraCt-there is n0 language of formation of a contract, n0 language of acceptance, no contractual language whatsoever, no dates and no signatures. It is further alleged in the First Cause of Action that Associa “breached the contract” by allegedly failing t0 perform the promised services. (Paragraph 15) It is further stated that “[a]1 such failures constitute gross negligence and/or willful misconduct as set for the in Section 7.7 of the contract. (Paragraph 16, lines 3-4) There is n0 contract attached, let alone a Section 7.7 in 8 MEMORANDUM OF POINTS AND AUTHORITYS IN SUPPORT OF DEMURRER TO CROSS-COMPLAINT MCNAMARA, NEY, BEATTY, SLATTERY, BORGES & AMBACHER LLP ATTORNEYS AT LAW 639 KENTUCKY STREET, FAIRFIELD, CA 94533-5530 (707) 427-3998 TELEPHONE: “GUIAUJN 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Exhibit B.‘ The first cause of action alleges without any detail that the actions and inactions result in damages in excess 0f $1,000,000. (Paragraph 17) B. Second Cause 0f Action Of The Cross-Complaint As already noted, the Cross-Complaint against Associa contains a Second Cause 0f Action. This cause 0f action is for gross negligence. The negligence cause of action incorporates paragraphs 1 through 11 0f the Cross-Complaint, which includes the introductory allegations and the allegations in the First Cause 0f Action for Breach 0f Contract. It is alleged that Associa owed the HOA a duty t0 perform in good faith and t0 the bast 0f its ability the services which it promised and appeared t0 undertake. (Paragraph 19) Recall that in the First Cause 0f Action it is alleged that Associa’s breach 0f contract constituted gross negligence and/or willful misconduct as set for the in Section 7.7 of tha contract. (Paragraph 16, lines 3-4) There is no contract attached t0 the Cross~Comp1aint, let alone a Section 7.7 in Exhibit B. It is alleged in the negligence cause 0f action that Associa fell below the standard of care 0f a project manager by failing to provide adequate assistance in managing the foundation movement issues and resulting repairs, by failing t0 obtain a sufficient number 0f competitive repair bids in a timely and efficient fashion, by failing to prepare an adequate preliminary project plan, by failing t0 enforce the protocols for overall project success, by failing t0 provide “resolution oriented guidance on project variables and to direct resource for the Board for guidance 0n prudent business judgment as it relates t0 the overall project”, by failing t0 manage vendor adherence t0 contract requirements, by failing t0 create a project budget in collaboraticn with the Board, by failing t0 adequately communicate with the membership of the Board regarding project services, by failing t0 monitor and report 0n completion of milestones and project goals. (Paragraph 19) The Cross~Comp1aint further alleges that Associa failed t0 perform its obligations with reasonable care, that its failures constituted gross negligence, which resulted in significant delays and which ultimately resulted in the HOA being sued by affected owners. I The only other exhibit t0 the Cross-Complaint is Exhibit A which is the Amended & Restated Declaration 0f Covenants, Conditions & Restrictions. It does not have a Section 7.7 either. 9 MEMORANDUM OF POINTS AND AUTHORITYS IN SUPPORT OF DEMURRER TO CROSS-COMPLAINT MCNAMARA, NEY, BEATTY, SLATTERY, BORGES & AMBACHER LLP ATTORNEYS AT LAW 639 KENTUCKY STREET, FAIRFIELD. CA 94533-5530 TELEPHONE: (707) 427-3998 A \DWQOU‘I 10 11 12 13 14 15 16 17 18 19 2O 21 22 23 24 25 26 27 28 (Paragraphs 19 and 20) The Second Cause 0f Action alleges without any detail that the actions and inactions result in damages in excess 0f $1,000,000, and attorney’s fees prosecuting the Bartlinski/DeYoung lawsuit. For the reasons discussed below in detail a special demurrer pursuant to Code CiV. Proc. § 430.10: subd. 1101 g), a demurrer for uncertainty and a general demurer for failure t0 state a cause of action is appropriately sustained t0 the First and Second Causes of Action 0f the Cross- Complaint. C. First and Second Causes 0f Action 0f Cross-Complaint Are Improperly Plead It is well established law that a Cross~Comp1aint is subject to demurrer where for any cause of action “founded upcm a contract, it cannot be ascertained from the pleading whether the contract is written, is oral, 0r is implied by conduct.” (Code Civ. Proc., § 430.10, subd. [101 (g); Hills Trans. C0. v. Southwest Forest Industries (1968) 266 Cal.App.2d 702, 706). Further, as noted in Lortz v. Connell (1969) 273 Cal.App.2d 286, 290 [78 Cal.Rptr. 6], “[i]t is hombook law that the essential elements t0 be pleaded in an action for breach 0f contract are: (1) the contract; (2) plaintiff’s performance of the contract 0r excuse for nonperformance; (3) defendants’ breach, and (4) the resulting damage to plaintiff. ” (See also, Low v Linkedln Corp, 900 F. Supp. 2d 1010, 1028 (N.D. Cal. 2012); Gautier v. General Tel. C0. (1965) 234 Cal. App. 2d. 302, 305 [44 Cal. Rptr. 404]. Contract formation requires an “offer communicated to the offeree and an acceptance communicated t0 the offeror.” It must appear 0n the face of the complaint that is what transpired, and there was mutual consent t0 enter into a contract. Otherwise the pleading 0f an alleged breach 0f contract is subject t0 demurrer. (Donahue v. Apple, Inc. (N.D.Ca1. 2012) 871 F.Supp.2d 913, 930-931.) If the pleading fails to set forth an agreement with sufficient certainty t0 show any rights, the pleading is properly subject t0, a demurrer for uncertainty. (Hays v. Temple (1937) 23 Cal.App.2d 690, 694~695 {73 P.2d 1248]) If the action is based 0n an alleged breach 0f a written contract, the terms must be set out verbatim in the body 0f the complaint or a copy 0f the written instrument must be attached and incorporated by reference. (0tw0rth v. Southern Pac.Transp0rtati0n C0. (1985) 166 Cal.App.3d 10 MEMORANDUM OF POINTS AND AUTHORITYS IN SUPPORT OF DEMURRER TO CROSS-COMPLAINT MCNAMARA, NEY, BEATTY, SLATTERY, BORGES & AMBACHER LLP ATFORNEYS AT LAW 639 KENTUCKY STREET, FAIRFIELD, CA 94533-5530 (707) 427-3998 TELEPHONE: 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 452, 458-459 [212 Cal.Rptr. 743]);McKell v. Washington Mutual, Inc. (2006) 142 Cal.App.4th 1457, 1489 [49 Cal.Rptr.3d 227].) The contract must either be attached t0 the complaint or the substance 0f the relevant terms must be set out completely and comprehensively in the pleading, without legal conclusions. Similarly, the material terms of an oral contract must be set forth in detail. Otherwise the Cross-Complaint is subject t0 a demurrer. (5 Witkin, Cal. Proc. Pleading, § 518-519; Gautier, supra, 234 Cal.App.2d at p.305); MCKell, supra, 142 Cal.App.4th at p. 1489; ) (See also, Bates v. Daley’ s (1935) 5 Cal.App.2d 95 [42 P.2d 706]) . The following quotation from Gautier, supra, 234 Cal.App.2d at p.305, is 0n point: For more than one reason the demurrer was well taken. T0 state a cause 0f action for breach 0f contract. it is required that there be a Dleading 0f the contract. Dlaintiffs‘ performance (0r excuse for nonperformance). defendant's breach; and damage t0 plaintiff therefrom. ( Citations omitted.) The allegations contained in Count I do notset out the actual terms 0f the contract. either in haec verba 0r in legal effect. If. as plaintiffs allege. thev are ignorant as t0 whether the contract is written 0r oral. the law nonetheless requires that there be an allegation of such verbal agreement bV setting forth the substance 0f its relative terms. A complaint which fails t0 identify the specific provision 0f the contract allegedly breached by the defendant is subject to demurrer. The facts constituting the defendant’s breach must be stated with certainty 0r the pleading is subject to attack by demurrer. (Gautier, supra 234 Cal.App. 2d atp. 305]; Low V Linkedln Com, 900 F. Supp. 2d 1010, 1028 (N.D. Cal. 2012). The following quotation from Gautier, supra, 234 Cal.App.2d at p.305, is also 0n point: The complaint must identify the specific provision of the contract 2111696le breached bV the defendant. (Donahue v. Alee. Inc. (N.D.Ca1. 2012} 871 F.SuDD.2d 913. 930-931.) Statements that the defendant " breached" or ”violated his contract" 0r " failed and refused t0 perform." or " whollv failed to Derform." 0r " still fails and refuses t0 perform." are considered to be unacceptable. either as conclusions 0f law. 0r as lacking in particularity. Such statements render the pleading subject to a demurrer. Not only must the facts constituting the defendant’s breach be stated with certainty, but thsre must be an allegation that tha damage to plaintiffs resulting therefrom is legally actionable. (Gautier, supra 234 Cal.App. 2d at p. 305]) As noted in Hills Trans. C0., supra, 266 Ca1.App.2d at p. 712, it is appropriate for the 11 MEMORANDUM OF POINTS AND AUTHORITYS IN SUPPORT OF DEMURRER TO CROSS-COMPLAINT SLATTERY, BORGES & AMBACHER LLP ATTORNEYS AT LAW 639 KENTUCKY STREET, FAIRFIELD, CA 94533-5530 MCNAMARA, NEY, BEATTY, (707) 427-3998 TELEPHONE: \OOO\}O\Lll-b 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 Court to sustain a demurrer to a complaint without leave t0 amend where the Court can make “the legitimate inference that the pleader is attempting t0 maintain his claim 0f a written contract with writings Which are inadequate for his purpose.” As noted in Hills Trans. Ca, supra, 266 Cal.App.2d at p. 713, a pleader may not attempt t0 breathe life into a complaint by omitting relevant facts...” If a “pleading is only a sham, and it is apparent that no cause 0f action can truthfully be stated, the court should disregard that pleading”. (Id) The Cross-Complaint contains two (2) causes 0f action against Associa of Northern California, 1110., one for breach 0f contract and the other for gross negligence. Both causes 0f action are founded upon an alleged contract between the parties. Code 0f Civil Procedure § 430.10, subd. (g) provides that the party against whom a cross-complaint has been filed may object by demurrer to the pleading 0n the grounds that “[i]n an action found upon a contract, it cannot be ascertained from the pleading whether the contract is written, is oral, or is implied by cenduct”. The Cross-Complaint is subject t0 this deficiency. The Cross-Complaint is also subject t0 demurrer because it is uncertain and fails to state causes 0f action. The purported contract is not attached t0 the Cross-Complaint; nor are the material terms 0f the purported contract plead. (See, Orworth v. Southern Pac.Transp0rtati0n C0. (1985) 166 Cal.App.3d 452, 458-459 {212 Cal.Rptr. 743]) The promotional materials attached t0 the Cross-Complaint obviously d0 not constitute a contract. There are no certain allegations regarding who are the parties to the contract, what are the material terms of the contract, who breached the contract, how it was breached, and when. It cannot even be determined with certainty whether Associa is being sued for breach 0f contract with regard to the contract originally executed by Massingham (which the HOA has denied as being executed, paragraph 13 0f the cross-complaint), 01‘ 0n a different contract. Gross negligence and willful misconduct must also be specifically plead. Greater certainty is required for a pleading 0f grass negligence and/or willful misconduct than ordinary negligence. Far greater culpability is required and that must be set out in the pleading. (5 Witkin, Cal. Proc. Pleading, § 595 and 609) Recall that in the First Cause 0f Action it is alleged that Associa’s breach 0f contract constituted gross negligence and/or willful misconduct as set for the in Section 12 MEMORANDUM OF POINTS AND AUTHORITYS IN SUPPORT OF DEMURRER TO CROSS-COMPLAINT MCNAMARA, NEY, BEATTY, SLATTERY, BORGES & AMBACHER LLP ATTORNEYS AT LAW 639 KENTUCKY STREET, FAIRFIELD, CA 94533-5530 (707) 427-3998 TELEPHONE: A \)O\UI 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 7.7 0f the contract. (Paragraph 16, lines 3-4) There is n0 contract attached t0 the Cross- Complaint, let alone a Section 7.7 in Exhibit B. There are no certain allegations about how and why Associa was grossly negligent 0r engaged in willful misconduct. Thus, a demurrer is appropriately sustained t0 the second cause of action. D. The Demurrer Should Be Sustained Without Leave t0 Amend It is apparent that there are defects in the Cross-Complaint which are not correctable, and the Cross-Complaint is a sham. Under such circumstances it is appropriate for the Court sustain the demurrer without granting leave to amend. (See, Vaccam v. Kaiman (1998) 63 Cal.App.4th 761 [73 Cal.Rptr.2d 829, 833-834D. In View 0f the fact that the HOA has alleged that the Massingham contract (Associa’s predecessor) was not actually executed (Paragraphs 13 and 14), the Cross-Complaint cannot be amended t0 cure these defects so the demurrer is appropriately sustained without leave t0 amend. V. CONCLUSION For the foregoing reasons, the Court is respectfully requested t0 sustain the demurrer t0 the Cross'Complaint 0f San Jose Creekside Homeowner’s Association without leave t0 Amend. Dated: September 7, 2018 MCNAMARA, NEY, BEATTY, SLATTERY, BORGES & AMBACHER LLP Elfi‘afif Guy D. Emigés/ Denise J. Serra Attorneys for Defendant ASSOCIA NORTHERN CALIFORNIA, INC, a California corporation K:\SFIR7975 Bart]inskj\MOTIONS\IvIEMORANDUM OF PTS AND AUTHORITIES IN SUP DEMURRER TO CROSS-COMPLAINT FlN.docx 13 MEMORANDUM OF POINTS AND AUTHORITYS IN SUPPORT OF DEMURRER TO CROSS-COMPLAINT MCNAMARA, NEY, BEATTY, SLATTERY, BORGES & AMBACHER LLP ATTORNEY? AT LAW 639 KENTUCKY STREET, FAIRFIELD, CA 94533-5530 TELEPHONE: (707) 427-3998 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 PROOF OF SERVICE BY MAIL (C.C.P. §§ 1013a, 2015.5) Ihereby declare that I am a Citizen 0f the United States, am over the age 0f eighteen years, and not a party to the within action; my business address is 639 Kentucky Street, First Floor, Fairfield, California 94533-5530. On this date I served the foregoing MEMORANDUM OF POINTS AND AUTHORITIES IN SUPPORT OF ASSOCIA NORTHERN CALIFORNIA, INC.‘S DEMURRER TO CROSS-COMPLAINT on the parties in said action, by placing a true copy thereof enclosed in a sealed envelope addressed as listed below for mailing. I am readily familiar with this firm's practice 0f collection and processing correspondence for mailing. Under that practice, it would be deposited with the United States Postal Service 0n that same day With postage thereon fully prepaid, in the United States Post Office mail box at Fairfield, California, addressed as follows: Attorneys For Plaintiffs: Attorneys For San Jose Creekside Villa Homeowner's Association: David W. Lively, Esq. Hopkins & Carley Alison Crane, Esq. 7O S. First Street Bledsoe, Diestel, Treppa & Crane LLP San Jose, CA 95 1 13-2406 601 California Street, 16th Floor San Francisco, CA 94108~2821 Phone: 408-286-9800 Fax: 408-998-4790 Phone: 415-981-5411 Fax: 415-981-0352 E-Mail: acrane@bledsoelaw.com Attorneys For Deft./Xcmplt SAN JOSE CREEKSIDE VILLA HOA: Sharon Glenn Pratt, Esq. Pratt & Associates 1871 The Alameda, Suite 425 San Jose, CA 95126 Phone: 408-369-0800 Fax: 408-369-0752 E-Mail: rtrazo@prattattorneys.com MCNAMARA, NEY, BEATTY, SLATTERY, BORGES & AMBACHER LLP ATTORNEYS AT LAW 639 KENTUCKY STREET, FAIRHELD, CA 94533-5530 TELEPHONE: (707) 427-3998 \DmflGM-h 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 I declare under penalty 0f perjury under the laws 0f the State 0f California that the foregoing is true and correct and that this declaration was executed on September 7, 2018 at (HQWMED Heather Permison Fairfield, California.