Mendes vs. Morrison

arguments against section 2030.230 lack merit and no further responses are warranted.

In light of all the above, the Motion to Compel Further Responses to Form Interrogatories is GRANTED as to No. 9.1 and DENIED as to all other disputed interrogatories. Plaintiff shall serve a further response within 15 days.

No sanctions.

Moving party to give notice. 10 2 Rask vs. County of Orange, 25-01495933

Off-calendar. 10 3 Mendes vs. Morrison, 25-01504828

Cross-Defendants Ace Professional Property Management Inc., James J. Liberio, and Liberio Realty Inc., dba Ace Professional Property Management (“Cross-Defendants”) demur to the (1) first cause of action for breach of contract, (2) second cause of action for negligence, (3) third cause of action for breach of fiduciary duty, (4) fourth cause of action for implied indemnity, (5) fifth cause of action for comparative indemnity, (6) sixth cause of action for equitable indemnity, (7) seventh cause of action for contribution, and (8) eighth cause of action for declaratory relief as alleged in the Cross- Complaint by Lyle Morrison in his individual capacity and as trustee of The Morrison Living Trust, Dated May 24, 2023. The Cross-Complaint at issue is ROA 13.

Cross-Complainant Lyle Morrison in his individual capacity and as trustee of The Morrison Living Trust, Dated May 24, 2023 opposes the demurrer.

The Demurer presents three arguments: (1) the indemnity clause in the Management Agreement attached as Exhibit A to the declaration in support of the Demurrer bars Cross-Complainant’s claims, (2) the negligence cause of action is barred by the economic loss rule, and (3) the fiduciary duty cause of action is barred because the parties were no in a fiduciary relationship.

1. Indemnity Clause

Much of Cross-Defendants’ demurrer rests upon (1) the Court considering the contract attached as an exhibit to the declaration filed in support of the demurrer and (2) the Court interpreting that contract and the impact of that interpretation on the facts alleged in the Complaint.

First, Cross-Defendants have provided no legal authority establishing that the Court is permitted to consider and interpret the contract attached as an exhibit to the

declaration filed in support of the demurrer. This contract is not attached as an exhibit to the Cross- Complaint at issue and does not appear to be judicially noticeable. Cross-Defendants also do not argue that the contract is judicially noticeable.

In determining the merits of a demurrer, “we accept as true all the material facts properly pleaded and we do not go beyond the four corners of the complaint, except as to matters which may be judicially noticed.” (Thorburn v. Department of Corrections (1998) 66 Cal.App.4th 1284, 1287–1288 [emphasis added].)

“A demurrer tests the pleadings alone and not the evidence or other extrinsic matters. Therefore, it lies only where the defects appear on the face of the pleading or are judicially noticed [citations]. The only issue involved in a demurrer hearing is whether the complaint, as it stands, unconnected with extraneous matters, states a cause of action [citation].” (SKF Farms v. Superior Court (1984) 153 Cal.App.3d 902, 905.)

“Although the existence of a document may be judicially noticeable, the truth of statements contained in the document and its proper interpretation are not subject to judicial notice if those matters are reasonably disputable.” (Fremont Indemnity Co. v. Fremont General Corp. (2007) 148 Cal.App.4th 97, 113.) “A matter ordinarily is subject to judicial notice only if the matter is reasonably beyond dispute.” (Ibid.)

“The proper interpretation of a contract is disputable if the contract is susceptible of more than one reasonable interpretation, that is, if the contract is ambiguous.” (Fremont Indemnity Co. v. Fremont General Corp. (2007) 148 Cal.App.4th 97, 114.) “An ambiguity may appear on the face of a contract, or extrinsic evidence may reveal a latent ambiguity.” (Ibid.)

Moreover, “[f]or a court to take judicial notice of the meaning of a document submitted by a demurring party based on the document alone, without allowing the parties an opportunity to present extrinsic evidence of the meaning of the document, would be improper.” (Fremont Indemnity Co. v. Fremont General Corp. (2007) 148 Cal.App.4th 97, 114–115.) “A court ruling on a demurrer therefore cannot take judicial notice of the proper interpretation of a document submitted in support of the demurrer.” (Ibid.) “In short, a court cannot by means of judicial notice convert a demurrer into an incomplete evidentiary hearing in which the demurring party can present documentary evidence and the

opposing party is bound by what that evidence appears to show.” (Ibid.)

“The hearing on demurrer may not be turned into a contested evidentiary hearing through the guise of having the court take judicial notice of documents whose truthfulness or proper interpretation are disputable.” (Fremont Indemnity Co. v. Fremont General Corp. (2007) 148 Cal.App.4th 97, 113–114.) “[J]udicial notice of matters upon demurrer will be dispositive only in those instances where there is not or cannot be a factual dispute concerning that which is sought to be judicially noticed.” (Ibid.)

Based on the authority above, the Court is not persuaded that it may consider, interpret, and apply the indemnity clause at issue in the demurrer.

Second, even if the Court were to take judicial notice of the contract attached to the declaration of in support of the demurrer, the Court is not permitted to interpret the application of this contract because the interpretation and applicable to the facts alleged in the Cross-Complaint is disputable. In fact, based on the allegations in the Cross-Complaint, the indemnity clause discussed in the demurrer would not apply because Cross-Complainant alleges that Cross-Defendants improperly managed the premises. The application of the indemnity clause raised in the demurrer depends on the “proper management of the premises.” Based on the facts alleged in the Cross- Complaint, the indemnity clause would not apply.

Given the above, the Demurrer is OVERRULED as to the indemnity clause argument. All arguments in the Demurrer rely on the Court applying the indemnity clause attached to the declaration in support of the Demurrer.

2. Economic Loss Rule

Next, Cross-Defendants argue that Cross-Complainant negligence cause of action is barred by the economic loss rule.

Defendant relies primarily on Rattagan v. Uber Technologies, Inc. (2024) 17 Cal.5th 1 in support its argument that the negligence cause of action is barred by the economic loss rule. Rattagan held:

“[U]nder the economic loss rule, tort recovery for breach of a contract duty is generally barred . . . unless two conditions are satisfied. A plaintiff must first demonstrate the defendant’s injury-causing conduct violated a duty that is independent of the duties and

rights assumed by the parties when they entered the contract. Second, the defendant’s conduct must have caused injury to persons or property that was not reasonably contemplated by the parties when the contract was formed.” (Rattagan v. Uber Technologies, Inc. (2024) 17 Cal.5th 1, 20-21.)

Importantly, “the economic loss rule does not apply to limit recovery for intentional tort claims like fraud. The doctrine only applies to bar tort recovery for negligently inflicted economic losses unaccompanied by physical or property damage under the limits recognized in Sheen.” (Rattagan v. Uber Technologies, Inc. (2024) 17 Cal.5th 1, 38.)

Here, the Court finds that the economic loss rule does not bar the negligence cause of action. The Cross- Complainant alleges damage to the property at issue as a result of Cross-Defendants’ alleged negligent management of the property at issue (water and mold damage) and further alleges that Cross-Complainants seek to recover damages according to proof.

The Demurrer is OVERRULED as to the economic loss rule argument.

3. Fiduciary Relationship

Last, Cross-Defendants argue that Cross-Complainant breach of fiduciary duty cause of action is barred because there is no fiduciary relationship between the parties. Rather, Cross-Defendants argue that their relationship is an “arm’s length transaction” wherein Cross-Defendants offered a service in exchange for money.

In California, “[t]he elements of a claim for breach of fiduciary duty are (1) the existence of a fiduciary relationship, (2) its breach, and (3) damage proximately caused by that breach.” (O’Neal v. Stanislaus County Employees’ Retirement Assn. (2017) 8 Cal.App.5th 1184, 1215.)

“A fiduciary relationship is any relation existing between parties to a transaction wherein one of the parties is in duty bound to act with the utmost good faith for the benefit of the other party.” (Wolf v. Superior Court (2003) 107 Cal.App.4th 25, 29, as modified on denial of reh’g (Mar. 20, 2003) [citations omitted].) “Such a relation ordinarily arises where a confidence is reposed by one person in the integrity of another, and in such a relation the party in whom the confidence is reposed, if he voluntarily accepts or assumes to accept the confidence, can take no advantage from his acts relating

to the interest of the other party without the latter’s knowledge or consent.” (Ibid.)

“Technically, a fiduciary relationship is a recognized legal relationship such as guardian and ward, trustee and beneficiary, principal and agent, or attorney and client ... whereas a ‘confidential relationship’ may be founded on a moral, social, domestic, or merely personal relationship as well as on a legal relationship.” (Persson v. Smart Inventions, Inc. (2005) 125 Cal.App.4th 1141, 1160.) Importantly, however, “[b]oth relationships give rise to a fiduciary duty, that is, a duty ‘to act with the utmost good faith for the benefit of the other party.’” (Persson v. Smart Inventions, Inc. (2005) 125 Cal.App.4th 1141, 1160.)

“The essence of a fiduciary or confidential relationship is that the parties do not deal on equal terms, because the person in whom trust and confidence is reposed and who accepts that trust and confidence is in a superior position to exert unique influence over the dependent party.” (Barbara A. v. John G. (1983) 145 Cal.App.3d 369, 383.)

Moreover, a “fiduciary relationship is created where a person reposes trust and confidence in another and the person in whom such confidence is reposed obtains control over the other person’s affairs.” (Richard B. LeVine, Inc. v. Higashi (2005) 131 Cal.App.4th 566, 586. Importantly, the Court in Richard B. LeVine, Inc. v. Higashi (2005) 131 Cal.App.4th 566, 583 expressly held that a “confidential relationship may exist between an accountant and a client.” (Ibid.)

Still, “[t]he mere placing of a trust in another person does not create a fiduciary relationship.” (Richard B. LeVine, Inc. v. Higashi (2005) 131 Cal.App.4th 566, 586 [citing Zumbrun v. University of Southern California (1972) 25 Cal.App.3d 1, 13].) Also, “an agreement to communicate one’s knowledge, exercising his special knowledge and skill in the area of learning concerned, does not create a trust but only a contractual obligation.” (Ibid.) Likewise, an “ordinary arm’s-length business relationship” does not constitute fiduciary relationship.” (Henry v. Associated Indemnity Corp. (1990) 217 Cal.App.3d 1405, 1419.)

Here, the Court finds that the Cross-Complaint alleges the requisite fiduciary relationship to survive the Demurrer. (Cross-Complaint, ¶¶ 33-42.) As alleged, “Section 1. a) of the Management Agreement provides in pertinent part: “The Owners [sic] hereby appoint ACE PROFESSIONAL PROPERTY MANAGEMENT as their sole and exclusive agent to rent, lease, and/or manage the

premises.” (Cross-Complaint, ¶ 9.) Moreover, “Section 1. c) of the Management Agreement provides in pertinent part: “The Company is empowered to sign leases on the Owner’s behalf, and to enforce the provisions of same, and to institute legal action or other proceedings to collect rents and other sums due, and to dispossess tenants and other persons from the premises.” (Cross- Complaint, ¶ 10.)

The Court finds that Cross-Complainants have alleged the requisite principal-agent relationship to establish a fiduciary relationship at this stage in the litigation.

As such, the Demurrer is OVERRULED as to this argument.

The Demurrer is further OVERRULED as to the cause of action for declaratory relief as the Demurrer only argues that cause of action fails on the assumption that the Court would sustain the other arguments made in the Demurrer.

In sum, the Demurrer is OVERRULED in its entirety.

Cross-Defendants shall filed an answer to the Cross- Complaint within 20 days of notice of this order

The Case Management Conference is continued to August 13, 2026 at 1:30 p.m.

Cross-Complainant to give notice. 10 4 TruAbutment Inc. vs. BioAbutment Inc., 25-01517952

Off-calendar. 10 5 Ortiz vs. Nelson, 24-01439993

Defendant, Lee Wilton Nelson (“Defendant”), moves for an order compelling Plaintiff, Brandon Ortiz (“Plaintiff”), to appear for an independent orthopedic medical examination (“orthopedic IME”) with Michael P. Weinstein, M.D. pursuant to Code of Civil Procedure section 2023.310 and 2032.320.

Defendant filed multiple versions of the instant motion, but they all seek the same relief.

Defendant contends that Plaintiff alleges multiple injuries, with the relevant alleged physical issues that form the basis of this motion being orthopedic injuries that extend to his back and both feet. Defendant asserts that good cause exists for an orthopedic examination because Plaintiff received multiple epidural steroid injections for his back injury. Defendant asserts that an