Matthew Coulter vs. Mark Olsen et al

to set the matter for dismissal pursuant to CCP section 583.420 and sanction each plaintiff $250.00.

6. CU0001584 Matthew Coulter vs. Mark Olsen et al

Plaintiff Matthew Coulter’s demurrer to Defendants’ answer to the Third Amended Complaint (TAC) is OVERRULED with respect to the first, eighth, and eleventh affirmative defenses, and otherwise SUSTAINED with thirty (30) days leave to amend.

Legal Standard

A party against whom an answer has been filed may object by demurrer on the following grounds: (a) the answer does not state facts sufficient to constitute a defense, (b) the answer is uncertain, or (c) where the answer pleads a contract and it cannot be ascertained from the answer whether the contract is written or oral. Code Civ. Proc. § 430.20. A demurrer may be taken to the entire answer or to any one or more of several defenses in it. Code Civ. Proc. § 430.50(b). “A demurrer reaches only to the contents of the pleading and such matters as may be considered under the doctrine of judicial notice.” South Shore Land Co. v. Petersen (1964) 226 Cal.App.2d 725, 732. The allegations of the pleading demurred to are regarded as true. Ibid.

“Unlike the usual general demurrer to a complaint the inquiry is not into the statement of a cause of action. Instead it is whether the answer raises a defense to the plaintiff's stated cause of action.” Timberidge Enterprises, Inc. v. City of Santa Rosa (1978) 86 Cal.App.3d 873, 879-880 (emphasis in original). The analysis of whether an answer states a defense is governed by the same principles as that of whether a complaint states a cause of action. South Shore Land Co., supra, 226 Cal.App.2d 725, 732.

The sufficiency of an answer is evaluated with reference to the complaint it purports to answer. South Shore Land Co., supra, 226 Cal.App.2d 725, 733. A defendant must set forth only the “essential facts” of the affirmative defense, “sufficient to acquaint [plaintiff] with the nature, source and extent” of the defense. Ludgate Ins. Co. v. Lockheed Martin Corp. (2000) 82 Cal.App.4th 592, 608. This is known as the “fair notice” test. Ibid. “There is no need to require specificity in the pleadings because “modern discovery procedures necessarily affect the amount of detail that should be required in a pleading.” Ibid.

Code of Civil Procedure § 431.30(b) provides that an answer to a complaint shall contain: (1) the general or specific denial of the material allegations of the complaint controverted by the defendant, and (2) a statement of any new matter constituting a defense. “The phrase ‘new matter’ refers to something relied on by a defendant which is not put in issue by the plaintiff. Thus, where matters are not responsive to essential allegations of the complaint, they must be raised in the answer as ‘new matter.’” State Farm Mut. Auto. Ins. Co. v. Superior Court (1991) 228 Cal.App.3d 721, 725, internal citations omitted. Where, however, the answer sets forth facts showing some essential allegation of the complaint is not true, such facts are not ‘new matter,’ but only a traverse.” State Farm Mut. Auto. Ins. Co., supra, 228 Cal.App.3d at 725. Traverse need not be specifically alleged. Ibid.

Allegations of new matter in an answer should not be proffered in the form of terse legal conclusions but rather they should be averred as carefully and with as much detail as the facts that constitute the cause of action alleged in the complaint. FPI Development, Inc. v. Nakashima (1991) 231 Cal.App.3d 367, 384; Quantification Settlement Agreement Cases (2011) 201 Cal.App.4th 758, 812-813. Equitable defenses are “new matter” requiring ultimate facts pled. Wade v. Howe (1934) 2 Cal.App.2d 435, 439-440. “It is elementary that if one wishes to avail himself of an equitable defense he must set it up in his answer.” Fillmore v. Reilly (1938) 28 Cal.App.2d 460, 463.

Analysis

First and Eighth Affirmative Defenses: Failure to State a Cause of Action / Failure to Plead with Specificity

Plaintiff argues the first and eighth affirmative defenses fail because this Court overruled Defendants’ demurrer as to the first and second causes of action in the Second Amended Complaint (SAC), and because defendants do not explain what the uncertainties are in the TAC.

Pursuant to Code of Civil Procedure § 430.20, a party against whom an answer has been filed may object by demurrer on the grounds, the “answer does not state facts sufficient to constitute a defense” and the “answer is uncertain.” Code Civ. Proc. § 430.20(a), (b). A demurrer for uncertainty will be sustained only when the pleading is such that the responding party cannot discern what it must respond to. “A demurrer for uncertainty is strictly construed, even where a [pleading] is in some respects uncertain, because ambiguities can be clarified under modern discovery procedures.”

Khoury v. Maly’s of California, Inc. (1993) 14 Cal.App.4th 612, 616. “A special demurrer on the ground that an answer is (a) ambiguous, (b) unintelligible, or (c) uncertain is insufficient unless the demurrer points out specifically wherein the pleading is ambiguous, uncertain or unintelligible.” Coons v. Thompson (1946) 75 Cal.App.2d 687, 690.

As to these defenses, the Court agrees additional allegations are not required. The defenses are legal contentions challenging the sufficiency of Plaintiff’s allegations and therefore do not require Defendants to allege additional facts in support. The Answer provides sufficient notice of Defendants’ defenses for Plaintiff to respond and any uncertainties can be clarified in discovery. Additionally, the court’s overruling of Defendants’ demurrer to the SAC is inapplicable to the TAC where there are additional facts and causes of action that have not been previously analyzed by the court. Thus, the demurrer to the first and eighth affirmative defenses are OVERRULED.

Second Affirmative Defense: Laches, Estoppel, and Waiver

Plaintiff argues the Second Affirmative Defense does not aver specific facts apprising Plaintiff of the basis for the defense. The Court agrees.

“The burden of pleading facts which raises the issue of estoppel lies with the party who would estop the other party [citation], and for estoppel to be available it must be specially pleaded.” Larue v. Swoap (1975) 51 Cal.App.3d 543, 551. The pleading of a generic statement is insufficient. To assert the defense of laches where the application of the defense does not appear 7

on the face of the complaint, a defense muse plead facts constituting laches. Phoenix Mut. Life Ins. Co. v. Birkelund (1946) 29 Cal.2d 352, 363; Victor Oil Co. v. Drum (1920) 184 Cal. 226, 243. Again, a generic statement is insufficient. “Waiver is an affirmative defense that must be pleaded with specificity and separately stated. In pleading waiver the defendant must set forth the facts upon which he bases his claim of waiver.” Meyer Koulish Co. v. Cannon (1963) 213 Cal.App.2d 419, 432; accord, Richter v. Adams (1937) 19 Cal.App.2d 572, 576. Defendants have not alleged facts supporting any of these affirmative defenses.

Moreover, laches, estoppel, and waiver are equitable defenses, and thus constitute new matter. Code Civ. Proc. § 431.30(b)(2); State Farm Mut. Auto. Ins. Co., supra, 228 Cal.App.3d at 725; Wade, supra, 2 Cal.App.2d at 439-440. Defendants must allege ultimate facts pleading the elements of these defenses, yet failed to do so. Defendants assert only that Plaintiff’s recovery is barred due to these equitable doctrines. Such a terse legal conclusion does not give Plaintiff fair notice of the nature and extent of the defenses or whether Defendants aver these defenses as to all or some of the causes of action. FPI Development, Inc., supra, 231 Cal.App.3d at 384; Quantification Settlement Agreement Cases, supra, 201 Cal.App.4th at 812-813; Ludgate Ins. Co., supra, 82 Cal.App.4th at 608.

As to Plaintiff’s assertion the second affirmative defense violates CRC 2.112, these doctrines have some overlap yet are not identical. Thus, each should be asserted as a separate defense.

Accordingly, the Demurrer to the second affirmative defense is SUSTAINED WITH LEAVE TO AMEND.

Third Affirmative Defense: Failure to Mitigate

The Third Affirmative Defense alleges, “plaintiff’s recovery is barred due to plaintiff’s failure to properly and reasonably mitigate his damages, if any were so sustained.” Answer to TAC, 2:17- 21.

To the extent the defense introduces factual theories not at issue in Plaintiff’s TAC, it constitutes new matter and must be pled with ultimate facts. Code Civ. Proc. § 431.30(b)(2); State Farm Mut. Auto. Ins. Co., supra, 228 Cal.App.3d at 725; FPI Development, Inc., supra, 231 Cal.App.3d at 384; Quantification Settlement Agreement Cases, supra, 201 Cal.App.4th at 812- 813. Defendants have not alleged in what manner, even generally, Plaintiff failed to mitigate his damages. Thus, the affirmative defense is insufficiently pled. Plaintiff cannot reasonably determine from the face of this defense in what way he failed to mitigate his damages, and thus the defense is uncertain within the meaning of Code of Civil Procedure § 430.20(b).

Accordingly, the Demurrer to the third affirmative defense is SUSTAINED WITH LEAVE TO AMEND.

Fourth, Fifth, Sixth, Ninth, and Tenth Affirmative Defenses

These affirmative defenses allege comparative fault, negligence/intentional torts of third parties, assumption of risk, avoidable consequences, and consent. The answer contains no facts alleged in support of any of these affirmative defenses. 8

These defenses constitute new matter. Code Civ. Proc. § 431.30(b)(2); State Farm Mut. Auto. Ins. Co., supra, 228 Cal.App.3d at 725. The defenses are not merely a denial of Plaintiff’s allegations, they introduce distinct factual claims that Plaintiff and/or third parties were negligent, which conduct contributed to Plaintiff’s damages, and Plaintiff assumed the risk and consented to Defendants conduct. The defenses are not responsive to any essential allegation contained in Plaintiff’s TAC. State Farm Mut.

Auto. Ins. Co., supra, 228 Cal.App.3d at 725. Because Plaintiff’s own negligent conduct is not put at issue by the Complaint, nor is the negligence/intentional tort of any unnamed third party, these affirmative defenses qualify as new matter and Defendants must plead ultimate facts supporting the defenses; terse legal conclusions are insufficient. FPI Development, Inc., supra, 231 Cal.App.3d at 384; Quantification Settlement Agreement Cases, supra, 201 Cal.App.4th at 812-813.

Specific to the ninth affirmative defense of avoidable consequences, Plaintiff asserts such is an improper affirmative defense in that it is grounded in negligence and, thus, inapplicable as a matter of law to the intentional torts of assault, battery and Bane Act violation. The Court disagrees. “Under the avoidable consequences doctrine as recognized in California, a person injured by another's wrongful conduct will not be compensated for damages that the injured person could have avoided by reasonable effort or expenditure.”

State Dept. of Health Services v. Superior Court (2003) 31 Cal.4th 1026, 1043. Thus, the doctrine lies with respect to mitigation of damages as opposed to any theory of negligence, and Plaintiff’s assertion the doctrine is founded in negligence is incorrect. It pertains solely to the issue of damages, and whether one asserts an intentional tort or one which lies in a negligence theory, such is irrelevant to the applicability of the doctrine. It is only once a party is found to have suffered damage applicability of the doctrine of avoidable consequences comes into question.

Thus, The Court overrules as to this basis for Plaintiff’s demurrer as to the second affirmative defense.

Accordingly, the Demurrer to the fourth, fifth, and sixth, ninth, and tenth affirmative defenses are SUSTAINED WITH LEAVE TO AMEND.

Seventh Affirmative Defense: Statute of Limitations

Plaintiff argues Defendants fail to plead sufficient facts showing what statute of limitation has run for a particular cause of action. The Court agrees.

To properly plead a statute of limitations defense, a party must either allege facts showing that the action is time barred and allege the lateness of the action as a defense, or plead the specific section and subdivision. Code Civ. Proc. § 458; Martin v. Van Bergen (2012) 209 Cal.App.4th 84, 91. “It is necessary for defendant who pleads the statute of limitations to specify the applicable section, and, if such section is divided into subdivisions, to specify the particular subdivision or subdivisions thereof. If he fails to do so the plea is insufficient.” Brown v. World Church (1969) 272 Cal.App.2d 684, 691.

Here, Defendants allege Plaintiff’s claims are “time barred due to the running and expiration of the applicable statute of limitations.” Answer to TAC, 3:12-15. Defendants fail to specify any facts showing the action is time barred or plead any specific section of code. Accordingly, the demurrer to the seventh affirmative defense is SUSTAINED WITH LEAVE TO AMEND. 9

Eleventh Affirmative Defense: Bane Act

Defendant’s eleventh affirmative defense alleges Plaintiff’s claims under the Bane Act are barred because Defendants’ conduct was not a substantial factor in causing Plaintiff’s harm, and speech alone is not sufficient to constitute a violation of the Bane Act unless it involves a credible threat of violence. This defense is an argumentative denial of the allegations in the TAC, paired with a legal argument Plaintiff is not entitled to relief under the Bane Act, and therefore does not require Defendants to allege additional facts in support.

Accordingly, the demurrer to the eleventh affirmative defense is OVERRULED.

Leave to Amend

When a demurrer is sustained, the Court determines whether there is a reasonable possibility that the defect can be cured by amendment. Blank v. Kirwan (1985) 39 Cal.3d 311, 318. California law imposes the burden on the party who filed the pleading to demonstrate the manner in which they can amend their pleadings to state their claims. See Goodman v. Kennedy (1976) 18 Cal.3d 335, 349. “Denial of leave to amend constitutes an abuse of discretion unless the [pleading] shows on its face it is incapable of amendment. [Citation.] Liberality in permitting amendment is the rule, if a fair opportunity to correct any defect has not been given." Angie M. v. Superior Court (1995) 37 Cal.App.4th 1217, 1227.

Here, Defendants have not shown the manner in which they could amend the answer to properly state their defenses against Plaintiff’s claims. However, given the liberal standard for permitting amendment of the pleadings, and the defects in the answer arising merely from a paucity of alleged facts, the Court will exercise its discretion to permit leave to amend the answer.

Conclusion

Accordingly, the Demurrer to the Answer is OVERRULED with respect to the first, eighth, and eleventh affirmative defenses and otherwise SUSTAINED with leave to amend. Defendants shall have 30 days leave to amend the answer from the date of this order.

7. CU0002636 John Lascoe et al vs. Selene Finance LP et al

Defendants Selene Finance, LP’s, Idea Law Group P.C.’s, and Ali Payravi, Trustee of 401K Arita’s demurrers are dropped as moot. A party may amend its pleading once without leave of the court after a demurrer is filed but before the demurrer is heard if the amended pleading is filed and served no later than the date for filing an opposition to the demurrer or motion to strike. Code Civ. Proc. § 472(a). Plaintiff’s First Amended Complaint was timely filed and served on July 14, 2026, rendering the demurrers moot.

8. CU0002676 Westcon Construction Corp. vs. C & D Contractors, Inc. et al

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