Demurrer to Fourth Amended Complaint
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Code § 1102.5 based on having reported HCCC's alleged mismanagement.
First Cause of Action: Breach of Public Contract and Retaliation A breach of contract claim requires that the plaintiff plead (1) the existence of a contract, (2) plaintiff's performance or excuse for nonperformance, (3) defendant's breach, and (4) resulting damages. (CACI No. 303.) Wh ere the claim is brought by a non-signatory, the plaintiff must additionally plead facts establishing standing to enforce the contract, either as a party or as an intended thi rd-party beneficiary under Civil Code § 1559.
Plaintiff does not allege he was a party to the Grant Agreement bet ween CDPH and HCCC; he alleges only that he was hired as a Peer Health Ambassador under t he program the Grant Agreement funded. To enforce the contract as a non-signatory, Plaintiff must show he is an intended beneficiary under the three-factor test of Goonewardene v. ADP, LLC (2019) 6 Cal.5th 817: whether he would benefit from the contract, whether benefiting him was a motivating purpose of the contract, and whether enforcement by him is consistent with th e contracting parties' objectives and reasonable expectations. The Grant Agreement forecloses this showing on its face, expressly disclaiming any intent to create third-party rights or remedies. See Clemens v. Am. Warranty Corp. (1987) 193 Cal.App.3d 444, 452 (court may look to the parties to a contract attached to the complaint in assessing sufficiency).
Plaintiff's opposition does not dispute that he is a non-signatory or that the disclaimer exists; it instead argues that an indemnification clause running to CDPH establishes HCCC's liability to him directly. An indemnity obligation owed to the grantor agency does not establish a right of enforcement in a non-signatory third party, and Plaintiff cites no authority extendi ng indemnity language of this kind to create third-party beneficiary status. Because the standing defect arises from the express language of an exhibit attached to the pleading, no further factual allegation can cure it. The demurrer to the first cause of action is therefore SUSTAINED without leave to amend.
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Second Cause of Action: Breach of Contract and Fiduciary Duty Regarding Grant Management This claim requires, in addition to the standard breach of contract elements above, that Plaintiff plead facts establishing a fiduciary relationship between himself and H CCC and a breach of the duties arising from that relationship.
As with the First Cause of Action, this claim is predicated on Plaintiff's enforcement of obligations arising under the Grant Agreement, to which he is not a party and unde r which he has no thirdparty rights. To the extent Plaintiff instead grounds this claim in H CCC's status as a nonprofit public benefit corporation holding grant funds in trust, enforcement of a charita ble trust or a corporation's adherence to its charitable purpose is generally c ommitted to the Attorney General. Gov. Code, § 12598(a). Leave to amend is denied because Plaintiff's relat ionship to HCCC as a former Peer Health Ambassador is not a fact subject to alteration by f urther pleading. The demurrer to the second cause of action is SUSTAINED without leave to amend.
Third Cause of Action: Breach of Fiduciary Trust A claim to enforce a publ ic or charitable trust requires that the plaintiff plead either that the trust was created for their direct benefit or that they otherwise hold a recognized special interest sufficient to confer standing distinct from the general public's interest in proper administration of charitable assets.
Plaintiff's 4AC, and his opposition, characterize this claim as resting on the public's general interest
in oversight of charitable and grant assets, an interest he labels his "Ex-Officio Overseer" or "Public Trust Heir" interest. This is the kind of public interest standing that California law reserves to the Attorney General absent a special interest such as a directorship or trusteeship. See Martinez v. Socoma Companies, Inc. (1974) 11 Cal.3d 394, 407 (members of the public generally lack standing to sue on a contract between a government agency and a private contractor). Plaintiff has not alleged, in four iterations of the complaint, that he holds any office, trusteeship, or directorship in HCCC that would take him outside the general public. Because this is a status Plaintiff either holds or does not, no further amendment could supply it. The demurrer to the third cause of action is SUSTAINED without leave to amend.
Fourth Cause of Action: Breach of Implied Contract An implied-in-fact contract requires the same elements as an express contract, mutual assent and consideratio n, manifested through conduct rather than words, along with a breach and resulting damages. (See CACI No. 302.)
Plaintiff does not allege a separate implied contract independent of the Grant Agreement and his at-will employment as a Peer Health Ambassador. His theory, that his position was implicitly guaranteed through the Grant Agreement's funding period of October 2022 through April 2024, is derivative of the same public contract to which he is not a party. The Grant Agreement does not obligate HCCC to continue operations through the full funding period, and no implied promise of continued employment through a date certain is otherwise pled. Plaintiff has had four opportunities to allege an independent basis for an implied contract without doing so. The demurrer to the fourth cause of action is SUSTAINED without leave to amend.
Fifth Cause of Action: Breach of Covenant of Good Faith and Fair Dealing A claim for breach of the implied covenant requires an underlying contract between the plaintiff and the defendant, and factual allegations that the defendant unfairly frustrated the plaintiff's right to receive the benefits of that contract. See Careau & Co. v. Security Pacific Business Credit, Inc. (1990) 222 Cal.App.3d 1371, 1394.
Because the covenant attaches only to a contract between the pl aintiff and the defendant, and Plaintiff has no enforceable contractual relationship with HCCC a rising from the Grant Agreement, this claim fails for the same reason as the First, Second, and Fourth Causes of Action. Plaintiff cannot use the implied covenant to create contractual rights broader than, or independent of, the underlying agreement to which he is not a party. The defect is the s ame standing defect addressed above and is not curable by amendment. The demurrer to the fi fth cause of action is SUSTAINED without leave to amend.
Seventeenth Cause of Action: Breach of Mandatory Duty (Gov. Code § 815.6) Liabili ty under Government Code § 815.6 requires that (1) a mandatory, non-discretionary duty be i mposed on a public entity by an enactment, (2) the enactment be designed to protect against the kind of injury the plaintiff suffered, and (3) breach of that duty proximately caused the injury. State Dept. of State Hospitals v. Superior Court (2015) 61 Cal.4th 339, 348.
Plaintiff’s 4AC does not plead a mandatory duty imposed on a public entity by an enactment. Pursuant to Gov. Code 811.2, a “public entity” includes the state, ..., a county, city, district, public authority, public agency, and any other political subdivision or public corporation in the State. The 4AC alleges HCCC is a Non-Profit Public Benefit Corporation. (The Opposition also requests that the Court take judicial notice of the Articles of Incorporation of HCCC which state the
organization is a 501(c)(3) nonprofit public benefit corporation.) Further, no stat utory duty is identified. Instead, Plaintiff again pleads a form of breach of contract, alleging that HCCC failed to utilize funds as described in the Grant Agreement. The inapplicability of Gov. Code 815.6 to a nonprofit corporation cannot be cured by amendment. The demurrer to the sevente enth cause of action is SUSTAINED without leave to amend.
Defendant’s Demurrer as to Causes of Action 1-5 and 17 of the Fourth A mended Complaint is SUSTAINED without leave to amend. No proposed order was lodged as required by Local Rule 5.17(D). Defendant shall prepare the order.
****************************************************************************** 9:00 a.m. Review Hearings ****************************************************************************** CARTER VS. CUSTER, ET AL. CASE NUMBER: 25CV-0208056 This matter is on calendar for trial setting. Both sides have file d status statements which request a 90-day continuance to attempt mediation. Today’s hearing is continued to Monday, November 2, 2026 at 9:00 a.m. in Department 64 for trial setting. No appearances are necessary on today’s calendar.
HEARN VS. KONDYBE, ET AL. CASE NUMBER: 25CV-0208638 This matter is on calendar for review regarding status of responsive ple ading. Defendants filed their Answer on June 3, 2026. The matter is at issue. This matter is set for trial setting on Monday, September 21, 2026 at 9:00 a.m. in Department 64. Plaintiff is to give notice. No appearances are necessary on today’s calendar.
LEWISTON COMMUNITY SERVICES DISTRICT VS. SUDA PROPER TIES, LLC, ET AL. CASE NUMBER: 25CV-0208034 This matter is on calendar for trial setting. The Court designates th is matter as a plan II case and intends to set the matter for trial no later than December 8, 2026. Neither side has posted jury fees. The parties are granted 10 days leave to post jury fees. A failure to post jury fees in that time will be deemed a waiver of the right to a jury. The parties are ordere d to appear to provide the Court with available trial dates.
LVNV FUNDING LLC VS. ROBBINS CASE NUMBER: 24CVG-01953 This matter is on calendar for review regarding status of the case. Notice of Conditional Settlement was filed on February 2, 2026 indicating the matter would be dismissed no later than September 24, 2026. The matter is continued to Monday, October 5, 2026 at 9:00 a.m. in Department 64 for status of dismissal. The Court intends to dismiss the matter wi thout prejudice on October 5, 2026 per CRC 3.1385 unless good cause is presented. Any good cause must be prese nted at or before the hearing. No appearance is necessary on today’s calendar.