Pagano vs. Yani Construction Corp

5 30-2024-01426948 Plaintiffs Kayla Olivo and Aaron Oman’s (collectively, Olivo vs. “Plaintiffs”) Motion for Preliminary Approval of Class Action ServiceLink and PAGA Settlement is GRANTED ON THE CONDITION Services, LLC THAT the following correction is made to the class notice before it is sent to the class members and aggrieved employees: Class members and aggrieved employees may object to the settlement amount allocated to PAGA penalties. Thus, on the left column, second row of the table on Page 3 of the class notice, the phrase “Participating Class Members Can Object to the Class Settlement but not the PAGA Settlement” should instead state “Participating Class Members Can Object to the Class Settlement.”

Plaintiffs’ counsel states that the summary table was amended to state: “Participating Class Members Can Object to the Class Settlement.” (Supp. Bokhour Dec. ¶ 16, Exs. D-E.) However, that change was not made to the notice.

A Final Approval Hearing is set for December 14, 2026 at 1:30 p.m. All papers in support of the Final Approval Hearing, including detailed hourly breakdowns of plaintiffs’ attorneys to support a lodestar cross-check, detailed plaintiffs’ attorney cost breakdowns, an Administrator declaration and invoice, and plaintiffs’ declarations to support the enhancement request, must be filed at least 16 calendar days before the Final Approval Hearing date to provide enough time for court review, and must be served in compliance with CCP notice of motion requirements.

Plaintiffs is ordered to give notice of this ruling to the LWDA and Defendant.

6 30-2024-01412038 Defendant Arash Firouzi’s (“Firouzi”) Demurrer to Plaintiffs Pagano vs. Yani Mauro Pagano and Vita Manzoli’s (collectively, “Plaintiffs”) Construction Corp Second Amended Complaint (“SAC”) is SUSTAINED WITHOUT LEAVE TO AMEND IN PART as to the Second Cause of Action and OVERRULED IN PART as to the Seventh Cause of Action. IT IS ORDERED THAT Firouzi shall file and serve an Answer to the remaining Second Amended Complaint within fourteen (14) days of this ruling.

As a threshold matter, Plaintiffs argue that Defendant Firouzi failed to meet and confer in person, by telephone or by video conference as required by CCP § 430.41(a) and instead only sent a meet and confer letter. (Opp. at p. 10.) However, “[a] determination by the court that the meet and confer process was insufficient shall not be grounds to overrule or sustain a

demurrer.” (CCP § 430.41(a)(4).) Thus, while Defendant Firouzi and his counsel are admonished for failing to adequately meet and confer before bringing this Motion and are warned of the possibility of future sanctions, it is not grounds for overruling the demurrer.

This action arises from alleged construction defects and product defects that damaged Plaintiffs’ property in Newport Beach. The court previously sustained Firouzi’s demurrer to Plaintiffs’ First Amended Complaint as to the Second and Seventh Causes of Action with leave to amend. (ROA 143.) In this Demurrer to Plaintiffs’ SAC, Firouzi asserts that Plaintiffs fail to state a claim as to the Second and Seventh Causes of Action in Plaintiffs’ SAC, and that the claims are uncertain. The court finds that Plaintiffs have failed to cure the defects as to the Second Cause of Action, but have sufficiently pled the Seventh Cause of Action.

Second Cause of Action (Breach of Implied Warranty of Merchantability)

In the court’s previous ruling on Firouzi’s demurrer to the FAC, the court stated in relevant part:

Third, Firouzi contends that the Second Cause of Action for breach of implied warranty of merchantability fails because the requisite elements are not pled.

“[A] warranty that the goods shall be merchantable is implied in a contract for their sale if the seller is a merchant with respect to goods of that kind.” (Cal. Com. Code § 2314(1) [emphasis added].) “Merchant” means a person who deals in goods of the kind or otherwise by his occupation holds himself out as having knowledge or skill peculiar to the practices or goods involved in the transaction or to whom such knowledge or skill may be attributed by his employment of an agent or broker or other intermediary who by his occupation holds himself out as having such knowledge or skill. (Cal.

Com. Code § 2104(1).) “Goods to be merchantable must be at least such as (a) Pass without objection in the trade under the contract description; and (b) In the case of fungible goods, are of fair average quality within the description; and (c) Are fit for the ordinary purposes for which such goods are used; and (d) Run, within the variations permitted by the agreement, of even kind, quality and quantity within each unit and among all units involved; and (e) Are adequately

contained, packaged, and labeled as the agreement may require; and (f) Conform to the promises or affirmations of fact made on the container or label if any.” (Cal. Com. Code § 2314(2).)

The FAC alleges that Firouzi and Defendants “were and now are the merchants and sellers of newly constructed housing such as the Subject Property, and/or products used in the construction,” and they “impliedly warranted that [the property] was properly construction and/or that said products were merchantable as of the time they were provided.” (FAC ¶¶ 28-29.) Plaintiffs allege that “[t]he Subject Property and said products used in the construction thereof was not of the same quality as those generally acceptable in the trade, was not fit for the ordinary purposes for which such goods are used, and/or did not conform to the quality established by the parties’ prior dealings or by usage of trade.” (FAC ¶ 30.)

However, there is no allegation of a contract for the sale of any products, and no allegations of any contract between Plaintiffs and Firouzi. Plaintiffs argue that, as the intended owners of the property, they are intended third party beneficiaries of Defendants’ construction contract but fails to plead facts to show that the contract was for a sale of goods and fails to plead facts to show that Plaintiffs are third-party beneficiaries of such a contract. Thus, the court SUSTAINS WITH LEAVE TO AMEND the demurrer to the Second Cause of Action to allow Plaintiffs to adequately plead facts to demonstrate a contractual basis for the implied warranty of merchantability. (ROA 143.)

As stated in the previous FAC, “PLAINTIFFS purchased the Subject Property from NIMA pursuant to New Construction Purchase Agreement dated October 16, 2023, for a total price of $6,500,000.” (SAC ¶ 15.) As previously alleged, Plaintiffs assert that Firouzi “was the designer and/or construction manager of the Subject Property” (SAC ¶ 5), and a “merchant[] and seller[] of newly constructed housing such as the Subject Property, and/or products used in the construction thereof.” (SAC ¶ 28 [emphasis added].)

In the SAC, Plaintiffs now allege that Firouzi is a “developer, builder, designer, and/or general contractor of the Subject

Property, retained DOES 21 through 50, inclusive, as subcontractors pursuant to written and/or oral subcontracts to provide . . . materials for the construction of the Subject Property,” which “were made expressly for the benefit of PLAINTIFFS, who were the intended purchasers and occupants of the Subject Property.” (SAC ¶ 29 [emphasis added].) “PLAINTIFFS are further informed and believe and thereon allege that a motivating purpose of said contracts was to provide PLAINTIFFS with a residence constructed in a workmanlike manner, in compliance with applicable building standards, and free from construction defects, including defects in workmanship, materials, waterproofing, and installation of building components.” (Id. ¶ 31 [emphasis added].)

Plaintiffs allege that Firouzi “at the time and place of the sale of the construction at the Subject Property, and/or the products used in the construction Subject Property, impliedly warranted that it was properly construction [sic] and/or that said products were merchantable as of the time they were provided.” (Id. ¶ 32 [emphasis added].) Plaintiffs contend that “[t]he Subject Property and said products used in the construction thereof was not of the same quality as those generally acceptable in the trade, was not fit for the ordinary purposes for which such goods are used, and/or did not conform to the quality established by the parties’ prior dealings or by usage of trade.” (Id. ¶ 33 [emphasis added].)

Plaintiffs’ SAC alleges no contract for the sale of goods between Firouzi and Plaintiffs. Instead, Plaintiffs have now alleged unspecified contracts for the sale of products by unnamed subcontractors to Firouzi for which Plaintiffs claim they were the intended third-party beneficiaries. This allegation is that the subcontractors were contracted to provide materials, not that Firouzi provided the materials for the construction project. Thus, Plaintiffs have still failed to allege any contract for the sale of goods in which Firouzi is the merchant or seller. If Plaintiff wishes to allege a claim of breach of implied warranty of merchantability against Firouzi, Plaintiffs must allege a contract in which Firouzi acted as the merchant/seller of goods.

Plaintiffs also fail to allege facts showing that they are third-party beneficiaries to these alleged subcontracts for the sale of goods. “The test in deciding whether a contract inures to the benefit of a third person is whether an intent to so benefit the third person appears from the terms of the agreement[.]” (Martin v. Bridgeport Cmty. Assn., Inc. (2009) 173 Cal. App. 4th 1024, 1034.) “The fact that a third party is incidentally named in the contract, or that the contract, if carried out according to its terms,

would inure to his benefit, is not sufficient to entitle him to enforce it.” (Id.) Here, there are no allegations as to the terms of the agreement to suggest that Plaintiffs were the intended beneficiaries of the alleged subcontracts.

In addition, Plaintiffs’ allegations based on information and belief are inadequately pled. “[P]laintiff may allege on information and belief any matters that are not within his personal knowledge, if he has information leading him to believe that the allegations are true . . . and thus a pleading made on information and belief is insufficient if it ‘merely assert[s] the facts so alleged without alleging such information that ‘lead[s] [the plaintiff] to believe that the allegations are true.’” (Gomes v. Countrywide Home Loans, Inc. (2011) 192 Cal. App. 4th 1149, 1158–59.) Here, Plaintiffs alleged purported subcontracts for sale of goods on information and belief (SAC ¶¶ 29-31), but fail to allege any basis for believing that these subcontracts exist or were intended for their benefit.

The only allegation as to Firouzi is that he provided services, not goods. “[T]he well settled rule in California is that where the primary objective of a transaction is to obtain services, the doctrines of implied warranty and strict liability do not apply.” (Allied Props. v. John A. Blume & Assocs. (1972) 25 Cal. App. 3d 848, 855.) A service provider is “not a seller of property who obligated himself as part of his bargain to convey property in the condition represented.” (Id.) Service providers “have a duty to exercise the ordinary skill and competence of members of their profession, and a failure to discharge that duty will subject them to liability for negligence.” (Id.) “Those who hire such persons are not justified in expecting infallibility, but can expect only reasonable care and competence.” (Id.) “They purchase service, not insurance.” (Id.)

As there are no allegations that Firouzi did anything other than provide a service to Plaintiffs, there are no grounds for Plaintiffs to assert a claim for breach of the implied warranty of merchantability against him.

Based on the foregoing, despite the opportunity to cure the defects in the complaint, Plaintiffs have failed to do so and offer no basis in which Plaintiffs could cure these deficiencies. Therefore, the court SUSTAINS WITHOUT LEAVE TO AMEND Firouzi’s Demurrer as to the Second Cause of Action as to Firouzi.

Seventh Cause of Action (Violation of Civil Code section 895)

In the court’s previous ruling on Firouzi’s demurrer to the FAC, the court stated in relevant part:

Fifth, Firouzi argues that the Seventh Cause of Action for violation of Civil Code section 895 fails because it is not pled with requisite particularity for a statutory claim.

The FAC alleges that “Defendants, and each of them, violated the applicable standards set forth under Civil Code section 896, et seq. PLAINTIFFS are informed and believe and thereon allege that that said violations arise out of, pertain to, or are related to, the construction of the Subject Property.” (FAC ¶ 56.) No further facts are pled as to what violations and what standards are at issue.

“[S]tatutory causes of action must be pleaded with particularity,” and it is unclear here what specific standards set forth under the Right to Repair Act were violated by defendants and specifically how the standards were violated by Defendants’ conduct so as to state this claim. (Covenant Care, Inc. v. Superior Ct. (2004) 32 Cal. 4th 771, 790.) Thus, the court SUSTAINS WITH LEAVE TO AMEND the demurrer as to the Seventh Cause of Action

In the SAC, Plaintiffs now allege: 1. Defendants allowed doors and/or door systems at the Subject Property to permit unintended water to pass beyond, around, or through the doors or their designed or actual moisture barriers, in violation of Cal. Civ. Code § 896(a)(1) 2. Defendants allowed windows, patio doors, deck doors, and/or their systems at the Subject Property to permit water to pass beyond, around, or through the windows, patio doors, deck doors, or their designed or actual moisture barriers, in violation of Cal. Civ. Code § 896(a)(2) 3. Defendants allowed roofs, roofing systems, chimney caps, ventilation components, and/or related systems at the Subject Property to permit water to enter the structure or pass beyond, around, or through designed or actual moisture barriers, in violation of Cal. Civ. Code § 896(a)(4).

4. Defendants installed hardscape, irrigation systems, landscaping systems, and/or drainage systems in such a way as to cause water or soil erosion to enter into or come

in contact with the structure and cause damage to other building components, in violation of Cal. Civ. Code § 896(a)(9).

5. Defendants allowed the lines and components of the plumbing system, sewer system, and/or utility systems at the Subject Property to leak, in violation of Cal. Civ. Code § 896(a)(14).

6. Defendants installed stucco, exterior siding, exterior walls, and/or other exterior wall finishes and fixtures, including related systems, in such a way as to allow unintended water to pass into the structure or beyond, around, or through the designed or actual moisture barriers of the system, in violation of Cal. Civ. Code § 896(a)(10). To the extent applicable, Defendants also caused the stucco, exterior siding, and/or exterior walls to allow excessive condensation to enter the structure and damage another component, in violation of Cal. Civ. Code § 896(a)(11).

7. Defendants allowed showers, baths, and/or related waterproofing systems and/or the waterproofing system behind or under ceramic tile and tile countertops to leak water into interior walls, flooring systems, or other components, in violation of Cal. Civ. Code § 896(a)(17) and Cal. Civ. Code § 896(a)(18). (SAC ¶ 59.)

Firouzi’s main complaint is that the allegations are not specific to him and instead allege that “Defendants” collectively violated certain statutory requirements.

“A plaintiff alleging [a statutory violation] . . . must state with reasonable particularity the facts supporting the statutory elements of the violation.” (Khoury v. Maly's of California, Inc. (1993) 14 Cal. App. 4th 612, 619.) A demurrer is properly sustained when the “complaint identifies no particular section of the statutory scheme which was violated and fails to describe with any reasonable particularity the facts supporting violation.” (Id.) However, “[a] demurrer for uncertainty is strictly construed, even where a complaint is in some respects uncertain, because ambiguities can be clarified under modern discovery procedures.” (Id. at 616.)

Further, “[l]ess specificity is required when ‘it appears from the nature of the allegations that the defendant must necessarily possess full information concerning the facts of the controversy[.]’” (Lauckhart v. El Macero Homeowners Assn. (2023) 92 Cal. App. 5th 889, 904.)

Here, Plaintiffs have alleged the violations at issue with sufficient particularity against Defendants collectively. As to the specific role each Defendant played in the violations, that is an issue of fact more likely within Defendants’ knowledge than Plaintiffs, and may be clarified through discovery rather than pleadings. Plaintiffs have alleged sufficient facts to put Firouzi and the other Defendants on notice as to the claim against them.

Firouzi also complains that the SAC fails to plead ultimate facts showing compliance with required prelitigation procedures. However, Plaintiffs allege in the SAC: PLAINTIFFS are informed and believe and thereon allege that Defendants failed to comply with the requirements set forth in Civil Code section 912 and therefore are not entitled to the pre-litigation procedures set forth in Civil Code section 895, et seq., and/or pursuant to Civil Code section 915, that Defendants have “elected not to engage in, follow, nor be bound by Civil Code sections 910-938.”

Accordingly, PLAINTIFFS are informed and believe and thereon asset that they are released from the procedural requirements set forth in Civil Code section 895, et seq., and are therefore permitted to proceed with the filing of this Complaint. (SAC ¶ 61.) To the extent Firouzi disputes these facts, that is not an issue to be resolved at the pleading stage.

In reply, Firouzi argues for the first time that Civil Code § 936 extends the Right to Repair Act to design professionals only “to the extent that [they] caused, in whole or in part, a violation of a particular standard as the result of a negligent act or omission or a breach of contract.” (Reply at p. 6.) However, as Plaintiffs have had no opportunity to respond, the court declines to reach this issue.

Based on the foregoing, the court overrules Firouzi’s Demurrer as to the Seventh Cause of Action.

Defendant Firouzi is ordered to give notice of this ruling.

9 30-2025-01535559 Defendant Anaheim Arena Management, LLC’s (“Defendant”) Wagner vs. Motion to Compel Individual Arbitration of Plaintiff Nicholas Anaheim Arena Wagner’s (“Plaintiff”) Claims and Dismiss Action is DENIED. Management, LLC The court OVERRULES Defendant’s objections to Plaintiff Nicholas Wagner’s Declaration as there is sufficient foundation

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