HVAC & Construction v. Owl Tower Construction Group, et. al.

(Santa Monica Courthouse: Dept. O) August 28, 2026 DEPARTMENT O LAW AND MOTION RULINGS

August 28, 2026 HVAC & Construction v. Owl Tower Construction Group, et. al.) RELEVANT BACKGROUND On May 8, 2025, plaintiff Southland HVAC & Construction, Inc. (Southland) filed its complaint against Owl Tower Construction Group, Inc., (Owl Tower) and Denmix I, LLC (Denmix), alleging (1) breach of contract; (2) common counts; and (3) foreclosure of mechanic's lien.

On July 7, 2025, Denmix filed a cross-complaint against Southland and Owl Tower. On July 11, 2025, Owl Tower filed a cross-complaint against Denmix, LC Equity Group Inc. (LC), and Moes 1-100.

On August 28, 2025, Denmix filed a first amended cross-complaint (FACC) against Southland and Owl Tower alleging ten causes of action: (1) breach of oral/implied contract; (2) indemnity; (3) breach of written contract; (4) breach of implied covenant of good faith and fair dealing; (5) unfair business practices (Bus. & Prof. Code Sec.Sec.17200 et seq.); (6) fraud; (7) intentional interference with prospective economic relations; (8) negligence; (9) unjust enrichment; and (10) declaratory relief.

On April 29, 2026, Owl Tower filed a first amended cross-complaint (FACC) against Denmix, Southkland, and Moes 1-100, alleging thirteen causes of action: (1) Contractual Indemnification; (2) Implied Equitable Indemnity; (3) Equitable Indemnity; (4) Contribution; (5) Breach of Contract; (6) To Enforce a Claim Against a Mechanic's Lien Bond; (7) Breach of Prompt Payment Statutes; (8) Quantum Meruit; (9) Account Stated; (10) Breach of the Covenant of Good Faith and Fair Dealing; (11) Fraud; (12) Negligent Misrepresentation; and (13) Declaratory Relief.

INSTANT MOTIONS On October 13, 2025, Denmix filed a demurrer to the first, second, third, fourth, and tenth causes of action alleged in Owl Tower's cross-complaint. But that demurrer is moot because Owl Tower filed a FACC on April 29, 2026.

On October 13, 2025, Owl Tower filed the instant demurrer and motion to strike the fourth, fifth, seventh, and eighth causes of action and the punitive-damages allegations in Denmix's FACC. Denmix filed an opposition, and Owl Tower filed a reply.

On November 12, 2025, Southland filed the instant demurrer and motion to strike the fourth through tenth causes of action and various allegations in Denmix's FACC. Denmix filed an opposition, and Southland filed a reply.

On June 2, 2026, Southland filed a motion for leave to file a First Amended Complaint. That motion is unopposed and is GRANTED. Southland may have thirty (30) days in which to file and serve an amended complaint.

MEET AND CONFER The Court finds that Owl Tower has satisfied the meet and confer requirement. The Court finds that Southland has satisfied the meet and confer requirement.

REQUEST FOR JUDICIAL NOTICE Denmix's request for judicial notice of the complaint in this action is granted.

DISCUSSION I. OWL TOWER'S DEMURRER TO DENMIX FACC A. Fourth Cause of Action -Implied Covenant of Good Faith and Fair Dealing "A breach of the implied covenant of good faith and fair dealing involves something beyond breach of the contractual duty itself and it has been held that bad faith implies unfair dealing rather than mistaken judgment." (Careau & Co. v. Security Pacific Business Credit, Inc. (1990) 222 Cal.App.3d 1371, 1394.)

"If the allegations do not go beyond the statement of a mere contract breach and, relying on the same alleged acts, simply seek the same damages or other relief already claimed in a companion contract cause of action, they may be disregarded as superfluous as no additional claim is actually stated ... [T]he only justification for asserting a separate cause of action for breach of the implied covenant is to obtain a tort recovery." (Id. at pp. 1394-1395.) To recover in tort for breach of the implied covenant, the defendant must "have acted unreasonably or without proper cause." (Id. at p. 1395 [citations and italics omitted].)

The Court agrees with Owl Tower that the FACC fails to allege facts sufficient to state a claim for breach of the implied covenant of good faith and fair dealing against it. (See FACC P. 58-60.) The fourth cause of action does not assert any new facts or allegations to distinguish it from the breach of contract claim. (Careau, 222 Cal.App.3d at p. 1394; See FACC P. 30-37; 45-51.)

The Court is not persuaded by Denmix's argument in opposition that the FACC alleges bad faith conduct in the performance of the contract because it is "directed at the manner of performance." (Opp at p. 5:21-22.) Denmix fails to point to any allegations in the FACC establishing bad faith conduct beyond the breach of contract claim. But the Court finds that leave to amend is appropriate because it is reasonably possible for the defects to be cured by amendment. The Court does not find that the FACC is uncertain.

Accordingly, Owl Tower's demurrer to the fourth cause of action alleged in the FACC is SUSTAINED WITH LEAVE TO AMEND.

B. Fifth Cause of Action - Unfair Business Practices To set forth a claim for a violation of Business and Professions Code section 17200 (UCL), Plaintiff must establish Defendant was engaged in an "unlawful, unfair or fraudulent business act or practice and unfair, deceptive, untrue or misleading advertising" and certain specific acts. (Bus. & Prof. Code, Sec. 17200.) A cause of action for unfair competition "is not an all-purpose substitute for a tort or contract action." (Cortez v. Purolator Air Filtration Products Co. (2000) 23 Cal.4th 163, 173.)

The Court agrees with Owl Tower that the FACC fails to allege facts sufficient to state a claim for unfair business practices. Denmix's fifth cross-claim repeats the same allegations asserted in its four preceding claims, including its breach of contract, indemnity, and breach of the covenant of good faith claims. (FACC P. 1-60.) Denmix does not allege facts in support of its conclusory assertions that Owl Tower engaged in an unlawful, unfair or fraudulent business act or practice or unfair, deceptive, untrue or misleading advertising. (Id. P. 61-66.)

Denmix also fails to address Owl Tower's argument that damages, the sole remedy pled in the fifth claim, are not an available remedy in a UCL claim, citing Cortez, 23 Cal.4th at p. 173 ["damages are not available in a UCL action"].) Nor does Denmix address that the claim does not implicate the public in general or individual consumers. But the Court finds that leave to amend is appropriate because it is reasonably possible for the defects to be cured by amendment. The Court does not find that the FACC is uncertain.

Accordingly, Owl Tower's demurrer to the fifth cause of action alleged in the FACC is SUSTAINED WITH LEAVE TO AMEND.

C. Seventh Cause of Action - Intentional Interference with Prospective Economic Relations The elements of a claim for intentional interference with prospective economic advantage include "(1) an economic relationship between the plaintiff and some third party, with the probability of future economic benefit to the plaintiff; (2) the defendant's knowledge of the relationship; (3) intentional or negligent acts on the part of the defendant designed to disrupt the relationship; (4) actual disruption of the relationship; and (5) economic harm to the plaintiff proximately caused by the acts of the defendant." (Crown Imports, LLC v. Superior Court (2014) 223 Cal.App.4th 1395, 1404 [citations, brackets, and quotation marks omitted].)

Further, "the alleged interference must have been wrongful by some measure beyond the fact of the interference itself. For an act to be sufficiently independently wrongful, it must be unlawful, that is, it is proscribed by some constitutional, statutory, regulatory, common law, or other determinable legal standard." (Ibid. [citation, ellipsis, and quotation marks omitted].)

The Court agrees with Owl Tower that the FACC fails to allege facts sufficient to state a claim for intentional interference with prospective economic relations. (FACC P. 76-82.) The allegations in the FACC do not identify an economic relationship between Dinamex and a third party that carries a probability of future economic benefit. Nor has Denmix identified any facts evidencing any actual disruption of Denmix's relationships with any third parties or facts showing that it is reasonably probable that the lost economic advantage would have been realized but for Owl Tower's interference.

In opposition, Denmix seeks leave to amend to identify the specific prospective purchasers, lenders and/or other business partners. The Court finds that leave to amend is appropriate because it is reasonably possible for the defects to be cured by amendment. The Court does not find that the FACC is uncertain.

Accordingly, Owl Tower's demurrer to the seventh cause of action alleged in the FACC is SUSTAINED WITH LEAVE TO AMEND.

D. Eighth Cause of Action - Negligence "The elements of a cause of action for medical malpractice are: (1) a duty to use such skill, prudence, and diligence as other members of the profession commonly possess and exercise; (2) a breach of the duty; (3) a proximate causal connection between the negligent conduct and the injury; and (4) resulting loss or damage." (Chakalis v. Elevator Solutions, Inc. (2012) 205 Cal.App.4th 1557, 1571.)

Economic Loss Rule "Simply stated, the economic loss rule provides: '[W]here a purchaser's expectations in a sale are frustrated because the product he bought is not working properly, his remedy is said to be in contract alone, for he has suffered only 'economic' losses.' ' This doctrine hinges on a distinction drawn between transactions involving the sale of goods for commercial purposes where economic expectations are protected by commercial and contract law, and those involving the sale of defective products to individual consumers who are injured in a manner which has traditionally been remedied by resort to the law of torts.' [Citations.]

The economic loss rule requires a purchaser to recover in contract for purely economic loss due to disappointed expectations, unless he can demonstrate harm above and beyond a broken contractual promise. [Citations.] Quite simply, the economic loss rule 'prevent[s] the law of contract and the law of tort from dissolving one into the other.'[Citations]." (Robinson Helicopter Co., Inc. v. Dana Corp. (2004) 34 Cal.4th 979, 988.)

"[T]ort 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.) "[I]n general, there is no recovery in tort for negligently inflicted purely economic losses, meaning financial losses unaccompanied by physical or property damage." (Sheen v. Wells Fargo Bank. N.A. (2022) 12 Cal.5 th 905, 922.)

The Court agrees with Owl Tower that the FACC fails to allege facts sufficient to state a claim for negligence. (FACC P. 83-88.) Denmix fails to adequately address Owl Tower's argument that the eighth crossclaim, which seeks to hold Owl Tower liable for economic losses, violates the economic loss rule. In opposition, Denmix argues that the economic loss rule does not provide a categorical bar and that an exception may apply. But Denmix fails to point to any allegations in the FACC showing physical or property damage aside from the economic losses amongst parties in privity of contract. But the Court finds that leave to amend is appropriate because it is reasonably possible for the defects to be cured by amendment. The Court does not find that the FACC is uncertain.

Accordingly, Owl Tower's demurrer to the eighth cause of action alleged in the FACC is SUSTAINED WITH LEAVE TO AMEND. Based on the foregoing, the Court also grants Owl Tower's motion to strike the punitive damages allegations in the FACC, with leave to amend.

II. SOUTHLAND'S DEMURRER TO DENMIX FACC A. Fourth Cause of Action - Implied Covenant of Good Faith and Fair Dealing "A breach of the implied covenant of good faith and fair dealing involves something beyond breach of the contractual duty itself and it has been held that bad faith implies unfair dealing rather than mistaken judgment." (Careau & Co. v. Security Pacific Business Credit, Inc. (1990) 222 Cal.App.3d 1371, 1394.)

"If the allegations do not go beyond the statement of a mere contract breach and, relying on the same alleged acts, simply seek the same damages or other relief already claimed in a companion contract cause of action, they may be disregarded as superfluous as no additional claim is actually stated ... [T]he only justification for asserting a separate cause of action for breach of the implied covenant is to obtain a tort recovery." (Id. at pp. 1394-1395.) To recover in tort for breach of the implied covenant, the defendant must "have acted unreasonably or without proper cause." (Id. at p. 1395 [citations and italics omitted].)

The Court agrees with Southland that the FACC fails to allege facts sufficient to state a claim for breach of the implied covenant of good faith and fair dealing against it. (FACC, P.P. 9, 11, 13-14, 47.) Denmix's FACC alleges that Southland breached the implied covenant by submitting change orders, failing to perform work timely, and abandoning the project. The FACC does not allege facts showing Southland engaged in conduct beyond a mere failure to perform under the contract. (Careau, 222 Cal.App.3d at p. 1394; See FACC P. 30-37; 45-51.). Denmix fails to point to any allegations in the FACC establishing bad faith conduct beyond the breach of contract claim.

Additionally, Southland argues that the allegations regarding the recording of a mechanic's lien are privileged, citing Frank Pisano & Associates v. Taggart (1972) 29 Cal.App.3d 1, 25 ["[T]he filing of a claim of mechanic's lien in conjunction with a judicial proceeding to enforce it is privileged within the meaning of Civil Code section 47," and "[a]ny deficiencies in the lien procedure were a matter of defense to the action and did not militate against the privilege."] and RGC Gaslamp, LLC v. Ehmcke Sheet Metal Co., Inc. (2020) 56 Cal.App.5th 413 ["As established in Frank Pisano, the recording of a mechanic's lien is absolutely privileged, and does not give rise to a slander of title action even if the claim of lien is invalid."]

The Court agrees with Southland that the privileged lien allegations should be stricken on this basis, and that the fourth cause of action thus rests on the same acts as the third. But the Court finds that leave to amend is appropriate because it is reasonably possible for the defects to be cured by amendment.

Accordingly, Southland's demurrer to the fourth cause of action alleged in the FACC is SUSTAINED WITH LEAVE TO AMEND.

B. Fifth Cause of Action - Unfair Business Practices To set forth a claim for a violation of Business and Professions Code section 17200 (UCL), Plaintiff must establish Defendant was engaged in an "unlawful, unfair or fraudulent business act or practice and unfair, deceptive, untrue or misleading advertising" and certain specific acts. (Bus. & Prof. Code, Sec. 17200.) A cause of action for unfair competition "is not an all-purpose substitute for a tort or contract action." (Cortez v. Purolator Air Filtration Products Co. (2000) 23 Cal.4th 163, 173.)

The Court agrees with Southland that the FACC fails to allege facts sufficient to state a claim for unfair business practices. The FACC alleges that Southland engaged in unfair business practices by submitting change orders and abandoning the project, but these allegations arise solely from the contractual relationship between Southland and Denmix and do not implicate the public or consumers. (FACC P. 63.) Additionally, the FACC seeks damages, overhead, and delay costs, which are not available under the UCL. (Id. P. 66; Cortez, 23 Cal.4th at p. 173 ["damages are not available in a UCL action"].) But the Court finds that leave to amend is appropriate because it is reasonably possible for the defects to be cured by amendment.

Accordingly, Southland's demurrer to the fifth cause of action alleged in the FACC is SUSTAINED WITH LEAVE TO AMEND.

C. Sixth Cause of Action - Fraud "The elements of fraud are (a) a misrepresentation (false representation, concealment, or nondisclosure); (b) scienter or knowledge of its falsity; (c) intent to induce reliance; (d) justifiable reliance; and (e) resulting damage." (Hinesley v. Oakshade Town Ctr. (2005) 135 Cal.App.4th 289, 294.) The facts constituting the alleged fraud must be alleged factually and specifically as to every element of fraud, as the policy of "liberal construction" of the pleadings will not ordinarily be invoked. (Lazar v. Superior Court (1996) 12 Cal.4th 631, 645.)

The facts constituting the alleged fraud must be alleged factually and specifically as to every element of fraud, as the policy of "liberal construction" of the pleadings will not ordinarily be invoked. (Ibid.) "[Fraud's] particularity requirement necessitates pleading facts which 'show how, when, where, to whom, and by what means the representations were tendered.' [Citation.]" (Stansfield v. Starkey (1990) 220 Cal.App.3d 59, 73.) To properly allege fraud against a corporation, the plaintiffs must plead the names of the persons allegedly making the false representations, their authority to speak, to whom they spoke, what they said or wrote, and when it was said or written. (Tarmann v. State Farm Mut. Auto. Ins. Co. (1991) 2 Cal.App.4th 153, 157.)

The Court disagrees with Southland's contention that the fraud claim is insufficiently pleaded and barred by the economic loss rule. "[T]he 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." (Rattaga, 17 Cal.5th at p. 39.)

The FACC alleges that Southland, through its CEO Edward Bezinover, "submitted a proposal fixing a contract price of $160,000" while "intentionally underbid[ding] the project to secure the contract, with the ulterior motive of later submitting unapproved change orders for work already within the original scope." (FACC, P. 72.) The FACC further alleges that, on December 25, 2024, Bezinover submitted backdated change orders representing that the described work "was outside the scope of the original HVAC CONTRACT," "had been fully performed and completed and without material defects," and "had been approved and authorized by OWL and/or DENMIX" -- allegedly false and known to be false. (FACC, P.P. 68-71.)

As for particularity, the FACC supplies each item: who (Bezinover, Southland's CEO (FACC, P.P. 9, 68, 72)); what (the three representations in the change orders and the $160,000 fixed-price representation (P.P. 69, 72)); when (December 25, 2024, and December 24, 2023 (P.P. 68, 72)); to whom (Denmix and Owl (P.P. 21, 69)); and by what means (written change orders and the written Proposal attached as Exhibit 1 (P.P. 12, 21, 68)). It pleads falsity and scienter (P. 70), intent to induce payment (P. 71), reliance (P. 73), and damage (P. 74).

Accordingly, Southland's demurrer to the sixth cause of action alleged in the FACC is OVERRULED.

D. Seventh Cause of Action - Intentional Interference with Prospective Economic Relations The elements of a claim for intentional interference with prospective economic advantage include "(1) an economic relationship between the plaintiff and some third party, with the probability of future economic benefit to the plaintiff; (2) the defendant's knowledge of the relationship; (3) intentional or negligent acts on the part of the defendant designed to disrupt the relationship; (4) actual disruption of the relationship; and (5) economic harm to the plaintiff proximately caused by the acts of the defendant." (Crown Imports, LLC v. Superior Court (2014) 223 Cal.App.4th 1395, 1404 [citations, brackets, and quotation marks omitted].)

Further, "the alleged interference must have been wrongful by some measure beyond the fact of the interference itself. For an act to be sufficiently independently wrongful, it must be unlawful, that is, it is proscribed by some constitutional, statutory, regulatory, common law, or other determinable legal standard." (Ibid. [citation, ellipsis, and quotation marks omitted].)

The Court agrees with Southland that the FACC fails to allege facts sufficient to state a claim for intentional interference with prospective economic relations. (FACC P. 76-82.) The allegations in the FACC do not identify an economic relationship between Dinamex and a third party that carries a probability of future economic benefit. Nor has Denmix identified any facts evidencing any actual disruption of Denmix's relationships with any third parties or facts showing that it is reasonably probable that the lost economic advantage would have been realized but for Southland's interference. The Court finds that leave to amend is appropriate because it is reasonably possible for the defects to be cured by amendment.

Accordingly, Southland's demurrer to the seventh cause of action alleged in the FACC is SUSTAINED WITH LEAVE TO AMEND.

E. Eighth Cause of Action - Negligence "The elements of a cause of action for medical malpractice are: (1) a duty to use such skill, prudence, and diligence as other members of the profession commonly possess and exercise; (2) a breach of the duty; (3) a proximate causal connection between the negligent conduct and the injury; and (4) resulting loss or damage." (Chakalis v. Elevator Solutions, Inc. (2012) 205 Cal.App.4th 1557, 1571.)

Economic Loss Rule "Simply stated, the economic loss rule provides: '[W]here a purchaser's expectations in a sale are frustrated because the product he bought is not working properly, his remedy is said to be in contract alone, for he has suffered only 'economic' losses.' ' This doctrine hinges on a distinction drawn between transactions involving the sale of goods for commercial purposes where economic expectations are protected by commercial and contract law, and those involving the sale of defective products to individual consumers who are injured in a manner which has traditionally been remedied by resort to the law of torts.' [Citations.]

The economic loss rule requires a purchaser to recover in contract for purely economic loss due to disappointed expectations, unless he can demonstrate harm above and beyond a broken contractual promise. [Citations.] Quite simply, the economic loss rule 'prevent[s] the law of contract and the law of tort from dissolving one into the other.'[Citations]." (Robinson Helicopter Co., Inc. v. Dana Corp. (2004) 34 Cal.4th 979, 988.)

"[T]ort 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.) "[I]n general, there is no recovery in tort for negligently inflicted purely economic losses, meaning financial losses unaccompanied by physical or property damage." (Sheen v. Wells Fargo Bank. N.A. (2022) 12 Cal.5 th 905, 922.)

The Court agrees with Southland that the FACC fails to allege facts sufficient to state a claim for negligence. (FACC P. 83-88.) The FACC alleges that Southland failed to perform work according to industry standards and failed to obtain approval for change orders, but these allegations arise solely from the contractual relationship and do not allege any independent duty. (Id.) The Court disagrees with Southland that the FACC alleges purely financial harm unaccompanied by physical or property damage against it.

The FACC alleges that Southland's work was "materially defective," that the deficiencies "rendered portions of the HVAC installation work performed by SOUTHLAND unsafe, inoperable, or noncompliant with required codes," and that Denmix suffered "property damage" as a result. (FACC, P.P. 29, 60, 66, 81, 88.) Therefore, the Court's ruling does not rely on this contention asserted by Southland. But the Court finds that leave to amend is appropriate because it is reasonably possible for the defects to be cured by amendment.

Accordingly, Southland's demurrer to the eighth cause of action alleged in the FACC is SUSTAINED WITH LEAVE TO AMEND.

A. Ninth Cause of Action - Unjust Enrichment "The elements for a claim of unjust enrichment are receipt of a benefit and unjust retention of the benefit at the expense of another. The theory of unjust enrichment requires one who acquires a benefit which may not justly be retained, to return either the thing or its equivalent to the aggrieved party so as not to be unjustly enriched." (Lyles v. Sangadeo-Patel (2014) 225 Cal.App.4th 759, 769, quotation marks and citations omitted.) Notably, "[u]njust enrichment is not a cause of action"; it is simply "a restitution claim." (Hill v. Roll International Corp. (2011) 195 Cal.App.4th 1295, 1307; see also Melchior v. New Line Productions, Inc. (2003) 106 Cal.App.4th 779, 793 ["there is no cause of action in California for unjust enrichment"].)

"[R]estitution may be awarded in lieu of breach of contract damages when the parties had an express contract, but it was procured by fraud or is unenforceable or ineffective for some reason.' [Citation.] Thus, a party to an express contract can assert a claim for restitution based on unjust enrichment by 'alleg[ing in that cause of action] that the express contract is void or was rescinded.' [Citation.] A claim for restitution is permitted even if the party inconsistently pleads a breach of contract claim that alleges the existence of an enforceable agreement. [Citations.]" (Rutherford Holdings, LLC v. Plaza Del Rey (2014) 223 Cal.App.4th 221, 232.)

The Court disagrees with Southland's contention that the unjust enrichment claim is precluded because the FACC alleges that Southland was paid for work not performed and the parties' rights and obligations are governed by the written contract. (Rutherford, supra, 223 Cal.App.4th at p. 232 ["A claim for restitution is permitted even if the party inconsistently pleads a breach of contract claim that alleges the existence of an enforceable agreement"].) is appropriate because it is reasonably possible for the defects to be cured by amendment.

The Court also disagrees with Southland's argument in reply that Denmix has not alleged that the express contract is void or was rescinded. Rutherford provides that a party to an express contract can assert a claim for restitution based on unjust enrichment by alleging that "it was procured by fraud or is unenforceable or ineffective for some reason," which is what Denmix has alleged here. (FACC, P.P. 72, -92.)

Accordingly, Southland's demurrer to the ninth cause of action alleged in the FACC is OVERRULED.

B. Tenth Cause of Action - Declaratory Relief "To qualify for declaratory relief, a party would have to demonstrate its action presented two essential elements: (1) a proper subject of declaratory relief, and (2) an actual controversy involving justiciable questions relating to the party's rights or obligations." (Jolley v. Chase Home Finance, LLC (2013) 213 Cal.App.4th 872, 909, quotation marks and brackets omitted.) A cause of action for declaratory relief should not be used as a second cause of action for the determination of identical issues raised in another cause of action. (General of America Insurance Co. v. Lilly (1968) 258 Cal.App.2d 465, 470.)

"The availability of another form of relief that is adequate will usually justify refusal to grant declaratory relief" (California Insurance Guarantee Association v. Superior Court (1991) 231 Cal.App.3d 1617, 1624), and a duplicative cause of action is subject to demurrer (Palm Springs Villas II Homeowners Association, Inc. v. Parth (2016) 248 Cal.App.4th 268, 290). Further, "there is no basis for declaratory relief where only past wrongs are involved." (Osseous Technologies of America, Inc. v. DiscoveryOrtho Partners LLC (2010) 191 Cal.App.4th 357, 366, quotation marks omitted.)

The Court disagrees with Southland's contention that the declaratory relief claim is duplicative because it seeks a declaration of rights and obligations already at issue in the breach of contract and lien foreclosure claims. (Osseous, 191 Cal.App.4th at p. 366 ["[i]f there is a controversy that calls for a declaration of rights, it is no objection that past wrongs are also to be redressed."].) Denmix's claim is forward-looking, as it seeks declarations that the change orders were within the original scope, that Southland is not entitled to further payment, and that "the change orders are not a valid basis for the lien; and therefore SOUTHLAND has no right to foreclose on the lien, and instead, it must be discharged." (FACC, P. 95.)

Therefore, the demurrer is not sustained on this basis, and Southland does not present any other arguments in the moving papers with respect to this cause of action.

Accordingly, Southland's demurrer to the tenth cause of action alleged in the FACC is OVERRULED.

III. SOUTHLAND'S MOTION TO STRIKE A motion to strike reaches only "irrelevant, false, or improper matter" and matter "not drawn or filed in conformity with the laws of this state, a court rule, or an order of the court." (Code Civ. Proc., Sec. 436.) The grounds must appear on the face of the pleading or from judicially noticeable matter. (Code Civ. Proc., Sec. 437.)

Punitive damages are appropriate when a defendant acted with malice, oppression, or fraud. (Civ. Code, Sec. 3294, subd. (a).) "Malice" is defined as conduct intended to cause injury to a person or despicable conduct carried on with a willful and conscious disregard for the rights or safety of others. (Turman v. Turning Point of Cent. Cal., Inc. (2010) 191 Cal.App.4th 53, 63.) "Oppression" means despicable conduct subjecting a person to cruel and unjust hardship, in conscious disregard of the person's rights. (Ibid.) "Fraud" is an intentional misrepresentation, deceit, or concealment of a material fact known by defendant, with intent to deprive a person of property, rights or otherwise cause injury. (Ibid.)

"In order to survive a motion to strike an allegation of punitive damages, the ultimate facts showing an entitlement to such relief must be pled by a plaintiff." (Clauson v. Superior Court (1998) 67 Cal.App.4th 1253, 1255.) "In passing on the correctness of a ruling on a motion to strike, judges read allegations of a pleading subject to a motion to strike as a whole, all parts in their context, and assume their truth." (Ibid.) "In ruling on a motion to strike, courts do not read allegations in isolation." (Ibid.) Conclusory allegations, devoid of any factual assertions, are insufficient to support a conclusion that parties acted with oppression, fraud or malice. (Smith v. Superior Court (1992) 10 Cal.App.4th 1033, 1042.)

Southland moves to strike the following portions of Denmix's FACC on the grounds that they are improper and/or not drawn in conformity with the laws of this State pursuant to Code of Civil Procedure Sections 435-436: 1. All allegations and prayers for punitive, exemplary, and treble damages, including but not limited to FACC P.¿21, P.¿74, P.¿75, P.¿82, and Prayer P.¿1, as such damages are unavailable for contract or UCL claims and are not supported by any factual allegations of despicable conduct, oppression, fraud, or malice.

2. All allegations and prayers for attorney's fees absent any statutory or contractual basis applicable to Southland, including but not limited to FACC P.¿3, P.¿12, P.¿37, P.¿44, P.¿56, P.¿66, and Prayer P.¿4.

3. All allegations and prayers for non-restitutionary UCL remedies, including damages, overhead, and delay costs, as found in FACC P.¿3, P.¿37, P.¿66, and Prayer P.¿1, P.¿3, which are not recoverable under the UCL.

4. All allegations improperly asserting joint and several liability or imposing duties on Southland that belong, if at all, to other parties, including but not limited to FACC P.¿14, P.¿58, P.¿60, P.¿66, and Prayer P.¿1.

5. All surplusage contradicting the express terms and exclusions of the written contract, including but not limited to FACC P.¿13, P.¿14, P.¿24, P.¿49, and Prayer P.¿1.

Southland's motion to strike is DENIED with respect to punitive and exemplary damages (No. 1). As set forth above, the Court finds the allegations in the FACC adequate to state a claim for fraud against Southland, and punitive and exemplary damages are therefore recoverable. The motion is also denied with respect to request No. 5 above (FACC P.¿13, P.¿14, P.¿24, P.¿49, and Prayer P.¿1).

Southland's motion to strike is GRANTED with respect to treble damages (No. 1). The Court notes that, with respect to treble damages, Southland concedes that "the FACC pleads no statutory basis for them, and Denmix does not oppose striking the word 'treble' from paragraph 1 of the Prayer, without prejudice to amendment should a statutory basis be established."

Southland's motion to strike is DENIED with respect to attorney fees (No. 2). The Court notes that, in reply, Southland states: "Southland narrows this ground but does not accept Denmix's premise. Denmix does not seek fees only as an item of injury; it seeks the fees it is incurring in this action." (Reply at p. 4:8-10.) The Court finds that Southland has failed to establish that the prayer for attorney's fees "where authorized by law" is improper, and the demurrer to the UCL claim is sustained with leave to amend, as set forth above.

Southland's motion to strike is GRANTED with respect to the allegations and prayers for non-restitutionary UCL remedies (No. 3) for the reasons set forth in the Court's above ruling on the demurrer.

Southland's motion to strike is DENIED with respect to the allegations asserting joint and several liability (No. 4). The Court notes that Southland withdraws its reference to paragraphs 14. Additionally, the Court is not persuaded with respect to paragraphs 58, 60, or 66. Paragraph 58 describes Owl's breaches of the implied covenant in a cause of action asserted against both cross-defendants; it is the factual basis for the claim against Owl and the context for the claim against Southland, and Southland cannot strike allegations directed at a co-cross-defendant.

Paragraphs 60 and 66 allege that Owl and Southland "are jointly and severally liable" for the damages caused by their combined conduct. Whether two defendants whose conduct produced an indivisible injury -- a stalled project, a clouded title, and the cost of completing and repairing the HVAC system -- are jointly liable is a question of law and fact for trial, not "irrelevant, false, or improper matter" to be excised from the pleading. (Code Civ. Proc., Sec. 436.) Southland's cites Civil Code section 8470, which concerns a direct contractor's duty to defend a lien action, but identifies no allegation that imposes such a duty on Southland.

Southland's motion to strike is DENIED as MOOT with respect to alleged "surplusage contradicting the express terms" (No. 5). Southland withdraws its surplusage ground in reply. (See Reply at p. 6:17-21.)

Denmix may have thirty (30) days in which to file and serve a further amended cross-complaint. Moving parties to give notice. | Home -->)" -->