Case Name: Golden State Lumber, Inc. v. Mark McConville, et al.

Case No.: 2017-CV-310917

Demurrer to the Complaint by Defendant Bank of America, N.A.

Factual and Procedural Background

This an action for foreclosure of a mechanics lien. Plaintiff Golden Gate Lumber, Inc. (“Plaintiff”) is involved in the sale and provision of plywood, lumber, and related building materials. (Complaint at ¶ 1.) Defendants Thomas F. Wilson and Peggy J. Franczyk, as individuals and trustees of the Franczyk, are the owners of improved real property located at 237 Thompson Square in Mountain View, California (“Property 3”). (Id. at ¶ 5.) Defendant Bank of America, N.A. (“Bank”) claims an interest in Property 3. (Id. at ¶ 7.)

As relevant here, Plaintiff alleges that it provided services, goods, and materials used in the construction and improvement at Property 3 which are reasonably necessary for the convenient use and enjoyment of the property. (Complaint at ¶ 70.) Thereafter, Plaintiff recorded a Mechanic’s Lien claim setting forth its demands, the name of the reputed owner, a description of the affected real property, a statement of materials, the identities of the respective parties involved, and the estimated amount of indebtedness resulting from its provision of materials and supplies. (Id. at ¶ 71.) The Mechanic’s Lien was recorded on April 28, 2017 as document number 23635997 in the office of the Santa Clara County Recorder. (Ibid.) Plaintiff alleges that the claims of defendants, including Bank, are junior and subordinate to the interest and claim of lien asserted by Plaintiff. (Id. at ¶ 75.)

 

On May 24, 2017, Plaintiff filed the operative Complaint against defendants setting forth claims for open book account, sale and delivery of materials, account stated, breach of contract, foreclosure of mechanic’s lien, and enforcement of the stop payment notice.

 

Demurrer to the Complaint

Currently before the Court is Bank’s demurrer to the eighth cause of action in the Complaint on the ground that it fails to state a claim. (Code Civ. Proc., § 430.10, subd. (e).) Bank filed a request for judicial notice in conjunction with the motion. Plaintiff filed written opposition. Bank filed reply papers.[1]

 

Request for Judicial Notice

 

In support of the demurrer, Bank requests judicial notice of the Deed of Trust recorded with the Santa Clara County Recorder’s Office on August 11, 2015 as Instrument Number 23049173 (Exhibit A).

 

“Judicial notice is the recognition and acceptance by the court, for use by the trier of fact or by the court, of the existence of a matter of law or fact that is relevant to an issue in the action without requiring formal proof of the matter.” (Poseidon Development, Inc. v. Woodland Lane Estates, LLC (2007) 152 Cal.App.4th 1106, 1117.) Evidence Code section 452, subdivision (h) allows a court, in its discretion, to take judicial notice of facts and propositions that are not reasonably subject to dispute and are capable of immediate and accurate determination by resort to sources of reasonably indisputable accuracy.

 

“[C]ourts have taken judicial notice of the existence and recordation of real property records, including deeds of trust, when the authenticity of the documents is not challenged. [Citations.] The official act of recordation and the common use of a notary public in the execution of such documents assure their reliability, and the maintenance of the documents in the recorder’s office makes their existence and text capable of ready confirmation, thereby placing such documents beyond reasonable dispute.” (Fontenot v. Wells Fargo Bank, N.A. (2011) 198 Cal.App.4th 256, 264-265 [disapproved on other grounds in Yvanova v. New Century Morg. Corp. (2016) 62 Cal.4th 919].) Although it would be improper to take judicial notice of the truth of statements of fact recited within the documents, the trial court is permitted to take judicial notice of the legal effect of the documents’ language when that effect is clear. (Id. at p. 265.)

 

Here, Exhibit A constitutes a real property document recorded in Santa Clara County and thus subject to judicial notice under Evidence Code section 452, subdivision (h). Accordingly, the request for judicial notice is GRANTED.

 

Legal Standard

 

“In reviewing the sufficiency of a complaint against a general demurer, we are guided by long settled rules. ‘We treat the demurrer as admitting all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law. We also consider matters which may be judicially noticed.’” (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.) “A demurrer tests only the legal sufficiency of the pleading. It admits the truth of all material factual allegations in the complaint; the question of plaintiff’s ability to prove these allegations, or the possible difficulty in making such proof does not concern the reviewing court.” (Committee on Children’s Television, Inc. v. General Foods Corp. (1983) 35 Cal.3d 197, 213–214.)

 

“The reviewing court gives the complaint a reasonable interpretation, and treats the demurrer as admitting all material facts properly pleaded. The court does not, however, assume the truth of contentions, deductions or conclusions of law. … [I]t is error for a trial court to sustain a demurrer when the plaintiff has stated a cause of action under any possible legal theory. And it is an abuse of discretion to sustain a demurrer without leave to amend if the plaintiff shows there is a reasonable possibility any defect identified by the defendant can be cured by amendment.” (Gregory v. Albertson’s, Inc. (2002) 104 Cal.App.4th 845, 850.)

 

Eight Cause of Action: Foreclosure of Mechanics Lien

 

The eighth cause of action is a claim for foreclosure of mechanics lien. “A mechanics lien is a claim against the real property upon which a claimant has bestowed labor or furnished materials and is founded in California Constitution article XIV, section 3. The lien is effected by the filing of a claim of lien with certain time limitations ([Civ. Code] §§ 3115, 3116) and by meeting other statutory requirements. Because of the unique constitutional command establishing mechanics liens, ‘the courts have uniformly classified the mechanics’ lien laws as remedial legislation, to be liberally construed for the protection of laborers and materialmen.’ [Citation.]” (Kim v. JF Enterprises (1996) 42 Cal.App.4th 849, 854 (Kim).)

 

“Although a mechanics lien itself is not recorded until after the completion of the work in question ([Civ. Code] §§ 3115, 3116), with certain exceptions, a claimant must serve a ‘preliminary notice’ not later ‘than 20 days after the claimant has first furnished labor, service, equipment, or materials to the jobsite.’ ([Civ. Code] §§ 3097, 3097, subd. (d).)” (Kim, supra, 42 Cal.App.4th at p. 855.) A preliminary 20-day notice is a necessary prerequisite to the validity of any claim of lien. (Ibid.)

 

Here, Bank persuasively argues that Plaintiff fails to allege that it served Bank with a preliminary 20-day notice to support its claim for foreclosure of mechanic’s lien. (See Memo of P’s & A’s at p. 4:23-5:3.) Instead, Plaintiff alleges that it served a preliminary 20-day notice on March 4, 2016 as to some of the other defendants involved in the action. (See Complaint at ¶ 67.) There is no allegation that Plaintiff served Bank with the required preliminary notice and Plaintiff fails to even address this argument in opposition to the motion. Thus, the Court concludes that the demurrer is sustainable on this ground alone.

 

Accordingly, the demurrer to the eighth cause of action is SUSTAINED WITH 10 DAYS’ LEAVE TO AMEND for failure to state a claim. (See City of Stockton v. Super Ct. (2007) 42 Cal.4th 730, 747 [where plaintiff has not had opportunity to amend complaint in response to demurrer, “leave to amend is liberally allowed as a matter of fairness unless the complaint shows on its face that it is incapable of amendment”].)

 

The Court will prepare the Order.

[1]The Court notes that Plaintiff filed a sur-reply with supporting objections. There is no legal authority which allows Plaintiff to file a sur-reply so the Court declines to consider it. Furthermore, there is no authority for the proposition that the Court must rule on evidentiary objections made in connection with a motion other than a motion for summary judgment or an anti-SLAPP motion.