Opinion
NOT TO BE PUBLISHED
Superior Court County of San Luis Obispo, No. CV090106 Dodie A. Harman, Judge.
Monteleone & McCrory; William J. Ingalsbe and John M. McGowan, for San Benito Supply, Appellant.
Kevin D. Morris; Andre, Morris & Buttery, for Kleinfelder West, Inc., Respondent.
YEGAN, J.
San Benito Supply (San Benito) appeals from a dismissal entered in favor of Kleinfelder West, Inc. (Kleinfelder) after the trial court sustained, without leave to amend, a demurrer to San Benito's second amended cross-complaint for equitable indemnity, contribution, and declaratory relief. We affirm. San Benito cannot seek equitable indemnity or contribution against Kleinfelder for damages caused by San Benito's breach of contract as a concrete supplier. (Stop Loss Ins. Brokers, Inc. v. Brown & Toland Medical Group (2006) 143 Cal.App.4th 1036, 1040-1044 (Stop Loss).)
Facts and Procedural History
In 2008, San Benito was hired by Mountain Cascade, Inc. (Mountain), a public works general contractor, to supply concrete for a San Luis Obispo County Flood Control & Water Conservation District (District) project. District's construction manager, Jacobs Engineering Group, Inc. (Jacobs) hired Kleinfelder to test the concrete to assure it complied with project specifications for compression strength. This required that Kleinfelder take concrete samples as the concrete was poured, allow the samples to cure for 28 days, and break the samples in a laboratory to determine the compression strength.
On June 13, 2008, San Benito delivered concrete that failed to achieve a minimum compression strength (4, 000 psi) after it cured. Kleinfelder submitted a report to Jacobs setting forth its test results on July 11, 2008.
On August 8, 2008, San Benito delivered another batch of nonconforming concrete that was sampled, cured, and tested by Kleinfelder.
In September 2008, District notified Mountain that the concrete was deficient and would not be accepted. Mountain replaced the concrete at a cost of approximately $428,000 and sued San Benito for breach of contract and breach of warranty. San Benito filed a cross-complaint for equitable indemnity against Kleinfelder, Jacobs, Mountain, and Nick E. Pokrajac, Inc. (Pokrajac) who poured the concrete. The second amended cross-complaint alleges that Jacobs, Mountain, and Pokrajac "allowed water to be added to the concrete" so it would flow down a chute, causing the concrete to become non-conforming.
Kleinfelder demurred on the ground that it had no privity of contract with San Benito and breached no duty of care to San Benito or Mountain. The trial court sustained the demurrer without leave to amend, concluding that no cause of action was stated for equitable indemnification or contribution.
Discussion
On review, we treat the demurrer as admitting all material facts properly pleaded but not contentions, deductions, or conclusions of fact or law. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.) "It is well settled in California that equitable indemnity is only available among tortfeasors who are jointly and severally liable for the plaintiff's injury. [Citations.]" (Stop Loss, supra, 143 Cal.App.4th at p. 1041.) California does not permit equitable apportionment of damages for breach of contract. (Id., at p. 1041, fn. 2.)
The trial court correctly ruled that San Benito could not sue Kleinfelder for equitable indemnity or contribution. No facts are alleged that Kleinfelder owed San Benito "a duty of care sounding in tort." (Id., at p. 1041.)
Nor can San Benito sue for equitable indemnification based on the theory that Kleinfelder negligently performed its contract with District. (Id., at pp. 1042-1043.) "[C]onduct amounting to a breach of contract becomes tortious only when it also violates a duty independent of the contract arising from principles of tort law. [Citation.] ' " ' An omission to perform a contract obligation is never a tort, unless that omission is also an omission of a legal duty.' " ' [Citation.]" (Erlich v. Menezes (1999) 21 Cal.4th 543, 551, italics added.)
In BFGC Architects Planners, Inc. v. Forcum/Mackey Construction, Inc. (2004) 119 Cal.App.4th 848 (BFGC), a school district (project owner) sued its architect for breach of contract and professional negligence that caused $4 million in extra project costs. Architect filed a cross-complaint for equitable indemnity against the project general contractors, alleging that they negligently failed to comply with the terms of their contracts with the school district. The Court of Appeal held that the no cognizable claim for equitable indemnity was stated. "The only allegations of defendants' misconduct are based on their alleged breach of contract.... This is an improper attempt to recast a breach of contract cause of action as a tort claim. Nor is there any social policy that would demand resort to tort remedies. Without any action sounding in tort, there is no basis for a finding of potential joint and several liability on the part of defendants, thereby precluding a claim for equitable indemnity." (Id., at p. 853.)
The same principle applies here. San Benito cannot recast Mountain's complaint for breach of contract/warranty as a tort action for equitable indemnity purposes. Ordinarily "a person may not recover in tort for the breach of duties that merely restate contractual obligations." (Aas v. Superior Court (2000) 24 Cal.4th 627, 643.) One exception is where the defective product or services provided damages other property or physically injures a third person. (Id., at pp. 635-636, discussing economic loss rule.) San Benito asserts that the wet concrete harmed another product, namely the hardened concrete foundation. This is a bald conclusion and makes no sense. No facts are alleged that the concrete damaged other property or that the foundation cracked after it hardened.
Biakanja Factors To Impose Duty of Care
San Benito argues that Kleinfelder owed a duty of care based on the public policy factors set forth in Biakanja v. Irving (1958) 49 Cal.2d 647, 650 (Biakanja): (1) the extent to which the transaction was intended to affect the plaintiff; (2) the foreseeability of harm to plaintiff; (3) the degree of certainty that the plaintiff suffered injury: (4) the closeness of the connection between defendant's conduct and the injury suffered; (5) the moral blame attached to defendant's conduct; and (6) the policy of preventing future harm. Lack of privity of contract does not bar equitable indemnity if these factors favor imposition of a legal duty of care. (See also Weseloh Family Ltd. Partnership v. K.L. Wessel Construction Co., Inc. (2004) 125 Cal.App.4th 152, 165.)
First, no facts are alleged that Kleinfelder's services were intended to affect San Benito or Mountain. Kleinfelder was hired to provide testing services for District and the project manager. Based on the test data, District made the ultimate decision to accept or reject the concrete. San Benito was free to provide its own quality control measures, which it did. The second amended cross-complaint states that San Benito hired GeoSolutions, Inc. (GeoSolutions) to approve the mix design and test the concrete before it was delivered.
The second Biakanja factor, foreseeability of harm, is also lacking. San Benito alleges that Kleinfelder knew the concrete did not meet slump and air entrainment specifications. But that is not why the concrete was nonconforming. District rejected the concrete because it failed to attain a minimum compression strength after it cured 28 days later. There is no allegation that at the time of delivery, Kleinfelder knew or should have known that the concrete would not achieve a 4, 000 psi compression strength a month after it was poured.
The third Biakanja factor, certainty of injury, clearly weighs against imposition of a duty of care. The second amended cross-complaint alleges that San Benito's quality control inspector, GeoSolutions, failed to test the concrete to assure that it complied with contract specifications. It further states that Mountain and Pokrajac added water to the concrete after it was delivered, causing the concrete to become non-conforming. No facts are alleged that Kleinfelder observed these activities, that it collected concrete samples after the water was added, or that it should have known that GeoSolutions was not doing its job.
The fourth Biakanja factor, the closeness of the connection between Kleinfelder's conduct and the injury suffered, is lacking. San Benito mixed the concrete and employed GeoSolutions to test the mix to see if it conformed with project specifications. Although the second amended cross-complaint states that Kleinfelder changed the air entrainment mixture, no facts are alleged that the changes caused the concrete to not attain the required compression strength. Lacking clairvoyant powers, Kleinfelder could not predict the structural soundness of the concrete after it cured or predict that District would reject the concrete months later.
The fifth factor, moral blame, is wanting. No facts are alleged that Kleinfelder controlled San Benito's performance or controlled what GeoSolutions, Jacobs, Mountain, and Pokrajaz did to the concrete. Furthermore, Kleinfelder had no control or influence over the contractual relationship between San Benito and Mountain, or Mountain and District.
The final Biakanja factor, preventing future harm, does not support the imposition of a legal duty of care. Simply stated, Kleinfelder is not an insurer of San Benito's mistakes or those who added water to concrete. San Benito can protect itself by hiring its own quality control tester (which it did), by taking its own concrete samples at time of delivery (which it didn't), or negotiating protections in future contracts to minimize the risk of harm. (See e.g., Weseloh Family Ltd. Partnership v. K.L. Wessel Construction Co., Inc., supra, 125 Cal.App.4th at p. 172.)
San Benito is expected to rely on its own prudence, diligence, and contracting powers. (Bily v. Arthur Young & Co. (1992) 3 Cal.4th 370, 398.) It is not a " 'powerless consumer.' " (Ibid.) "Invoking the Biakanja factors to create a tort duty in the absence of injury to a third party would... blur the law's distinction between contract and tort remedies. [San Benito] has cited no case holding a business entity owes a tort duty of care to prevent another business from suffering purely financial losses, and we decline to announce such a duty here." (Stop Loss, supra, 143 Cal.App.4th p. 1043.)
Serving Two Masters
San Benito argues that Kleinfelder had a duty to "sound the alarm" and stop the work when the concrete was delivered. To impose such a duty would require that Kleinfelder serve two masters with conflicting interests. Kleinfelder's duties were to District, not Mountain or San Benito. "[C]ourts have refused to impose a duty to protect third parties to a contract for professional services from economic loss where such a duty would subject the professional service provider to a conflict in loyalties." (Ratcliff Architects v. Vanir Construction Management, Inc. (2001) 88 Cal.App.4th 595, 606.)
The second amended cross-complaint alleges, on information and belief, that Kleinfelder "had the power to stop the work...." It is a conclusory allegation devoid of facts and may be disregarded on demurrer. (Chicago Title Ins. Co. v. Great Western Financial Corp. (1968) 69 Cal.2d 305, 327.)
San Benito cites no controlling authority to equitably apportion Mountain's damages with Kleinfelder who is a stranger to the Mountain–San Benito contract. (See Stop Loss, supra, 143 Cal.App.4th at pp. 1042-1043, fn. 3.) This is so because the "mere negligent breach of a contract" does not sound in tort absent a special relationship or some overriding public policy. (Erlich v. Menezes, supra, 21 Cal.4th at p. 552.) "If every negligent breach of a contract [gave] rise to tort damages the limitation would be meaningless, as would the statutory distinction between tort and contract remedies." (Id., at p. 554.)
San Benito's reliance on United States v. Rogers & Rogers (1958) 161 F.Supp. 132 (Rogers) in misplaced. There, a federal court concluded that an architect's negligent performance gave rise to liability for the prime contractor's economic damages. The court reasoned that the architect had the power to direct and stop the work which was "tantamount to a power of economic life or death over the contractor. It is only just that such authority, exercised in such a relationship, carry commensurate legal responsibility." (Id., at p. 136.)
The judgment (order sustaining demurrer without leave to amend) is affirmed. Kleinfelder is awarded costs on appeal.
We concur: GILBERT, P.J., PERREN, J.
Rogers is not an equitable indemnity case. Nor has San Benito alleged that Kleinfelder had the ultimate power to direct, supervise, and stop the work. The second amended cross-complaint states that the project manager, Jacobs, "directed the work, supervised the actual construction, tested and inspected the actual construction, had the power to reject work, had the power to stop the work on the Project if non-conforming, and had the responsibility of overseeing the construction to assure that the specifications were met. Jacobs had the commensurate legal responsibility to the general contractors, the subcontractors, and the suppliers of this Project to perform this work in a non-negligent manner."