Opinion
B291088
02-04-2020
DALLASWHITE CORPORATION, Plaintiff and Appellant, v. CALIFORNIA CAPITAL INSURANCE COMPANY, Defendant and Respondent.
Von Esch Law Group, Robert A. Von Esch IV and David V. Luu for Plaintiff and Appellant. GladstoneWeisberg, Gene A. Weisberg and Joseph P. Wohrle for Defendant and Respondent.
NOT TO BE PUBLISHED IN THE OFFICIAL REPORTS
California Rules of Court, rule 8.1115(a), prohibits courts and parties from citing or relying on opinions not certified for publication or ordered published, except as specified by rule 8.1115(b). This opinion has not been certified for publication or ordered published for purposes of rule 8.1115. (Los Angeles County Super. Ct. No. BC611607) APPEAL from a judgment of the Superior Court of Los Angeles County, Richard E. Rico, Judge. Affirmed in part, reversed in part. Von Esch Law Group, Robert A. Von Esch IV and David V. Luu for Plaintiff and Appellant. GladstoneWeisberg, Gene A. Weisberg and Joseph P. Wohrle for Defendant and Respondent.
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After an apartment building owned by 328 Maple Limited Partnership (Maple) suffered water damage, plaintiff Dallaswhite Corporation (Dallaswhite) provided construction services to repair the structure and bring it up to code. Maple was insured for the flood loss by defendant California Capital Insurance Company (CCIC). Disputes arose among Maple, Dallaswhite, and CCIC over what work was covered by the insurance policy and necessary to repair the water damage, and the propriety of Dallaswhite's charges.
Alleging it was left with unpaid invoices totaling over $600,000, Dallaswhite brought suit against both Maple and CCIC. Dallaswhite alleged CCIC was liable to Dallaswhite for breach of the insurance contract, as well as bad faith damages, because Maple assigned to Dallaswhite all of Maple's rights and benefits under Maple's insurance policy with CCIC. The policy at issue required any such assignment to be approved by CCIC in writing. Dallaswhite asserted that written approval was given by CCIC in an email from its claims adjuster.
Dallaswhite also alleged that, pursuant to that same adjuster email, CCIC agreed to be bound by a work authorization agreement between Dallaswhite and Maple. Dallaswhite brought a separate cause of action against CCIC for breach of that work authorization agreement, as well as a claim for promissory estoppel in the event CCIC was found not to be a party to that contract.
After giving Dallaswhite several opportunities to amend its contract and bad faith claims, the trial court sustained CCIC's demurrer to those claims without leave to amend, finding Dallaswhite was not a party to either of the alleged contracts on which it sought damages. It also sustained CCIC's demurrer to Dallaswhite's promissory estoppel claim without leave to amend, finding the claim "conclusory."
We agree that Dallaswhite failed to state a claim for breach of the insurance policy or bad faith, and affirm the trial court's ruling on those causes of action. Reading the pertinent agreements and allegations in the light most favorable to the plaintiff, Dallaswhite did state a claim for breach of the work authorization and could have stated a claim for promissory estoppel. We accordingly reverse the sustaining of the demurrer without leave to amend as to those two claims.
FACTUAL AND PROCEDURAL BACKGROUND
A. Allegations of the Original Complaint
On February 25, 2016, Dallaswhite filed a complaint against Maple to foreclose on a mechanic's lien it had recorded against real property owned by Maple, and for breach of written/oral contract, common counts, and quantum meruit. That complaint alleged as follows.
Maple is not a party to the appeal. Accordingly, we do not discuss the claims against it except as they are necessary to explain Dallaswhite's claims against CCIC.
Dallaswhite is a general building contractor in the business of property restoration, emergency drying, remediation and construction services. Maple owned and managed an apartment building located at 328 North Maple Drive in Beverly Hills (Property).
In August 2014, the Property was severely damaged by a flood emanating from the top floor of the building. On August 25, 2014, Maple "entered into a partly-written partly-oral contract for the restoration and repair of the [Property]." The written portion of the contract was a "Work Authorization" whereby Maple authorized Dallaswhite to perform repair-related services as approved by Maple's insurer, CCIC. Dallaswhite alleged that under the written terms of this contract, Maple assigned to Dallaswhite Maple's "rights to insurance policy proceeds paid for the LOSS." Under the contract's oral terms, Maple agreed that Dallaswhite would be paid in full for services rendered, and that Maple would be responsible for ensuring Dallaswhite was paid by Maple's insurer.
Dallaswhite performed all necessary work except where prevented or excused from performing by Maple. Maple failed to cause CCIC to pay Dallaswhite, leaving a balance of $308,290.62. On November 30, 2015, Dallaswhite recorded a mechanic's lien in this amount, a copy of which was attached to Dallaswhite's complaint.
B. The First Amended Complaint
Dallaswhite amended its complaint on July 28, 2016, adding CCIC as a defendant and asserting four new causes of action against it: breach of insurance contract, tortious breach of the implied covenant of good faith and fair dealing (insurance bad faith), unfair business practices in violation of Business and Professions Code section 17200 et seq., and intentional interference with contractual relations.
The first amended complaint alleged that at all relevant times, the Property was covered by an insurance policy issued by CCIC (Policy). Maple made a timely claim for the damage with CCIC. Dallaswhite alleged that CCIC "was not a party" to the written part of the contract (the Work Authorization), but that Maple assigned Dallaswhite the Policy benefits for the flood loss.
Maple's assignment of Policy benefits to Dallaswhite was alleged to have included the assignment of Maple's rights under the covenant of good faith and fair dealing. Accordingly, CCIC allegedly "owed contractual duties directly to [Dallaswhite], including without limitation the duty to promptly and completely respond to [Dallaswhite's] inquiries, to provide a written explanation of the factual and legal bases for each reason for its coverage decisions, to reasonably adjust the [claim], and to promptly pay [Dallaswhite] for all sums due it."
Based on this purported assignment, Dallaswhite asserted a right to sue CCIC for bad faith. Dallaswhite's bad faith claim was based on CCIC's alleged refusal to pay Dallaswhite for certain work in order to artificially depress the total repair cost, because the necessary repair costs would have exceeded a threshold triggering building code provisions requiring still further repairs to bring the building up to code. Maple instructed Dallaswhite to proceed with the code upgrade work, which Dallaswhite completed in reliance upon the "explicit authorization and directions from CCIC and [Maple] that [Dallaswhite] would be paid for the code upgrade work."
C. CCIC's Demurrer to the First Amended Complaint
CCIC demurred to all causes of action alleged against it on the grounds that Dallaswhite was not an insured under the Policy, and thus lacked standing. CCIC further asserted the first amended complaint was factually insufficient and uncertain because Dallaswhite failed to attach the Policy, the Work Authorization, or the assignment that formed the basis of its claims. The trial court sustained the demurrer in its entirety and granted Dallaswhite leave to amend.
CCIC also moved to strike the first amended complaint. However, no issues presented by the motion to strike the first amended complaint, or any of the subsequent motions to strike, are before this court on appeal. Nonetheless, many of the papers related to the motions to strike as well as motions concerning Maple's cross-complaint—also irrelevant to this appeal—were unnecessarily designated by the parties and constitute approximately half of the 10-volume clerk's transcript. We remind counsel that, "[w]hile great care must be taken to furnish an adequate record on appeal, it is also important to avoid including unnecessary material in the record." (Eisenberg et al., Cal. Practice Guide: Civil Appeals and Writs (The Rutter Group 2019) ¶ 4:55, p. 4-15.)
D. The Second Amended Complaint and CCIC's Demurrer to It
Sometime after filing the first amended complaint, Dallaswhite retained new counsel. That new counsel filed a second amended complaint reasserting claims against CCIC for breach of the Policy and bad faith, adding claims for breach of the Work Authorization and for promissory estoppel, and dropping the claims for unfair business practices and intentional interference with contractual relations. Dallaswhite expanded its allegations regarding Maple's assignment of its rights under the Policy to assert that Maple and Dallaswhite "verbally agreed" Dallaswhite was receiving the right to enforce CCIC's payment obligations as well as Maple's implied right to assert bad faith claims against CCIC.
CCIC demurred to all of the claims asserted against it in the second amended complaint. CCIC argued: (1) Dallaswhite's assignment was limited to the proceeds of the Policy, so it lacked standing to assert claims for breach of contract and bad faith; (2) the breach of contract and bad faith claims remained uncertain because Dallaswhite failed to attach the Work Authorization or the Policy to its complaint; (3) CCIC was merely a guarantor on the Work Authorization and Dallaswhite failed to properly allege breach of guarantee; and (4) the two new claims for breach of the Work Authorization and promissory estoppel were added in contravention of the trial court's order on the previous demurrer, which solely granted leave to amend existing causes of action.
The trial court sustained CCIC's demurrer with leave to amend as to Dallaswhite's claims for breach of the Work Authorization, breach of the Policy, and bad faith, noting it "would be surprised if the [P]olicy did not have" an anti-assignment provision. The court ordered Dallaswhite to attach "the policy agreement and written contract" to any further amendment.
Finding Dallaswhite's allegations in support of the promissory estoppel claim "conclusory and rel[iant upon] legal conclusions," the court sustained CCIC's demurrer to the promissory estoppel cause of action without leave to amend. E. The Third Amended Complaint, the Demurrer, and Judgment
Dallaswhite amended its complaint for the third time in November 2017, reasserting the same claims against CCIC as the second amended complaint minus the cause of action for promissory estoppel. As ordered, Dallaswhite attached the Work Authorization, the Policy, and an August 25, 2014 email exchange by which Dallaswhite alleged CCIC "agreed to be bound" by the Work Authorization.
As the trial court anticipated, the Policy between Maple and CCIC expressly states that Maple's "rights and duties under this policy may not be transferred without [CCIC's] written consent." The August 25, 2014 Work Authorization is a form agreement containing standard terms and conditions authorizing Dallaswhite to enter onto the Property and perform services "to prevent further damage to/reduce the safety hazard created by a catastrophic event." In certain instances (primarily concerning payment for services rendered), the terms of the Work Authorization were interlineated by hand to indicate rights and obligations usually held by the "insured" (in this case, Maple) would be assumed by CIG Insurance (which is a service mark for CCIC). These included: "Insured CIG Insurance agrees to pay [Dallaswhite] for all [w]ork performed . . . in accordance with this Agreement"; "Insured CIG Insurance shall remain primarily and fully responsible for payment of all sums owed to [Dallaswhite] for any services provided and not paid by Insured's insurance company"; "Insured CIG Insurance may make changes in the [s]cope of [w]ork"; and "Insured CIG Insurance is liable to pay [Dallaswhite] all amounts due pursuant to this Agreement for Services rendered." (Italics added.) Lastly, following the provision that "[Maple] agrees to make payment in accordance with this Agreement if [Maple's] insurance company does not make timely payments" was a handwritten parenthetical, "[a]s per agreement CIG will reimburse [Dallaswhite]."
On August 25, 2014, the same day the Work Authorization was executed, a Dallaswhite representative emailed the Work Authorization to Phil Henry, CCIC's adjuster, stating "Phil - please see attached contract which authorizes [CCIC] to make payment to [Dallaswhite] for all work approved and authorized by [CCIC]." Henry later replied to the email, stating "Looks good approved from my end."
CCIC demurred to the third amended complaint, arguing: (1) the breach of Work Authorization claim failed because CCIC was not a party to that agreement; (2) Dallaswhite lacked standing to sue CCIC for breach of the Policy and bad faith because Dallaswhite was not an insured under the Policy; and (3) any assignment which purported to give Dallaswhite the right to enforce Maple's rights was ineffective because the Policy contained an anti-assignment provision.
The trial court sustained CCIC's demurrer to the third amended complaint without leave to amend. The court found Dallaswhite failed to state a claim for breach of the Work Authorization because the August 25, 2014 email did not bind CCIC to that agreement or make it a party—instead, it merely evidenced an "approval of payments." As to the breach of Policy and bad faith claims, the trial court determined these causes of action were precluded by the Policy's anti-assignment clause.
On April 23, 2018, the trial court entered judgment in favor of CCIC. Neither CCIC nor the court served notice of entry of the judgment, and Dallaswhite timely appealed on June 29, 2018.
Where no document entitled "Notice of Entry" is filed, appellant must file its notice of appeal within "180 days after entry of judgment." (Cal. Rules of Court, rule 8.104(a)(1)(C).)
DISCUSSION
A. Standard of Review
When the trial court sustains a demurrer, we independently determine whether the complaint states a cause of action. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318.) "In reviewing the sufficiency of a complaint against a general demurrer, we are guided by long-settled rules." (Ibid.) " 'We treat the demurrer as admitting all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law.' " (Ibid.) "[W]e give the complaint a reasonable interpretation, reading it as a whole and its parts in their context." (Ibid.) "If the allegations in the complaint conflict with the exhibits, we rely on and accept as true the contents of the exhibits. However, in doing so, if the exhibits are ambiguous and can be construed in the manner suggested by plaintiff, then we must accept the construction offered by plaintiff." (SC Manufactured Homes, Inc. v. Liebert (2008) 162 Cal.App.4th 68, 83.)
If the court sustains the demurrer without leave to amend, we determine "whether there is a reasonable possibility that the defect can be cured by amendment." (Blank v. Kirwan, supra, 39 Cal.3d at p. 318.) If it can, the court has abused its discretion. (Ibid.) If it cannot, there has been no abuse. (Ibid.) The plaintiff bears the burden of showing the complaint can be cured by amendment. (Ibid.) The plaintiff may make that showing for the first time on appeal. (Rakestraw v. California Physicians' Service (2000) 81 Cal.App.4th 39, 43.)
B. The Insurance Policy Related Claims
Dallaswhite contends the trial court erred in sustaining the demurrer to its breach of insurance contract and bad faith claims by failing to credit the complaint's allegations about the purported assignment of Maple's rights under the Policy. Dallaswhite contends the court instead improperly ordered it to attach documents to its complaint, and then adjudicated contested facts before Dallaswhite was afforded discovery and a trial. We reject this argument, which misapprehends the law applicable to demurrers to contract claims.
In an action based on a written contract, a plaintiff may plead the contract word for word in the body of the complaint, attach the contract to the complaint, or plead the legal effect of the contract rather than its precise language. (Construction Protective Services, Inc. v. TIG Specialty Ins. Co. (2002) 29 Cal.4th 189, 198-199.) Dallaswhite's original, first amended, and second amended complaints failed this test. They did not set out the verbatim language of the alleged written contracts, or attach a copy of the written agreements. Nor did they plead the legal effect of the contract. For example, the trial court found the allegations in the second amended complaint concerning breach of the Policy and bad faith defective because Dallaswhite was "essentially arguing that the [Work Authorization] said one thing [i.e., that it assigned policy benefits] and that the parties then orally agreed that it would say another [i.e, that it assigned all rights under the Policy]." In light of the number of prior amendments, and a plaintiff's obligation to set forth the particulars of the written contract allegedly breached, the trial court did not abuse its discretion in ordering the written contracts to be attached to the complaint as a condition of granting further leave to amend. (Fontenot v. Wells Fargo Bank, N.A. (2011) 198 Cal.App.4th 256, 274, disapproved on other grounds in Yvanova v. New Century Mortgage Corp. (2016) 62 Cal.4th 919, 939, fn. 13.)
"[T]he elements of a cause of action for breach of contract are (1) the existence of the contract, (2) plaintiff's performance or excuse for nonperformance, (3) defendant's breach, and (4) the resulting damages to the plaintiff." (Oasis West Realty, LLC v. Goldman (2011) 51 Cal.4th 811, 821.) The existence of a contractual relationship between the parties is also a prerequisite to the bad faith cause of action, since the covenant of good faith and fair dealing covenant is an implied term in the contract itself. (Kim v. Regents of University of California (2000) 80 Cal.App.4th 160, 164.)
Someone who is not a party to a contract has no standing to challenge the performance of the contract. (Bleavins v. Demarest (2011) 196 Cal.App.4th 1533, 1542.) Dallaswhite does not allege it was a party to the Policy. Instead, it alleged that Maple was the insured under the Policy, and that Maple assigned rights under the Policy to Dallaswhite, including the rights to enforce payment obligations, the covenant of good faith and fair dealing, and bad faith rights. Dallaswhite contends the trial court was constrained by these allegations, which the court was required to deem true, and therefore the sustaining of the demurrer was error.
The trial court properly looked to the actual contractual language in the attached exhibits, rather than contrary allegations about that language in the complaint. (George v. Automobile Club of Southern California (2011) 201 Cal.App.4th 1112, 1128). The Policy expressly stated that Maple's "rights and duties under this policy may not be transferred without [CCIC's] written consent," and the trial court was permitted to consider that contractual requirement in determining whether Dallaswhite stated a claim. Dallaswhite alleged that Maple gave a written assignment to Dallaswhite of the right to receive benefits paid under the Policy. These allegations were consistent with the Work Authorization, which authorized CCIC to make payment directly to Dallaswhite, and the August 25, 2014 email from CCIC approving that authorization.
This type of provision is common in liability policies, and operates " ' "to prevent an increase of risk and hazard of loss by a change of ownership without the knowledge of the insurer." ' [Citation.]" (Quemetco Inc. v. Pacific Automobile Ins. Co. (1994) 24 Cal.App.4th 494, 503.)
Interpreting the Work Authorization and the August 25, 2014 email in the light most favorable to Dallaswhite, they cannot be read as a written approval of the assignment of the entirety of Maple's rights under the Policy, including bad faith rights. Implicitly recognizing that an assignment of policy benefits is not the same as an assignment of rights to sue CCIC for its administration of the policy, Dallaswhite alleged that Maple and Dallaswhite orally agreed that the assignment included not only benefits under the Policy for the flood loss, but also Maple's rights under the Policy. This purported oral agreement, however, was not alleged to have been shared with Dallaswhite or approved by it in writing. Those allegations were therefore insufficient as a matter of law to assert the necessary assignment for Dallaswhite to bring a claim for breach of the Policy or bad faith.
Interpretation of a written contact, including an insurance policy, is a question of law. (Baldwin v. AAA Northern California, Nevada & Utah Ins. Exchange (2016) 1 Cal.App.5th 545, 549.) If the contractual language is clear and explicit, it governs and its meaning determined at the demurrer stage. (Id. at p. 550.) Once the actual contractual terms were before it, including the anti-assignment clause, the trial court did not err in concluding the Policy's unambiguous language negated beyond reasonable controversy the assignment claimed by Dallaswhite. (E.g., George v. Automobile Club of Southern California, supra, 201 Cal.App.4th at p. 1128 ["In a case such as this one, where the insurance contract is not reasonably susceptible to the meaning alleged in the complaint, it is proper to sustain a demurrer without leave to amend"].)
Without a valid assignment by Maple approved by CCIC, Dallaswhite lacks standing to sue CCIC for breach of the insurance contract between Maple and CCIC, or for bad faith. (Bleavins v. Demarest, supra, 196 Cal.App.4th at pp. 1542-1543.) As Dallaswhite consistently alleged the necessary assignment was an oral agreement between Maple and Dallaswhite, and could not allege it was approved in writing by CCIC, the infirmities in the breach of Policy and bad faith causes of action cannot be overcome by amendment. Accordingly, the trial court did not abuse its discretion in denying leave to amend.
C. Breach of the Work Authorization
We turn next to the claim for breach of the Work Authorization. "Where a complaint is based on a written contract which it sets out in full, a general demurrer to the complaint admits not only the contents of the instrument but also any pleaded meaning to which the instrument is reasonably susceptible." (Aragon-Haas v. Family Security Ins. Services, Inc. (1991) 231 Cal.App.3d 232, 239.) " 'So long as the pleading does not place a clearly erroneous construction upon the provisions of the contract, in passing upon the sufficiency of the complaint, we must accept as correct plaintiff's allegations as to the meaning of the agreement.' " (Ibid.)
CCIC did not sign the Work Authorization itself. Dallaswhite's claim for breach of that contract relies upon its allegations that CCIC "agreed to be bound" by the contract and "became a party to" it when CCIC's claims adjuster approved the Work Authorization in the August 25, 2014 email. Dallaswhite contends the trial court should have assumed the truth of this allegation and "[n]othing more [was] required."
One can read the August 25, 2014 email, as CCIC does and the trial court did, as approving only the text of the email from Dallaswhite, namely that CCIC agreed to make payment to Dallaswhite "for all work approved and authorized by" the insurer. But one can also read the email, as Dallaswhite avers, as approving the entire Work Authorization which was attached to the email sent to CCIC's adjuster. The email from Dallaswhite directed CCIC's adjuster to "please see [the] attached contract," and CCIC's adjuster responded "Looks good approved from my end." That Work Authorization included additional obligations to be undertaken by CCIC, including obligations to pay Dallaswhite "all amounts due pursuant to this Agreement for Services rendered," and at the demurrer stage one can reasonably construe the email as agreeing that CCIC will undertake and be bound by those contractual obligations.
CCIC argues that Dallaswhite's allegation that CCIC "agreed to be bound by" the Work Authorization only supports the interpretation that CCIC was a guarantor, and thus could be sued only on the guarantee and not the Work Authorization. Read in the light most favorable to Dallaswhite, the August 25, 2014 email shows that in allegedly agreeing to be bound, CCIC agreed to be bound by becoming a party to the contract and undertaking the obligations ascribed to it—not simply to guarantee performance by another. CCIC also argues the alleged contract was illegal, because Business and Professions Code section 7159 required the agreement to be in writing, and Dallaswhite alleges the Work Authorization was partially oral. This argument misreads the complaint. While the insurance policy assignment was alleged to be partially written and partially oral, the Work Authorization agreement itself is alleged to be a written agreement only.
Given this ambiguity, we cannot say that Dallaswhite's interpretation of the August 25, 2014 email—that in approving the Work Authorization forwarded to it, CCIC agreed to become a party to that agreement and undertake the obligations set forth in it assigned to CCIC—is a clearly erroneous interpretation. Accordingly, it was error to sustain the demurrer to that count. "While plaintiff's interpretation of the contract ultimately may prove invalid, it was improper to resolve the issue against [it] solely on [its] own pleading. 'In ruling on a demurrer, the likelihood that the pleader will be able to prove his allegations is not the question.' [Citation.]" (Aragon-Haas v. Family Security Ins. Services, Inc., supra, 231 Cal.App.3d at p. 239.)
CCIC urges we affirm the demurrer because Dallaswhite alleged in its first amended complaint that CCIC "was not a party" to the Work Authorization, and cannot now claim to the contrary. The sham pleading doctrine provides that where "a party files an amended complaint and attempts to avoid the defects of the original complaint by either omitting facts which made the previous complaint defective or by adding facts inconsistent with those of previous pleadings, the court may take judicial notice of prior pleadings and may disregard any inconsistent allegations." (Colapinto v. County of Riverside (1991) 230 Cal.App.3d 147, 151.)
The sham pleading doctrine cannot be mechanically applied. (JPMorgan Chase Bank, N.A. v. Ward (2019) 33 Cal.App.5th 678, 690.) "The sham pleading doctrine is not ' "intended to prevent honest complainants from correcting erroneous allegations . . . or to prevent correction of ambiguous facts." ' [Citation.] Instead, it is intended to enable courts ' "to prevent an abuse of process." ' [Citation.]" (Deveny v. Entropin, Inc. (2006) 139 Cal.App.4th 408, 426.)
In sustaining the demurrer to the breach of Work Authorization claim, the trial court did not take judicial notice of the prior allegation about whether CCIC was a party or consider the argument now urged by CCIC. Dallaswhite was not attempting to avoid a defect in its complaint when omitting this allegation from the second and third amended complaints. There was no claim against CCIC for breach of the Work Authorization in the first amended complaint, and thus no attempt to plead around an alleged defect in that claim in later amended complaints. The first amended complaint "was drafted by prior counsel," and "[t]his is not a situation where the proposed amendment impugns the trustworthiness of the pleading." (JPMorgan Chase Bank, N.A. v. Ward, supra, 33 Cal.App.5th at p. 692.) Indeed, when the Work Authorization and the August 25, 2014 email were in fact attached to the complaint, their terms were susceptible to the reading urged by Dallaswhite, and took precedence over contrary allegations.
We therefore decline to find the amended allegation that CCIC was a party to the Work Authorization is subject to the sham pleading doctrine, and conclude the trial court erred in sustaining the demurrer to the breach of Work Authorization claim in the third amended complaint.
D. Promissory Estoppel
We turn finally to the promissory estoppel claim. Neither the original nor the first amended complaint contained a promissory estoppel claim against any party. Following the trial court's sustaining of CCIC's demurrer to the first amended complaint with leave to amend, Dallaswhite filed a second amended complaint that contained a cause of action for promissory estoppel against both Maple and CCIC. The trial court sustained CCIC's demurrer to that cause of action without leave to amend on the ground the claim was "conclusory and rel[iant upon] legal conclusions."
Dallaswhite argues this was error because the second amended complaint alleged sufficient facts to state a claim for promissory estoppel and, if it did not Dallaswhite should have been given leave to amend. Had it been granted leave to amend, Dallaswhite asserts it would have "attached the Work Authorization, or included supporting facts about the work, allegations that [CCIC] authorized specific work, allegations as to whether [Dallaswhite] performed the work, or when the work was performed." (Italics omitted.)
Generally, when a court sustains a demurrer with leave to amend, as the court did to the claims in the first amended complaint, the pleader may amend only the cause of action as to which the demurrer was sustained. (Patrick v. Alacer Corp. (2008) 167 Cal.App.4th 995, 1015.) Adding additional claims typically requires leave of court. (Zakk v. Diesel (2019) 33 Cal.App.5th 431, 456.) CCIC argues that Dallaswhite's failure to seek leave before adding the promissory estoppel claim should now bar the assertion of that claim.
This general rule does not apply, however, if the new cause of action responds to the court's reasoning for sustaining the earlier demurrer. (Patrick v. Alacer Corp., supra, 167 Cal.App.4th at p. 1015.) Further, it is error for the trial court to sustain a demurrer if the plaintiff has stated or can state a cause of action under any possible legal theory. (Blank v. Kirwan, supra, 39 Cal.3d at p. 318.) Here, the Work Authorization and August 25, 2014 email indicate that Dallaswhite can state a claim for promissory estoppel against CCIC as an alternative to its breach of contract claim related to the Work Authorization, a breach of contract claim for which Dallaswhite was granted leave to amend.
Read in the light most favorable to Dallaswhite, the Work Authorization and the August 25, 2014 email, if not found to be a contract binding on CCIC, may support a claim for promissory estoppel. While as initially plead the claim was conclusory, Dallaswhite should have been given an opportunity to add specifics to the allegations before a demurrer to the promissory estoppel claim was sustained without leave to amend. Accordingly, it was error to deny Dallaswhite an opportunity to amend the allegations in support of its promissory estoppel claim.
DISPOSITION
That portion of the judgment dismissing the causes of action for breach of the Work Authorization and promissory estoppel is reversed. The matter is remanded to the trial court with directions (1) to vacate its order sustaining CCIC's demurrer without leave to amend to the promissory estoppel claim, and to enter a new and different order sustaining the demurrer to that claim with leave to amend, and (2) to vacate its order sustaining the demurrer to the breach of Work Authorization claim. In all other respects, the judgment is affirmed. The parties shall bear their own costs on appeal.
NOT TO BE PUBLISHED
Judge of the Los Angeles Superior Court, assigned by the Chief Justice pursuant to article VI, section 6 of the California Constitution.
CHANEY, Acting P. J.
BENDIX, J.