Banerian v. O'Malley

Decision Date23 October 1974
Citation116 Cal.Rptr. 919,42 Cal.App.3d 604
PartiesGordon BANERIAN and Margaret A. Banerian, Plaintiffs and Appellants, v. William O'MALLEY, Defendant and Respondent. Civ. 31344.
CourtCalifornia Court of Appeals Court of Appeals

George K. Littlefield, Sacramento, for plaintiffs-appellants.

Jones & Wilson, Roy E. Harper, Los Angeles, for defendant-respondent.

ROUSE, Associate Justice.

Plaintiffs, Gordon and Margaret Banerian, appeal from a judgment of dismissal entered after the trial court sustained, without leave to amend, defendant William O'Malley's demurrer to the third count of plaintiffs' complaint. 1

The third count of the complaint incorporates various factual allegations from the other five counts of the complaint. In order to understand the theory upon which the third count is based, it is essential that we summarize the entire complaint.

Taking in chronological order the facts which are alleged by plaintiffs to have occurred, it appears that on or about May 1, 1961, plaintiffs Banerian purchased certain real property located in Danville, California. The sellers of the property, Robert and Margaret Snyder, allegedly knew that there had been extensive grading and filling performed on the property, but failed to disclose this fact to the Banerians.

Immediately upon purchasing the property, the Banerians entered into a written contract with a general contractor, Carl Hansen, for the construction of a home on the property.

On November 16, 1961, the Banerians procured a policy of personal liability and property damage insurance from Northern Insurance Company of New York, through its agent, Robert Dilling. The termination date of said policy was November 16, 1964.

On October 8, 1962, the Banerians requested that Woodard-Clyde-Sherard and Associates, a firm engaged in the land survey and engineering business, examine the Danville property and determine whether any problem existed with regard to a movement of the land. Woodard-Clyde- Sherard and Associates surveyed the property and stated in a written report to the Banerians that the movement of the soil was due to settlement and that there was no visible evidence of a slide. Plaintiffs alleged that these representations were false, but that they believed them to be true and in reliance thereon constructed a new patio area on their property.

On September 1, 1963, the Banerians offered the Danville property for sale with E. J. Carey, an individual engaged in the real estate business under the name of E. J. Carey and Company. Willson E. Close, an agent of that firm, handled the sale of the Banerians' property to Howard and Donna Preece. In the course of making the sale, Close allegedly told the Preeces that certain visible hairline cracks in the pool concrete and in the patio were caused by normal settling and that everything was satisfactory. Plaintiffs alleged that when Close made these statements, he had no basis for believing them to be true and that he should have known that they were false and that the cracks were caused by faulty workmanship on the part of the patio contractor.

In January 1965, after the Preeces had purchased the real property from the Banerians, an extensive land movement took place on the premises and the improvements constructed thereon were seriously damaged and endangered.

On February 25, 1966, the Preeces brought suit against the Banerians, E. J. Carey, E. J. Carey and Company and Wilson Close. The Preeces' complaint contained five counts, the first two alleging an intentional tort, the third and fifth alleging negligence and the fourth breech of implied warranty.

Immediately upon being served with the summons and complaint in the action brought by the preeces, Gordon Banerian notified Northern Insurance Company of New York, through its agent, Robert Dilling, and was told that the policy issued to the Banerians did not provide coverage for the lawsuit.

On October 6, 1966, the Banerians employed William O'Malley, an attorney, to represent them in the action brought against them by the Preeces. The action proceeded to trial, and the jury awarded the Preeces compensatory damages in the amount of $12,500 against the Banerians and also purported to make an award of punitive damages only as against Wilson Close. The jury found in favor of E. J. Carey and E. J. Carey and Company. Since the jury had made no award of compensatory damages against Close, the award of punitive damages could not be upheld, and judgment was entered in favor of Close, as well as in favor of E. J. Carey and E. J. Carey Company. Judgment on the verdict was entered in favor of the Preeces against the Banerians.

The Banerians then commenced the instant action, seeking to be indemnified against the loss sustained in the action brought by the Preeces.

The third count of their complaint, the sufficiency of which is the sole issue on this appeal, ran against William O'Malley, the attorney who represented the Banerians in the action brought by the Preeces. It was alleged that O'Malley knew or in the exercise of due care should have known the terms of the insurance policy which Northern Insurance Company of New York had issued to the Banerians and that O'Malley failed to protect the Banerians' interests by notifying the insurer of the suit brought by the Preeces and requesting that the insurer provide a defense to said action. It was further alleged that O'Malley should have known that one George Jovick, who was the original developer of the property which the Banerians sold to the Preeces, was strictly liable in tort for a defect in the land developed by him. It was likewise alleged that O'Malley should have known that any negligence on the part of the general contractor Carl Hansen would be imputed to the Banerians, as would the misrepresentations made by the real estate agents who sold the property to the Preeces. O'Malley was alleged to have been negligent in failing to cross-complain, in the Preece action, against George Jovick, Carl Hansen, E. J. Carey, Wilson Close, Woodard-Clyde-Sherard and Associates and Robert and Margaret Snyder. It was also alleged that O'Malley's negligent failure to request that Northern Insurance Company of New York provide a defense against the Preece action made it necessary for the Banerians to pay their own attorney's fees in defending against said action and also caused the Banerians to satisfy the judgment in favor of the Preeces.

Plaintiffs contend that a cause of action was stated against defendant O'Malley in the amended third cause of action and therefore that the trial court erred in sustaining the demurrer to the amended complaint without leave to amend. They argue that the general demurrer was implicitly overruled when the trial court sustained defendant's special demurrer to the original complaint on grounds of uncertainty. However, the court subsequently sustained defendant's demurrers to plaintiffs' second amended complaint, both generally and specially. It held that the complaint failed to state facts sufficient to constitute a cause of action and that particular allegations of the complaint were too uncertain for the defendant or the court to make a determination as to what was alleged. In its memorandum of decision (pertaining to the second amended complaint), the court specifically sustained defendant's general demurrer and stated that the special demurrer had become moot. Defendant demurrered, both generally and specially, to plaintiffs' final amended complaint and the court sustained the demurrer with the statement that the former rulings were correct.

Section 472d of the Code of Civil Procedure requires the court to specify the grounds upon which it sustains a demurrer. Although the trial court's final memorandum of decision, in which it sustained defendant's last demurrer and explained the reasons for doing so, is not as explicit as it might have been, the entire record clearly discloses that defendant's general demurrer was sustained and the reasons for doing so. Section 472d has been interpreted to require the affirmance of trial court rulings on demurrers if any of the grounds raised by defendant require the sustaining of the demurrer, whether or not the court specifies all the grounds. (Weinstock v. Eissler (1964) 224 Cal.App.2d 212, 224, 36 Cal.Rptr. 537.) Thus, the plaintiffs' contention that the 'general demurrer, by operation of law, is overruled if the demurrer for uncertainty is Sustained without leave to amend,' is inapplicable to the procedural facts of this case. Also, plaintiffs did not raise this point below, and an appellate court should not ordinarily consider procedural defects or erroneous rulings where an objection could have been but was not presented to the lower court. (6 Witkin, Cal. Procedure (2d ed. 1971) § 276, p. 4264; Nanny v. Ruby Lighting Corp. (1952) 108 Cal.App.2d 856, 859, 239 P.2d 885.) Thus, this court will consider the further contentions of plaintiffs, on appeal, on the basis that the trial court sustained defendant's general demurrer, thus making any further reference to the special demurrer moot.

Plaintiffs contend that the trial court erred in sustaining the demurrer because the court must look to the pleadings, viewing the allegations in a light most favorable to plaintiffs. "In passing upon the sufficiency of a pleading, its allegations must be liberally construed with a view to substantial justice between the parties." (Wise v. Southern Pacific Co. (1963) 223 Cal.App.2d 50, 59, 35 Cal.Rptr. 652, 657.) However, on appeal, all intendments weigh in favor of the regularity of the trial court proceedings and the correctness of the judgment. (Walling v. Kimball (1941) 17 Cal.2d 364, 373, 110 P.2d 58.) Unless clear error or abuse of discretion is demonstrated, the trial court's judgment of dismissal following the sustaining of defendant's demurrer will be affirmed on appeal. (See Wheelwright v County of Marin (1970) 2 Cal.3d 448,...

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