Street v. Aon, Inc.

MICHAEL STREET, Plaintiff and Appellant, v. AON, INC. et al., Defendants and Respondents.

E072477

COURT OF APPEAL OF THE STATE OF CALIFORNIA FOURTH APPELLATE DISTRICT DIVISION TWO

March 11, 2021

NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication or ordered published for purposes of rule 8.1115.

(Super.Ct.No. CIVDS910518)

OPINION

APPEAL from the Superior Court of San Bernardino County. John M. Pacheco, Judge. Affirmed.

Glenn A. Williams, for Plaintiff and Appellant.

Law Office of Jillisa L. O'Brien, Jillisa L. O'Brien and Douglas E. Jacobs; Law Office of Robert William Morris and Robert William Morris, for Defendants and Respondents.

Plaintiff and appellant Michael Street appeals from summary judgment entered against him. We affirm.

I. BACKGROUND

The essence of Street's lawsuit is that a single family residence secured by a deed of trust belonging to him was wrongfully demolished, rendering his security interest "valueless." Street thus alleged that "Defendants, and each of them, acted to impair or deprive Plaintiff of his interest in the [real property] by demolishing the structures (including, inter alia, a dwelling, garage, and pool) located upon the [real property] improperly, without a valid warrant, without proper permits, and without following proper procedure." (Italics removed.) Defendant and respondent Aon, Inc. (Aon) was the contractor hired by the City of San Bernardino (City) for the demolition, and defendant and respondent Jim Morris is Aon's President and CEO as well as an 80 percent shareholder. Aon and Morris were not the only defendants named, but they are the only ones involved in this appeal, so for simplicity we use the term "defendants" to refer only to Aon and Morris.¹

The operative complaint contains eight causes of action. These consist of four causes of action—trespass, negligence, "violation of statute," and inverse condemnation—each alleged once under a "with improper warrant" heading and once under an "entry without warrant" heading. The inverse condemnation causes of action are alleged against only the City, but the other six are alleged against defendants (as well as the City and others).

The trial court granted defendants' motion for summary judgment. The court based its ruling on three grounds: first, that "all causes of action[] seek damages for acts done for the City . . . who authorized the acts under its exercise of authority whereby the City . . . is the only party who can be liable for damages to the [real property]"; second, that "Street lacks standing to sue for trespass as he held no possessory interest"; and third, that "Morris, as the officer and shareholder of Aon, cannot be jointly liable with . . . Aon when he did not personally and individually participate in the alleged tort."

II. ANALYSIS

We independently review an order granting summary judgment. (Guz v. Bechtel National, Inc. (2000) 24 Cal.4th 317, 334.) Nevertheless, "our review is limited to contentions adequately raised" in an appellant's briefs. (Paslay v. State Farm General Ins. Co. (2016) 248 Cal.App.4th 639, 645.)

On appeal, Street contends that defendants are not immune from liability and that Morris can be held individually liable. Neither contention has merit.

A. Government Contractor Immunity

In their summary judgment motion, defendants contended that only the City could be held liable because the demolition was done according to the City's plans and specifications. Defendants relied on Heimann v. City of Los Angeles (1947) 30 Cal.2d 746 (Heimann), overruled on other grounds in Los Angeles County v. Faus (1957) 48 Cal.2d 672, 680. Heimann stated that "[w]here a public improvement has been constructed and private property has been taken or damaged for a public use it isimmaterial that the work of construction may have been done by a contractor. The public agency authorizing the work is the party to be held liable under the constitutional provision for damage resulting from the exercise of its power. If the public work is constructed according to the plans and specifications furnished by such public agency and upon completion is accepted by it, this is sufficient to fix liability." (Heimann, supra, at p. 756; see also Tyler v. Tehama County (1895) 109 Cal. 618, 626.) In other words, a contractor that follows a government entity's "plans and specifications" will be immune, and a plaintiff may seek recovery only from the government entity.²

Few recent cases in this state have applied the Heimann rule, but recent cases in other jurisdictions have explained the reasoning behind this immunity doctrine. A federal district court has described the rule in the following way:

"The rationale underlying the government contractor defense is easy to understand. Where the government hires a contractor to perform a given task, and specifies the manner in which the task is to be performed, and the contractor is later haled into court to answer for a harm that was caused by the contractor's compliance with the government's specifications, the contractor is entitled to the same immunity the government would enjoy, because the contractor is, under those circumstances,effectively acting as an organ of government, without independent discretion. Where, however, the contractor is hired to perform the same task, but is allowed to exercise discretion in determining how the task should be accomplished, if the manner of performing the task ultimately causes actionable harm to a third party the contractor is not entitled to derivative sovereign immunity, because the harm can be traced, not to the government's actions or decisions, but to the contractor's independent decision to perform the task in an unsafe manner. Similarly, where the contractor is hired to perform the task according to precise specifications but fails to comply with those specifications, and the contractor's deviation from the government specifications actionably harms a third party, the contractor is not entitled to immunity because, again, the harm was not caused by the government's insistence on a specified manner of performance but rather by the contractor's failure to act in accordance with the government's directives." (Bixby v. KBR, Inc. (D. Or. 2010) 748 F.Supp.2d 1224, 1242 (Bixby).)

The "plans and specifications" doctrine thus turns on whether the conduct causing a plaintiff's harm was the result of, on the one hand, government plans and specifications, or on the other hand, a contractor's independent decisions, i.e., the "discretion in determining how the task should be accomplished." (Bixby, supra, 748 F.Supp.2d at p. 1242; see also Nettles v. GTECH Corporation (Tex. 2020) 603 S.W.3d 63, 69 ["Put simply, these courts ask (1) did the government tell the contractor what to do and how to do it (as opposed to the contractor having 'some discretion in performing the contract');and, if so, (2) did the contractor do as it was told? When the answer to both questions is yes, these courts extend a form of immunity to the contractor's conduct."], fns. omitted.)

Street contends that the immunity provided by this doctrine only applies when a contractor is "building . . . a work of public improvement," not when the "demolition of structures" is involved, as here. He further contends that, even if the doctrine applies to the demolition of structures, there are material factual questions about whether it would apply in this case. Neither contention is convincing.

First, in Leppo v. City of Petaluma (1971) 20 Cal.App.3d 711, the Court of Appeal squarely found that "'"plans and specifications"'" immunity applied to a demolition contractor. (Id. at p. 719.) Street has offered no reasoned argument why we should not follow Leppo. The trial court relied on Leppo in its summary judgment ruling, but Street did not seek to distinguish the case or even discuss its substance in his opening brief. In his reply brief, Street concedes that, under Leppo, "the concept of 'work of public improvement' is broad enough to encompass demolition of a building."

Second, Street contends that there were no "'plans and specifications'" from the City on this project, but even if this is true, this does not mean that immunity did not apply. Rather, it means that, in order to establish liability, Street needed to identify how "the manner of performing the task ultimately cause[d] actionable harm." (Bixby, supra, 748 F.Supp.2d at p. 1242.) Otherwise, Street's lawsuit against defendants would be premised simply on the fact that a demolition took place, in which case it would be proper to view defendants as carrying out the City's instructions and for immunity toextend to them. Street has not attempted to show how defendants' manner of doing the demolition harmed him.

Finally, although Street contends that there were no "plans and specifications" provided by the City, he also contends that to the extent there were any plans and specifications, defendants violated them. Not so. Street alleges that defendants violated the terms of an "Inspection/Abatement/Demolition/Administrative Warrant," which specified that demolition had to take place within 30 days. However, the warrant was issued by a trial court judge to the City, not to defendants, and thus the warrant is not direct evidence of any restriction or specification the City placed on defendants. Moreover, Street has not proffered any evidence indicating that defendants were aware of the warrant's limitations, or that the City instructed defendants to demolish the house within similar time limits.³ And again, even if we were to assume that defendants violated the City's plans and specifications with an untimely demolition, Street has not attempted to show how...