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November 2019

California Construction Litigation Team Secures Complete Dismissal in Multi-Party Action on behalf of Project Manager Client Against Lawsuit Alleging Excess of $45,000,000 Damages

Los Angeles Partner Brenda K. Radmacher and Senior Counsel Jason W. Suh along with San Francisco Senior Counsel Catherine W. Delorey obtained a complete dismissal in a multi-party action involving a luxury boutique beach-front hotel and the hotel’s former architect, general contractor and project manager. The lawsuit alleged breach of contract and professional negligence against the hotel’s project manager for failing to secure the necessary Coastal Development Permit prior to the development of the hotel. The plaintiff alleged damages against all defendants in excess of $45,000,000.

The defense team filed a demurrer to the plaintiff’s complaint, which the court sustained in its entirety without leave to amend. In the demurrer, the defense marshalled the public information and pointed out that the plaintiff had notice from the Coastal Commission as early as January 2014. The plaintiff inexplicably failed to pursue its claims against the defendants until May 2019; accordingly, the plaintiff’s claims are time barred. In response, the plaintiff tried to argue that, up until the time that damages were appreciable sometime in early 2019, there were no damages and, thus, no claims of relief available to the plaintiff.  The court soundly agreed with Gordon & Rees' position and held that the statute of limitations had expired, and that it was not a question of fact.  As a result, the court sustained the demurrer without leave to amend and dismissed this case.

This case is an important lesson that an early challenge to the pleadings is critical to an effective defense. Moreover, under California law, submitting publicly available records to be judicially noticed by the court can be an effective strategy used to supplement the moving party’s argument on demurrer to help judges render a decision in accordance with the facts and the law.

Catherine W. Delorey
Brenda K. Radmacher
Jason W. Suh