1

Filed 2/23/21 Luzuriaga v. R.C. Berger Construction CA4/2

NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication 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.

IN THE COURT OF APPEAL OF THE STATE OF CALIFORNIA

FOURTH APPELLATE DISTRICT

DIVISION TWO

DEBORAH LUZURIAGA,

Plaintiff and Appellant,

v.

R.C. BERGER CONSTRUCTION, INC. et 

al.,

Defendants and Respondents.

E072526

(Super.Ct.No. RIC1602017)

OPINION

APPEAL from the Superior Court of Riverside County. Raquel A. Marquez and 

Angel M. Bermudez, Judges.

* Affirmed.

Law Offices of Jonathan C. Stevens and Jonathan C. Stevens for Plaintiff and 

Appellant.

*

Judge Marquez ruled on the motions for summary judgment/summary 

adjudication, although Judge Bermudez signed the formal order on those motions. Judge 

Bermudez also denied the motion for leave to amend and entered judgment.
2

The Mouzis Law Firm, Gerald W. Mouzis, and Amanda L. Voivedich for 

Defendants and Respondents R.C. Berger Construction, Inc., Carla Berger, and Ronald 

Berger.

Richard A. Nervig for Defendant and Respondent Gary Cuellar.

Deborah Luzuriaga sought to construct a veterinary hospital on property that she 

owned in Wildomar. Mechanic’s liens against the property started to mount up, and she 

came to believe that the general contractor (not a party to this action) had embezzled 

construction funds. She fired the general contractor and took over management of the 

project herself. Needless to say, litigation ensued, on several fronts. This is not even the 

first time that some of that litigation has come before this court. (See Precision Framing 

Systems Inc. v. Luzuriaga (2019) 39 Cal.App.5th 457, 459.)

In this particular action, Luzuriaga sued the grading subcontractor, along with 

various other individuals and entities that were also involved in the grading. She alleges 

that the grading was not done in accordance with the plans and specifications. As a 

result, she had to pay to have it partially redone; moreover, she incurred additional 

expenses to obtain the release of a mechanic’s lien. She also alleges that some of the 

defendants carried out grading work without being licensed to do so, and that some of the 

defendants claimed a mechanic’s lien without being legally entitled to do so.

The grading subcontractor defaulted. Its owner declared bankruptcy. The trial 

court granted summary judgment in favor of all the other defendants. It ruled that they 

were not required to have contractor’s licenses. It also ruled that they were not negligent 
3

because they did not owe Luzuriaga a duty of care. Finally, it ruled that Luzuriaga had

failed to plead her theory that one of the defendants improperly claimed a mechanic’s lien 

because it acted only as a go-between and thus did not provide work for the work of 

improvement. It denied Luzuriaga’s motion for leave to amend to plead this theory.

Luzuriaga appeals. We will uphold the trial court on all points. Hence, we will 

affirm.

I

STATEMENT OF FACTS

We consider all of the evidence set forth in the papers, except evidence to which 

the trial court sustained an objection. (Code Civ. Proc., § 437c, subd. (c).) Moreover, 

because the evidence in support of the three motions was generally consistent, and 

because it appears that the trial court considered all three motions together, we consider 

the evidence offered in connection with all three motions collectively.

A. Grading Work.

Luzuriaga and her husband own a piece of property in Wildomar. She undertook 

to develop it as a veterinary hospital. 

She hired a general contractor. The contract between them was an American 

Institute of Architects (AIA) standard form construction contract. It incorporated the 

plans and specifications. It provided that the contractor must require each subcontractor 

to be bound by the plans and specifications. It also provided that a subcontractor must 

require each sub-subcontractor to be bound by the plans and specifications, “[w]here 
4

appropriate.” It defined a “sub-subcontractor” as “a person or entity who has a direct or 

indirect contract with a Subcontractor to perform a portion of the Work at the site.” 

1. July 2013 grading work.

In July 2013, the general contractor hired B&T Works, Inc. (B&T) as a grading 

subcontractor. The contract between them required B&T’s work to conform to the plans 

and specifications. 

Giovanni Nanci, the owner of B&T, testified that it was “exclusively” the duty of 

B&T to ensure that the grading work was done in accordance with the plans and 

specifications and within the standard of care. 

B&T had a contractor’s license; however, its license was suspended from July 17, 

2013, through August 22, 2013. 

B&T, in turn, entered into a contract with R.C. Berger Construction, Inc., dba RC 

Grading (RC) (owned by Ronald and Carla Berger). RC did not have a contractor’s 

license at all. 

According to Carla Berger, RC is an equipment broker; it rents out equipment, 

with or without an operator, to construction projects. It may or may not own the 

equipment. Its contract with B&T merely required it to provide equipment and an 

operator, which would not require a contractor’s license. According to Luzuriaga, 

however, the contract required RC to do grading work, which would require a 

contractor’s license. 
5

RC carried out grading work between July 17 and July 22, 2013; it billed B&T, on 

an hourly basis, a total of $3,759. The work was done by Ronald Berger, using a skip 

loader that RC did not own, but rather leased from one L. Moreno. 

Ronald Berger worked under the supervision and control of B&T; RC never 

reviewed the plans and specifications for the project. 

RC received full payment for its work in June. 

2. December 2013 grading work.

In October 2013, the general contractor rehired B&T to do additional grading 

work. By this time, B&T was properly licensed. 

Once again, B&T entered into a contract with RC. RC, in turn, contracted with 

Gary Cuellar, dba Cuellar Grading & Excavation. Cuellar was a licensed grading 

contractor. He did the work using a skip loader that he owned. He worked under the 

supervision and control of B&T. He did exactly what the B&T foreman told him to do. 

He never reviewed the plans and specifications for the project. 

Cuellar carried out grading work between December 11 and 16, 2013, for which 

he billed RC, on an hourly basis, a total of $2,852. RC turned around and billed B&T 

$3,850. RC, and thus Cuellar, were never paid for the December work. 

On January 30, 2014, Luzuriaga fired the general contractor. She then assumed 

control of the project. 
6

On June 19, 2014, RC recorded a mechanic’s lien against the property. Luzuriaga 

obtained a release of the lien by filing a bond, issued by American Contractors Indemnity 

Company (American). 

Luzuriaga hired a different grading subcontractor to complete the project. 

Meanwhile, she discovered that the grading work already done, first by Ronald Berger 

and then by Cuellar, was not in conformance with the plans and specifications. It cost her 

$22,657.88 to correct their nonconforming work. 

B. The Prior Action.

In September 2014, RC filed an action against American to recover against the 

bond. As the bond required, Luzuriaga provided American with a defense. 

RC was seeking the $3,850 that it had billed for the December work. On the eve 

of trial, American and RC settled for $2,500. On behalf of American, Luzuriaga paid RC 

this amount. RC then paid Cuellar $1,000. Luzuriaga also incurred attorney fees and 

costs. 

II

STATEMENT OF THE CASE

Luzuriaga filed this action in 2016. The operative (second amended) complaint 

named B&T (along with Giovanni Nanci), RC (along with Ronald and Carla Berger),1

and Cuellar as defendants. It asserted causes of action for:

1 Because the interests of Ronald and Carla Berger are aligned with RC’s, 

references to RC, as a litigant, will include them, unless the context otherwise requires.
7

First: Unlawful business practices (Bus. & Prof. Code, § 17200), against RC. In 

support of this cause of action, it alleged that RC:

(1) Was an unlicensed contractor; and

(2) Recorded a mechanic’s lien for “equipment, work, service, and/or materials 

that were not performed or provided to the Project by RC . . . .”2

Second: Acting as an unlicensed contractor (Bus. & Prof. Code, § 7031), against 

RC;

Third and fourth: Negligence, against RC and Cuellar;

Fifth: Statutory contribution, against B&T (Civ. Code, § 8470); and

Sixth: Indemnity, against B&T. 

B&T defaulted; Luzuriaga eventually obtained a default judgment against it. 

Nanci filed for bankruptcy, resulting in an automatic stay of the case as against 

him. 

Luzuriaga filed a motion for summary adjudication against RC on her first cause 

of action (unlawful business practices). She argued that RC had claimed a mechanic’s 

lien improperly, because it was only a “broker” or a “middleman,” and as such, it did not 

actually provide any work on the project. 

RC and Cuellar each filed a cross-motion for summary judgment.

2

It also alleged that RC recorded a mechanic’s lien prematurely, when it had 

abandoned the project. Luzuriaga did not argue this in connection with the motions for 

summary judgment, nor does she argue it on appeal.
8

With respect to the first (unlawful business practices) and second (unlicensed 

contractor) causes of action, RC argued, among other things, that it was not required to 

have a contractor’s license because it was a “lessor of equipment and labor” rather than a 

contractor. 

With respect to the third (negligence) cause of action, both RC and Cuellar argued, 

among other things, that they did not owe Luzuriaga a duty of care. 

The trial court denied Luzuriaga’s motion and granted RC and Cuellar’s motions. 

It agreed that “because RC . . . merely acted to furnish an operated skip loader, it was not 

required to be a licensed contractor.” It rejected Luzuriaga’s argument that RC was not 

entitled to claim a mechanic’s lien because it was only a go-between, in part because 

Luzuriaga had not pleaded this theory. Finally, it agreed that RC and Cuellar did not owe 

Luzuriaga a duty of care. 

Luzuriaga filed a motion for leave to file an amended complaint. In January 2019, 

the trial court denied that motion. In February 2019, it entered separate judgments in 

favor of RC and Cuellar. 

III

STANDARD OF REVIEW

“Summary judgment is appropriate only ‘where no triable issue of material fact 

exists and the moving party is entitled to judgment as a matter of law.’ [Citation.]” 

(Regents of University of California v. Superior Court (2018) 4 Cal.5th 607, 618.) 

“There is a triable issue of material fact if, and only if, the evidence would allow a 
9

reasonable trier of fact to find the underlying fact in favor of the party opposing the 

motion in accordance with the applicable standard of proof.” (Aguilar v. Atlantic 

Richfield Co. (2001) 25 Cal.4th 826, 850.)

“Courts deciding motions for summary judgment or summary adjudication may 

not weigh the evidence but must instead view it in the light most favorable to the 

opposing party and draw all reasonable inferences in favor of that party. [Citations.]” 

(Weiss v. People ex rel. Department of Transportation (2020) 9 Cal.5th 840, 864.)

“Whether the trial court erred by granting [the] motion for summary judgment is a 

question of law we review de novo. [Citation.]” (Samara v. Matar (2018) 5 Cal.5th 322, 

338.)

IV

THE CONTRACTOR’S LICENSE REQUIREMENT

Luzuriaga contends that the trial court erred by ruling that RC was not required to 

be licensed. 

Under the Contractors’ State License Law (Bus. & Prof. Code, § 7000 et seq.), 

absent an exemption, it is a crime to act as a contractor without a license. (Bus. & Prof. 

Code, § 7028, subd. (a)(1).) An unlicensed contractor cannot “bring or maintain any 

action, or recover in law or equity in any action, in any court of this state for the 

collection of compensation . . . .” (Bus. & Prof. Code, § 7031, subd. (a).) Moreover, “a 

person who utilizes the services of an unlicensed contractor may bring an action in any 

court of competent jurisdiction in this state to recover all compensation paid to the 
10

unlicensed contractor for performance of any act or contract.” (Bus. & Prof. Code, 

§ 7031, subd. (b).)

“Contractor,” as relevant here, is defined as “any person who undertakes to . . . , or 

does himself or herself or by or through others, construct, alter, repair, add to, subtract 

from, improve, move, wreck or demolish any building, highway, road, parking facility, 

railroad, excavation or other structure, project, development or improvement, or to do any 

part thereof, including . . . .” (Bus. & Prof. Code, § 7026.) The term “contractor” 

includes a subcontractor. (Ibid.)

Andrew v. Conner (1951) 101 Cal.App.2d 621 (Andrew) held that one who merely 

rents out equipment, even with an operator, is not a contractor. (Id. at p. 623.) There, the 

“defendants desired to clear, grade and level land, as well as construct a harbor and 

levees . . . , and . . . to accomplish their purpose they rented equipment and operators 

from [the] plaintiffs over which [the] defendants retained complete supervision, direction 

and control.” (Ibid.) “Perhaps it is true,” the court acknowledged, “that the operations 

here involved were such as normally come within the purview of the provisions of 

section 7026 of the Business and Professions Code.” (Ibid.) In the case before it, 

however, they did not, because “the trial court . . . found that [the] plaintiffs did not agree 

to do the work for [the] defendants on a contract basis but only agreed to rent to [the] 

defendants certain equipment at a certain price.” (Ibid.)

Rodoni v. Harbor Engineers (1961) 191 Cal.App.2d 560 is to similar effect. 

There, the plaintiff contracted to provide earth-moving equipment and drivers to do 
11

bulldozing, excavation, grading, and surfacing. (Id. at pp. 561-562.) He was paid by the 

hour. (Id. at p. 562.) He “made a profit over and above the wages paid his operators and 

the cost of maintaining his equipment and . . . he paid his drivers’ wages, social security 

and unemployment insurance and withheld their income tax.” (Id. at p. 563.) 

Nevertheless, the court of appeal upheld the trial court’s finding that he was an employee 

rather than a contractor. (Id. at pp. 561-563.) It noted that “[a]ctual supervision was by 

[the grading subcontractor], whose representative directed the work done by plaintiff and 

his drivers. Plaintiff ‘had nothing to do with the supervision of the job.’” (Id. at pp. 562-

563; see also Contractors Dump Truck Service, Inc. v. Gregg Const. Co. (1965) 237 

Cal.App.2d 1, 7 [citing and following Rodoni.)

Likewise, Dahl-Beck Elec. Co. v. Rogge (1969) 275 Cal.App.2d 893 held that a 

person who sent a backhoe and an operator to the jobsite and who was paid on an hourly 

basis (see id. at p. 897) was an employee, rather than a contractor (id. at pp. 900-902), 

because the operator’s “work was very much under the control and direction of plaintiff’s 

project foreman.” (Id. at p. 900.)

Rodoni and Dahl-Beck (though not Andrew) turned, in part, on the fact that the 

asserted contractor was held to be an employee. When all three cases were decided, 

former section 7053 of the Business and Professions Code exempted an employee from 

the license requirement, as long as “wages [are] his sole compensation.” (Stats. 1949, 

ch. 90, § 6, p. 337.) In 1982, this section was amended so as to add two additional 

requirements: that the employee “does not customarily engage in an independently 
12

established business, and does not have the right to control or discretion as to the manner 

of performance so as to determine the final results of the work performed.” (Stats. 1982, 

ch. 1427, § 2, p. 5462.)

In light of this amendment, are Andrew, Rodoni, and Dahl-Beck still good law? 

Contractors Labor Pool, Inc. v. Westway Contractors, Inc. (1997) 53 Cal.App.4th 152 

said yes.

There, the plaintiff was “in the business of furnishing skilled and unskilled 

temporary workers to licensed construction contractors.” (Contractors Labor Pool, Inc. 

v. Westway Contractors, Inc., supra, 53 Cal.App.4th at p. 156.) It supplied workers to a 

subcontractor for a subway project. It was paid based on the number of hours of work 

performed; the subcontractor controlled the workers’ activities while they were on the 

job. (Id. at pp. 156-157.)

The appellate court held that the plaintiff was not a contractor, because it “only 

furnished laborers” and “the full supervision and control of the workers furnished . . . was 

the responsibility of . . . the subcontractor who actually performed the construction

services on the public work.” (Contractors Labor Pool, Inc. v. Westway Contractors, 

Inc., supra, 53 Cal.App.4th at p. 166.) “The purpose of the licensing law is to protect the 

public from incompetence and dishonesty in those who provide building and construction 

services. . . . To effect this purpose, the law need apply only to those who actually 

perform or supervise the performance of construction services; it need not apply to those 

who only supply materials to be used by others or laborers who will be supervised by 
13

others. Thus, a person or company in the business of supplying equipment or hiring out 

laborers to be supervised by others is not deemed to act in the capacity of a contractor 

and is not required to have a license. [Citations.]” (Id. at p. 165, italics added [citing, 

inter alia, Rodoni and Contractors Dump Truck].)

The appellate court further held that the 1982 amendment did not affect the result. 

It explained that what was critical was that the plaintiff was not a contractor within the 

meaning of Business and Professions Code section 7026, regardless of whether it was an 

employee within the meaning of Business and Professions Code section 7053. 

(Contractors Labor Pool, Inc. v. Westway Contractors, Inc., supra, 53 Cal.App.4th at 

pp. 166-167.)

We see no reason to disagree with Contractors Labor Pool. As noted, it is simply 

the most recent in a line of cases, all pointing in the same direction. One leading 

commentator states, citing only Andrew, that one who “merely furnished equipment and 

operators to work under the supervision” of a contractor need not be licensed. (Acret, 

Cal. Constr. L. Manual (2019 ed.) § 4:28.)

In 2003, the Legislature amended Business and Professions Code section 7026.1 

so as to provide that the term “contractor” includes “[a] temporary labor service agency 

that, as the employer, provides employees for the performance of work covered by this 

chapter. The provisions of this subdivision shall not apply if there is a properly licensed 

contractor who exercises supervision . . . and who is directly responsible for the final 

results of the work.” (Bus. & Prof. Code, § 7026.1, subd (c), Stats. 2003, ch. 759, § 1, p. 
14

5718.) This effectively codified the result in Contractors Labor Pool. It did not abrogate 

Contractors Labor Pool, nor did it undermine the reasoning in Contractors Labor Pool.

Here, Carla Berger testified that RC was in the business of supplying equipment, 

with or without an operator, for construction projects. “[RC] is not provided with the 

plans and specifications for a project, does not visit a project site, and does not control the 

performance of work on a certain project. . . . When RC . . . provides an operator, the 

equipment is operated under the supervision, direction, and control of the contractor,

most often the grading subcontractor, who is responsible to assure that the grading work 

being performed is in accordance with the plans and specifications . . . .” 

In addition, Giovanni Nanci, the owner of B&T, testified that “B&T . . . retained 

RC . . . solely to provide operated equipment rental . . . .” “RC . . . served as only a lessor 

of equipment and labor for work on the Project.” “RC . . . worked exclusively under the 

direction, supervision and control of B&T . . . .” 

Luzuriaga claims that her objections to this testimony were erroneously overruled. 

She argues that Carla Berger was never at the project site, and therefore her testimony 

was not based on personal knowledge. Carla Berger, however, could properly testify to 

the nature of the business that RC was in; she also could properly testify to RC’s patterns 

and practices, which she did. Absent contrary evidence, the only reasonable inference is 

that RC carried out this particular project the same way it carried out others.

Luzuriaga similarly argues that Nanci’s testimony was not based on personal 

knowledge. However, he testified that “all Grading Work was being performed under my 
15

direction, supervision and control . . . .” In addition, the facts stated were matters of 

which, as owner of B&T, he would reasonably have personal knowledge; in the absence 

of a contrary showing, this was sufficient. (Weil & Brown, Cal. Practice Guide: Civil 

Procedure Before Trial (The Rutter Group 2020) ¶ 10:113, pp. 10-47, 10-48; see, e.g., 

People ex rel. Owen v. Media One Direct, LLC (2013) 213 Cal.App.4th 1480, 1484.)

Next, Luzuriaga picks away at Cuellar’s testimony to the effect that his work was 

supervised by B&T. Cuellar’s testimony was not particularly relevant to whether RC

was entitled to summary judgment. Unlike RC, Cuellar had a contractor’s license. 

Accordingly, he was not named as a defendant in the first (unlawful business practices) 

or the second (unlicensed contractor) causes of action; the only cause of action against 

him was the third, for negligence.

Finally, Luzuriaga complains that the declarations lack detail. For example, Nanci 

did not specifically say that he was ever at the project site,3 did not say when or how RC 

was supervised, and did not produce any supporting documentary evidence. Moreover, 

Ronald Berger, who actually did the work, did not submit a declaration. Nevertheless, 

“evidentiary objections based on lack of foundation . . . and conclusory and speculative 

testimony are traditionally left to the sound discretion of the trial court.” (Alexander v. 

Scripps Memorial Hospital La Jolla (2018) 23 Cal.App.5th 206, 226.) We cannot say the 

3 Luzuriaga also affirmatively asserts, “Nanci . . . w[as] never at the Project 

site.” There is no evidence of this. While he did not specifically testify that he was at the 

project site, he did testify, “I was responsible for assuring that elevations and surveys 

were correct, and that rough and fine grading work was performed in a fashion that the 

work would be accepted by inspectors . . . .” 
16

trial court abused its discretion here. Luzuriaga’s palladium against overly general (or 

even false) declarations was to take the declarants’ depositions. It does not appear that 

she did; the evidence in connection with the summary judgment motions is singularly 

devoid of any deposition testimony. Thus, the declarations stand unimpeached.

Luzuriaga did not raise a triable issue of fact as to whether RC needed a 

contractor’s license. She argues that there was a triable issue of fact as to whether RC 

was an equipment “lessor,” because (1) it did not own either of the skip loaders that were 

used in July and December 2013, and (2) it did not transfer possession of the skip loaders

to B&T. RC characterized itself, however, not only as a “lessor,” but also as a “broker,” 

“provid[er],” or “supplier” of equipment. Under Contractors Labor Pool, what is crucial 

is not under which of these particular categories RC falls, but whether RC was under the 

supervision, direction, and control of a contractor or subcontractor. The evidence showed 

that it was.

Luzuriaga points out that, in July 2013, when B&T was supervising RC, B&T 

itself was unlicensed. She argues that, because RC was not supervised by a licensed

contractor, it must be treated as an unlicensed contractor. 

Johnson v. Silver (1958) 161 Cal.App.2d Supp. 853, while not precisely on point, 

is contrary to this contention. There, Silver hired Shirey to do construction work. Shirey, 

in turn, hired Johnson and Hough to haul away dirt. Shirey, Johnson, and Hough were all 

unlicensed. Johnson and Hough sued Silver for payment. (Id. at p. 854.)
17

The appellate court upheld the trial court’s finding that Johnson and Hough were 

Shirey’s employees, rather than subcontractors, and therefore were not required to be 

licensed. (Johnson v. Silver, supra, 161 Cal.App.2d Supp. at pp. 854-855.) It further 

held that Johnson and Hough could recover, even though Shirey was unlicensed. (Id. at 

p. 856.) It explained that Johnson and Hough were not themselves unlicensed 

contractors, and “‘[t]he courts will not impose penalties for noncompliance in addition to 

those that are provided expressly or by necessary implication.’ [Citation.]” (Ibid.)

Here, if RC were an individual employee of B&T, it would not have to be 

licensed, regardless of whether B&T was properly licensed. We see no reason for a 

different result just because RC was not an employee. Admittedly, this fact takes it 

outside the safe harbor afforded to an employee under Business and Professions Code 

section 7053. Contractors Labor Pool, however, carved out a parallel safe harbor for a 

non-employee provider and operator of equipment. A berth in that safe harbor does 

require that the equipment operator must work under the supervision of a contractor, but 

Contractors Labor Pool did not require that that contractor be licensed. Rather, it 

explained, the purpose of the Contractors State License Law is adequately served by 

requiring the contractor to be licensed (even though every law can and will be broken 

sometimes). Like a non-employee equipment operator, an employee must work under the 

supervision of an employer. (See Bus. & Prof. Code, § 7053.) If the employee of an 

unlicensed contractor does not have to be licensed, then neither does an equipment 

operator supervised by an unlicensed contractor.
18

We therefore conclude that on this record, as a matter of law, RC was not a 

contractor and was not required to be licensed.

V

A DUTY OF CARE FOR THE PURPOSE OF NEGLIGENCE

Luzuriaga contends that the trial court erred by ruling that RC and Cuellar did not 

owe her a duty of care. 

A. General Legal Background.

“Duty is indeed the cornerstone of every negligence claim. In California, the 

general rule governing duty is codified in Civil Code section 1714, subdivision (a): 

‘Everyone is responsible . . . for an injury occasioned to another by his or her want of 

ordinary care or skill in the management of his or her property or person . . . .’” (T.H. v. 

Novartis Pharmaceuticals Corp. (2017) 4 Cal.5th 145, 163.) “Whether a party has a duty 

of care in a particular case is a question of law for the court, which we review 

independently on appeal. [Citation.]” (Ibid.)

“‘[T]he same wrongful act may constitute both a breach of contract and an 

invasion of an interest protected by the law of torts.’ [Citation.]” (Erlich v. Menezes

(1999) 21 Cal.4th 543, 551.) “‘[A] contractual obligation may create a legal duty and the 

breach of that duty may support an action in tort.’” (Ibid.)

RC and Cuellar do not dispute that their allegedly negligent performance of their 

contracts would be a tort. (See Erlich v. Menezes, supra, 21 Cal.4th at pp. 550-554.) To 

put it another way, they are not arguing that B&T could not recover from them on a 
19

negligence theory. They do argue, however, that Luzuriaga cannot recover from them on 

a negligence theory, because they were not in privity of contract with her.

“California formerly followed the traditional view that no tort cause of action 

arises from negligent breach of a contractual duty in the absence of privity of contract 

between the plaintiff and defendant. [Citations.]” (6 Witkin, Summary of Cal. Law (11th 

ed. 2020) Torts, § 1327, p. 622.)

In Biakanja v. Irving (1958) 49 Cal.2d 647, however, the Supreme Court broke 

with this view and held that, under some circumstances, a contracting party may be liable 

to a third party for its negligent performance of a contract. (Id. at pp. 649-650.) It stated: 

“The determination whether in a specific case the defendant will be held liable to a third 

person not in privity is a matter of policy and involves the balancing of various factors, 

among which are [1] the extent to which the transaction was intended to affect the 

plaintiff, [2] the foreseeability of harm to him, [3] the degree of certainty that the plaintiff 

suffered injury, [4] the closeness of the connection between the defendant’s conduct and 

the injury suffered, [5] the moral blame attached to the defendant’s conduct, and [6] the 

policy of preventing future harm. [Citations.]” (Id. at p. 650.)4

In Bily v. Arthur Young & Co. (1992) 3 Cal.4th 370, the Supreme Court applied 

the Biakanja factors in deciding whether an accountant who certifies a corporation’s 

4 “The Biakanja considerations are similar to, but not identical with, the 

policy considerations set forth in Rowland v. Christian (1968) 69 Cal.2d 108 . . . that bear 

on the recognition of a duty of care among persons not parties to a business or financial 

transaction.” (QDOS, Inc. v. Signature Financial, LLC (2017) 17 Cal.App.5th 990, 999.)
20

financial statement has a duty to investors in the corporation. It recognized that 

“economic injury to lenders, investors, and others who may read and rely on audit reports 

is certainly ‘foreseeable.’” (Id. at p. 398.) However, after extensively reviewing the 

policy issues bearing on accountant liability (id. at pp. 384-396), it stated, “we will not 

treat the mere presence of a foreseeable risk of injury to third persons as sufficient, 

standing alone, to impose liability for negligent conduct. We must consider other 

pertinent factors.” (Id. at p. 399.)

In the case before it, it found three such factors determinative. First, liability out 

of proportion to fault: The client has substantial control over the auditing process, and 

the accountant’s fault is secondary to the client’s. (Bily v. Arthur Young & Co., supra, 3 

Cal.4th at pp. 399-402.) Second, the possibility of private ordering (id. at pp. 402-403): 

“[T]he third party in an audit negligence case . . . can ‘privately order’ the risk of 

inaccurate financial reporting by contractual arrangements with the client. [Citation.]” 

(Id. at p. 403.) “This kind of self-reliance promotes sound investment and credit 

practices and discourages the careless use of monetary resources.” (Ibid.) Third, adverse 

societal effects (id. at pp. 404-405): “[W]e doubt whether audits can be done in ways that 

would yield significantly greater accuracy without disadvantages. [Citation.]” (Id. at 

p. 404.) “[T]he economic result of unlimited negligence liability could just as easily be 

an increase in the cost and decrease in the availability of audits and audit reports with no 

compensating improvement in overall audit quality. [Citations.]” (Id. at pp. 404-405.)
21

The court therefore held that “an auditor’s liability for general negligence in the 

conduct of an audit of its client financial statements is confined to the client . . . .” (Bily 

v. Arthur Young & Co., supra, 3 Cal.4th at p. 406.) However, it also held that a “narrow 

class of persons” (ibid), namely “specifically intended beneficiaries of the audit report 

who are known to the auditor and for whose benefit it renders the audit report,” (id. at 

p. 407), can recover on a theory of negligent misrepresentation. (Id. at pp. 407-412.)

Luzuriaga argues that it is established that a subcontractor owes a duty to the 

property owner, and therefore the trial court erred by even considering the Biakanja

factors. Not so. “The liability of a contractor or subcontractor must be determined by 

applying th[e] general [Biakanja] test rather than by arbitrarily placing them in a separate 

category subject to a special rule. [Citation.]” (Stewart v. Cox (1961) 55 Cal.2d 857, 

863.)

B. Key Cases in the Construction Context.

There are three leading cases applying the Biakanja factors to the question of 

whether, in the construction context, an entity not in privity of contract with the owner 

nevertheless owes the owner a duty of care.

1. Stewart v. Cox.

In Stewart v. Cox, supra, 55 Cal.2d 857, the Supreme Court held that a 

subcontractor that negligently applied gunite during the construction of a swimming pool 

did owe the owner a duty of care. (Id. at pp. 861-863.) It stated: “Here it was obvious 

that the pool for which [the subcontractor] provided the gunite work was intended for the
22

plaintiffs and that property damage to them — and possibly to some of their neighbors —

was foreseeable in the event the work was so negligently done as to permit water to 

escape. It is clear that the transaction between [the contractor] and [the subcontractor] 

was intended to specially affect plaintiffs. There is no doubt that plaintiffs suffered 

serious damage, and the court found, supported by ample evidence, that the injury was 

caused by [the subcontractor’s] negligence. Under all the circumstances [the 

subcontractor] should not be exempted from liability if negligence on his part was the 

proximate cause of the damage to plaintiffs.” (Id. at p. 863; see also Stonegate 

Homeowners Assn. v. Staben (2006) 144 Cal.App.4th 740, 748 [“‘The owner ordinarily

has a cause of action against the subcontractor arising from the subcontractor’s defective 

work, even though there is no privity of contract between the owner and the 

subcontractor.’”]; 9 Miller & Starr, Cal. Real Estate (4th ed. 2015) § 33:25, p. 33-144

[same].)

2. Weseloh Family Ltd. Partnership v. K.L. Wessel Construction Co., 

Inc.

Our trial court found no duty mainly because it relied on Weseloh Family Ltd. 

Partnership v. K.L. Wessel Construction Co., Inc. (2004) 125 Cal.App.4th 152. We 

therefore discuss that case in some detail.

In Weseloh, property owners hired a general contractor, who in turn hired a 

retaining wall subcontractor, who in turn hired engineers to design and inspect the 

retaining walls. (Weseloh Family Ltd. Partnership v. K.L. Wessel Construction Co., Inc., 
23

supra, 125 Cal.App.4th at pp. 159-160.) A portion of the retaining walls failed (id. at 

p. 160), and litigation ensued. The trial court granted summary judgment for the 

engineers, ruling that they did not owe a duty to the owners. (Id. at p. 161.)

The appellate court held that the owners failed to show that, under the Biakanja

factors, the engineers had a duty of care. (Weseloh Family Ltd. Partnership v. K.L. 

Wessel Construction Co., Inc., supra, 125 Cal.App.4th at pp. 166-173.)

First, it noted that the engineers contracted only with the wall subcontractor, and 

there was no third-party beneficiary clause in that contract. It concluded that the 

engineers’ work was “primarily” to benefit the subcontractor. (Weseloh Family Ltd. 

Partnership v. K.L. Wessel Construction Co., Inc., supra, 125 Cal.App.4th at p. 167.)

Second, it conceded that “it is generally foreseeable a design defect could result in 

the failure of a retaining wall.” (Weseloh Family Ltd. Partnership v. K.L. Wessel 

Construction Co., Inc., supra, 125 Cal.App.4th at p. 168.) It concluded, however, that 

“[the owners] failed to produce evidence showing how and the extent to which their 

damages were caused by the asserted design defects. This is a significant fact in light of 

the absence of evidence showing [the engineers’] design was followed without 

alteration.” (Ibid.) It stated that, due to “the insufficiency of the evidence on causation in 

this case, we give the factor of foreseeability limited weight.” (Ibid.)

Third, again because it found insufficient evidence of causation, it found that there 

was no close connection between the engineers’ conduct and the owners’ injury. 
24

(Weseloh Family Ltd. Partnership v. K.L. Wessel Construction Co., Inc., supra, 125 

Cal.App.4th at pp. 168-169.)

Fourth, it found no evidence of moral blame; it noted that “[the owners’] opening 

brief does not even argue the trial court should have concluded [the engineers’] conduct 

implicated moral blame.” (Weseloh Family Ltd. Partnership v. K.L. Wessel Construction 

Co., Inc., supra, 125 Cal.App.4th at pp. 168-169.)

Fifth, regarding the policy of preventing future harm, Weseloh found “no evidence 

supporting an argument that greater care in design engineering would result from 

expanded liability.” (Weseloh Family Ltd. Partnership v. K.L. Wessel Construction Co., 

Inc., supra, 125 Cal.App.4th at p. 170.) It added that the owners “are not without [a] 

remedy,” because they could sue the general contractor, who could sue the subcontractor, 

who could sue the engineers. (Ibid.)

The court also considered the three additional factors set forth in Bily. It was 

concerned about liability out of proportion to fault, because the engineers had been paid 

$2,200, whereas the owners were claiming $6,000,000 in damages. (Weseloh Family Ltd. 

Partnership v. K.L. Wessel Construction Co., Inc., supra, 125 Cal.App.4th at pp. 171-

172.) It found a possibility of private ordering, because the owners could have 

“negotiat[ed] a clause naming them the intended beneficiaries in contracts related to the 

project and expressly providing for the right to pursue claims directly against 

subcontractors” and “could have required they be named as additional insureds on all 

insurance policies covering the risks of defective workmanship of subcontractors.” (Id. at 
25

p. 172.) Finally, it concluded that “there is no evidence supporting a policy ‘to favor the 

alleged tortfeasor over the alleged victim as an effective distributor of loss.’ [Citation.]” 

(Ibid.)

3. Beacon Residential Community Assn. v. Skidmore, Owings & Merrill 

LLP.

The third leading case is Beacon Residential Community Assn. v. Skidmore, 

Owings & Merrill LLP (2014) 59 Cal.4th 568. There, the Supreme Court held that two 

architectural firms that designed homes did owe a duty of care to a homeowner’s 

association, as representative of the subsequent purchasers of those homes. (Id. at p. 

571.) It explained: “(1) Defendants’ work was intended to benefit the homeowners 

living in the residential units that defendants designed and helped to construct. (2) It was 

foreseeable that these homeowners would be among the limited class of persons harmed 

by the negligently designed units. (3) Plaintiff’s members have suffered injury; the 

design defects have made their homes unsafe and uninhabitable during certain periods. 

(4) In light of the nature and extent of defendants’ role as the sole architects on the 

Project, there is a close connection between defendants’ conduct and the injury suffered. 

(5) Because of defendants’ unique and well-compensated role in the Project as well as 

their awareness that future homeowners would rely on their specialized expertise in 

designing safe and habitable homes, significant moral blame attaches to defendants’ 

conduct. (6) The policy of preventing future harm to homeowners reliant on architects’ 

specialized skills supports recognition of a duty of care.” (Id. at p. 586.)
26

The court distinguished Bily on three grounds: “(1) the closeness of the 

connection between defendants’ conduct and plaintiff’s injury; (2) the limited and wholly 

evident class of persons and transactions that defendants’ conduct was intended to affect; 

and (3) the absence of private ordering options that would more efficiently protect 

homeowners from design defects and their resulting harms.” (Beacon Residential 

Community Assn. v. Skidmore, Owings & Merrill LLP, supra, 59 Cal.4th at p. 581.)

“First, unlike the secondary role played by the auditor in the financial reporting 

process, defendants’ primary role in the design of the Project bears a ‘“close connection”’ 

to the injury alleged by plaintiff. [Citation.]” (Beacon Residential Community Assn. v. 

Skidmore, Owings & Merrill LLP, supra, 59 Cal.4th at p. 581.) “An architect providing 

professional design services to a developer does not operate in a ‘client-controlled 

environment’ comparable to the relationship between an auditor and its client. 

[Citation.]” (Id. at p. 582.) The court also stressed that “defendants played a lead role 

not only in designing the Project but also in implementing the Project design.” (Id. at 

p. 583.)

“Second, recognizing that an architect who is a principal provider of professional 

design services on a residential building project owes a duty of care to future 

homeowners does not raise the prospect of ‘“liability in an indeterminate amount for an 

indeterminate time to an indeterminate class.”’ [Citation.]” (Beacon Residential 

Community Assn. v. Skidmore, Owings & Merrill LLP, supra, 59 Cal.4th at p. 583.) It 

declined to rely on the fact that the homeowners were not third-party beneficiaries of the 
27

architects’ contracts, stating, “we have never held that third party beneficiary status is a 

prerequisite to alleging negligence.” (Id. at p. 584.)

“Third, the prospect of private ordering as an alternative to negligence liability is 

far less compelling . . . than in Bily.” (Beacon Residential Community Assn. v. Skidmore, 

Owings & Merrill LLP, supra, 59 Cal.4th at p. 584.) An ordinary homeowner has no 

construction expertise and cannot negotiate “‘meaningful protective changes in the 

conveyancing documents prepared by the builder vendor . . . .’” (Id. at pp. 584-585.) 

The court found it “questionable” that allowing the homeowner to sue the developer “will 

consistently provide adequate redress” and noted that “the chief interest of prospective 

homeowners is to avoid purchasing a defective home, not only to have adequate redress 

after the fact.” (Id. at p. 585.)

Last but not least, the Supreme Court also distinguished Weseloh, on two grounds. 

In Weseloh, the engineers had had the “limited role” of assisting the wall subcontractor 

with its calculations, but in Beacon, the architects “were the sole entities providing 

architectural services to the Project.” (Beacon Residential Community Assn. v. Skidmore, 

Owings & Merrill LLP, supra, 59 Cal.4th at pp. 586-587.) Also, in Weseloh, there was 

insufficient evidence of causation, but in Beacon, there was “no similar causation 

problem . . . .” (Beacon, supra, at p. 587.)

C. Forfeiture.

Preliminarily, RC contends that Luzuriaga forfeited any contention that the 

Biakanja factors weigh in her favor by failing to raise it below. 
28

In its motion for summary judgment, RC and Cuellar argued that, based on the 

application of the Biakanja factors, they did not owe Luzuriaga a duty of care. In 

opposition, Luzuriaga did not address each of the Biakanja factors separately. However 

she did argue that cases such as Stewart had applied the Biakanja factors in the 

construction context and had held, as a result, that a subcontractor owes the owner a duty 

of care. 

Thus, there was no forfeiture. Ultimately, the trial court declined to follow 

Stewart, because it had already ruled (for licensing purposes) that RC and Cuellar were 

not subcontractors. Instead, it accepted RC and Cuellar’s argument. It is therefore 

appropriate for Luzuriaga to argue — albeit in more detail than she did below — that the 

Biakanja factors, as applied in cases such as Stewart, support a duty here.

RC also argues, more specifically, that Luzuriaga did not argue below that (1) 

Weseloh is not controlling, or (2) Beacon is controlling. We are not aware of any law 

that a litigant cannot cite a new case on appeal or cannot assert a new distinction of an old 

case. In fact, such fine-tuned approaches to the case law are probably more common on 

appeal than not.

D. Synthesis and Analysis.

We proceed to apply the Biakanja factors here in light of Stewart, Weseloh, and 

Beacon.

(1) The extent to which the transaction was intended to affect the plaintiff: As in 

Weseloh, there was no third-party beneficiary clause in the relevant contracts, but under 
29

Beacon, this is not determinative. It has been said that “[t]he owner is . . . an intended 

beneficiary of the subcontractor’s contract with the general contractor. . . .” (Sanchez v. 

Swinerton & Walberg Co. (1996) 47 Cal.App.4th 1461, 1469.) It would seem that the 

owner is equally an intended beneficiary of a subcontractor’s contract with an equipment 

operator or lessor.

As in Stewart, it was obvious that the grading work was ultimately intended to 

benefit the owner, and that if it were done negligently, the owner would be damaged. 

Cuellar testified that he did not know who the owner was, but he could hardly claim he 

did not know there was an owner.

The trial court distinguished Stewart on the ground that RC and Cuellar were not 

subcontractors. In part VI, ante, we agreed that they were not subcontractors within the 

meaning of the Contractors State License Law. For present purposes, however, the 

question is not whether they were subcontractors as thus defined, but rather whether they 

are more analogous to the subcontractor in Stewart, on one hand, or to the engineers in 

Weseloh, on the other hand.

Beacon indicated that the controlling distinction between the two is whether the 

project participant had a limited role or contributed to the project as a whole. Here, RC 

and Cuellar contributed only to the grading; moreover, each of them did only part, not all, 

of the grading. Thus, the transaction was primarily intended to benefit B&T, rather than 

Luzuriaga.
30

(2) The foreseeability of harm to the plaintiff: As in Stewart and Beacon, it was 

obvious that negligent performance by the defendants would cause damages to the 

property owner. Weseloh discounted this factor, because in that case, there was no 

evidence that the plaintiff’s damages were actually caused by the defendants’ negligent 

performance. Here, by contrast, there was uncontradicted evidence of causation.

Bily held, however, that “the mere presence of a foreseeable risk of injury to third 

persons [is not] sufficient, standing alone, to impose liability for negligent conduct.” 

(Bily v. Arthur Young & Co., supra, 3 Cal.4th at p. 399.)

(3) The degree of certainty that the plaintiff suffered injury: Once again, as in 

Stewart and Beacon, and unlike in Weseloh, there was ample evidence of causation. And 

Luzuriaga is the main injured party. This is not a situation, as in Bily, in which there is 

some large and nebulous class of potential plaintiffs. The general contractor and B&T 

might have some cause of action against RC and Cuellar, but only because Luzuriaga has 

a cause of action against all of them.

(4) The closeness of the connection between the defendant’s conduct and the 

injury suffered: In one sense, the connection was close; RC and Cuellar did the grading, 

and the grading was defective. In a more important sense, however, it was not close. 

Nanci testified that it was B&T’s duty to see to it that the grading work was done in 

accordance with the plans and specifications, and moreover that this was B&T’s duty 

“exclusively” — i.e., to the exclusion of RC and Cuellar. For this reason, he did not 

show RC or Cuellar the plans and specifications. As he owned B&T, which was a 
31

(usually) licensed grading contractor, he was qualified to testify as an expert. And his 

testimony on this point was uncontradicted. Cuellar testified that he did exactly what the 

B&T foreman told him to do. 

Indeed, it is hard to see how RC and Cuellar were allegedly negligent. To the 

extent that they supplied equipment, they were not; there is no allegation that the 

equipment was defective, that it was not appropriate for the task, or that it somehow 

caused the grading to deviate from the plans and specifications.5 To the extent that they 

operated equipment, they did so under B&T’s supervision; according to Nanci, this was 

consistent with the standard of care in the industry. However, it is possible that some of 

the deviations from the plans and specifications were obvious. In any event, RC and 

Cuellar did not move for summary judgment on the ground that they were not negligent; 

it is possible that, had they done so, Luzuriaga could and would have introduced 

additional evidence.

We therefore assume that RC and Cuellar were negligent. Even if so, B&T had 

the closest connection to Luzuriaga’s alleged injury; RC and Cuellar were one step 

removed, and, on this record, only tangentially responsible for it, at best.

5 RC contends that a holding that it has a duty “would have a devastating 

effect on business establishments, such as Home Depot, Loews [sic], United Rentals, etc., 

who rent equipment and cannot control its proper use or application in the field, in the 

event claimed deficiencies in construction are caused by the lessee of such equipment.” 

However, because Luzuriaga seeks to hold RC and Cuellar liable as equipment operators, 

not as equipment suppliers, this concern is misplaced.
32

(5) The moral blame attached to the defendant’s conduct: Stewart did not 

specifically discuss moral blame; either it felt that negligence is morally blameworthy per 

se or that the absence of moral blame did not outweigh the other factors. Weseloh found 

no moral blame; that finding, however, may have been influenced by the fact that it also 

found no causation. Beacon found that the defendants’ negligent performance of their 

“unique and well-compensated role in the Project as well as their awareness that future 

homeowners would rely on their specialized expertise in designing safe and habitable 

homes” gave rise to “significant moral blame.” (Beacon Residential Community Assn. v. 

Skidmore, Owings & Merrill LLP, supra, 59 Cal.4th at p. 586.)

Here, unlike in Beacon, RC and Cuellar did not provide specialized expertise and 

were not particularly well-compensated. As discussed above, it was B&T that was 

supposed to provide the specialized expertise. This means that B&T took primary moral 

blame for any negligent grading; RC and Cuellar had only secondary moral blame or no 

moral blame at all, depending on how you look at it. In this situation — where there was 

a more blameworthy joint tortfeasor — the moral blame factor militates against a duty. 

(K.G. v. S.B. (2020) 46 Cal.App.5th 625, 628-629, 633 [father who provided financial 

support to his son, who used the money to buy drugs that killed his girlfriend, had no 

moral blame]); State Ready Mix, Inc. v. Moffatt & Nichol (2015) 232 Cal.App.4th 1227, 

1230-1231, 1233-1234 [design engineer who gratuitously reviewed concrete mix 

designed and prepared by concrete supplier had no moral blame].)
33

Luzuriaga argues that RC is morally blameworthy because it performed unlicensed 

grading work. As we held in part IV, ante, however, it was not required to be licensed.

Luzuriaga also argues that Cuellar is morally blameworthy because he was a 

licensed contractor, and a licensed contractor is subject to discipline for “[a] willful 

departure from or disregard of plans or specifications in any material respect, which is 

prejudicial to another . . . .” (Bus. & Prof. Code, § 7109, subd. (b).) However, as we 

held with respect to RC in part IV, ante, Cuellar was not doing work that required a 

contractor’s license.6In any event, the violation of such a regulatory statute is not 

inherently morally blameworthy.

(6) The policy of preventing future harm: As a general rule, it would seem that 

the more project participants who have a duty of care, the more future harm is prevented. 

Weseloh found no evidence “that greater care . . . would result from expanded liability” 

(Weseloh Family Ltd. Partnership v. K.L. Wessel Construction Co., Inc., supra, 125 

Cal.App.4th at p. 170); however, the presumption that it would, unless proven otherwise, 

is fundamental to the law of negligence.

The law of negligence, however, is not the only body of law involved here. 

Luzuriaga also had the option of suing for breach of contract. As discussed above, it 

6 The Contractors State License Board can take disciplinary action against a 

licensed contractor, even if it was not acting in that capacity by virtue of one of the 

exemptions to the licensing requirement set forth in Business and Professions Code 

section 7044 [owner-builder], 7045 [non-fixtures], 7046 [personal property], or 7048

[project under $500]. (Bus. & Prof. Code, § 7090.) By negative implication, it cannot

take disciplinary action against a licensed contractor that was not acting in that capacity 

for some other reason.
34

would seem that she is a third-party beneficiary of the contracts with RC and Cuellar. 

But even if she is not, she could sue B&T, which most likely would just turn around and 

sue RC and Cuellar. It does not appear that holding RC and Cuellar liable directly to 

Luzuriaga for negligence is necessary to further the policy of preventing future harm.

So far, then, the Biakanja factors are something of a mixed bag. Numerically, four 

of the factors weigh in favor of a duty, and only two weigh against (one of which the 

Supreme Court has told us is not determinative). Of course, we are to evaluate them 

qualitatively, not just quantitatively; alas, the case law does not clearly lay out how we 

are to go about doing so.

We therefore turn to the three additional Bily factors.

(1) Liability out of proportion to fault: Bily held that this factor applied in the 

case before it, because the accountant’s fault was secondary to the client’s. (Bily v. 

Arthur Young & Co., supra, 3 Cal.4th at pp. 399-402.) Here, as discussed above, it is 

hard to see how RC and Cuellar were negligent at all, but even if they were, their fault 

was secondary to B&T’s.

(2) The prospect of private ordering: As Weseloh held, an owner can protect itself 

by contractually requiring every project participant to be liable to the owner for failing to 

follow the plans and specifications. Here, however, the contract was an AIA form. It 

provided that the contractor and any subcontractor were to be bound by the plans and 

specifications; a sub-subcontractor, however, was to be bound only “[w]here 
35

appropriate.” It seems unlikely that Luzuriaga could have negotiated a change to this 

language. We conclude that this factor does not particularly favor either side.

(3) Adverse societal effects: According to Nanci, the custom in the industry is 

that the grading subcontractor is responsible for compliance with the plans and 

specifications; a provider of operated equipment is not. The AIA form contract is 

consistent with this testimony; it gives a contractor the option not to require a 

subcontractor to be bound by the plans and specifications, where appropriate. Luzuriaga 

does not point to any adverse societal effects resulting from this custom.

If we were to hold that RC and Cuellar had a duty to Luzuriaga, the likely result 

would be greater risk and — assuming insurance for this risk is even available — higher 

insurance premiums for small construction businesses. The supply of their services 

would go down and the price for those services would go up. In the absence of any 

apparent problems resulting from the existing custom, we see no justification for this.

In sum, then, the Biakanja factors, when combined with the Bily factors, point to 

the conclusion that RC and Cuellar had no duty of care toward Luzuriaga. The key facts 

that favor Luzuriaga are that she was undoubtedly damaged, and that she is the main 

member of a small class of foreseeable plaintiffs. The key fact that favors RC and 

Cuellar is that, under the contract documents and under the custom in the industry, they 

had only a limited role in the project, and it was not their responsibility to ensure that the 

grading conformed to the plans and specifications. The latter fact plays into many of the 

Biakanja and Bily factors and strongly influences our evaluation of them.
36

We therefore conclude that the trial court correctly held that RC and Cuellar did 

not owe Luzuriaga a duty of care.

VI

RC’S ENTITLEMENT TO CLAIM A MECHANIC’S LIEN

In connection with her first (unlawful business practices) cause of action, 

Luzuriaga contends that RC was not entitled to claim a mechanic’s lien. 

Civil Code section 8400 provides: “A person that provides work authorized for a 

work of improvement, including, but not limited to, the following persons, has a lien right 

under this chapter:

“(a) Direct contractor.

“(b) Subcontractor.

“(c) Material supplier.

“(d) Equipment lessor.

“(e) Laborer.

“(f) Design professional.” (Italics added.)

Luzuriaga argues that RC was not an “[e]quipment lessor” or a “[l]aborer.” More 

generally, she also argues that RC did not actually “provide[] work for [the] work of 

improvement” (Civ. Code, § 8400), because it merely acted as a middleman for the labor 

and equipment of others (i.e., Ronald Berger, L. Moreno, and Cuellar). 

On this cause of action, the trial court denied Luzuriaga’s motion for summary 

adjudication — and granted RC’s cross-motion for summary adjudication — for two 
37

alternative reasons: (1) because Luzuriaga had not pleaded this theory; and (2) because 

RC was entitled to claim a mechanic’s lien. 

Luzuriaga contends that she did adequately plead this theory. Her first cause of 

action was almost entirely taken up by allegations that RC was an unlicensed contractor. 

However, one paragraph additionally alleged that: “RC[’s] claim of lien includes 

equipment, work, service, and/or materials that were not performed or provided to the 

Project by RC . . . .” 

The commonsense meaning of this is that RC demanded payment for something 

that it never actually did. Evidently that is how RC and the trial court read it.

Luzuriaga is now arguing that, even though RC actually did something, it was not 

qualified to claim a mechanic’s lien because what it did was not “work” and was not done 

on a “work of improvement.” Once you know that, it is possible to look back at the 

crucial paragraph, to realize that it is ambiguous, and to see how it could be read as 

asserting this argument.

Nevertheless, it was insufficient to raise this theory for purposes of summary 

judgment. A complaint must contain “[a] statement of the facts constituting the cause of 

action, in ordinary and concise language.” (Code Civ. Proc., § 425.10, subd. (a)(1).) 

“This fact-pleading requirement obligates the plaintiff to allege ultimate facts that ‘as a 

whole apprise[] the adversary of the factual basis of the claim. [Citations.]’ [Citation.]” 

(Medical Marijuana, Inc. v. ProjectCBD.com (2020) 46 Cal.App.5th 869, 886.) “The 

requirement to specifically plead facts in a complaint is to apprise the defendant of the 
38

circumstances upon which plaintiff relies and to prevent defendant from being taken by 

surprise.” (Frisvold v. Leahy (1936) 15 Cal.App.2d 752, 756.)

Here, Luzuriaga’s construction of her own allegation was not its ordinary 

meaning. Significantly absent was the essential fact that RC was acting only as a broker 

or middleman. Indeed, the same cause of action alleged, to the contrary, that “RC . . . 

performed unlicensed contractor’s work on the Project . . . .” (Capitalization altered.) 

While Luzuriaga would have been allowed to plead inconsistent allegations, she never 

actually did plead the entirely inconsistent allegation that RC acted only as a middleman 

for work performed by others. As a result, the crucial paragraph did not reasonably 

apprise RC of Luzuriaga’s present contention.

“‘The pleadings define the issues to be considered on a motion for summary 

judgment.’ [Citation.]” (Lowe v. California League of Prof. Baseball (1997) 56 

Cal.App.4th 112, 122.) “Summary judgment cannot be granted on a ground not raised by 

the pleadings. [Citation.] Conversely, summary judgment cannot be denied on a ground 

not raised by the pleadings. [Citations.]” (Bostrom v. County of San Bernardino (1995) 

35 Cal.App.4th 1654, 1663, italics omitted.)

Finally, Luzuriaga quotes Lewis & Queen v. N. M. Ball Sons (1957) 48 Cal.2d 141 

to the effect that: “Whatever the state of the pleadings, when the evidence shows that the 

plaintiff in substance seeks to enforce an illegal contract or recover compensation for an 

illegal act, the court has both the power and duty to ascertain the true facts in order that it 

may not unwittingly lend its assistance to the consummation or encouragement of what 
39

public policy forbids. [Citations.]” (Id. at pp. 147-148.) This quotation (if it applies in 

the context of summary judgment at all) might apply to Luzuriaga’s theory that RC was 

an unlicensed contractor (see ibid.), but it does not apply to her theory that RC was not 

entitled to claim a mechanic’s lien. Even if RC was claiming a mechanic’s lien when it 

was not entitled to do so, it was nevertheless owed the money; it was not seeking “to 

enforce an illegal contract” nor to “recover compensation for an illegal act.”

We therefore conclude that Luzuriaga forfeited this theory for purposes of 

summary judgment.

VII

DENIAL OF LEAVE TO AMEND

Anticipating our holding that she did not adequately plead her theory that RC was 

not entitled to claim a mechanic’s lien (see part VI, ante), Luzuriaga contends that the 

trial court erred by denying her leave to amend so as to allege this theory. 

A. Additional Factual and Procedural Background.

In opposition to Luzuriaga’s motion for summary adjudication, RC argued that she 

had not pleaded this theory. Thus, in her reply memorandum, in a single sentence, 

Luzuriaga requested leave to amend, “if needed.” Even though she had not requested 

oral argument, she appeared on the date set for hearing and reiterated her request for 
40

leave to amend.7 The trial court responded, “I think you’re going to have to file a motion 

. . . .” 

About two and a half months later, Luzuriaga filed a motion for leave to file a 

third amended complaint. The trial court denied that motion. 

B. Discussion.

As already discussed (see part VI, ante), the pleadings define the issues to be 

considered on a motion for summary judgment. At that stage of the proceedings, 

Luzuriaga could not amend her complaint without leave of court. (Code Civ. Proc., 

§ 472.) And she could not obtain leave of court without a noticed motion, which had to 

include a copy of the proposed amended complaint. (Code Civ. Proc., §§ 473, subd. 

(a)(1), 1005, subd. (a)(13); Cal. Rules of Court, rule 3.1324(a).)

Cases do state that a request for leave to amend may be made at or before the 

hearing on a motion for summary judgment (e.g., Laabs v. City of Victorville (2008) 163 

Cal.App.4th 1242, 1257), but this cannot be read as excusing the requirement of a duly 

noticed motion. What Luzuriaga should have done was to file a motion for leave to 

amend, together with a motion (or ex parte application) for a continuance of the hearing 

on the pending summary judgment/summary adjudication motions, to allow her motion 

for leave to amend to be heard first. Her request for leave to amend in her reply memo 

7 Luzuriaga characterizes the hearing as a trial setting conference. A trial 

setting conference had been set for the same date, but the trial court continued it. Thus, it 

was solely a hearing on the motion for summary judgment.
41

was ineffective. Her oral request at the hearing (even if we were to view that hearing as a 

trial setting conference) was likewise ineffective.

There is a split of opinion as to whether a motion for leave to amend can be filed 

after a motion for summary judgment has been granted but before judgment has been 

entered. (See Oakland Raiders v. National Football League (2005) 131 Cal.App.4th 621, 

648, fn. 24; Weil & Brown, Cal. Practice Guide: Civil Procedure Before Trial (The Rutter 

Group 2020) ¶ 10:52.6 at p. 10-27, and cases cited.) We therefore assume, without 

deciding, that the trial court still had the authority to grant the motion for leave to amend, 

provided Luzuriaga showed good cause.

Even if so, she has not shown that the trial court erred by denying her motion. 

“The denial of leave to amend is reviewed under an abuse of discretion standard. 

[Citation.]” (Centex Homes v. St. Paul Fire & Marine Ins. Co. (2015) 237 Cal.App.4th 

23, 28.) In opposition to the motion for leave to amend, RC argued, among other things, 

that Luzuriaga had failed to show that she filed the motion promptly after learning the 

underlying facts. 

“The law is . . . clear that even if a good amendment is proposed in proper form, 

unwarranted delay in presenting it may — of itself — be a valid reason for denial. . . . 

[T]he denial may rest upon the element of lack of diligence in offering the amendment 

after knowledge of the facts, or the effect of the delay on the adverse party. [Citations.]” 

(Roemer v. Retail Credit Co. (1975) 44 Cal.App.3d 926, 939-940.) Luzuriaga does not 

even argue that she demonstrated diligence. Thus, she has forfeited this argument. In 
42

any event, she admitted in her motion that she had known since January 2017 that RC 

claimed to be acting as a broker. Discovery was complete by March 2018. RC’s status 

as a broker was the major premise of her motion for summary adjudication, filed in June 

2018. We therefore sustain the denial.

VIII

DISPOSITION

The judgment is affirmed. RC (including Ronald and Carla Berger) and Cuellar 

are awarded costs on appeal against Luzuriaga.

NOT TO BE PUBLISHED IN OFFICIAL REPORTS

RAMIREZ

P. J.

We concur:

MILLER

J.

MENETREZ

J.