California Landmark Cases on Incorporation by Reference

"The phrase 'incorporation by reference' is almost universally understood, both by lawyers and nonlawyers, to mean the inclusion, within a body of a document, of text which, although physically separate from the document, becomes as much a part of the document as if it had been typed in directly." (Republic Bank v. Marine Nat. Bank (1996) 45 Cal.App.4th 919, 922 53 Cal. Rptr. 2d 90.) The statutory pleading requirements in the Code of Civil Procedure do not explicitly address the practice of incorporation by reference. The general requirement that a complaint or cross-complaint contain a "statement of the facts constituting the cause of action, in ordinary and concise language" ( 425.10, subd. (a)(1)) offers little guidance. The policy underlying this requirement "is to inform the parties within reasonable limits of the nature of the action pending and the issues involved." (Casaretto v. De Lucchi (1946) 76 Cal.App.2d 800, 806 174 P.2d 328.) Furthermore, the California Rules of Court do not specifically address incorporation by reference used at the pleadings stage. Case law, however, does address the practice: "The general rule is that in the absence of restrictions imposed by statute or by rules of court, facts alleged in other pleadings in the same case may be incorporated by reference in subsequent pleadings therein. " (Estate of Dargie (1939) 33 Cal.App.2d 148, 157.) Courts have applied this general rule to cross-complaints. "A cross-complaint must itself be sufficient and cannot be cured by the pleadings in the original action, that is, the complaint and answer, apart from permissible incorporation by reference." (Berg v. Investors Real Estate Loan Co. (1962) 207 Cal.App.2d 808, 816 24 Cal. Rptr. 701.) In Turney v. Collins (1941) 48 Cal.App.2d 381, the pleader in an amended answer and counterclaim incorporated by reference certain exhibits pleaded in the original answer. The court concluded there was "not the slightest reason" for holding that a pleading could not incorporate by reference an exhibit or allegation found in another pleading in the same case, even though the pleading has been superseded by such later pleading. (Id. at p. 388.) One practice guide states that it generally is not good practice to incorporate by reference parts of other pleadings in the same lawsuit, even though there is no rule against it. (Weil & Brown, Cal. Practice Guide: Civil Procedure Before Trial (The Rutter Group 2008) 6:239, p. 6-66 (rev. # 1, 2007).) The practice guide modifies this advice as follows: "One noteworthy exception: Cross-complaints for indemnification usually incorporate by reference the allegations of the complaint as a 'shorthand' way of showing the existence of the claim for which indemnification is sought." (Ibid.)