Judge: Alison Mackenzie, Case: 23STCV17587, Date: 2024-01-09 Tentative Ruling

Case Number: 23STCV17587    Hearing Date: January 9, 2024    Dept: 55

NATURE OF PROCEEDINGS:  Defendants Bit Holdings Seventy-Two, Inc. and Legacy Partners, Inc.’s Motion to Strike Punitive Damages.

The motion is denied.  Twenty days to answer.

On 7/26/23, plaintiffs CARMEN BERG and GURCAN SEN (“plaintiffs”) filed a Complaint against BIT HOLDINGS SEVENTY-TWO, INC. and LEGACY PARTNERS, INC. (“defendants”) alleging that, on or about 11/11/20, plaintiffs entered into a written Rental Agreement with defendants, for the apartment at 7950 W. Sunset Blvd. #337, Los Angeles, but Defendants failed to maintain habitable conditions in spite of repeated notice of uninhabitable conditions, such as lack of heating, infestations, dampness, mold, dilapidation, buckling ceiling, adequate garbage receptacles, broken doors and windows and lack of weatherproofing.  Plaintiffs allege five causes of action. Plaintiffs’ prayer for relief seeks punitive damages for the fourth cause of action, for Breach of Implied Covenant of Quiet Enjoyment - Wrongful Constructive Eviction.

Defendants have filed a motion to strike Plaintiffs’ allegations regarding punitive damages. Plaintiffs oppose the motion.

A claim for punitive damages must state facts sufficient to support conclusions of malice, fraud, or oppression.  Turman v. Turning Point of Central Calif., Inc. (2010) 191 Cal.App.4th 53, 63.  “In order to survive a motion to strike an allegation of punitive damages, the ultimate facts showing an entitlement to such relief must be pled by a plaintiff.”  Clauson v. Sup. Ct. (1998) 67 Cal. App. 4th 1253, 1255.  In considering a motion to strike punitive damages, “judges read allegations of a pleading subject to a motion to strike as a whole, all parts in their context, and assume their truth.” (Turman, 191 Cal.App.4th at 63 (internal quotation omitted).

Alleging that persons acted “with the permission and consent” of all defendants including corporate defendants is sufficient to plead corporate employer liability for punitive damages. O'Hara v. Western Seven Trees Corp. (1977) 75 Cal. App. 3d 798, 806. A tort involving negligence, together with conduct or omissions that one knows or should know probably will result in harm, can support an award of punitive damages.  Nolin v. National Convenience Stores, Inc. (1979) 95 Cal.App.3d 279, 286-88 (defendant's inattention to danger showed a complete lack of concern for the likelihood of personal injuries at defendant’s premises).  “A nuisance may be either a negligent or an intentional tort. If the latter, then exemplary damages are recoverable….”  Stoiber v. Honeychuck (1980) 101 Cal. App. 3d 903, 920 (Appellant has pleaded sufficient facts to support .. exemplary damages. She alleged that defendant had actual knowledge of defective conditions in the premises including leaking sewage…” and alleged acting with full knowledge of the consequences of damage being caused to plaintiff).

Defendants argue that the Complaint fails to state specific facts to support a demand for punitive damages, but the Court disagrees. Plaintiffs allege that their apartment contained numerous, specified substandard conditions and that they asked Defendants to repair the conditions, but Defendants failed to do so. (Compl., ¶¶ 3, 8.) Plaintiffs alleges that Defendants had “actual and constructive knowledge” of the “untenantable conditions and plaintiffs made repeated requests that defendants maintain and repair” them but Defendants failed to make the repairs. (Id., ¶ 9.) Plaintiffs allege that because of Defendants’ conduct, they suffered injury, damages, had to move out of the apartment, and lease a new apartment. (Id., ¶ 10.) In their fourth cause of action for breach of the implied covenant of quiet enjoyment – wrongful constructive eviction, Plaintiffs allege that Defendants’ conduct “substantially and seriously interfered” with Plaintiffs’ enjoyment of the property resulting in a wrongful constructive eviction. (Id., ¶ 33.) And that Defendants’ failure to correct the substandard conditions was “knowing, intentional, willful, and malicious, despicable conduct, and was done with full knowledge of the discomfort, annoyance, cruel and unjust hardship which said failure would case to Plaintiffs.” (Id., ¶ 36.)

Plaintiffs therefore sufficiently allege ultimate facts to the effect that Defendants intentionally or negligently omitted to make repairs when that they knew or should have known it was likely to cause plaintiffs physical harm, such as gradually falling roofs, infestations, and mold.

Further, the Complaint does not reveal that only Defendants’ hired agents acted wrongfully and independently, but instead it alleges a variety of theories of direct and vicarious liability, such as defendants’ own managing, and their agents’ acting in the court and scope of employment (e.g., Complaint, ¶¶ 4, 5 and 7).

The Complaint thus sufficiently alleges ultimate facts in support of punitive damages as to the fourth cause of action. Therefore, the motion is denied.