Judge: Andrew E. Cooper, Case: 23CHCV03595, Date: 2024-06-03 Tentative Ruling

Case Number: 23CHCV03595    Hearing Date: June 3, 2024    Dept: F51

MOTION TO STRIKE

Motion Filed: 2/16/24

MOVING PARTY: Defendants Paradise Ranch, LLC; and Newport Pacific Capital Company, Inc. (collectively, “Defendants”)

RESPONDING PARTY: Plaintiffs Brigido Acevedo Ortega, et al. (collectively, “Plaintiffs”)

NOTICE: OK

RELIEF REQUESTED: Defendants move to strike references relating to punitive damages from Plaintiffs’ complaint.

TENTATIVE RULING: The motion is denied. Defendants to file and serve their answer to Plaintiffs’ complaint within 30 days.

BACKGROUND 

This is a habitability action in which “Plaintiffs are [88] current and former residents of and/or owners of mobilehomes located in Paradise Ranch Estates MHP, a mobilehome park located at 36200 N. Paradise Ranch Rd., Castaic, California 91384” (the “Park”). (Compl. ¶ 1.) Defendants are the owners and managers of the Park. (Id. at ¶¶ 7–8.) Plaintiffs allege that Defendants negligently maintained the Park, causing such habitability problems as inadequate sewage, draining, and electrical systems, poor walkway conditions, and gas leaks. (Id. at ¶ 15.)

On 11/22/23, Plaintiffs filed their complaint, alleging against Defendants the following causes of action: (1) Nuisance; (2) Breach of Contract; (3) Breach of the Covenant of Good Faith and Fair Dealing; (4) Negligence; (5) Breach of Statutes; (6) Breach of Warranty of Habitability; (7) Breach of Covenant of Quiet Enjoyment; (8) Breach of Unfair Competition Law; and (9) Declaratory and Injunctive Relief.

On 2/16/24, Defendants filed the instant motion to strike. On 5/20/24, Plaintiffs filed their opposition. On 5/24/24, Defendants filed their reply.

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ANALYSIS

The court may, upon a motion, or at any time in its discretion, and upon terms it deems proper, strike any irrelevant, false, or improper matter inserted in any pleading. (Code Civ. Proc., § 436, subd. (a).) The court may also strike all or any part of any pleading not drawn or filed in conformity with the laws of this state, a court rule, or an order of the court. (Id., § 436, subd. (b).) The grounds for moving to strike must appear on the face of the pleading or by way of judicial notice. (Id., § 437.)

A.    Meet and Confer

Defendants’ counsel declares that on 2/12/24, she sent a meet and confer email to Plaintiffs’ counsel raising the issues discussed in the instant motion. (Decl. of Allision A. Marchi ¶ 2.) Counsel for the parties met and conferred telephonically on 2/13/24, but were unable to informally resolve the issues. (Ibid.) The Court therefore finds that counsel has satisfied the preliminary meet and confer requirements under Code of Civil Procedure section 435.5, subdivision (a).

B.     Punitive Damages

Punitive damages may be recovered upon a proper showing of malice, fraud, or oppression by clear and convincing evidence. (Civ. Code § 3294, subd. (a).) “Malice” is defined as conduct intended to cause injury to a person or despicable conduct carried on with a willful and conscious disregard for the rights or safety of others. (Id. at subd. (c); Turman v. Turning Point of Cent. Cal., Inc. (2010) 191 Cal.App.4th 53, 63.) “Oppression” means despicable conduct subjecting a person to cruel and unjust hardship, in conscious disregard of the person’s rights. (Ibid.) “Fraud” is an intentional misrepresentation, deceit, or concealment of a material fact known by defendant, with intent to deprive a person of property, rights or otherwise cause injury. (Ibid.)

1.      Malice, Fraud, or Oppression

Punitive damages must be supported by factual allegations. Conclusory allegations, devoid of any factual assertions, are insufficient to support a conclusion that parties acted with oppression, fraud or malice. (Smith v. Superior Court (1992) 10 Cal.App.4th 1033, 1042; Anschutz Entertainment Group, Inc. v. Snepp (2009) 171 Cal.App.4th 598, 643.)

In the complaint, Plaintiffs allege, inter alia, that “Defendants forced Plaintiffs to live in filth and degradation by ignoring these [substandard] conditions. Defendants had the financial ability to abate and remedy the above [habitability] problems, but out of greed deliberately chose to let Plaintiffs suffer rather than make any repairs.” (Compl. ¶ 21.)

Here, Defendants argue that the Complaint “contains no specific allegations to allege, for example there are no specific allegations of when Defendants had notice of the alleged bad acts, how Defendants approved or ratifies said bad acts, or how they were specifically done with the intent to harm Plaintiffs.” (MTS 11:6–9.) Defendants contend that “Plaintiffs’ Complaint fails to advance a single factual allegation against either particular entity itself that would support its purported ill will, despicable conduct, or deceit.” (Id. at 13:28–14:2.)

In opposition, Plaintiffs argue that they have sufficiently met the pleading standard for punitive damages because “the Complaint contains five (5) full pages of specific facts relating to the horrific habitability-related conditions in the Park, including, inter alia, repeat raw sewage overflows, poor water quality causing physical illness, significant drainage problems causing severe damage to homes, and the poor state of the Park’s common areas.” (Pls.’ Opp. 2:17–20, citing Compl. ¶ 15.) “Plaintiffs allege that ‘Plaintiffs notified Defendants of [poor Park conditions identified in ¶15] and made numerous complaints to Defendants and local governmental agencies about the foregoing ....’. … Plaintiffs also allege that Defendants ‘were cited for drainage related violations by government entities, including the Department of Housing and Community Development (‘HCD’)’… Based on this express knowledge, Defendants advised the relevant Plaintiffs that their spaces were not suitable for habitation, offered to relocate them, and then failed to do so.” (Id. at 5:8–14, citing Compl. ¶¶ 15(d)(ii), 19–20.)

On reply, Defendants argue that “nowhere in the Complaint do Plaintiffs allege any facts regarding dates, places, or occasions when the alleged wrongful behavior occurred.” (Defs.’ Reply 3:12–13.) Defendants further assert that “the alleged circumstances do not demonstrate an evil motive on Defendants’ part, as is necessary to support an award of punitive damages.” (Id. at 3:23–24, citing Lackner v. North (2006) 135 Cal. App. 4th 1188, 1210–1211.).”

Based on a review of Plaintiffs’ factual allegations, the Court finds that the Complaint, as pled, sufficiently pleads a basis for punitive damages against Defendants based on malice or oppression. As Plaintiffs contend, the Complaint sufficiently alleges that Defendants had actual knowledge about the substandard conditions at the Park, yet failed “to provide and maintain the Park in good working order and condition.” (Compl. at ¶ 22.) This alleged conduct sufficiently supports a prayer for punitive damages as a “conscious disregard for the rights or safety of others.” (Civ. Code § 3294, subd. (c).)

Accordingly, the Court finds that at this stage, Defendants’ alleged conduct as pled may be considered malicious and oppressive as defined by Civil Code section 3294. Further investigation of the merits of Plaintiffs’ allegations may be resolved through the discovery process.

2.      Employer Liability

“An employer shall not be liable for [punitive] damages … based upon acts of an employee of the employer, unless the employer had advance knowledge of the unfitness of the employee and employed him or her with a conscious disregard of the rights or safety of others or authorized or ratified the wrongful conduct for which the damages are awarded or was personally guilty of oppression, fraud, or malice. With respect to a corporate employer, the advance knowledge and conscious disregard, authorization, ratification or act of oppression, fraud, or malice must be on the part of an officer, director, or managing agent of the corporation.” (Civ. Code § 3294, subd. (b).)

In their complaint, Plaintiffs name three individuals who were managing agents of Defendants during the relevant time period. (Compl. ¶¶ 9–12.) Plaintiffs further allege that “each Defendant authorized or ratified the wrongful conduct of its agents and/or employees or was personally guilty of oppression or malice, and the authorization, ratification or act of oppression or malice was on the part of a member, manager, officer, director and/or managing agent of each Defendant.” (Id. at ¶¶ 21, 42, 83, 91.) Specifically, “Defendants’ managing agents, including ZARNEGIN, FAIRBROTHER, AND SULLIVAN, adopted and/or approved Defendants’ employees’ conduct after it occurred by accepting what they did without any reprimand or changing the manner and procedures by which its employees perform in similar situations such as the ones involving Plaintiffs.” (Id. at ¶ 22.)

Here, Defendants argue that the Complaint fails to “provide information regarding when Defendants had notice of the alleged bad acts, how Defendants approved or ratified said bad acts, or how they were specifically done with the intent to harm Plaintiffs.” (MTS 14:6–8.) In opposition, Plaintiffs argue that they have “plead ultimate facts demonstrating that Zarnegin, Fairbrother, and Sullivan, as Defendants’ officers, directors, and/or managing agents, exercised substantial discretionary authority over vital aspects of corporate decision-making, including decisions that determine corporate policy including deciding the budget for maintenance and repairs. … Zarnegin, Fairbrother, and Sullivan's actions demonstrate they intentionally and deliberately chose not to provide and maintain the Park in good working order and condition, thereby consciously disregarding Plaintiffs’ rights and safety, and intentionally violating the MRL.” (Pls.’ Opp. 7:1–8, citing Compl. ¶¶ 9–10, 15(d)(ii); 19–22; 40–43; 81–84; 89–92.)

Upon review of the Plaintiffs’ factual allegations in the Complaint, the Court agrees with Plaintiffs that they have sufficiently alleged “that Defendants consciously disregarded Plaintiffs’ rights and safety by and through, inter alias 1) their awareness of the multitude of significant problems in the Park, and 2) their deliberate failure to fix them, despite their awareness of the resulting harm to Plaintiffs (including, but not limited to, bodily injury and monetary damages).” (Id. at 7:15–19.)

Based on the foregoing, the Court finds that at this stage, Plaintiffs have sufficiently alleged that Defendants ratified/approved of the allegedly wrongful conduct by their agents and/or employees. The Court again notes that further investigation of the merits of Plaintiffs’ allegations may be resolved through the discovery process. Accordingly, the Court denies Defendants’ motion to strike portions of Plaintiffs’ complaint referencing punitive damages.

CONCLUSION 

The motion to strike is denied. Defendants to file and serve their answer to Plaintiffs’ complaint within 30 days.