Judge: Anne Richardson, Case: 21STCV14591, Date: 2023-03-06 Tentative Ruling

Case Number: 21STCV14591    Hearing Date: March 6, 2023    Dept: 40

Superior Court of California

County of Los Angeles

Department 40

MOVING PARTY:              Defendant Sung Ki Lee.

OPPOSITION:                      Plaintiff The Oriental Mission Church.

REPLY:                                 Defendant Sung Ki Lee.

Background

The instant action arises from a dispute between two rival factions within Plaintiff The Oriental Mission Church (“the OMC”). (See The Oriental Mission Church, et al. v. Chi Hoon Kim, et al., LASC No. 20STCV42005; Jang Geun Chung, a Session Member of the Oriental Mission Church, et al. v. Kwang Chan Kim, et al., LASC No. 21STCV04092; and The Oriental Mission Church v. Jang Geun Chung, et al., LASC No. 21STCV14591—the instant action.)

The instant action sues Defendants Jang Geun Chung, Sung Ki Lee, Yeon Ho Lee, and Seung Mi Pak pursuant to claims of (1) Breach of Fiduciary Duty, (2) Negligence, (3) Fraud, (4) Intentional Interference with Prospective Economic Advantage, (5) Negligent Interference with Prospective Economic Advantage, (6) Accounting, and (7) Declaratory Relief. The claims are grounded in allegations in the operative Second Amended Complaint that the Defendants used their positions at the OMC to engage in actions constituting breaches of fiduciary duty and other torts against the OMC, including: attempted embezzlement of $210,000 of the OMC funds; wrongfully freezing the OMC accounts at Commonwealth Business Bank; filing incorrect statements with the California Secretary of State identifying persons who had not been elected to positions in church leadership (the “Session”); wrongfully informing the United States Citizenship and Immigration Services (“USCIS”) that it was withdrawing its visa application for Reverend Chan Woo Kim without permission of the OMC’s CEO, Session, or independent management; wrongfully cancelling the pastoral payroll without permission of the OMC’s CEO, Session, or independent management; wrongfully changing the salary of the praise team and the musical performers without permission of the OMC’s CEO, Session, or independent management; and physically interfering with the operations of the OMC and threatening members thereof. Plaintiff seeks compensatory damages, punitive damages, declaratory relief, attorney’s fees according to applicable contract, law, rule, or regulation, actual costs, and other relief as deemed appropriate by the Court.

Now before the Court is Defendant Sung Ki Lee’s opposed Motion to Strike Punitive Damages and Attorney’s Fees and Costs from Plaintiff’s Second Amended Complaint.

Judicial Notice

The Court DECLINES to take Judicial Notice of the “entire file[s]” for the three actions between the competing factions in the management of Plaintiff the OMC because of the overbreadth of the request and the Court’s ability to resolve this Motion without reference to such documents. (Evid. Code, §§ 452, subd. (d), 453.)

Motion to Strike

Legal Standard

The court may, upon a motion or at any time in its discretion and upon terms it deems proper: (1) strike out any irrelevant, false, or improper matter inserted in any pleading; or (2) strike out all or any part of any pleading not drawn or filed in conformity with the laws of California, a court rule, or an order of the court. (Code Civ. Proc. § 436, subds. (a)-(b).) For the purposes of a motion to strike pursuant to Sections 435 to 437 of the Code of Civil Procedure, the term “pleading” means a demurrer, answer, complaint, or cross-complaint, (Code Civ. Proc., § 435, subd. (a)), and an immaterial allegation or irrelevant matter in a pleading entails (1) an allegation that is not essential to the statement of a claim or defense, (2) an allegation that is neither pertinent to nor supported by an otherwise sufficient claim or defense, or (3) a demand for judgment requesting relief not supported by the allegations of the complaint or cross-complaint (Code Civ. Proc., § 431.10, subds. (b)(1)-(3)).

Attorney’s Fees and Costs: DENIED.

Defendant Sung Ki Lee moves for the Court to strike attorney’s fees and costs from the Second Amended Complaint because (1) “a plain reading of [the OMC’s] SAC shows it failed to attach any type of contract [that] would support its Prayer” of attorney’s fees and costs, and (2) while the “OMC prays for attorneys’ fees and costs pursuant to applicable ‘law, rule, or regulation,’ [it] fails to make reference to any applicable law, rule, or regulation that would support its Prayer.” (Mot., 5:21-27.)

In opposition, Plaintiff the OMC argues that its Accounting claim properly supports a prayer of attorney’s fees and costs pursuant to case law holding (1) that an accounting cause of action is an action in equity and (2) that courts of equity may award attorney’s fees to a successful litigant as compensation for the work of the litigant’s attorneys. (Opp’n, 5:4-16 [referring to Wittenberg v. Bornstein (2020) 51 Cal.App.5th 556, 568 for former proposition and In re Marre's Est. (1941) 18 Cal.2d 191, 192 for latter proposition].) The Opposition also refers to Code of Civil Procedure sections 128.5, 128.7, 1021.5, and 2016.010, et. seq. as grounds for supporting its prayer for attorney’s fees and costs but does not elaborate on how these statutes connect to the pleadings at hand. (Opp’n, 5:16-18.)

In reply Defendant Lee argues that while equitable relief and the above cited statutes could afford the requested relief, attorney’s fees and costs sought pursuant to equity and those statutes must be moved for in a motion and cannot be stated in pleadings absent an alleged contract between the parties or a statute providing otherwise. (Reply, 5:19-6:2.)

The Court finds that the Second Amended Complaint makes pleadings properly supporting a prayer for attorney’s fees and costs. As highlighted by Plaintiff the OMC, an accounting cause of action is an action brought in equity. (Wittenberg v. Bornstein, supra, 51 Cal.App.5th 556, 568.) As further highlighted by Plaintiff the OMC, courts may award attorney’s fees and costs for actions brought in equity. (In re Marre's Est., supra, 18 Cal.2d at p. 192.) Here, the Second Amended Complaint’s sixth cause of action pleads Accounting. (SAC, ¶¶ 61-65.) Under these circumstances, the Second Amended Complaint pleads a cause of action entitling Plaintiff the OMC to attorney’s fees and costs, though what the scope of that recovery may be is not appropriately addressed at this time.

Punitive Damages: DENIED.

Defendant Sung Ki Lee moves for the Court to strike punitive damages pleadings from the Second Amended Complaint on the ground that the allegations made therein do not contain sufficient factual pleadings to support a prayer for punitive damages pursuant to Civil Code section 3294. (Mot., 7:11-8:13.)

In opposition, the OMC argues that punitive damages are properly supported by ultimate fact allegations in the Second Amended Complaint under its causes of action for (1) Breach of Fiduciary Duty, (3) Fraud, (4) Intentional Interference with Prospective Economic Advantage. (Opp’n, 2:13-22.) The OMC specifically points to case law holding that punitive damages are recoverable for pleadings of fraud (see Opp’n, 3:23-4:6 [citing to case law for this proposition and pointing to SAC, ¶¶ 34-42) and breach of fiduciary duty by officers or directors or interference with prospective economic advantage (see Opp’n, 4:7-27 [citing case law and referencing SAC, ¶¶ 27, 52).

In reply, Defendant Lee argues that the authority cited by the OMC in opposition is inapposite. (Reply, 1:24-3:19.) Lee also argues that the plaintiff’s argument that fraud, breach of fiduciary duty, and interference with prospective economic advantage does nothing to show that the Second Amended Complaint actually pleads facts showing oppression, fraud, or malice supporting punitive damages pursuant to Civil Code section 3294. (Reply, 3:23-5:15.)

The Court finds that the Second Amended Complaint pleads sufficient ultimate facts of oppression, fraud, or malice as to support its prayer for punitive and exemplary damages. “Malice” is defined as conduct that is intended by the defendant to cause injury to the plaintiff or despicable conduct which is carried on by the defendant with a willful and conscious disregard of the rights or safety of others. (Civil Code, § 3294, subd. (c)(1).) “Oppression” is defined as despicable conduct that subjects a person to cruel and unjust hardship in conscious disregard of that person’s rights. (Civil Code, § 3294, subd. (c)(2).) “Fraud” is defined as an intentional misrepresentation, deceit, or concealment of a material fact known to the defendant with the intention on the part of the defendant of thereby depriving a person of property or legal rights or otherwise causing injury. (Civil Code, § 3294, subd. (c)(3).)

At the very least, the Second Amended Complaint pleads that the Defendants attempted to embezzle $200,000 from the OMC’s funds. (See, e.g., SAC, ¶¶ 11(a), 36(a).) These pleadings allege attempted embezzlement by way of facts such as an attempt to divert $200,000 of the OMC funds from the church. Defendant Lee appears to argue that the Second Amended Complaint does not provide sufficient evidentiary facts to support the ultimate facts advanced in the pleadings, e.g., how the Defendants went about attempting to embezzle $200,000. At the pleadings stage, the Court is satisfied that these allegations (1) sufficiently place the Defendants on notice as to the overall conduct supporting the claims and prayers against them and (2) connote pleadings of malice toward the OMC’s operations or fraud against the OMC.

Conclusion

Defendant Sung Ki Lee’s Motion to Strike Punitive Damages and Attorney’s Fees and Costs from Plaintiff’s Second Amended Complaint is DENIED because (1) the Second Amended Complaint’s Accounting cause of action supports a prayer for attorney’s fees and costs and (2) at minimum, the Second Amended Complaint’s attempted embezzlement pleadings support a prayer for punitive damages.