Judge: Armen Tamzarian, Case: 21STCV32347, Date: 2023-06-29 Tentative Ruling

Case Number: 21STCV32347    Hearing Date: June 29, 2023    Dept: 52

Defendants Steven C. Huskey and Epport Richman & Robbins LLP’s Motion to Strike Portions of Second Amended Complaint

Defendants Steven C. Huskey and Epport Richman & Robbins LLP move to strike three portions regarding punitive damages from plaintiff Kamran Broukhim’s second amended complaint.

A plaintiff may only recover punitive damages when the defendant is “guilty of oppression, fraud, or malice.”  (Civ. Code, § 3294(a).)  Courts may strike allegations related to punitive damages where the facts alleged cannot support recovery of punitive damages under Civil Code section 3294.  (Turman v. Turning Point of Central California, Inc. (2010) 191 Cal.App.4th 53, 64.)  Conclusory allegations are not enough.  (Smith v. Superior Court (1992) 10 Cal.App.4th 1033, 1042.)    

Plaintiff alleges sufficient facts to constitute malice.  “ ‘Malice’ means conduct which 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.”  (Civ. Code, § 3294(c)(1).) 

This action arises from defendants representing plaintiff as attorneys in a transaction to sell his medical practice.  The second amended complaint alleges, “Defendants had a prior and/or contemporaneous attorney client relationship with the broker in this sale, and willfully and intentionally never advised Plaintiff in writing or obtained a conflict waiver from the client.  …  Defendants also breached their fiduciary duties by willfully and intentionally failing to advise the client at all about the potential conflict of interest due to the prior and/or contemporaneous attorney client relationship with the broker.  All of this was done with the intent of earning the fee and benefiting the broker in the deal and without regard to plaintiff’s interests or to the paramount duties owed to the actual client in the transaction who was supposed to be the plaintiff, not the broker.”  (SAC, p. 7.)

These factual allegations suffice to state defendants intended to injure plaintiff.  Intent is generally an allegation of ultimate fact.  (Perkins v. Superior Court (1981) 117 Cal.App.3d 1, 6 [allegations that defendants acted “wrongfully and intentionally” and “in retaliation” sufficient to support prayer for punitive damages]; Johnson v. Casetta (1961) 197 Cal.App.2d 272, 276 [“an allegation of knowledge of incompetency is an allegation of ultimate fact”]; Rosin v. Superior Court (1960) 181 Cal.App.2d 486, 490 [“It has been suggested that the allegation of petitioner’s intent in removing the children from the jurisdiction is only a conclusion. . . .  This is an allegation of fact, not a mere conclusion.”].)  The second amended complaint alleges defendants intentionally acted to benefit the broker instead of their client. 

The factual allegations also suffice to state defendants engaged in despicable conduct with a willful and conscious disregard of plaintiff’s rights.  “ ‘One of the principal obligations which bind an attorney is that of fidelity, the maintaining inviolate the confidence reposed in him by those who employ him, and at every peril to himself to preserve the secrets of his client.  …  By virtue of this rule an attorney is precluded from assuming any relation which would prevent him from devoting his entire energies to his client’s interests.’ ”  (Flatt v. Superior Court (1994) 9 Cal.4th 275, 289.)  “An attorney owes the highest duty of fidelity to his clients.”  (Alkow v. State Bar (1971) 3 Cal.3d 924, 935.) 

The second amended complaint alleges defendants violated this duty by acting against their client’s interest.  It alleges they acted to benefit the broker in the deal at their client’s expense, and they hid the fact that they had a preexisting relationship with the broker.  As attorneys, defendants knew they owed plaintiff a duty of loyalty.  The second amended complaint alleges they consciously disregarded that duty.  The court cannot conclude that, as a matter of law, doing so was not despicable. 

Disposition

            Defendants Steven C. Huskey and Epport Richman & Robbins LLP’s motion to strike portions of plaintiff’s second amended complaint is denied.  Defendants are ordered to answer within 20 days.