Judge: Armen Tamzarian, Case: 24STCV19760, Date: 2024-10-04 Tentative Ruling

Case Number: 24STCV19760    Hearing Date: October 4, 2024    Dept: 52

Tentative Ruling:

            Defendants’ Motion to Strike Portions of Complaint

Defendants Robert Artura, Building Worx, Inc., and Luxe Home Design, Inc. move to strike several portions of the complaint by plaintiffs Danny Izumi and Mariko Izumi.

Defendants move to strike the targeted portions of the complaint on the basis that plaintiffs do not allege sufficient facts to support punitive damages.  Courts may strike allegations related to punitive damages where the facts alleged “do not rise to the level of malice, oppression or fraud necessary” to recover punitive damages under Civil Code section 3294.  (Turman v. Turning Point of Central California, Inc. (2010) 191 Cal.App.4th 53, 64.) 

Plaintiffs allege sufficient facts to recover punitive damages.  They allege they hired Robert Artura’s company, Building Worx, Inc. to do a home improvement project.  (Comp., ¶¶ 14, 16.)  Plaintiffs agreed to pay Building Worx, Inc. a percentage of the project’s cost as a “Contractor’s Fee.”  (¶¶ 18-19.)  They allege Artura “sought to have bills from subcontractors inflated so that the subcontractors would work on Artura’s properties for free or at a reduced cost.”  (¶ 48.)  Artura allegedly did this to “ ‘mark-up’ the services provided by those subcontractors.”  (¶ 49.)  Plaintiffs allege they “relied on the fraudulent billing submitted.”  (¶ 52.)  A reasonable trier of fact could conclude these facts constitute fraud as required for punitive damages under Civil Code section 3294.    

Defendants argue the plaintiffs do not allege facts “demonstrating” the fraudulent billing or intent to defraud.  (Motion, p. 4.)  “The plaintiff is required to plead only ultimate facts, not evidentiary facts.”  (C. W. Johnson & Sons, Inc. v. Carpenter (2020) 53 Cal.App.5th 165, 169.) 

Regarding “fraudulent billing” (Comp., ¶ 52), the facts discussed above explain the basis for that characterization.  Plaintiffs allege Artura artificially increased the subcontractors’ bills for the project so that his company would get paid more for its Contractor’s Fee.  (¶¶ 18-19, 47-51.)  Furthermore, Artura allegedly got the subcontractors to provide a kickback to him in the form of “work on Artura’s properties for free or at a reduced cost.”  (¶ 48.)    

As for intent, plaintiffs need not allege additional facts “demonstrating” it.  Intent is an allegation of ultimate fact.  (Perkins v. Superior Court (1981) 117 Cal.App.3d 1, 6; Rosin v. Superior Court (1960) 181 Cal.App.2d 486, 490.)  Moreover, for fraud, “the only intent by a defendant necessary to prove a case of fraud is the intent to induce reliance.  …  [L]iability is affixed not only where the plaintiff's reliance is intended by the defendant but also where it is reasonably expected to occur.”  (Lovejoy v. AT&T Corp. (2001) 92 Cal.App.4th 85, 93.)  One should reasonably expect that submitting artificially inflated bills to clients will result in the clients relying on those bills and paying more money than the services truly cost.

Disposition

Defendants Robert Artura, Building Worx, Inc., and Luxe Home Design, Inc.’s motion to strike portions of the complaint is denied.  Defendants Robert Artura, Building Worx, Inc., and Luxe Home Design, Inc. are ordered to answer within 20 days.