Judge: Barbara M. Scheper, Case: 20STCV18357, Date: 2022-12-15 Tentative Ruling

Case Number: 20STCV18357    Hearing Date: December 15, 2022    Dept: 30

Dept. 30

Calendar No.

Bankuthy, et. al. vs. Millennium House, Inc., et. al., Case No. 20STCV18357

Tentative Ruling re:  Plaintiffs’ Motion for Order Permitting Discovery of Financial Information

Plaintiffs Michael Bankuthy, Abraham Cheng, Luke Pollock, Michael Salazar, Ryan Stegen (collectively, Plaintiffs) move for an order permitting discovery into the financial condition of Defendants Peter Schuster, 127 Boyle, LLC, Caara Shayne, and Millennium House, Inc. (collectively, Defendants). The motion is denied.

While pretrial discovery of a defendant’s financial condition is generally not permitted, “[u]pon motion by the plaintiff supported by appropriate affidavits and after a hearing, if the court deems a hearing to be necessary, the court may at any time enter an order permitting the discovery otherwise prohibited by this subdivision if the court finds, on the basis of the supporting and opposing affidavits presented, that the plaintiff has established that there is a substantial probability that the plaintiff will prevail on the claim pursuant to Section 3294.” (Civ. Code, § 3295(c); see Jabro v. Superior Court (2002) 95 Cal.App.4th 754, 756.) “Such order shall not be considered to be a determination on the merits of the claim or any defense thereto and shall not be given in evidence or referred to at the trial.”  (Ibid.) 

“[B]efore a court may enter an order permitting discovery of a defendant’s financial condition, it must (1) weigh the evidence submitted in favor of and in opposition to motion for discovery, and (2) make a finding that it is very likely the plaintiff will prevail on his claim for punitive damages.”  (Jabro, supra, 95 Cal.App.4th at 758.) “In this context, a ‘substantial probability’ of prevailing on a claim for punitive damages means that it is ‘very likely’ that the plaintiff will prevail on such a claim or there is a ‘strong likelihood’ that the plaintiff will prevail on such a claim.” (I-CA Enterprises, Inc. v. Palram Americas, Inc. (2015) 235 Cal.App.4th 257, 283.)

Plaintiffs’ initial motion argued that Plaintiffs were entitled punitive damages pursuant to their claims for Breach of Warranty of Habitability and Violation of Civil Code § 1942.4. As Plaintiffs acknowledge in their Reply, punitive damages are not available for these causes of action. An action for breach of the warranty of habitability is based on contract, and punitive damages may not be awarded as relief for actions in contract. (Civ. Code § 3294; Ginsberg v. Gamson (2012) 205 Cal.App.4th 873, 896.) Civ. Code § 1942.4 does not provide for recovery of punitive damages for claims made under that section. (See Brewer v. Premier Golf Properties, LP (2008) 168 Cal.App.4th 1243, 1252 [“[w]here a statute creates new rights and obligations not previously existing in the common law, the express statutory remedy is deemed to be the exclusive remedy available for statutory violations, unless it is inadequate”].) Consequently, Plaintiffs have not shown that it is very likely that they will prevail on their claims for punitive damages.

Plaintiffs’ Reply clarifies that Plaintiffs seek punitive damages pursuant to their tort causes of action for Nuisance and Intentional Infliction of Emotional Distress. The Court declines to consider this argument. “Courts generally ‘will not consider points raised for the first time in a reply brief for the obvious reason that opposing counsel has not been given the opportunity to address those points…’ ” (Ajaxo, Inc. v. E*Trade Financial Corporation (2020) 48 Cal.App.5th 129, 194.)