Judge: Barbara M. Scheper, Case: 22STCV29449, Date: 2023-03-24 Tentative Ruling
Case Number: 22STCV29449 Hearing Date: March 24, 2023 Dept: 30
Calendar No.
Zuru LLC vs. Bay
Cities Container Corporation, et. al., Case No. 22STCV29449
Tentative Ruling
re: Defendant’s Motion to Strike
Defendant Pflug Packaging &
Fulfillment, Inc. (Pflug) moves to strike the allegations in the Complaint of
Plaintiff Zuru LLC (Plaintiff) relating to punitive damages. The motion is
granted as to the allegation under the cause of action for negligence, and
otherwise denied.
Any party may file a timely notice
of a motion to strike the whole or any part of a pleading. (Code Civ. Proc., §
435, subd. (b).) The motion may seek to strike any “irrelevant, false or
improper matter inserted in any pleading” or any part of the pleading “not
drawn or filed in conformity with the laws of this state, a court rule, or an
order of the court.” (Code Civ. Proc., § 436.) Irrelevant allegations include
allegations that are not essential to the statement of a claim, allegations
that are not pertinent to or supported by the claim and demands for judgment
requesting relief not supported by the allegations. (Code Civ. Proc., § 431.10,
subds. (b), (c).)
“[W]hen a substantive defect is clear from the
face of a complaint, such as a violation of the applicable statute of
limitations or a purported claim of right which is legally invalid, a defendant
may attack that portion of the cause of action by filing a motion to strike.” (PH
II, Inc. v. Superior Court (1995) 33 Cal.App.4th 1680, 1682–1683.)
Civil Code § 3294, subd. (a)
authorizes the recovery of punitive damages where the defendant has been guilty
of oppression, fraud, or malice, express or implied. “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).) “Oppression” is despicable conduct that
subjects a person to cruel and unjust hardship in conscious disregard of that
person’s rights. (Civ. Code § 3294(c)(2).) “Fraud” means an intentional
misrepresentation, deceit, or concealment of a material fact known to the
defendant with the intention on the party of the defendant of thereby depriving
a person of property or legal rights or otherwise causing injury. (Civ. Code §
3294(c)(3).)¿
Plaintiff is a company that manufactures and sells toys and consumer
products. (Comp. ¶ 11.) In late 2021, Plaintiff entered into discussions with
Defendant Bay Cities to handle packaging and shipment of Plaintiff’s goods to
Walmart. (Comp. ¶¶ 24-26.) In those discussions, Bay Cities expressly
represented to Plaintiff that it would be capable of handling the large
deliveries and that it would employ its own facilities, warehouse, and staff
for the project. (Comp. ¶¶ 26-27.) Plaintiff and Bay Cities subsequently
entered into a Master Distribution Agreement, effective September 29, 2021 (the
Distribution Agreement). (Comp. ¶ 32, Ex. A.) The Distribution Agreement
included a non-delegation clause, prohibiting the parties from assigning or
delegating their obligations under the Distribution Agreement without prior
written consent from the other party. (Comp. ¶ 36.)
Unbeknownst to Plaintiff, around
the same time that the parties entered into the Distribution Agreement, Bay
Cities entered into a separate agreement with Pflug to delegate its
responsibilities under the Distribution Agreement to Pflug. (Comp. ¶ 39.) Bay
Cities deliberately hid Pflug’s involvement from Plaintiff, and was successful
until February 2022, when Plaintiff’s representatives began to investigate
project failures that had been occurring. (Comp. ¶ 49.)
Plaintiff discovered that Pflug’s capabilities were clearly inadequate to
handle Plaintiff’s distribution requirements. (Comp. ¶¶ 50-51.) Bay Cities and
Pflug’s defective performance included the failure to deliver a substantial
amount of Plaintiff’s product; late deliveries resulting in charges, lost
sales, and mandatory price markdowns imposed by Walmart; damaged and defective
products; and penalties from Walmart for an excessive amount of product in
certain shipments. (Comp. ¶ 52.) Additionally, Pflug “deliberately held
Zuru products ‘hostage’ in order to demand payments from Bay Cities,
interfering with the safe and timely delivery of those products to Walmart, and
causing Zuru damages.” (Comp. ¶ 53.)
Plaintiff seeks recovery of punitive damages against Pflug, pursuant to
the fourth cause of action for negligence and the sixth cause of action for
conversion. (Comp. ¶¶ 88, 102, Prayer 4.)
Punitive damages are not available when the defendant’s conduct was
merely negligent. (Bell v. Sharp Cabrillo
Hospital (1989) 212 Cal.App.3d 1034,
1044.) Accordingly, the motion
is granted as to the request for punitive damages under the fourth cause of
action for negligent. (Comp. ¶ 88.)
The Court finds that Plaintiff has pled grounds for recovery of punitive
damages pursuant to the conversion cause of action, based on the allegation
that Pflug deliberately withheld Plaintiff’s product to demand payments from
Bay Cities, injuring Plaintiff. (Comp. ¶¶ 53, 99-100.) The alleged acts are
sufficient to show “a willful and conscious
disregard of the rights or safety of others.” (Civ. Code § 3294(c)(1).) The Court disagrees with Defendant that
these allegations are conclusory.