Judge Bruce G. Iwasaki, Case Number: 23STCV06568, Date: 2024-01-03 Tentative Ruling

Moving Party: Category 3 Defendants Francini Inc., Caesarstone USA, Inc., and DAL-Tile Distribution, LLC

Tentative Ruling: The Demurrer by Category Three Defendants to the fourth cause of action is overruled. The Motion to Strike is granted with leave to amend regarding punitive damages.

This is a personal injury action involving exposure to toxic silica, metals and other fibrogenic substances. Plaintiff Oscar Alvarado Ortiz (Plaintiff) sued Defendant Architectural Surfaces Group, LLC and 48 other defendants for injuries Plaintiff allegedly sustained while working “in Los Angeles County, cutting, grinding, drilling, edging, and polishing granite, marble, [and] other natural stone and artificial stone countertops” from 2005 to 2009 and 2013 to 2022.

On January 30, 2024, Category 2 Defendants Parsoda USA, Inc. dba Pacifica Wholesale Tile and Stone; Lilly Industries, Inc. dba The Slab Studio; and Architectural Surfaces Group, LLC demurred to the fourth cause of action of the Complaint. Category 2 Defendants also filed a motion to strike portions of the Complaint. Category 2 Defendant Elite Stone and Cabinet, Inc. filed a joinder to the demurrer. Category 2 Defendant Parsoda USA, Inc. filed a one-page additional briefing to the demurrer and motion to strike. Category 2 Defendant Lilly Industries, Inc. dba The Slab Studio filed a joinder to the Category 2 Demurrer and Motion to strike. Category 2 Defendant Surface Concepts & Slabs, Inc. also filed an additional joinder. Category 2 Defendant Marbolis, Inc. also filed a joinder to the Category 2 demurrer and additionally demurred to first, second, third, and fifth causes of action. Plaintiff opposed the demurrer and motion to strike. The Court overruled the demurrer but granted the motion to strike with leave to amend.

On February 13, 2024, Category 3 Defendants demurred to the fourth cause of action of the Complaint. Category 3 Defendants also filed a motion to strike portions of the Complaint. Plaintiff opposed the demurrer and motion to strike.

The demurrer to the fourth cause of action is overruled. The motion to strike is granted with leave to amend.

A demurrer is an objection to a pleading, the grounds for which are apparent from either the face of the complaint or a matter of which the court may take judicial notice. (Code Civ. Proc., § 430.30, subd. (a); see also Blank v. Kirwan (1985) 39 Cal.3d 311, 318.) The purpose of a demurrer is to challenge the sufficiency of a pleading “by raising questions of law.” (Postley v. Harvey (1984) 153 Cal.App.3d 280, 286.) “In the construction of a pleading, for the purpose of determining its effect, its allegations must be liberally construed, with a view to substantial justice between the parties.” (Code Civ. Proc., § 452.) The court “ ‘ “treat[s] the demurrer as admitting all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law . . ..” ’ ” (Berkley v. Dowds (2007) 152 Cal.App.4th 518, 525.)

As a preliminary matter, Plaintiff’s opposition to the demurrer argues “[n]owhere does the joint motion identify who the “Category 3 Defendants” actually are. Indeed, the law firm that authored the joint motion represents four defendants, but two of them (Lilly and Parsoda) filed joinders in the “Category 2” motion to strike.” (Opp. 3:14-16.) Category 3 Defendants do not provide any clarification or otherwise address this ambiguity on reply.

This argument is well taken. On this basis alone, the demurrer must be overruled except as to Defendants Francini Inc., Caesarstone USA, Inc., and DAL-Tile Distribution, LLC, who were not part of Category 2 Defendants but filed specific joinders to the demurrer and motion to strike here.

Category 3 Defendants demur to the fourth cause of action for fraudulent concealment on the grounds that the Complaint fails to allege the fraud claim with the request specificity (especially as to corporate defendants) and fails to allege facts showing the existence of a duty to disclose.

To state a claim for fraudulent concealment, Plaintiffs must allege: (1) the defendant “concealed or suppressed a material fact,” (2) the defendant was “under a duty to disclose the fact to the plaintiff,” (3) the defendant “intentionally concealed or suppressed the fact with the intent to defraud the plaintiff,” (4) the plaintiff was “unaware of the fact and would not have acted as he did if he had known of the concealed or suppressed fact,” and (5) “as a result of the concealment or suppression of the fact, the plaintiff must have sustained damage.” (BiglerEngler v. Breg, Inc. (2017) 7 Cal.App.5th 276, 310–11.)

The ordinary rule about pleading fraud with specificity is less demanding when the alleged fraud is concealing the truth. Ordinarily, “fraud must be pleaded specifically; general and conclusory allegations do not suffice.” (Lazar v. Superior Court (1996) 12 Cal.4th 631, 645.). “This particularity requirement necessitates pleading facts which show how, where, to whom, and by what means” the alleged fraud occurred. (Id.) The purpose of the particularity requirement is to “separate meritorious and nonmeritorious cases, if possible in advance of trial.” (Small v. Fritz Companies, Inc. (2003) 30 Cal.4th 167, 184.)

This standard is less stringent when the defendant already has “ ‘full information concerning the facts of the controversy.’ ” (Committee on Children’s Television, Inc. v. General Foods Corp. (1983) 35 Cal.3d 197, 217, superseded by statute on other grounds as stated in Californians for Disability Rights v. Mervyn's, LLC (2006) 39 Cal.4th 223, 227.) Relaxation of the specificity requirement is particularly appropriate in a concealment case. Unlike intentional misrepresentation, which requires some affirmative representation or promise, a fraudulent concealment is the absence of something, the suppression of a fact. (Civ. Code § 1710.)

This distinction was recognized in Turner v. Milstein (1951) 103 Cal.App.2d 651. In rejecting a demurrer based on uncertainty, the Turner court pointed out:

“The only specification of uncertainty was that it could not be determined how, or in what manner, Milstein concealed from plaintiff the time and place of the sale of the real property. The ultimate fact is pleaded. It is an old and elemental rule of pleading that a demurrer for uncertainty does not lie if what is sought is a statement of matter already within the knowledge of the demurring party.... If, in truth, Milstein concealed from plaintiff the fact that the property was to be sold, he knows it and he knows the time and place of concealment, if there was a time and place. It would seem that concealment is negative and that it would occur without any time or place. Milstein knows the facts.” (103 Cal.App.2d at p. 658.)

Thus, based on the nature of this type of claim, a plaintiff in a fraud by omission suit will not be able to specify the time, place, and specific content of an omission as precisely as would a plaintiff in a false representation claim.

However, absent a fiduciary relationship between the parties (which Plaintiff does not allege here), a duty to disclose can arise in only three circumstances: (1) the defendant had exclusive knowledge of the material fact; (2) the defendant actively concealed the material fact; or (3) the defendant made partial representations while also suppressing the material fact. (BiglerEngler, supra, 7 Cal.App.5th at p. 311; LiMandri v. Judkins (1997) 52 Cal.App.4th 326, 336.) The California Supreme Court “has described the necessary relationship giving rise to a duty to disclose as a ‘transaction’ between the plaintiff and defendant ….” (BiglerEngler v. Breg, Inc. (2017) 7 Cal.App.5th 276, 311; Warner Construction Corp. v. City of Los Angeles (1970) 2 Cal.3d 285, 294 [“In transactions which do not involve fiduciary or confidential relations”]; Hoffman v. 162 North Wolfe LLC (2014) 228 Cal.App.4th 1178, 1187–89 [rejecting concealment claim where plaintiffs “were not involved in a transaction with the parties they claim defrauded them”]; LiMandri v. Judkins (1997) 52 Cal.App.4th 326, 337 [“such a relationship can only come into being as a result of some sort of transaction between the parties”].)

Here, the Complaint alleges that Defendants owed “a legal duty to fully disclose the toxic and fibrogenic properties of their products directly to Plaintiff.” (Compl., ¶ 413.) Plaintiff alleges that Defendants owed this duty “because Defendants alone had knowledge of material facts, to wit the toxic properties of their products, which were not accessible to Plaintiff,” “Defendants made representations regarding their stone products, but failed to disclose additional facts which materially qualify the facts disclosed, and/or which rendered the disclosures made, likely to mislead Plaintiff,” and “because a transactional relationship existed between [Plaintiff] and Defendants inasmuch as [Plaintiff] and/or received toxic stone products from Defendants.” (Compl., ¶¶ 414-416.)

The Complaint further alleges that Defendants were aware that Plaintiff’s employers lacked knowledge of the extreme toxic hazards of Defendants’ stone products, and “nevertheless concealed from Plaintiff . . . the extreme measures that are necessary to prevent fabricators and installers from getting silicosis…” (Compl., ¶¶ 497-498.) Further, Defendants allegedly concealed from Plaintiff and others that greater protective equipment was necessary and the hazardous nature of their products. (Compl., ¶¶ 500-501.) In conclusory language, the Complaint also alleges that Defendants owed a duty to disclose the toxic hazards of their stone products because they alone had knowledge of their toxic properties, which were inaccessible to Plaintiff, and because they “made representations regarding their stone products, but failed to disclose additional facts which materially qualify the facts disclosed….” (Compl., ¶¶ 414-415.)

When the Court ruled on the demurrer of Category 2 Defendants, the Court noted that Plaintiff’s allegations relied solely on the general allegations set forth with respect to “all Defendants.” (Compl., ¶¶ 495-516.)

Specifically, the Court found the allegations were conclusory concerning any specific knowledge held by any specific Category 2 Defendant. The Complaint did not state what knowledge Defendants had about toxic properties,^{^[1]} or what partial representations they supposedly made and failed to disclose. Plaintiff maintained, however, that these allegations pass muster under Jones v. ConocoPhillips Co. (2011) 198 Cal.App.4th 1187.

In Jones, the appellate court concluded that, at the pleading stage, the plaintiffs (family members of a deceased worker exposed to toxic chemicals) had alleged sufficient facts to support a claim of fraudulent concealment against chemical manufacturers. Specifically, they alleged that the defendants alone were aware of their products’ toxicity, it was a fact not available to the decedent, and the defendants concealed that fact. (Id. at pp. 1199-1200.) Characterizing these as “conclusory allegations,” the Jones decision recognized that it was a “closer question” whether they were adequate to state a fraudulent concealment claim against defendants against whom there were no allegations of manufacturing a specific product – DMF – for which published studies had attested to its toxicity. (Id. at p. 1200.) “On balance,” reasoned the Jones court, the pleading provided “adequate notice to the remaining defendants of the material facts they allegedly concealed” from plaintiff. Each defendant was found to be “on notice that it allegedly concealed or failed to disclose the toxic properties of the product it sold…. Although sparse, nothing more is required at this early stage of the litigation.” (Ibid.)

Accepting these allegations as true, and adopting the “sparse but sufficient” standard set forth in Jones v. ConocoPhillips, the Court held that the allegations survived demurrer with respect to Category 2 Defendants.

Turning now to the allegations as they pertain to Category 3 Defendants, the Complaint alleges greater detail as to this claim with respect to Defendants Arizona Title, Ceaserstone USA, Inc., Cambria Company, LLC, Cosentino Group and C&C North America, Inc., E.I. Dupont de Nemours & Company, Francini, Inc., LX Hausys America, Inc., M S International, Inc., Pacific Shore Stones, Pental Granite and Marble, LLC, Stylenquaz LLC, and Vadara Quartz Surfaces. (Compl., ¶¶ 433-494.) More detailed allegations were also provided as to Defendant Dal-Tile. (Compl., ¶¶ 227-241.)

Thus, in applying the Court’s Category 2 Defendants analysis to Category 3 Defendants, the Court finds that the Complaint adequately states a claim for fraud under Jones v. ConocoPhillips.

“The court may, upon a motion made pursuant to Section 435, or at any time in its discretion, and upon terms it deems proper: (a) Strike out any irrelevant, false, or improper matter inserted in any pleading. (b) Strike out all or any part of any 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.) “Immaterial” or “irrelevant” matters include allegations not essential to the claim, allegations neither pertinent to nor supported by an otherwise sufficient claim or a demand for judgment requesting relief not supported by the allegations of the complaint. (Code Civ. Proc., § 431.10, subds. (b)(1)-(3).)

Category 3 Defendants move to strike from the Complaint the phrase “And other stone products to be identified in discovery,” as well as the request for punitive damages.

First, citing Bockrath v. Aldrich Chemical Co., Inc. (1999) 21 Cal.4th 71, Defendants argue the Court must strike Plaintiff’s reliance on “other products” as the basis for liability. Defendants argue that this allegation is contrary to Bockrath, which held “the plaintiff must allege facts albeit as succinctly as possible, explaining how the conduct caused or contributed to the injury” because “the law cannot tolerate lawsuits by prospecting plaintiffs who sue multiple defendants on speculation that their products may have caused harm over time through exposure to toxins in them, and who thereafter try to learn through discovery whether their speculation was well founded.” (Id. at 79-80.) This argument is well taken. The Court will grant the motion to strike this allegation.[2]

Second, with respect to allegations of punitive damages, they are recoverable where the defendant has been guilty of oppression, fraud, or malice, express or implied. (Civ. Code, § 3294.) “Something more than the mere commission of a tort is always required for punitive damages. There must be circumstances of aggravation our outrage, such as spite or ‘malice,’ or a fraudulent or evil motive on the part of the defendant, or such a conscious and deliberate disregard of the interests of others that his conduct may be called willful or wanton.” (Taylor v. Superior Court (1979) 24 Cal.3d 890, 894-895 [quoting Prosser, Law of Torts (4th ed. 1971) § 2, at pp. 9-10] [italics omitted].) Specific intent to injure is not necessary for a showing of malice—it is sufficient that the defendant’s conduct was so “wanton or so reckless as to evince malice or conscious disregard of others’ rights.” (McConnell v. Quinn (1925) 71 Cal. App. 671, 682.)

A request for punitive damages that is not supported with specific allegations of oppression, fraud, or malice is subject to a motion to strike. Conclusory allegations that defendants acted “willfully,” “maliciously,” or with “oppression, fraud, or malice” are not, without more, sufficient to give rise to a claim for punitive damages, but such language is permissible where the complaint contains sufficient factual support for the conclusions. (Perkins v. Superior Court (1981) 117 Cal.App.3d 1, 6-7.)

The Complaint contains no allegations showing any wanton, willful or fraudulent conduct by Category 3 Defendants. Further, as punitive damages are sought against corporate entities, Plaintiff was also required to – and failed – to comply with Civil Code section 3294, subdivision (b). The motion to strike is granted as to the request for punitive damages.

Accordingly, the motion to strike is granted as to references to “other stone products” and the request for punitive damages.

The Demurrer by Category 3 Defendants to the fourth cause of action is overruled. The motion to strike is granted. Plaintiff shall have leave to amend with respect to the request for punitive damages.

[1] Plaintiff’s allegations of the fibrogenic hazards of stone products being known to the industry “for centuries, indeed millen[n]ia,” (Compl., ¶ 94.) undercuts the claim that “Defendants alone had knowledge of . . . the toxic properties of their products.” (Id. ¶ 414.)

[2] The motion to strike also argues that during the March 13, 2024 Category 2 Defendants’ joint motion to strike and demurrer hearing, this Court clarified that the Category 2 order striking “other stone products” from the complaint, applied to all Defendants, not just Category 2 Defendants. Thus, this issue is also arguably moot.

Department 58