Judge: Cherol J. Nellon, Case: 24STCV18692, Date: 2025-01-13 Tentative Ruling

Case Number: 24STCV18692    Hearing Date: January 13, 2025    Dept: 14

#7

Case Background

This is an action for negligence, products liability, fraudulent concealment, breach of implied warranty, and loss of consortium. Plaintiff Luis Miguel Puentes Sanchez alleges he fell ill after inhaling toxic dust generated by stone products manufactured and distributed by Defendants.

On July 26, 224, Plaintiffs Luis Miguel Puentes Sanchez and Maria Gabriela Diaz Delgado filed their Complaint against a large number of Defendants.

On September 12, 2024, IKEA US Retail, LLC filed a Cross-Complaint.

On September 13, 2024, Angel of Stone, Inc. filed a Cross-Complaint.

On September 20, 2024, C&C North America, Inc. filed a Cross-Complaint.

On September 23, 2024, Marble Bros, Inc. filed a Cross-Complaint.

On September 30, 2024, Costco Wholesale Corporation filed a Cross-Complaint.

On October 1, 2024, Plaintiffs filed a Doe Amendment naming Georgia Stone Quarries, Inc. as a Defendant in this action.

On October 3, 2024, Francini, Inc. filed a Cross-Complaint.

On October 7, 2024, Caesarstone USA, Inc. filed a Cross-Complaint.

On October 8, 2024, Stone Supplies, Inc. filed a Cross-Complaint.

On October 9, 2024, Stoneville USA, Inc. filed a Cross-Complaint.

On October 14, 2024, Defendant Qiu & C Corp (Qiu & C) filed a Motion to Strike.

On November 14, 2024, Plaintiffs dismissed Artisan Tile & Stonework from this action.

On November 13, 2024, Wisonart LLC filed a Cross-Complaint.

Instant Pleading

Defendant Qiu & C moves to strike Plaintiffs’ demands for punitive damages.

Decision

Defendant Qiu & C’s motion to strike is GRANTED. The Court allows Plaintiff 15 days leave to amend.

Discussion

Defendant Qiu & C moves to strike Plaintiffs’ demand for punitive damages on the grounds that (1) the Complaint fails to allege facts sufficient to support an award for punitive damages against it and (2) the Complaint fails to plead that any act of fraud, malice, or oppression was ratified by an officer, director or managing agent of Qiu & C.

In order to state a prima facie claim for punitive damages, a complaint must set forth the elements as stated in the general punitive damage statute, Civil Code section 3294. (College Hospital, Inc. v. Superior Court (1994) 8 Cal.4th 704, 721.) These statutory elements include allegations that the defendant has been guilty of oppression, fraud or malice. (Civ. Code, § 3294, subd. (a).) 

“[T]he imposition of punitive damages upon a corporation is based upon its own fault. It is not imposed vicariously by virtue of the fault of others.” (City Products Corp. v. Globe Indemnity Co. (1979) 88 Cal.App.3d 31, 36.) “Corporations are legal entities which do not have minds capable of recklessness, wickedness, or intent to injure or deceive. An award of punitive damages against a corporation therefore must rest on the malice of the corporation’s employees. But the law does not impute every employee’s malice to the corporation. Instead, the punitive damages statute requires proof of malice among corporate leaders: the ‘officer[s], director[s], or managing agent[s].’” (Cruz v. Home Base (2000) 83 Cal.App.4th 160, 167 [citation omitted].) As to ratification, “[a] corporation cannot confirm and accept that which it does not actually know about.’” (Ibid. [citing College Hospital, Inc., supra, 8 Cal.4th at p. 726 [for ratification sufficient to justify punitive damages against corporation, there must be proof that officers, directors, or managing agents had actual knowledge of the malicious conduct and its outrageous character]].) 

Qiu & C first argue that the Complaint fails to allege that it engaged in any act of fraud, malice or oppression. The Complaint contains a cause of action for fraudulent concealment against all Defendants, including Qiu & C. If the cause of action for fraud is adequately pled, the Complaint sufficiently pleads fraudulent conduct that supports a demand for punitive damages.

The elements of fraud (i.e. intentional misrepresentation) are: “(a) misrepresentation (false representation, concealment, or nondisclosure); (b) knowledge of falsity (or ‘scienter’); (c) intent to defraud, i.e., to induce reliance; (d) justifiable reliance; and (e) resulting damage.” (Charnay v. Cobert (2006) 145 Cal.App.4th 170, 184.)

Here, the Complaint alleges that Defendants were aware of the toxic nature of their stone products which caused silicosis. (Compl., ¶1207.) Plaintiff had a duty to disclose the toxic nature of the products to Plaintiff Sanchez. (Compl., ¶1209-1212.) Defendants concealed the extreme protective measures that were necessary to prevent fabricators and installers from getting silicosis from exposure to Defendants’ products. (Compl., ¶1217.) Defendants concealed the toxicity so that Plaintiff would use their products in his work. (Compl., ¶1220.) Plaintiff would not have worked with the hazardous materials if he knew of the hazards. (Compl., ¶1221.) As a result of Defendants’ failure to disclose the toxic nature of their products, Plaintiff sustained serious injuries. (Compl., ¶1223.)

The Complaint adequately pleads a cause of action for fraudulent concealment against Qiu & C because it alleges that all Defendants concealed the toxic nature of their products, that they knew of the products’ toxicity, that they intended to induce Plaintiff to use their stone products, that Plaintiff relied on the concealment when he used the stone products, and that Plaintiff suffered damages as a result of the concealment. Therefore, the Complaint adequately pleads fraudulent conduct which supports a demand for punitive damages.

Qiu & C next argues that the Complaint fails to state an officer, director, or managing agent ratified the alleged fraudulent conduct. The Court agrees. Plaintiff failed to meet the requirements for demanding punitive damages from a corporate defendant. Therefore, the motion to strike filed by Defendant Qiu & C is GRANTED. Because this is a defect which could be remedied with leave to amend, the Court will allow Plaintiff 15 days leave to amend.

Conclusion

Defendant Qiu & C’s motion to strike is GRANTED. The Court allows Plaintiff 15 days leave to amend.