Judge Colin Leis, Case Number: 23STCV20628, Date: 2024-11-18 Tentative Ruling

Judge: Colin Leis, Case: 23STCV20628, Date: 2024-11-18 Tentative Ruling

Case Number: 23STCV20628 Hearing Date: November 18, 2024 Dept: 74

Butterfly Pavillion, LLC et al. v. Carlin

Defendant Gary Carlin’s Motion to Strike

BACKGROUND

This motion arises out of a legal malpractice case.

Plaintiffs Butterfly Pavillion, LLC, Butterfly Palladium, LLC, Stephen Whang and Lila Stahl (Plaintiffs) filed a complaint against defendant Gary Carlin on August 28, 2023. Plaintiffs filed the instant First Amended Complaint (FAC) on August 5, 2024.

Defendant moves to strike references to oppression, malice and fraud and the prayer for punitive damages and reasonable attorney’s fees.

JUDICIAL NOTICE

Granted as material mentioned in, but not attached to, the Complaint. (Hendy v. Losse (1996) 54 Cal.3d 723, 728-729.)

LEGAL STANDARD

A court may strike any “¿irrelevant, false or improper matter¿inserted in any pleading¿” or any part of a 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¿.) “¿The grounds for a motion to strike shall appear on the face of the challenged pleading or from any matter of which the court is required to take judicial notice.¿” (¿Code Civ. Proc., § 437¿.)

In ruling on a motion to strike punitive-damages allegations, judges assume the truth of the pleading allegations. (Kaiser Foundation Health Plan, Inc. v. Superior Court (2012) 203 Cal.App.4th 696, 699, fn.1.) “[J]udges read allegations of a pleading subject to a motion to strike as a whole, all parts in their context….” (Clauson v. Superior Court (1998) 67 Cal.App.4th 1253, 1255.)

DISCUSSION

Punitive Damages

Defendant argues that Plaintiffs failed to plead sufficient facts to support claims of malice, oppression, or fraud. Oppression is “despicable conduct that subjects a person to cruel and unjust hardship and conscious disregards of that person’s rights.” (Civ. Code § 3294(c)(2).) Fraud is “an intentional misrepresentation, deceit, or concealment of a material fact known to the defendant with the intention of depriving a person of property or legal rights.” (Civ. Code § 3294(c)(3).)

Plaintiffs allege that Defendant either “failed to discover… or made an inexcusable error in judgment” in Defendant’s representation of Plaintiffs. (FAC, ¶ 28, 32.) Plaintiffs also allege that Defendant failed to inform Plaintiffs of key developments and disclose necessary information. (FAC, ¶ 33.)

Plaintiffs allege that Defendant’s conduct was oppressive because Defendant acted in conscious disregard of Plaintiffs’ rights by failing to keep Plaintiffs properly informed on the status of the case and failed to properly represent them. (FAC, ¶ 41.) Plaintiffs do not plead that the defendant intended to cause injury, nor that the defendant’s conduct was despicable. Rather, taking the context of the Complaint as a whole, Plaintiffs plead Defendant was either unaware of the issue or made an error in judgement. (FAC, ¶ 28, 32.) Thus, Plaintiffs do not properly plead oppression for the purpose of punitive damages under Civil Code section 3294.

Additionally, Plaintiffs allege that Defendant’s conduct was fraudulent because they intentionally concealed material facts, depriving Plaintiffs of their legal rights. (FAC, ¶ 42.) Unlike the oppression allegations, Plaintiffs does plead that Defendant intentionally concealed material facts from Plaintiffs which then deprived Plaintiffs of their legal rights. (FAC, ¶ 42.) Thus, Plaintiffs successfully plead fraud for the purpose of punitive damages under Civil Code section 3294.

Therefore, Defendant’s motion to strike is granted as to allegations of oppression, but not fraud.

Attorney’s Fees

Defendant also argues that Plaintiffs are not entitled to attorney’s fees because the retainer agreement does not provide for attorney’s fees. Plaintiffs allege that they are entitled to attorney’s fees under the Third Party Tort Exception. The Third Party Tort Exception is available in cases where a defendant has “wrongfully made it necessary for a plaintiff to sue a third person.” (Prentice v. North Am. Title Guaranty Corp., Alameda Division (1963) 59 Cal.2nd 618, 621.) The attorney’s fees for the prosecution of the action against the third person are recoverable as damages against Defendant. (Id.) The Third Party Tort Exception does not, however, provide for recovery of attorney’s fees as costs in the action against Defendant. The court grants Plaintiffs leave to amend to allege the actual agreement that entitles them to recover attorney’s fees as costs in this action.

CONCLUSION

The court grants Defendant’s motion to strike in part and denies in part. The court grants Defendant’s motion to strike as to:

(a) Paragraph 41, page 8, lines 26 – page 9, line 3

(b) Paragraph 47, page 9, lines 21-27

Defendant to give notice.