Judge: Cynthia A Freeland, Case: 37-2021-00054111-CU-CO-NC, Date: 2023-09-01 Tentative Ruling

SUPERIOR COURT OF CALIFORNIA,

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SOUTH BUILDING TENTATIVE RULINGS - August 31, 2023

09/01/2023  01:30:00 PM  N-27 COUNTY OF SAN DIEGO

JUDICIAL OFFICER:Cynthia A. Freeland

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Civil - Unlimited  Contract - Other Demurrer / Motion to Strike 37-2021-00054111-CU-CO-NC ESCONDIDO VIEW HOMEOWNERS ASSOCIATION VS FENNER [IMAGED] CAUSAL DOCUMENT/DATE FILED: Motion to Strike, 05/03/2023

Plaintiff/Cross-Defendant Escondido View Homeowners Association ('Cross-Defendant')'s motion to strike portions of Defendants/Cross-Complainants Douglas Fenner and Jacqueline Fenner (collectively, 'Cross-Complainants')'s First Amended Cross-Complaint (the 'FACC') is granted.

The court declines to deny the motion for Cross-Defendant's failure to sufficiently meet and confer before filing the motion. The court respectfully disagrees with Cross-Complainants' contention that Cross-Defendant entirely failed to engage in the meet and confer process. The evidence shows that on May 2, 2023, Cross-Defendant's counsel sent Cross-Complainants' counsel a meet and confer e-mail highlighting the perceived deficiencies with the FACC. See Anderson Decl., Ex. B. Cross-Complainants are correct that this, without more, was not a sufficient meet and confer effort – indeed, the Code requires that the moving party meet and confer in person or by telephone at least five days before the motion to strike must be filed. See Cal. Code Civ. P. § 435.5(a). However, Cross-Complainants cite no authority for the proposition that Cross-Defendant's insufficient meet and confer efforts are equivalent to no meet and confer at all. Regardless, and as Cross-Complainants concede in their opposition, '[a] determination by the court that the meet and confer process was insufficient shall not be grounds to grant or deny the motion to strike.' Cal. Code Civ. P. § 435.5(a)(4). Accordingly, the court will proceed to the motion's merits.

California Code of Civil Procedure ('CCP') § 436 provides that '[t]he 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.' Cal. Code Civ. P. §§ 436(a)-(b). In ruling on a motion to strike, courts do not read allegations in isolation.

See Perkins v. Sup. Ct. (1981) 117 Cal. App. 3d 1, 6. 'In passing on the correctness of a ruling on a motion to strike, judges read allegations of a pleading subject to a motion to strike as a whole, all parts in their context, and assume their truth.' Clauson v. Sup. Ct. (1998) 67 Cal. App. 4th 1253, 1255. The grounds for a motion to strike must appear on the face of the challenged pleading or any matter of which the court is required to take judicial notice. See Cal. Code Civ. P. § 437(a).

'In order to state a prima facie claim for punitive damages, a complaint must set forth the elements as stated in the general punitive damages statute, Civil Code section 3294.' Turman v. Turning Point of Central California, Inc. (2010) 191 Cal. App. 4th 53, 63. California Civil Code ('CC') § 3294 allows a plaintiff to recover punitive damages '[i]n an action for the breach of an obligation not arising from contract, where it is proven by clear and convincing evidence that the defendant has been guilty of oppression, fraud, or malice.' Cal. Civ. Code § 3294(a). For purposes of awarding punitive damages, Calendar No.: Event ID:  TENTATIVE RULINGS

2970276 CASE NUMBER: CASE TITLE:  ESCONDIDO VIEW HOMEOWNERS ASSOCIATION VS FENNER  37-2021-00054111-CU-CO-NC ''[m]alice' 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.' Cal. Civ. Code § 3294(c)(1). ''Oppression' means despicable conduct that subjects a person to cruel and unjust hardship in conscious disregard of that person's rights.' Cal. 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 part of the defendant of thereby depriving a person of property or legal rights or otherwise causing injury.' Cal. Civ. Code § 3294(c)(3). 'Despicable conduct' is conduct that is so mean, vile, base, or contemptible that it would be looked down upon and despised by reasonable people. See CACI 3940. Such conduct has been described as having 'the character of outrage frequently associated with crime.' Scott v. Phoenix Schools, Inc. (2009) 175 Cal. App. 4th 702, 715.

The court finds that the FACC fails to sufficiently plead the ultimate facts with the requisite specificity demonstrating that Cross-Defendant's conduct, if ultimately proven by clear and convincing evidence, would warrant the imposition of punitive damages against Cross-Defendant. See Brousseau v. Jarrett (1977) 73 Cal. App. 3d 864, 872; Hillard v. A.H. Robins Co. (1983) 148 Cal. App. 3d 374, 391-392. The FACC alleges that on August 6, 2020, Cross-Complainants purchased the real property located at 2354 Valley View Place, Escondido, CA 92026 (the 'Property'). See FACC, ¶ 8. On September 17, 2020, Cross-Complainants submitted an Architectural Improvement Application (the 'Roof Application') for replacement of the Property's roof using the same materials and specifications utilized by a neighbor that Cross-Defendant approved several years earlier. Ibid., ¶¶ 10-11. The roof work was scheduled to occur between October 15 and 17, 2020. Ibid., ¶ 12. On September 30, 2020, Cross-Complainants received notice that the Roof Application was denied due to the proposed roof color. Ibid., ¶ 13. Between October 6 and 19, 2020, Cross-Complainants sent Cross-Defendant several appeal letters regarding the denial of the Roof Application, all of which went unanswered. Ibid., ¶¶ 14-16. Unable to get a response, Cross-Complainants proceeded with the roof replacement on October 16, 2020. Ibid., ¶ 16. On November 23, 2020, Cross-Defendant sent Cross-Complainants a cease-and-desist letter, demanding that they stop construction of exterior improvements to the Property. Ibid., ¶ 17. By that point, the roof construction was completed, and Cross-Complainants were replacing an existing fence in their front yard. The cease-and-desist letter referred to a fence yet did not mention Cross-Complainants' roof. Ibid.

A separate issue between the parties concerns a purportedly unapproved dog-eared fence that was installed before Cross-Complainants owned the Property. Ibid., ¶ 18. On October 13, 2020, Cross-Complainants, to address the alleged fencing violation, submitted an Architectural Improvement Application (the 'Fence Application') to remove and replace the fence. Ibid., ¶ 19. The Architectural Review Committee did not respond within the 30-day period for approving or disapproving a proposed improvement and, pursuant to Article V, § 1 of the CC&Rs, the Fence Application was deemed approved. Ibid., ¶¶ 19-20. On that basis, Cross-Complainants proceeded with the fence work or about November 17, 2020. Ibid., ¶ 20. On November 24, 2020, Frank Sandoval of the City of Escondido Department of Code Enforcement notified Cross-Complainants that he had received a complaint regarding their fence. Specifically, Mr. Sandoval indicated that the fence exceeded the City's height and setback requirements. Cross-Complainants subsequently complied with the City's request to lower the fence. Ibid., ¶ 21.

On December 21, 2020, Cross-Complainants received separate letters captioned 'Hearing Notice/Cease and Desist' regarding 'exterior changes that are not in compliance.' Ibid., ¶ 23. The Hearing Notice referred to the fence but not the roof. Cross-Complainants attended the hearing on January 19, 2021, at which time they learned that the Architectural Review Committee had in fact approved construction of the fence yet failed to advise Cross-Complainants of same. Despite the approval, Cross-Defendant demanded that Cross-Complainants remove the roof and fence. Ibid., ¶ 24. Cross-Complainants believe that Cross-Defendant selectively enforces its CC&Rs and used Cross-Complainants' roof construction as a pretense to compel removal of the fence. Ibid., ¶¶ 26-27. Cross-Defendant's disapproval of Cross-Complainants' roof materials and color cannot be reconciled with its approval of the identical roofing materials and colors for other homes in the neighborhood. Ibid., ¶ 27. On January 22, 2021, Cross-Defendant sent Cross-Complainants separate Notices of Assessed Fine letters, imposing Calendar No.: Event ID:  TENTATIVE RULINGS

2970276 CASE NUMBER: CASE TITLE:  ESCONDIDO VIEW HOMEOWNERS ASSOCIATION VS FENNER  37-2021-00054111-CU-CO-NC separate $50.00 fines for the fence and roof violations. Ibid., ¶ 28. As to the third cause of action for breach of fiduciary duty, which is the cause of action upon which Cross-Complainants' punitive damages request is based, the FACC alleges that Cross-Defendant owed Cross-Complainants fiduciary duties of reasonable care and undivided loyalty, to enforce the terms of the CC&Rs and other governing documents, and to act with the utmost good faith for Cross-Complainants' benefit. Ibid., ¶ 42. However, Cross-Defendant breached its fiduciary obligations by failing to: (1) approve the Fence Application despite failing to respond to the Fence Application within 30 days, and (2) uniformly apply the CC&Rs concerning the proposed roof color. Ibid. The FACC alleges that Cross-Defendant acted with oppression, fraud, and malice in breaching its fiduciary duty(s). Ibid., ¶ 46.

The foregoing is insufficient to state an entitlement to punitive damages. To start, punitive damages are recoverable for breach of fiduciary duty; however, the conduct underlying the breach must be proven to be malicious, fraudulent, and/or oppressive. See American Airlines, Inc. v. Sheppard, Mullin, Richter & Hampton (2002) 96 Cal. App. 4th 1017, 1051; Heller v. Pillsbury Madison & Sutro (1996) 50 Cal. App. 4th 1367, 1390. That being said, the FACC fails to meet CC § 3294's pleading requirements. The gravamen of the FACC, in essence, is that Cross-Defendant breached its fiduciary obligations by failing to approve the Fence Application in a timely manner and not uniformly applying the CC&Rs concerning Cross-Complainants' proposed roof color. To the extent Cross-Complainants allege in their opposition that Cross-Defendant or its board members or officers selectively enforced the CC&Rs and/or leveraged the roof issue to facilitate removal of the fence, such contention does not rise to the level of malicious or oppressive conduct. The FACC is devoid of any factual allegations that Cross-Defendant's actions were intended to injure Cross-Complainants or to subject them to cruel and unjust hardship in disregard of their rights. The FACC, at best, speculates as to the reason(s) why Cross-Defendant disapproved Cross-Complainants roof materials and color while allegedly approving identical materials and color for other homes in the neighborhood. The FACC alleges no facts supporting Cross-Complainants' contention that Cross-Defendant 'purposefully and consciously decided to 'play games'' with Cross-Complainants. Nor does the FACC allege facts supporting Cross-Complainants' theory that Cross-Defendant intended to abuse its authority or otherwise abuse/harass Cross-Complainants.

Furthermore, and consistent with CC § 3294(b), the FACC fails to allege with specificity the offending conduct committed by Cross-Defendant's President and/or Vice-President, how that conduct constitutes malice, oppression, and/or fraud, and how and under what circumstances Cross-Defendant ratified its board members' conduct. See Cal. Civ. Code § 3294(b). Merely alleging that: (1) Cross-Defendant's President was not concerned with Cross-Complainants' roof, and (2) Cross-Defendant's Vice-President warned the Board about pursuing Cross-Complainants after the alleged approval of the Fence Application, without more, is insufficient to state an entitlement to punitive damages. Similarly, the FACC allegation that Cross-Defendant's property manager, Jan Weiler, dismissed Mrs. Fenner's concerns regarding Cross-Defendant's purported violation of the CC&Rs, without more, fails to demonstrate malicious and/or oppressive conduct.

In light of the foregoing, the court grants the motion and strikes from the FACC: (1) ¶ 46 in its entirety, and (2) ¶ 2 of the Prayer for Relief as to the third cause of action in its entirety. Cross-Complainants are correct that leave to amend is liberally granted. See City of Torrance v. Southern California Edison Company (2021) 61 Cal. App. 5th 1071, 1091. Indeed, the court must grant leave to amend if there is a reasonable possibility that the deficiencies identified in this ruling can be cured by amendment. See Grieves v. Sup. Ct. (1984) 157 Cal. App. 3d 159, 168. However, Cross-Complainants bear the burden of showing how the pleading can be amended to state a viable punitive damages claim. To satisfy their burden, Cross-Complainants must 'show in what manner the pleading can be amended and how such amendments will change the legal effect of their pleadings.' Careau & Co. v. Security Pacific Business Credit, Inc. (1990) 222 Cal. App. 3d 1371, 1388. The court finds that Cross-Complainants have not met their burden. Notably, the court granted Cross-Defendant's previous motion to strike those portions of the initial Cross-Complaint requesting punitive damages. See ROA No. 60. In its prior ruling, the court was very specific as to the Cross-Complaint's deficiencies and what Cross-Complainants needed to accomplish to correct those deficiencies. However, as set forth herein, the FACC is deficient for the same reasons the Cross-Complaint was. Consequently, the court grants the motion to strike without leave to amend. Cross-Defendant shall file and serve an answer or otherwise plead to the FACC within Calendar No.: Event ID:  TENTATIVE RULINGS

2970276 CASE NUMBER: CASE TITLE:  ESCONDIDO VIEW HOMEOWNERS ASSOCIATION VS FENNER  37-2021-00054111-CU-CO-NC ten (10) days of this hearing. See Cal. R. Ct. 3.1320(j).

This is the tentative ruling for the hearing at 1:30 p.m. on Friday, September 1, 2023. If no party appears at the hearing, this tentative ruling will become the order of the court as of September 1, 2023. If the parties are satisfied with the court's tentative ruling or do not otherwise wish to argue the motion, they are encouraged to give notice to the court and each other of their intention not to appear, though this notice is not required.

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