Judge: Cynthia A Freeland, Case: 37-2023-00034994-CU-BC-NC, Date: 2024-04-05 Tentative Ruling

SUPERIOR COURT OF CALIFORNIA,

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SOUTH BUILDING TENTATIVE RULINGS - April 04, 2024

04/05/2024  01:30:00 PM  N-27 COUNTY OF SAN DIEGO

JUDICIAL OFFICER:Cynthia A. Freeland

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Civil - Unlimited  Breach of Contract/Warranty Motion Hearing (Civil) 37-2023-00034994-CU-BC-NC ALVARADO VS QUIET OAKS MANUFACTURED HOUSING COMMUNITY, LLC CAUSAL DOCUMENT/DATE FILED: Motion to Strike, 12/18/2023

Defendant Quiet Oaks Manufactured Housing Community, LLC ('Defendant')'s motion to strike portions of Plaintiffs Frankie Alvarado, Jessica Cassell, David Cruz, Magda P. Cruz, Irma R. Echeverria, Angelica M. Gamino, Ricardo Lara, Christina Gomez, Sadie Jennings, Angel Lukeman, Collette Lukeman, Laura Martinez, Kayla R. Nevarez, Obed Osorio, Inocente Reyes, Juana Reyes, Lorenzo Rodriguez, Natalia Rodriguez, Roxana Rodriguez, Lourdes Ruiz, Obed Osorio Salazar, Olivia Salazar, Yessenia Sanchez, and Billie Jo Gregory Winkelman (collectively, 'Plaintiffs')'s First Amended Complaint (the 'FAC') is granted in part and denied in part.

California Code of Civil Procedure § 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 this case, Defendant moves to strike Plaintiffs' requests for punitive damages and prejudgment interest from the FAC. The court addresses each request in turn.

Plaintiffs' Request for Punitive Damages '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). Moreover, '[a]n employer shall not be liable for damages pursuant to subdivision (a), based upon acts of an employee of the employer, unless the employer had advance knowledge of the unfitness of the employee and employed him or her with a conscious disregard of the rights or safety of others or authorized or ratified the wrongful conduct for which the damages are awarded or was personally guilty of oppression, fraud, or malice. With respect to a corporate employer, the advance knowledge and conscious disregard, authorization, ratification or act Calendar No.: Event ID:  TENTATIVE RULINGS

3067517 CASE NUMBER: CASE TITLE:  ALVARADO VS QUIET OAKS MANUFACTURED HOUSING  37-2023-00034994-CU-BC-NC of oppression, fraud, or malice must be on the part of an officer, director, or managing agent of the corporation.' Cal. Civ. Code § 3294(b). For purposes of awarding punitive damages, ''[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.

In this case, Plaintiffs seek punitive damages in connection with their first cause of action for nuisance, fourth cause of action for negligence, fifth cause of action for breaches under the MRL and the Mobile Home Parks Act, and sixth cause of action for breach of warranty of habitability. However, the court finds that the FAC, as presently pled, fails to plead the ultimate facts with the requisite specificity demonstrating that Defendant's conduct, if ultimately proven by clear and convincing evidence, could give rise to the imposition of punitive damages. 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. Initially, the court agrees with Plaintiffs that punitive damages are recoverable for willful violations of the MRL. See Cal. Civ. Code § 798.86(b). Consequently, to the extent that the first, fourth, fifth, and sixth causes of action are predicated on such violations, the motion is not well taken. At the same time, however, to the extent that the subject claims sound in negligence, as opposed to statutory violations under the MRL or a nuisance constituting an intentional tort, punitive damages will not be recoverable. See Stoiber v. Honeychuck (1980) 101 Cal. App. 3d 903, 920 ('A nuisance may be either a negligent or an intentional tort. If the latter, then exemplary damages are recoverable.'); Colombo v. BRP US Inc. (2014) 230 Cal. App. 4th 1442, 1486, fn. 8 ('California does not recognize punitive damages for conduct that is grossly negligent or reckless.'). However, California courts have made clear that punitive damages are recoverable for breach of warranty of habitability. See Smith v. David (1981) 120 Cal. App. 3d 101, 115, fn. 3 (punitive damages are recoverable for an alleged tortious breach of warranty of habitability).

That being said, while punitive damages are legally permissible, Plaintiffs must still properly plead entitlement to such damages. They have not done so. The FAC alleges that Plaintiffs are current and former residents of and/or owners of mobile homes located in Quiet Oaks Mobile Home Park located at 26455 Paradise Valley Road, Warner Springs, CA 92086 (the 'Park'). See FAC, ¶ 1. From October 2016 through May 19, 2022, Defendant Danielle J. Ornelas and Joseph A. Ornelas, in their capacities as trustees of the Joseph A. Ornelas Revocable Trust Dated October 4, 2016, operated the Park and were responsible for the Park's development, financing, and asset management. Ibid., ¶¶ 6-7. Defendant and owned and/or operated the Park from May 19, 2022 to the present. Ibid., ¶ 8. Molly Thompson and MHC Manager 1, LLC vis-à-vis its management member/managing agent, Jordan Wadsworth, are Defendant's managing members/agents. Ms. Thompson and MHC are responsible for the Park's development, financing, and asset management for Defendant. Ibid., ¶ 9. The FAC alleges generally that Defendants have failed to maintain the Park's common areas, facilities, and physical improvements in good working order and condition, which has resulted, among other things, in sewage system spills, contaminated water, inadequate power, poor drainage, gas leaks, potholes, cracks, and depressions in the streets, insufficient lighting, an unavailable club house, improperly maintained trees and landscaping, unstocked and/or unmaintained restrooms and showers, an inadequate number of trash containers, fences that are in disrepair, vacant homes creating a rundown appearance, and a lack of security. The FAC alleges that Plaintiffs have notified Defendants of the foregoing conditions and lodged numerous complaints with Defendants and local governmental agencies regarding Defendants' failure to provide for and maintain the Park. Moreover, Defendants, through their managing agents Ms. Ornelas, Mr.

Ornelas, Ms. Thompson, MHC, and Mr. Wadsworth knew of the foregoing issues and that the Park's conditions create health and safety hazards for Plaintiffs and their families. As it pertains to punitive Calendar No.: Event ID:  TENTATIVE RULINGS

3067517 CASE NUMBER: CASE TITLE:  ALVARADO VS QUIET OAKS MANUFACTURED HOUSING  37-2023-00034994-CU-BC-NC damages, the FAC alleges at ¶¶ 20-21, 42-43, 85-86, and 93-94 that Defendants, in essence, have forced Plaintiffs to live in filth and degradation by ignoring the foregoing conditions despite having the financial wherewithal to correct the problems. Additionally, Defendants' members, managers, officers, directors, and/or managing agents were negligent in hiring, training, and/or directing Park agents and employees, none of whom were properly trained to address Park maintenance, problems, and health and safety hazards in the Park and thus were unfit to perform their jobs. Defendants' managing agents adopted and approved this by not changing Defendants' methods and procedures even though Plaintiffs allegedly were injuries by Defendants' failure to act.

The foregoing is insufficient to demonstrate that Defendant's conduct was malicious and/or oppressive.

The court agrees with Plaintiffs that the FAC need not be so detailed that a further amended pleading would be ineffective and actually provide less notice. However, Plaintiffs still must allege specific facts sufficient to place Defendant on notice of the allegations which Plaintiffs believe give rise to a punitive damages claim. See Ludgate Ins. Co. v. Lockheed Martin Corp. (2000) 82 Cal. App. 4th 592, 608; Hilliard v. AH Robbins Co. (1983) 148 Cal. App. 3d 374, 392. Plaintiffs have not done so. The FAC alleges that the Ornelas, through their trust, were responsible for the Park from October 2016 through May 19, 2022. Defendant has owned or operated the Park since May 19, 2022. However, the FAC fails to adequately allege what specific actions are attributable to Defendant that give rise to a finding of malicious or oppressive conduct. The FAC repeatedly lumps the Ornelases and Defendant together. For instance, ¶ 19 alleges that 'Defendants' through their respective managing agents, knew of the Park's various deficiencies. Paragraph 20 similarly alleges that 'Defendants' forced Plaintiffs to live in filth and degradation despite having the financial ability to remedy the situation. The court agrees with Defendant that this is insufficient because the FAC, as presently pled, fails to attribute specific conduct to Defendant. By way of further example, ¶ 22 alleges that 'Defendants' through their members, managers, officers, director, and/or managing agents, were negligent in hiring, training, and/or supervising employees. However, as set forth above, the FAC is devoid of factual allegations showing that an officer, director, or managing agent of Defendant, in particular, had advanced knowledge of the unfitness of Defendant's employees and either authorized or ratified such conduct and is devoid of specific factual allegations sufficient to state a claim for punitive damages against Defendant.

Accordingly, the court grants the motion to strike with leave to amend as Plaintiffs have demonstrated a reasonable possibility that the foregoing deficiencies can be cured by amendment. See Grieves v. Sup.

Ct. (1984) 157 Cal. App. 3d 159, 168.

Plaintiffs' Request for Prejudgment Interest Defendant also moves to strike Plaintiffs' prayer for prejudgment interest, which prayer is made in connection with the first, second, third, fourth, fifth, sixth, and seventh causes of action. Defendant is correct that a motion to strike may be used to strike improper damage claims in the prayer or otherwise, such as an unauthorized claim for attorney's fees or prejudgment interest. See Agricultural Ins. Co. v. Sup. Ct. (1999) 70 Cal. App. 4th 385, 396. However, the court finds that Defendant's request to strike Plaintiffs' prayer for prejudgment interest, at best, is premature given that it is presently unknown whether Plaintiffs will prevail at trial on claims or damages that allow for the recovery of prejudgment interest. Moreover, the court is not required to strike the prayer for prejudgment interest before Plaintiffs have had a full opportunity, through discovery, to determine whether, and to what extent, a basis for such recovery exists. See, e.g., Camenisch v. Sup. Ct. (1996) 44 Cal. App. 4th 1689, 1699. Defendant is correct that CC § 3287(a) requires damages which are certain or capable of being made certain by calculation. See Cal. Civ. Code § 3287(a); American Federation of Labor v. Unemployment Ins. Appeals Bd. (1996) 13 Cal. 4th 1017, 1022. However, there is no evidence that will be the case by the time this matter goes to trial. Plaintiffs already have pled certain damages that are ascertainable, including repair and replacement costs for personal property. As to much of Plaintiffs' remaining damages, there plainly is a dispute between the parties concerning liability. Damages are not unascertainable simply because there is a dispute over liability or uncertainty concerning the damages measure. See Olson v. Cory (1983) 35 Cal. 3d 390, 402; Uzyel v. Kadisha (2010) 188 Cal. App. 4th 866, 919.

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3067517 CASE NUMBER: CASE TITLE:  ALVARADO VS QUIET OAKS MANUFACTURED HOUSING  37-2023-00034994-CU-BC-NC Accordingly, the court denies Defendant's motion to strike prejudgment interest.

In light of the foregoing, the court: (1) grants Defendant's motion to strike punitive damages with leave to amend, and (2) denies Defendant's motion to strike prejudgment interest. Plaintiffs shall file and serve a second amended complaint, if they choose to file such a pleading, within ten (10) days of this hearing.

See Cal. R. Ct. 3.1320(g).

This is the tentative ruling for the hearing at 1:30 p.m. on Friday, April 5, 2024. If no party appears at the hearing, this tentative ruling will become the order of the court as of April 5, 2024. 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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