Judge: Daniel S. Murphy, Case: 23STCV16789, Date: 2023-10-06 Tentative Ruling

Case Number: 23STCV16789    Hearing Date: January 5, 2024    Dept: 32

BACKGROUND

            On July 18, 2023, Plaintiffs Siedah Garrett and Erik Nuri filed this action against Defendants Advance Home Improvement, Inc., Moorpark USA, LLC, and Amnon Edri. The complaint asserts causes of action for (1) breach of contract, (2) breach of statutory standards in construction, (3) negligence, (4) breach of subcontracts, (5) intentional misrepresentation, (6) fraudulent concealment, and (7) negligent misrepresentation.

            On October 6, 2023, the Court partially sustained a demurrer to the complaint, giving Plaintiffs leave to amend their claims for intentional and negligent misrepresentation. On October 26, 2023, Plaintiffs filed the operative First Amended Complaint, asserting the same seven causes of action.   

            Plaintiffs own and resided in the subject property located in Los Angeles before they were allegedly displaced by construction defects. Plaintiffs bring this action against the developer (Advance Home Improvement, Inc.), seller (Moorpark USA, LLC), and CEO of the developer (Amnon Edri). Plaintiffs allege that they entered into a Residential Purchase Agreement (RPA) with Seller on May 4, 2016. Under the RPA, Seller was required to disclose all material defects with the property. Seller also represented in a New Construction Property Disclosure Statement (NCDS) that the property has been designed to properly accommodate water runoff and that construction will occur in conformance with specifications. Plaintiffs allege that after taking possession, they discovered various defects, including water intrusion, faulty plumbing, loose tiles, malfunctioning windows, poorly installed shelving, dangerous electrical installations, and poor waterproofing.

            Plaintiffs allege that they notified Seller and Developer of the defects but that Defendants responded with ineffective repairs and failed to identify the cause of the water intrusion. Defendants allegedly failed to make the proper repairs despite making assurances and caused more damage in the process. Defendants allegedly represented orally and in writing that they would make all of the necessary repairs. Plaintiffs allege that they reasonably relied on Defendants’ representations and delayed pursuing legal remedies.

            On November 27, 2023, Defendants Advance Home Improvement, Inc. and Amnon Edri (Developer and its CEO) filed the instant motion to strike punitive damages in the FAC. Plaintiffs filed their opposition on December 21, 2023.

LEGAL STANDARD

Any party, within the time allowed to respond to a pleading, may serve and file a notice of motion to strike the whole or any part of that pleading. (Code Civ. Proc., § 435, subd. (b).) The court may, upon a motion, or at any time in its discretion, and upon terms it deems proper, strike (1) any irrelevant, false, or improper matter inserted in any pleading and (2) 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. (Id., § 436.) The grounds for moving to strike must appear on the face of the pleading or by way of judicial notice. (Id., § 437.)

MEET AND CONFER

Before filing a demurrer or a motion to strike, the demurring or moving party is required to meet and confer with the party who filed the pleading demurred to or the pleading that is subject to the motion to strike for the purposes of determining whether an agreement can be reached through a filing of an amended pleading that would resolve the objections to be raised in the demurrer. (Code Civ. Proc., §§ 430.41, 435.5.) The Court notes that Defendants have complied with the meet and confer requirement. (See Hampton Decl.)

DISCUSSION

“In 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, the plaintiff, in addition to the actual damages, may recover damages for the sake of example and by way of punishing the defendant.” (Civ. Code, § 3294, subd. (a).) “‘Malice’ 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.” (Id., subd. (c)(1).) “‘Oppression’ means despicable conduct that subjects a person to cruel and unjust hardship in conscious disregard of that person’s rights.” (Id., subd. (c)(2).) Fraud is “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.” (Id., subd. (c)(3).)

Defendants seek to strike the punitive damage allegations pertaining to the fifth and sixth causes of action for intentional misrepresentation and fraudulent concealment. (Mtn. 2:13-25.) Defendants argue that the complaint contains no facts demonstrating malice. However, fraud is an independent basis for punitive damages. (See Civ. Code, § 3294(c)(3).) In fact, the Court held in the prior demurrer that the fraudulent concealment allegations were sufficient to support punitive damages. (October 6, 2023 Order re Demurrer 8:5-9.) Defendants do not challenge the sufficiency of the intentional misrepresentation claim, which also supports punitive damages.   

CONCLUSION

            Defendants’ motion to strike is DENIED.