Judge: David A. Hoffer, Case: 30-02022-01271355, Date: 2023-07-31 Tentative Ruling

The Motion by Starbucks Corporation to Strike Paragraphs 21, 24 and Item 2 of the Prayer from plaintiff Gary Sauter’s First Amended Complaint is GRANTED without leave to amend.

In this action, it is alleged that Sauter owns two adjacent commercial properties, one of which was leased to Starbucks from approximately 1995-2020. During its tenancy, Starbucks Corporation installed, and presumably maintained, a grease trap that was on the property adjacent to the one it leased. Plaintiff alleges that when Starbuck’s lease ended, an unidentified Starbucks employee improperly went on the adjacent property and removed the “grease trap.” Plaintiff alleges this was a violation of the lease which only allowed removal of fixtures/equipment Starbucks installed on the leased premises. Based on these facts, plaintiff alleges breach of contract, trespass and conversion. In paragraphs 21 and 24 of the trespass and conversion causes of action, respectively, plaintiff alleges the acts were “willful, malicious and fraudulent” and seeks punitive damages.

At the pleading stage, the complaint must allege facts supporting circumstances of oppression, fraud, or malice. (See Grieves v. Superior Court (1984) 157 Cal.App.3d 159, 166 - “The mere allegation an intentional tort was committed is not sufficient to warrant an award of punitive damages. [Citation] Not only must there be circumstances of oppression, fraud or malice, but facts must be alleged in the pleading to support such a claim. [Citation].”). “Malice” is defined as 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. Civ. Code § 3294(c)(1). “Oppression” is defined as despicable conduct that subjects a person to cruel and unjust hardship in conscious disregard of that person’s rights. Civ. Code § 3294(c)(2). “Fraud” is defined as 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. Civ. Code § 3294(c)(3).

Here, plaintiff has not alleged any wrongful motive or purpose on the part of the defendant in removing the grease trap at the conclusion of its tenancy. “There is no allegation that defendants intentionally, as opposed to negligently or mistakenly, disregarded plaintiff's right to possession. … No wrongful motive or purpose is stated in the complaint.” (Cyrus v. Haveson (1976) 65 Cal.App.3d 306, 317) The allegations in the FAC suggest that the defendant was at most mistaken when it removed its grease trap at the conclusion of the lease. The defendant may also have been mistaken as to whether it was required to obtain written approval prior to removing the grease trap. (FAC at ¶7).

However, what plaintiff has not alleged are facts showing that the defendant had a malicious intent. In order to survive a motion to strike punitive damages, the Plaintiff must plead ultimate facts to show it is entitled to such relief. (Grieves v. Superior Court (1984) 157 Cal.App.3d 159, 166.) While Plaintiff may have alleged the intentional torts of trespass and conversion, that is not enough. Plaintiff has not alleged specific facts showing malice, oppression, or fraud.

In addition, plaintiff has failed to allege sufficient facts to pursue punitive damages against a corporate defendant. A corporate defendant may not be liable for punitive damages based on the acts of its employees unless the plaintiff alleges and proves that an officer, director or managing agent of the corporation: (1) was personally guilty of oppression, fraud or malice; or (2) had advance knowledge of, authorized, or ratified the wrongful conduct for which the damages are awarded. (Civ. Code § 3294(b).) “The term “managing agent” includes “only those corporate employees who exercise substantial independent authority and judgment in their corporate decision making so that their decisions ultimately determine corporate policy.” (White v. Ultramar, Inc. (1999) 21 Cal.4th 563, 566-567.)

To support a ratification argument, Plaintiff names Starbucks employees Haislip, Dacus, Persiani, Stuckey and Swarthout, and their respective titles, as various employees the plaintiff engaged with after the removal of the grease trap.  While the FAC alleges that Plaintiff was advised by another Starbuck’s employee, Persiani, that Dacus (Asset Manager) and Haislip (Transaction Manager) were responsible for the relevant decisions relative to the removal and taking of the grease trap from the garage abutting the 226 Marine store, there are no facts showing that Dacus or Hailslip were managing agents. There are no facts alleged regarding their discretionary powers. Plaintiff’s assertion that Hailslip or others denied liability “on Starbucks’ behalf” is a mere conclusion.

Accordingly, the Motion to Strike is granted.  Furthermore, as the court previously granted leave to amend and as the plaintiff provides no basis to believe an amendment could cure the defect, the court declines to grant further leave to amend at this time.  Nealy v. County of Orange (2020) 54 Cal.App.5^th 594, 600 (“To determine whether the trial court should, in sustaining the demurrer, have granted plaintiff leave to amend, we consider whether on the pleaded and noticeable facts there is a reasonable possibility of an amendment that would cure the complaint's legal defect or defects . . . .The burden of proving such reasonable possibility is squarely on the plaintiff”) (citation omitted). 

Defendant is ordered to give notice of this ruling.