Judge: David A. Rosen, Case: 23GDCV00055, Date: 2023-08-18 Tentative Ruling
Case Number: 23GDCV00055 Hearing Date: August 18, 2023 Dept: E
Case No: 23GDCV00055
Hearing Date: 08/18/2023 – 10:00am
Trial Date: Unset
Case Name: VAHAN DER GRIGORIAN v. BENY SARKSIAN;
E CHE PIZZA & PASTA & More LLC; and DOES 1-20
TENTATIVE RULING ON
DEMURRER AND MOTION TO STRIKE
Moving
Party: Defendant, Beny Sarksian
Responding Party: Plaintiff, Vahan Der Grigorian
Proof of Service Timely Filed (CRC Rule
3.1300): Ok
16/21 Court Days Lapsed (CCP 1005(b)): Ok
Proper Address: Ok
Moving Papers: Demurrer; [There are two documents
filed titled “Declaration of Demurring or Moving Party Regarding Meet and
Confer.” However, neither of these two declarations have a proof of service.
Therefore, presumably, the declarations were not served on Plaintiff.]
Opposition Papers: Opposition
Reply: Reply
RELIEF REQUESTED
Pursuant to CCP §§430.10 and 430.30(a), Defendant, Beny Sarksian moves this
Court for an order sustaining the demurrer, generally and specially, to the [First
Amended] Complaint of Vahan Der Grigorian.
[On
the notice page, Defendant referred to the Complaint. However, this is likely
an error, as the Complaint was already demurred to. This is likely a demurrer
to the FAC. On page 4 of the Motion, Defendant states, “Plaintiff filed a first
Amended Complaint, to which Defendant Sarksian now demurs.” Therefore, this
Court will consider this a demurrer to the FAC and not the Complaint.]
[The
Court notes that moving Defendant indicates on his notice page that he is
demurring generally and specially to the [FAC]. However, as indicated on page 3
and pages 4-9, Defendant only appears to be demurring to the second, fourth,
and eighth causes of action. Page 3 indicates that Defendant is demurring to
the second and fourth causes of action on the basis of uncertainty and failure
to state facts sufficient to constitute a cause of action, and the eighth cause
of action on the basis of failure to state facts sufficient to constitute a
cause of action and no cognizable action for unjust enrichment.]
BACKGROUND
Plaintiff, Vahan Der
Grigorian, filed his Complaint against Defendants on 01/11/2023. The Complaint
alleged nine causes of action: (1) Damages for Breach
of Oral Agreement, (2) Damages for Breach of Written Agreement, (3) Damages for
Breach of Fiduciary Duty, (4) Damages for Fraud, (5) Damages for Fraud, (6)
Promissory Estoppel, (7) Accounting, (8) Damages for Unjust Enrichment, and (9)
Dissolution of Partnership.
On
April 21, 2023, this Court heard Defendant’s demurrer to the Complaint. The
Court sustained the demurrer to the first and second causes of action with
leave to amend. The Court sustained the demurrer to the fourth cause of action
with leave to amend. The Court overruled the demurrer to the fifth cause of
action. The Court sustained the demurrer to the sixth cause of action with
leave to amend. The Court sustained the demurrer to the eighth cause of action
with leave to amend. The Court sustained the demurrer to the ninth cause of
action with leave to amend.
On
May 5, 2023, Plaintiff filed a First Amended Complaint alleging the following nine
causes of action: (1) Damages for Breach of Oral Agreement, (2) Damages for
Breach of Written Agreement, (3) Damages for Breach of Fiduciary Duty, (4)
Damages for Fraud, (5) Damages for Fraud, (6) Promissory Estoppel, (7)
Accounting, (8) Damages for Unjust Enrichment, and (9) Dissolution of
Partnership.
The
first through sixth causes of action are alleged against Defendant Sarksian
ONLY. The seventh through ninth causes of action is alleged against all
Defendants.
This
case arises from a disagreement between Plaintiff and Defendants with respect
to an alleged restaurant business agreement.
PROCEDURAL
Meet
and Confer
A party filing a
demurrer “shall meet and confer in person or by telephone with the party who
filed the pleading that is subject to demurrer for the purpose of determining
whether an agreement can be reached that would resolve the objections to be
raised in the demurrer.” (Code Civ.
Proc., §430.41, subd. (a).) “The parties
shall meet and confer at least five days before the date the responsive
pleading is due. If the parties are not able to meet and confer at least five
days prior to the date the responsive pleading is due, the demurring party
shall be granted an automatic 30-day extension of time within which to file a
responsive pleading, by filing and serving, on or before the date on which a
demurrer would be due, a declaration stating under penalty of perjury that a
good faith attempt to meet and confer was made and explaining the reasons why
the parties could not meet and confer.”
(Code Civ. Proc., §430.41, subd. (a)(2).) Failure to sufficiently meet
and confer is not grounds to overrule or sustain a demurrer. (Id., §430.41(a)(4).)
Here,
the meet and confer requirement was met.
LEGAL STANDARDS FOR DEMURRERS
Demurrer
– Sufficiency
A demurrer for
sufficiency tests whether the complaint states a cause of action. (Hahn v. Mirda, (2007) 147 Cal.App.4th
740, 747.) When considering demurrers,
courts read the allegations liberally and in context. (Taylor v. City of Los Angeles Dept. of
Water and Power (2006) 144 Cal.App.4th 1216, 1228.) The court “treat[s] the demurrer as admitting
all material facts properly pleaded, but not contentions, deductions or
conclusions of fact or law ….” (Berkley
v. Dowds (2007) 152 Cal.App.4th 518, 525.)
In a demurrer proceeding, the defects must be apparent on the face of
the pleading or via proper judicial notice.
(Donabedian v. Mercury Ins. Co. (2004) 116 Cal.App.4th 968,
994.) A demurrer tests the pleadings
alone and not the evidence or other extrinsic matters; therefore, it lies only
where the defects appear on the face of the pleading or are judicially noticed. (Code Civ. Proc., §§ 430.30, 430.70.) The only issue involved in a demurrer hearing
is whether the complaint, as it stands, unconnected with extraneous matters,
states a cause of action. (Hahn, supra, 147 Cal.App.4th at
747.)
The
general rule is that the plaintiff need only allege ultimate facts, not evidentiary
facts. (Doe v. City of Los Angeles
(2007) 42 Cal.4th 531, 550.) “All that
is required of a plaintiff, as a matter of pleading … is that his complaint set
forth the essential facts of the case with reasonable precision and with
sufficient particularity to acquaint the defendant with the nature, source and
extent of his cause of action.” (Rannard
v. Lockheed Aircraft Corp. (1945) 26 Cal.2d 149, 156-157.)
On
demurrer, a trial court has an independent duty to “determine whether or not
the … complaint alleges facts sufficient to state a cause of action under any
legal theory.” (Das v. Bank of
America, N.A. (2010) 186 Cal.App.4th 727, 734.) “A demurrer does not lie to a portion of a
cause of action.” (PH II, Inc. v. Superior Court (1995) 33 Cal.App.4th
1680, 1682.) “Generally
it is an abuse of discretion to sustain a demurrer without leave to amend if
there is any reasonable possibility that the defect can be cured by
amendment.” (Goodman v. Kennedy
(1976) 18 Cal.3d 335, 349.)
Demurrer – Uncertainty
A special demurrer for uncertainty, CCP section 430.10(f), is disfavored
and will only be sustained where the pleading is so bad that defendant cannot
reasonably respond—i.e., cannot reasonably determine what issues must be
admitted or denied, or what counts or claims are directed against
him/her. (Khoury v. Maly’s of Calif., Inc. (1993) 14
Cal.App.4th 612, 616.) Moreover, even if the pleading is somewhat vague,
“ambiguities can be clarified under modern discovery procedures.” (Ibid.)
ANALYSIS
Second Cause of Action – Breach of Written Agreement
As a preliminary note, the allegations for breach of
written agreement start with Paragraph 32; however, the preceding allegations
in the FAC are not incorporated into the second cause of action.
Plaintiff alleges as follows in the FAC:
In or about
mid-2022, Plaintiff became aware that Defendant-Sarksian was taking funds,
generated by the parties’ joint business (the restaurant) for himself without
disbursing any funds to Plaintiff and without making the necessary payments to
creditors of the parties’ business including, but not limited to the landlord
of the restaurant premises, as well as sales taxes on the sales of the
business, in addition to not paying other creditors.
In July 2019,
Plaintiff and Defendant-Sarksian entered into a written contract,
Defendant-LLC’s operating agreement, for the operation of a restaurant business
which resulted in the creation of Defendant-LLC and creation and operation of
the restaurant business.
The terms of that
written agreement required the parties to mediate any dispute with reference to
Defendant-LLC and the parties’ restaurant business.
In December, 2022,
Defendant-Sarksian was asked to honor the terms of the parties’ written
agreement and cooperate in mediating the parties dispute, which was
specifically, Defendant-Sarksian’s failure to abide by the parties’ oral
agreement as it related to the maintenance and operation of the parties’ joint
business.
Defendant-Sarksian
has failed and refused to cooperate in mediating the parties’ dispute(s) as
required by Defendant-LLC’s operating agreement required.
Plaintiff has
performed all obligations required of it pursuant to the parties’ written
agreement.
As to any term of
the agreement which Plaintiff has not performed, he has been prevented
(including mediating and/or arbitrating this dispute before lawsuit was
required to be filed) from so performing pursuant to the actions of Defendants
and each of them.
As a proximate
result of Defendants’, and each of their, breach of the written contract with
Plaintiff has been required to engage the services of legal counsel and incur
the expense of this litigation.
As a further
proximate result of the actions of Defendants’ and each of their breach of
written agreement, as alleged herein, Plaintiff has been damaged in an amount
within the jurisdiction of this court, all according to proof at trial, all in
excess of $25, 000.00.
(FAC ¶¶32-40.)
Defendant
demurred to this cause of action on grounds of uncertainty and failure to state
facts sufficient to constitute a cause of action. Defendant argues that
Plaintiff did not attach a written copy of the contract, nor did Defendant set
out verbatim the terms of the contract. Defendant also argues that the breach
element suffers ambiguity. The Court notes that Defendant’s argument about the
difference between ¶36 and 38 of the FAC is unclear to the Court. Defendant
also argues that causation and damages were not alleged.
In Opposition,
Plaintiff argues that a material term of the contract required the parties to
mediate any dispute and that when asked to mediate, Defendant breached the
contract by refusing to do so. Plaintiff also states that Defendant has in its
possession the operating agreement of E. Che Pizza & Pasta & More LLC.
Discussion –
Breach of Written Agreement
To state a cause of action for breach of contract, Plaintiff
must allege “(1) the existence of the contract, (2) plaintiff’s performance or
excuse for nonperformance, (3) defendant’s breach, and (4) resulting damages to
the plaintiff.” (Oasis West Realty,
LLC v. Goldman (2011) 51 Cal.4th 811, 821.)
A cause of action for breach of contract is subject to demurrer if “it
cannot be ascertained from the pleading whether the contract is written, is
oral, or is implied by conduct.” (Code
Civ. Proc., §430.10(g).) A written contract must be pled verbatim in the body
of the complaint, be attached to the complaint and incorporated by reference,
or be pled according to its legal effect.
(Bowden v. Robinson (1977) 67 Cal.App.3d 705, 718.) An allegation of an oral agreement must
“set[] forth the substance of its relative terms.” (Gautier v. General Tel. Co. (1965)
234 Cal.App.2d 302, 305.)
“Facts alleging a breach, like all essential elements of a breach of
contract cause of action, must be pleaded with specificity. (See generally 4 *6
Witkin, Cal. Procedure (4th ed. 1996) Pleading, § 4495, pp. 585–586; Bentley v.
Mountain (1942) 51 Cal.App.2d 95, 98, 124 P.2d 91 [general averments that
defendants violated contract insufficient; pleader must allege facts
demonstrating breach]; Thompson v. Purdy (1931) 117 Cal.App. 565, 567, 4 P.2d
282, [general averments that defendant failed to perform duties or comply with
contract insufficient].)” (Levy v. State Farm Automobile Ins. Co. (2007) 150
Cal.App.4th 1, 5-6.)
TENTATIVE RULING – SECOND CAUSE OF ACTION-BREACH OF WRITTEN AGREEMENT
Here, Plaintiff did not attach the written
contract and incorporate it by reference. Further, as Defendant noted,
Plaintiff did not plead verbatim in the body of the complaint as to the written
agreement. Defendant does not mention that Plaintiff can also plead a contract
by its legal effect. However, here, it does not appear as if the contract is
pled according to its legal effect. Presumably, the written contract appears to
be the alleged operating agreement. However, Plaintiff does not plead the
substance of its relevant terms. “In order to plead a contract by its legal
effect, plaintiff must allege the substance of its relevant terms. This is more
difficult, for it requires a careful analysis of the instrument,
comprehensiveness in statement, and avoidance of legal conclusions.” (Heritage
Pacific Financial, LLC v. Monroy (2013) 215 Cal.App.4th 972, 993 citing McKell
v. Washington Mutual, Inc. (2006) 142 Cal.App.4th 1457, 1489.) Plaintiff did state that the written agreement
required the parties to mediate any dispute with reference to Defendant-LLC and
the parties’ restaurant business, and that Defendant failed to do so. This appears to the Court to be pleading the
legal effect. Further, in the opposition to the motion to strike, Plaintiff
attached the operating agreement. It’s unclear why Plaintiff didn’t attach it
here or even mention it in the opposition to the demurrer.
The Court further notes that the allegations in Paragraph 35 are
completely uncertain. Paragraph 35 says, “. In December, 2022,
Defendant-Sarksian was asked to honor the terms of the parties’ written
agreement and cooperate in mediating the parties dispute, which was specifically,
Defendant-Sarksian’s failure to abide by the parties’ oral agreement as it
related to the maintenance and operation of the parties’ joint business.”
Defendant’s argument that Plaintiff fails to allege damages resulting
from the alleged breach is persuasive.
Demurrer to the 2d C/A is sustained with 10 days leave to amend on the
grounds of uncertainty and failure to state sufficient facts constituting a
cause of action.
Fourth Cause of Action – Fraud – Intentional
Misrepresentation
Defendant argues that Plaintiff didn’t plead facts alleging
how, when where, to whom, and by what means the representations were tendered.
The Court notes it does not understand the argument that
Defendant is making with respect to there being a gap in the allegations of
what amounts to promissory fraud.
Opposition provides no substantive argument.
Legal Standard Fraud Intentional Misrepresentation
“ ‘The elements of fraud, which
gives rise to the tort action for deceit, are (a) misrepresentation (false representation,
concealment, or nondisclosure); (b) knowledge of falsity (or “scienter”); (c)
intent to defraud, i.e., to induce reliance; (d) justifiable reliance; and (e)
resulting damage.’ “ (Small v. Fritz Companies, Inc. (2003)
30Cal.4th 167, 173 citing Lazar v.
Superior Court (1996) 12 Cal.4th 631, 638.)
(1) Misrepresentation
Fraud must be pleaded with specificity rather than with
“‘general and conclusory allegations.’” (Small v. Fritz Companies, Inc.
(2003) 30 Cal.4th 167, 184.) The specificity requirement means a plaintiff must
allege facts showing how, when, where, to whom, and by what means the
representations were made, and, in the case of a corporate defendant, the
plaintiff must allege the names of the persons who made the representations,
their authority to speak on behalf of the corporation, to whom they spoke, what
they said or wrote, and when the representation was made. (Lazar v. Superior
Court (1996)12 Cal.4th 631, 645.)
Here, Defendant is not a corporate defendant; however,
Plaintiff still did not meet the specificity requirements of alleging facts
showing how, when, where, and by what means the representations were made.
The Court will not address the remaining elements of fraud,
as Plaintiff at the very least did not sufficiently plead the first element.
TENTATIVE RULING – FOURTH CAUSE OF ACTION – INTENTIONAL
MISREPRESETNATION
Defendant’s demurrer to the fourth cause of action is
sustained without leave to amend for failure to state facts sufficient to
constitute a cause of action.
EIGHTH CAUSE OF ACTION – UNJUST ENRICHMENT
Defendant
argues as follows:
"There is no
cause of action in California for unjust enrichment. Everett v. Mountains
Recreation & Conservancy Authority (2015) 239 Cal App 4th 541, 553, citing
Melchior v. New Line Productions, Inc. (2003) 106 Cal App 4th 779, 793.
"Unjust
enrichment is not a cause of action, however, or even a remedy, but rather a
general principle, underlying various legal doctrines and remedies . . . it is
synonymous with restitution." Rutherford Holdings, LLC v. Plaza Del Rey
(2014) 223 Cal App 4th 221, 231.
Because there is
no cognizable cause of action in California for unjust enrichment, and because
Plaintiff has elected not to morph its "unjust enrichment" claim into
pursuit of a breach of contract restitution remedy, the demurrer must be
sustained without leave to amend.
(Def. Mot. p.
8-9.)
Plaintiff argues
as follows:
An unjust
enrichment cause of action can co-exist with a breach of contract cause of
action. (Hernandez v. Lopez (2009) 180 Cal.App.4th 932, 939.)
Technically, there
may not be a “cause of action” for unjust enrichment, however, as such a
“claim” may be addressed at trial, even if a demurrer to the cause of action
has previously been sustained, a court may include such a claim through a jury
instruction. As such, it is Plaintiff’s position that the cause of action is
properly plead. (See American Master Lease LLC v. Idanta Partners Ltd. (2014)
225 Cal.App.4th 1451, 1469.)
The necessary
elements of a cause of action for unjust enrichment. The Plaintiff did satisfy
his burden as follows:
- Promise made by
Defendant (FAC ¶90) incorporating the previous allegations regarding the
promise made to induce action on the part of Plaintiff)
- The promise
induced Plaintiff to act as intended by Defendant (FAC ¶¶92-93)
- Injustice will
result if the promise is not enforced (FAC ¶98)
- Damage (FAC
¶100)
Overruling of the
demurrer to this cause of action is appropriate.
(Oppo. p. 3-4.)
TENTATIVE RULING
EIGHTH CAUSE OF ACTION – UNJUST ENRICHMENT
4-21-2023 Minute
Order
When appellate
decisions are in conflict on a point, the court exercising inferior
jurisdiction must choose between the conflicting decisions. (Auto Equity Sales,
Inc. v. Superior Court of Santa Clara County (1962) 57 Cal.2d 450, 456.)
“The elements of
an unjust enrichment claim are the receipt of a benefit and the unjust
retention of the benefit at the expense of another. (Peterson v. Cellco
Partnership (2008) 164 Cal.App.4th 1583, 1593.)
“There is no cause
of action in California for unjust enrichment.” (Everett v. Mountains
Recreation & Conservancy Auth. (2015) 239 Cal.App.4th 541, 553 citing
Melchior v. New Line Productions, Inc. (2003) 106 Cal.App.4th 779, 793.)
“Unjust enrichment is synonymous with restitution.” (Levine v. Blue Shield of
California (2010) 189 Cal.App.4th 189 Cal.App.4th 1117, 1138.)
In California,
there is no cause of action for unjust enrichment. (See Rutherford Holdings LLC
v. Plaza Del Rey (2014) 223 Cal.App.4th 221, 231; Levine v. Blue Shield of
California (2010) 189 Cal.App.4th 1117, 1138.) The Court notes that while
Plaintiff cites a case recognizing an unjust enrichment claim under California
law, the more recent cases of Rutherford Holdings and Levine have confirmed
that unjust enrichment is not a cause of action in California.? “Unjust
enrichment is not a cause of action, however, or even a remedy, but rather a
general principle, underlying various legal doctrines and remedies…it is
synonymous with restitution.” (Rutherford Holdings LLC v. Plaza Del Rey (2014)
223 Cal.App.4th 221, 231.)
“Under the law of
restitution, an individual is required to make restitution if he or she is
unjustly enriched at the expense of another. A person is enriched if the person
receives a benefit at another’s expense. However, the fact that one person
benefits another is not, by itself, sufficient to require restitution. The
person receiving the benefit is required to make restitution only if the
circumstances are such that, as between the two individuals, it is unjust for
the person to retain it.” (Durell v. Sharp Healthcare (2010) 183 Cal.App.4th
1350, 1370 citing McBride v. Boughton (2004) 123 Cal.App.4th 379, 388.)
“There are several
potential bases for a cause of action seeking restitution. For example,
restitution may be awarded in lieu of breach of contract damages when the
parties had an express contract, but it was procured by fraud or is
unenforceable or ineffective for some reason.” (McBride v. Boughton (2004) 123
Cal.App.4th 379, 388.) Thus, a party to an express contract can assert a claim
for restitution based on unjust enrichment by alleging in that cause of action
that the express contract is void or was rescinded. (Rutherford Holdings LLC v.
Plaza Del Rey (2014) 223 Cal.App.4th 221, 231 citing Lance Camper Manufacturing
Corp.v. Republic Indemnity Co. (1996) 44 Cal.App.4th 194, 203.)
Here, even if this
Court were to construe Plaintiff’s unjust enrichment cause of action as a
breach of contract claim seeking restitution, Plaintiff failed to statute
sufficient facts sufficient to constitute a cause of action for both of its
contract claims. Further, the Complaint did not allege that the express
contract was void or rescinded. Further, the Complaint did not seek
restitution.
“Alternatively,
restitution may be awarded where the defendant obtained a benefit from the
plaintiff by fraud, duress, conversion or similar conduct. In such cases, the
plaintiff may choose not to sue in tort, but instead to seek restitution on a
quasi-contract theory (an election referred to at common law as “waiving the
tort and suing in assumpsit”). In such cases, where appropriate, the law will
imply a contract (or rather, a quasi-contract), without regard to the parties’
intent, in order to avoid unjust enrichment.” (McBride v. Boughton (2004) 123
Cal.App.4th 379, 388.)
Here, Plaintiff
does not allege in the Complaint that it is alleging a cause of action based on
a quasi-contract theory, and the Plaintiff does not allege it is seeking
restitution.
The Demurrer to the 8th C/A is
sustained without leave to amend.
MOTION TO STRIKE
Moving Party: Defendant, Beny Sarksian
Responding Party: Plaintiff,
Vahan Der Grigorian
Proof of Service
Timely Filed (CRC Rule 3.1300): Ok
16/21 Court Days Lapsed (CCP 1005(b)): Ok
Proper Address: Ok
Moving Papers: Motion
to Strike; [There are two documents filed titled “Declaration of Demurring or
Moving Party Regarding Meet and Confer.” However, neither of these two
declarations have a proof of service. Therefore, presumably, the declarations
were not served on Plaintiff. The boxes for both “demurrer” and “motion to
strike” were marked in.]
Opposition Papers:
Opposition
Reply: No reply submitted
RELIEF REQUESTED:
Pursuant to CCP §435, et
seq., Defendant moves the Court for an order striking the following portions of
the FAC:
1.
Punitive damages are not awardable for negligent
misrepresentation.
2.
Attorney's fees are not awardable where an attorney's fees award
is no authorized by statute or provided for in a written contract.
Legal Standard – Motion to Strike
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 thereof. (CCP § 435(b)(1); Cal. Rules of Court,
Rule 3.1322(b).) The court may, upon a motion or at any time in its discretion
and upon terms it deems proper: (1) strike out any irrelevant, false, or
improper matter inserted in any pleading; or (2) strike out all or any part of
any pleading not drawn or filed in conformity with the laws of California, a
court rule, or an order of the court. (CCP §§ 436(a)-(b); Stafford v. Shultz
(1954) 42 Cal.2d 767, 782 [“Matter in a pleading which is not essential to the
claim is surplusage; probative facts are surplusage and may be stricken out or
disregarded”].)
The
grounds for moving to strike must appear on the face of the pleading or by way
of judicial notice. (Code. Civ. Proc. § 437; Turman v. Turning
Point of Central California, Inc. (2010) 191 Cal.App.4th 53, 63 [“judges
read allegations of a pleading subject to a motion to strike as a whole, all
parts in their context, and assume their truth”].)
Meet and Confer
“Before filing a motion
to strike pursuant to this chapter, the moving party shall meet and confer in
person or by telephone with the party who filed the pleading that is subject to
the motion to strike for the purpose of determining if an agreement can be
reached that resolves the objections to be raised in the motion to strike. If
an amended pleading is filed, the responding party shall meet and confer again
with the party who filed the amended pleading before filing a motion to strike
the amended pleading.” (CCP §435.5(a).)
“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.” (CCP §435.5(a)(4).)
Here,
the meet and confer requirement was met.
ARGUMENTS
Defendant argues that
this Court must strike Paragraph 76 of the Complaint and The Prayer No.2 in the
Fifth cause of action seeking punitive damages for negligent misrepresentation because
punitive damages are not recoverable for negligent misrepresentation.
Defendant
also argues that the prayer for the second cause of action for breach of
written contract, prayer no. 2 seeking the award of attorney’s fees should be
stricken because nowhere in the FAC is it alleged that there is a statute
authorizing the award of attorney’s fees or that there is a written contract
containing an attorney’s fees clause.
Opposition
argues as follows with respect to punitive damages for negligent
misrepresentation: “Even when "negligence" is the foundation of a cause of
action, punitive damages are awardable where the Defendant's conduct (as alleged
in the FAC) is of the type that disregards the interests of the Plaintiff
(Lancker v. North (2006) 135 Cal.App.4th 1188, 1200.)” (Pl. Oppo. p. 2.)
Opposition
argues as follows with respect to attorney’s fees: “§8, of the parties'
Operating Agreement, allows for an award of attorneys' fees. (Copy of agreement
attached hereto and made a part hereof by this reference as Exhibit 1.)”
Legal Standard – Attorney’s Fees
“Except as attorney’s
fees are specifically provided for by statute, the measure and mode of
compensation of attorneys and counselors at law is left to the agreement,
express or implied, of the parties; but parties to actions or proceedings are
entitled to their costs, as hereinafter provided.” (CCP §1021.) The following
items are allowable as costs under Section 1032: attorney’s fees, when
authorized by contract. (CCP §1033.5(a)(10)(A).) An award of costs shall be
subject to attorney’s fees awarded pursuant to Section 1717 of the Civil Code
are allowable as costs under Section 1031 as authorized by subparagraph (A) of
paragraph (10) of subdivision (a). (CCP §1033.5(c)(5)(B).)
“In
any action on a contract, where the contract specifically provides that
attorney’s fees and costs, which are incurred to enforce that contract, shall
be awarded either to one of the parties or to the prevailing party, then the
party who is determined to be the party prevailing on the contract, whether he
or she is the party specified in the contract or not, shall be entitled to
reasonable attorney’s fees in addition to other costs.” (CCP §1717(a).)
TENTATIVE RULING ATTORNEY FEES
Defendant’s motion to
strike Prayer No. 2 in the second cause
of action requesting attorneys’ fees is GRANTED. Plaintiff attached an
Operating Agreement to the opposition to the motion to strike. That agreement
was not attached to the FAC for Plaintiff’s second cause of action for breach
of written contract. Further, there are no allegations in the FAC in the second
cause of action about attorney fees.
Punitive
Damages
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 by way of punishing the defendant. (Cal. Civ. Code
§3294(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.” (CCP §3294(c)(1).)
“‘Oppression’ means despicable conduct that subjects a person to cruel and
unjust hardship in conscious disregard of that person’s rights. (CCP
§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. (CCP §3294(c)(3).)
“In order to survive a motion to strike
an allegation of punitive damages, the ultimate facts showing an entitlement to
such relief must be pled by a plaintiff.” (Clauson v. Superior Court
(1998) 67 Cal. App. 4th 1253, 1255.) Conclusory allegations, devoid of any
factual assertions, are insufficient to support a conclusion that parties acted
with oppression, fraud or malice. (Smith v. Sup. Ct. (1992) 10 Cal. App.
4th 1033, 1042.)
Further as stated in Monge v. Superior Court,
which helps explain the case law behind alleging punitive damages:
In determining
whether a complaint states facts sufficient to sustain punitive damages, the
challenged allegations must be read in context with the other facts alleged in
the complaint. Further, even though certain language pleads ultimate facts or
conclusions of law, such language when read in context with the facts alleged
as to defendants' conduct may adequately plead the evil motive requisite to
recovery of punitive damages. (Perkins v. Superior Court (1981) 117
Cal.App.3d 1, 6–7, 172 Cal.Rptr. 427.)
Perkins provides the
highly pertinent example of this standard in the context of a motion to strike
punitive damage allegations. There the complaint alleged that defendants
“wrongfully and intentionally” invaded plaintiff's privacy and terminated his
telephone service “in retaliation” for prior complaints lodged by plaintiff.
The complaint also generally alleged that defendants were guilty of
“oppression, fraud and malice.” Perkins read the complaint as a whole
and held that the alleged conclusions of fact or law considered in the context
of alleged wrongful conduct “in retaliation” pleaded an evil injurious motive sufficient
to establish malice and sustain a plea for punitive damages.
In G.D. Searle
& Co. v. Superior Court (1975) 49 Cal.App.3d 22, 27–32, 122 Cal.Rptr.
218, it was pointed out that there exists an uncertainty in the case law as to
just what terms adequately describe the necessary elements of “oppression,
fraud or malice” under Civil Code section 3294. Searle suggests that
different types of injurious conduct allow different formulations in pleading
oppression or malice, but that the critical element is an “evil motive” of the
defendant. (Id., at pp. 29–31, 122 Cal.Rptr. 218.)
The meanings of
“oppression” and “malice” with regard to Civil Code section 3294 are explained
in Richardson v. Employers Liab. Assur. Corp. (1972) 25 Cal.App.3d 232,
245–246, 102 Cal.Rptr. 547. “Malice” means a wrongful intent to vex or annoy.
“Oppression” means “subjecting a person to cruel and unjust hardship in
conscious disregard of his rights.” Malice and oppression may be inferred from
the circumstances of a defendant's conduct.
(Monge v.
Superior Court (1986) 176 Cal.App.3d 503, 510-11.)
TENTATIVE RULING PUNITIVE DAMAGES FOR
NEGLIGENT MISREPRESNETATION
Defendant cited Delos v. Farmer Insurance Group
(1979) 93 Cal App 3d 642, 656.
This case states as follows, “ Punitive damages
are not recoverable for negligent misrepresentation. (Tri-Delta Engineering,
Inc. v. Insurance Co. of North America (1978) 80
Cal.App.3d 752, 759 [146 Cal.Rptr. 14]; Ebaugh v.
Rabkin (1972) 22 Cal.App.3d 891, 894 [99 Cal.Rptr.
706].)” (Delos v. Farmers Group, Inc. (1979) 93 Cal.App.3d 642, 656.)
Plaintiff argued, “Even when "negligence" is
the foundation of a cause of action, punitive damages are awardable where the
Defendant's conduct (as alleged in the FAC) is of the type that disregards the
interests of the Plaintiff (Lancker v. North (2006) 135 Cal.App.4th 1188,
1200.)” (Pl. Oppo. p. 2.)
Our law states that, “[p]unitive damages are
recoverable in those fraud actions involving intentional, but not negligent,
misrepresentations. (Wyatt v. Union Mortgage Co. (1979) 24 Cal.3d 773, 790, 157
Cal.Rptr. 392, 598 P.2d 45; Branch v. Homefed Bank (1992) 6 Cal.App.4th 793,
799, 8 Cal.Rptr.2d 182 [no punitive damages recoverable for negligent
misrepresentation]; § 3294.)” (Alliance Mortgage Co. v. Rothwell (1995)
10 Cal.4th 1226, 1241.)
The Motion to Strike is granted. The Court strikes both ¶76 and prayer 2 in
the fifth cause of action asking for punitive damages from the FAC.