Judge: Donald F. Gaffney, Case: Kennedy v. Emanuel, Date: 2022-10-12 Tentative Ruling
TENTATIVE RULING:
Demurrer and Motion to Strike.
Cross-Defendants Drake Kennedy and Stephanie Kennedy demur and move to strike the punitive damages allegations in the First Amended Cross-Complaint (FACC) filed by Cross-Complainants Glenn Emanuel and Outdoor Associates, LLC. For the following reasons, the demurrer is SUSTAINED with leave to amend and the motion to strike is GRANTED with leave to amend.
1. Meet and Confer Requirement Satisfied
Counsel satisfied the obligation to meet and confer “in person or by telephone” with the party that filed the offending pleading. (Code Civ. Proc. §§ 430.41, 435.5; Palmer Dec.)
2. General Principles on a Demurrer
A demurrer presents an issue of law regarding the sufficiency of the allegations set forth in the complaint. (Lambert v. Carneghi (2008) 158 Cal.App.4th 1120, 1126.) The challenge is limited to the “four corners” of the pleading (which includes exhibits attached and incorporated therein) or from matters outside the pleading which are judicially noticeable under Evidence Code §§ 451 or 452. Although California courts take a liberal view of inartfully drawn complaints, it remains essential that a complaint set forth the actionable facts relied upon with sufficient precision to inform the defendant of what plaintiff is complaining, and what remedies are being sought. (Leek v. Cooper (2011) 194 Cal.App.4th 399, 413.)
On demurrer, a complaint must be liberally construed. (Code Civ. Proc., § 452; Stevens v. Superior Court (1999) 75 Cal.App.4th 594, 601.) All material facts properly pleaded, and reasonable inferences, must be accepted as true. (Aubry v. Tri-City Hospital Dist. (1992) 2 Cal.4th 962, 966-67.)
A pleading is adequate if it contains a reasonably precise statement of the ultimate facts, in ordinary and concise language, and with sufficient detail to acquaint a defendant with the nature, source and extent of the claim. The degree of detail required depends on the extent to which the defendant in fairness needs such detail which can be conveniently provided by the plaintiff. Less particularity is required when the defendant ought to have co-extensive or superior knowledge of the facts. Under normal circumstances, there is no need for specificity in pleading evidentiary facts. However, bare conclusions of law are insufficient. (Code Civ. Proc., §§ 425.10(a), 459; Doe v. City of Los Angeles (2007) 42 Cal.4th 531, 549-50; Zelig v. County of Los Angeles (2002) 27 Cal.4th 1112, 1126; Doheny Park Terrace HOA v. Truck Ins. Exchange (2005) 132 Cal.App.4th 1076, 1098-99; Berger v. California Insurance Guarantee Assn (2005) 128 Cal.App.4th 989, 1006.)
3. Merits of the Demurrer
Plaintiffs contend that the second cause of action for “Breach of Fiduciary Obligations and Duties, Statutory Duties and Duties of Care” in the First Amended Cross-Complaint (FACC) fails because it does not adequately allege that a partnership existed and thus, that the statutory fiduciary duties imposed upon partners by the Revised Uniform Partnership Act (Corporations Code § 16100, et seq.) apply to this matter.
Here, the FACC does not allege facts showing that a partnership existed between Cross-Complainants and Cross-Defendants. Instead, the FACC pleads that Cross-Defendants must discharge their partnership duties “[a]ssuming this Court finds a partnership exists between Cross-Complainants and Cross-Defendants.” (FACC, ¶ 73.) The demurrer is sustained with leave to amend for Plaintiff to allege that a partnership exists such that the accompanying partnership duties apply to the facts alleged in the FACC.
4. General Principles on a Motion to Strike
A court may strike out any irrelevant, false, or improper matter inserted in any pleading or 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. Code Civ. Proc. § 436. “Irrelevant” matters include: allegations not essential to the claim, allegations neither pertinent to nor supported by an otherwise sufficient claim or a demand for judgment requesting relief not supported by the allegations of the complaint. Code Civ. Proc. § 431.10(b). A motion to strike can also strike legal conclusions. Weil & Brown, Cal. Prac. Guide, Civil Proc. before Trial, ¶ 7:179 (2010). Conclusory allegations are permitted, however, if they are supported by other factual allegations in the complaint. Perkins v. Superior Court (1981) 117 Cal. App. 3d 1, 6.
Motions to strike are disfavored. Pleadings are to be construed liberally with a view to substantial justice. Cal. Code Civ. Proc. § 452; Weil & Brown, Cal. Prac. Guide, Civil Proc. before Trial, ¶ 7:197 (2010). The allegations of the complaint are presumed true; they are read as a whole and in context. Clauson v. Superior Court (1998) 67 Cal. App. 4th 1253, 1255.
A notice of motion to strike a portion of a pleading must quote in full the portions sought to be stricken except where the motion is to strike an entire paragraph, cause of action, count, or defense. Specifications in a notice must be numbered consecutively. (CRC Rule 3.1322(a).) Here, the notice of motion specifies the portions of the FACC it seeks to strike.
5. Merits of the Motion to Strike
a. Punitive Damages
Civil Code § 3294 provides that punitive damages may be awarded in an action for breach of an obligation not arising from contract, if the plaintiff proves by clear and convincing evidence that the defendant has been guilty of oppression, fraud, or malice. Civ. Code § 3294(c) provides the following definitions:
(1) "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.
(2) "Oppression" means despicable conduct that subjects a person to cruel and unjust hardship in conscious disregard of that person's rights.
(3) "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.
“Despicable conduct” is conduct that is so “vile, base, contemptible, miserable, wretched or loathsome that it would be looked down upon and despised by ordinary decent people.” Scott v. Phoenix Schools, Inc. (2009) 175 Cal. App. 4th 702, 715. Such conduct has been described as “having the character of outrage frequently associated with crime.” Ibid. Conduct carried on with a willful and conscious disregard of the rights or safety of others, but that is not “despicable,” will not support an award of punitive damages. College Hospital Inc. v. Superior Court (1994) 8 Cal. 4th 704, 725.
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].”).].”).
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 same liberal policy regarding amendments that applies to the sustaining of demurrers applies for motions to strike. If a defect may be correctible, leave to amend should usually be given. (Id. at 168.)
Here, the FACC’s punitive damages allegations are based on the second cause of action for breach of fiduciary/statutory duties. (FACC, ¶ 77 and prayer at ¶ 5.) Because the demurrer to the second cause of action is sustained, the motion to strike those punitive damages allegations is granted with leave to amend.
Should Cross-Defendants wish to file a Second Amended Cross-Complaint to address this ruling, they must file it by October 24, 2022.
Plaintiffs to give notice.