Judge: Douglas W. Stern, Case: 22STCV04178, Date: 2022-12-06 Tentative Ruling
Case Number: 22STCV04178 Hearing Date: December 6, 2022 Dept: 68
Vanessa Moriel, et al. vs. State Farm General Insurance
Company, Case No. 22STCV04178
MOVING PARTIES: Defendants State Farm General Insurance
Company and Trish Bowe (Defendants)
RESPONDING PARTY: (1)/(2)
Vanessa Moriel, Nicolai Weist, and MPAC, LLC
MOTION: (1) Demurrer
to Second Amended Complaint
(2) Motion to Strike
BACKGROUND
Plaintiffs’ Second Amended Complaint alleges four causes of
action against Defendants. They are (1)
breach of contract; (2) breach of covenant of good faith and fair dealing; (3)
fraud – intentional misrepresentation; and (4) fraud – negligent
misrepresentation. The causes of action arise out the alleged failure of
Defendants to honor the Plaintiffs’ homeowners’ policy after Plaintiffs’
sustained losses during the Woolsey Fire in 2018.
This action was originally filed by Plaintiffs on February 2,
2022. Plaintiffs filed their Second Amended Complaint, which is the current
version of the complaint, on August 30, 2022. Defendants filed the Demurrer
with Motion to Strike that is now before the Court on September 29, 2022.
Plaintiffs filed their opposition on November 18, 2022. Defendants filed their
reply on November 29, 2022.
II. MOVING PARTIES’ GROUNDS FOR THE DEMURRER
Defendants demur to the causes of action for fraud – intentional misrepresentation and fraud – negligent misrepresentation in Plaintiffs’ Second Amended Complaint on the basis that they fail to state facts sufficient to constitute a cause of action.
ANALYSIS
A. The Demurrer
As a general matter, 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 pleading
alone, and not the evidence or facts alleged.” (E-Fab, Inc. v. Accountants,
Inc. Servs. (2007) 153 Cal.App.4th 1308, 1315.) As such, the court assumes
the truth of the complaint’s properly pleaded or implied factual allegations. (Id.) The only issue a demurrer is
concerned with is whether the complaint, as it stands, states a cause of
action. (Hahn v. Mirda (2007) 147 Cal.App.4th 740, 747.)
Where a demurrer is sustained, leave to amend must be
allowed where there is a reasonable possibility of successful amendment. (Goodman v. Kennedy (1976) 18 Cal.3d 335,
348.) The burden is on the plaintiff to show the court that a pleading can be
amended successfully. (Id.;
Lewis v. YouTube, LLC (2015) 244 Cal.App.4th 118, 226.) However, “[i]f
there is any reasonable possibility that the plaintiff can state a good cause
of action, it is error to sustain a demurrer without leave to amend.” (Youngman v. Nevada Irrigation Dist.
(1969) 70 Cal.2d 240, 245).
1. Third Cause of
Action for Fraud – Intentional Misrepresentation
Defendants demur to the cause of
action for fraud – intentional misrepresentation on the basis that Plaintiffs
do not plead sufficient facts to constitute a cause of action for this claim.
All elements of a fraud cause of
action must be specifically and factually alleged so that a defendant can fully
understand the nature of the charge. (Roberts v. Ball, Hunt, Brown &
Baerwitz (1976) 57 Cal.App.3d 104, 109.) A fraud cause of action requires
allegations of: (1) a representation of a material fact; (2) the representation
must have been false; (3) the defendant must have known that the representation
was false or must have made the representation recklessly without knowing
whether it was true; (4) the defendant must have had the intent to defraud; (5)
plaintiff must have been unaware of the falsity of the representation and acted
in reliance upon the representation; and (6) plaintiff’s reliance upon the
representation must have damaged plaintiff. (See, Handel v. U.S. Fid. &
Guar. Co. (1987) 192 Cal.App.3d 684, 693-94.)
The policy of liberal
construction of pleadings does not apply to a fraud claim and a plaintiff must
“show how, when, where, to whom, and by what means the representations were
tendered. [Citation.]” (Stansfield v. Starkey (1990) 220 Cal.App.3d 59,
73.) This requirement is even stricter when an action involves a corporation.
In that situation, a plaintiff must allege, “the names of the person who made
the allegedly fraudulent representations, their authority to speak, to whom
they spoke, what they said or wrote, and when it was said or written.” (Tarmann
v. State Farm Mutual Auto. Ins. Co. (1991) 2 Cal.App.4th 153, 157.)
Plaintiffs have failed to plead
how, when, where, to whom, and by what means the misrepresentations were
tendered. Plaintiffs claim that representations were made, but they fail to
plead facts sufficient to show the context of these alleged misrepresentations.
Additionally, Plaintiffs fail to plead facts sufficient to show that Defendants
had the requisite intent required to maintain a claim for fraud – intentional
misrepresentation. It is also unclear
how Plaintiff relied upon the claimed representations which are alleged to have
been false.
Accordingly, Defendants’
demurrer as to the cause of action for fraud – intentional misrepresentation is
SUSTAINED with leave to amend.
2. Fourth
Cause of Action for Fraud – Negligent Misrepresentation
Defendants demur to the cause of
action for fraud – negligent misrepresentation on the basis that Plaintiffs do
not plead sufficient facts to constitute a cause of action for this claim.
To state a claim for negligent
misrepresentation, a plaintiff must plead facts showing: (1) misrepresentation
of a material fact, while ignorant of the truth, but without reasonable ground
for believing it to be true; (2) made with the intent to induce reliance on the
fact misrepresented; (3) justifiable reliance on the misrepresentation; and (4)
resulting damage. (Hasso v. Hapke (2014) 227 Cal.App.4th 107, 127.)
The misrepresentations that Plaintiffs are alleging occurred after the
purchase of the policy. Defendants argue that this alone would nullify the
cause of action because Plaintiffs failed to show that the justifiable reliance
element was met. This Court agrees. Plaintiff have not alleged that they
justifiably relied on representations made by State Farm or its agents to their
detriment. It appears that Plaintiffs are trying to plead the misrepresentation
causes of action as another form of a breach of contract claim. As such, they
cannot maintain a cause of action for negligent misrepresentation.
Accordingly,
Defendants’ demurrer as to the cause of action for fraud – negligent
misrepresentation is SUSTAINED with leave to amend.
B. The Motion to
Strike
The court may, upon a motion, or at any time in its
discretion, and upon terms it deems proper, strike any irrelevant, false, or
improper matter inserted in any pleading. (Code Civ. Proc., § 436(a).) The
court may also strike 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(b).) The grounds for a
motion to strike are that the pleading has irrelevant, false, or improper
matter, or has not been drawn or filed in conformity with laws. (Id. § 436.) The grounds for moving to
strike must appear on the face of the pleading or by way of judicial notice. (Id. § 437.)
1. Punitive Damages
Defendants request that the Court strike Plaintiff’s
requests for punitive damages (Paragraphs 33, 34, 39, and Paragraph 4 of the
Prayer) and references to maliciousness and oppression (Paragraph 31, page 8,
lines 11-12) from the Second Amended Complaint.
Punitive damages are only awarded in a narrow set of
circumstances where a defendant intends to cause harm. (Woolstrum v. Mailoux
(1983) 141 Cal.App.3d Supp. 1, 10 [quoting Nolin v. National Convenience
Stores, Inc. (1979) 95 Cal.App.3d 279, 286].) Thus, a claim for punitive
damages can be stricken if it fails to provide facts sufficient to support
allegations of intent. (Turman v. Turning Point of Cent. Cal., Inc.
(2010) 191 Cal.App.4th 53, 63.) Punitive damages claims are typically improper
in a negligence claim because negligence is, by its very definition,
unintentional. (Woolstrum, supra, 141 Cal.App.3d Supp. at p. 10 (quoting
Prosser, Law of Torts (4th ed. 1971) p. 9).)
To sufficiently plead a claim for punitive damages pursuant
to Civil Code §3294, a plaintiff must satisfy circumstances of "malice,
oppression, or fraud," supported by facts alleged with sufficient
particularity. (G.D. Searle & Co. v. Superior Court (1975) 49
Cal.App.3d 22, 29.) These allegations are held to a heightened pleading
standard: a plaintiff may not state a mere conclusion of law to support a cause
of action. (Perkins v. Sup. Ct. (1981) 117 Cal.App.3d 1, 6.) More
importantly, the plaintiff may not simply "plead . . . a claim for damages
in the language authorizing such damages." (Id.) While some
conclusory statements may be permitted, they must make sense in the context of
the Complaint taken as a whole. (Id.)
Additionally, when it is an employer being sued for the
alleged acts of an employee, the following applies when determining if punitive
damages may be sought:
“An 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 of oppression, fraud, or malice must be on the part of an
officer, director, or managing agent of the corporation.” (Civ. Code §
3294(b).)
Here, Plaintiff has not pleaded facts sufficient to show
that Defendants intended to cause harm or alleged facts with sufficient
particularity to show that there was malice, oppression, or fraud on the part
of Defendants. Additionally, State Farm is a corporate Defendant, and Plaintiff
has not pled sufficient facts showing that an officer, director, or managing
agent of State Farm intended the fraud.
Accordingly, the references to punitive damages in
Plaintiffs’ Second Amended Complaint shall be stricken. Defendants’ motion to
strike as to the punitive damages is GRANTED with leave to amend.
2. General Request for Attorneys’ Fees
Defendants
request that the Court strike Plaintiffs’ requests for attorneys’ fees
(Paragraph 27, page 5, line 11; Paragraphs 38 and 45; and Paragraph 3 of the
Prayer) from the Second Amended Complaint.
Code of
Civil Procedure Section 1021 provides, “[e]xcept as attorneys fees are
specifically provided for by a statute, the measure and mode of compensation of
attorneys and counselors is left to the agreement express or implied, of the
parties.”
Here,
Plaintiffs have not indicated in their Second Amended Complaint what the
statutory or contractual authority is that would allow them to request
attorneys’ fees. As such, Plaintiffs cannot maintain a request for attorneys’
fees.
Accordingly,
Defendants’ motion to strike the requests for attorneys’ fees from Plaintiffs’
Second Amended Complaint is GRANTED with leave to amend.
3. Prejudgment Interest
Defendants
request that the Court strike Plaintiffs’ requests for prejudgment interest
(Paragraph 2 of the Prayer) from the Second Amended Complaint.
Civil
Code section 3287(a) states in relevant part that:
Every
person who is entitled to recover damages certain, or capable of being made
certain by calculation, and the right to recover which is vested in him upon a
particular day, is entitled also to recover interest thereon from that day...
As
further construed by case law, it is imperative to distinguish the difference
between legal uncertainty and factual uncertainty. Where there is legal uncertainty,
prejudgment interest is available. (Oil Base, Inc. v. Transport Indem. Co.
(1957) 148 Cal.App.2d 490, 492.) In an instance of factual uncertainty, a
defendant will not be liable for prejudgment interest if the essential facts
are in dispute between the parties. (Highlands Ins. Co. v. Continental Cas.
Co. (9th Cir. 1995) 64 F.3d 514, 521 (applying California Civil Code
section 3287(a)).) In Highland Ins. Co., the Ninth Circuit Court of
Appeals held that prejudgment interest was not justified because as a matter of
law, Civil Code section 3287(a) does not authorize such interest when damages
depend upon a judicial determination based upon conflicting evidence. (Highlands
Ins. Co. v. Continental Cas. Co., supra at p. 521; see also Duale v.
Mercedes-Benz USA, LLC (2007) 148 Cal.App.4th 718 (“where the amount of
damages cannot be resolved except by verdict or judgment, prejudgment interest
is not appropriate [citation]” [italics omitted]).)
The
amount of damages that Defendants would owe to Plaintiffs is a factual
uncertainty, and it could only be determined by verdict or judgment. As such,
prejudgment interest would not be appropriate in this situation.
Accordingly,
Defendants’ motion to strike the request for prejudgment interest from
Plaintiffs’ Second Amended Complaint is GRANTED with leave to amend.
4. General Damages
Plaintiffs
have agreed to remove their request for general damages (Paragraph 27, page 5,
lines 10 to 12) from the Second Amended Complaint. As such, it is not necessary
for the Court to address this part of the motion to strike.
The demurrer is sustained with 20
days leave to amend. The Motion to Strike
with 20 days leave to amend.