Judge: Douglas W. Stern, Case: 22STCV11454, Date: 2022-12-06 Tentative Ruling
Case Number: 22STCV11454 Hearing Date: December 6, 2022 Dept: 68
Matthew S. Garza vs. Certain Underwriters at Lloyd’s of
London Subscribing to the Subject Policy, et al., Case No. 22STCV11454
MOVING PARTY: Cross-Defendant Paradigm – Gilbert
Insurance Group, LLC
RESPONDING PARTY: Cross-Complainant Certain Underwriters
at Lloyd’s of London
MOTION: Motion to Strike
BACKGROUND
Factual
Cross-Complainant and Cross-Defendant were
sued by Plaintiff Garza for breach of contract, breach of implied duty of good
faith and fair and dealing, and other causes of action arising out of the
denial of Plaintiff Garza’s permanent sports disability claim. Subsequently,
Cross-Complainant filed this action against Cross-Defendant for four causes of
action: fraud, negligence, negligent misrepresentation, and comparative
fault/contribution. Cross-Complainant is alleging that Cross-Defendant is
responsible, or at least partially responsible, for the events that led to the
denial of Plaintiff Garza’s claims, including the submission of false
statements on Plaintiff Garza’s Application Form. Two forms of relief that
Cross-Complainant is seeking are punitive damages and attorney’s fees.
Procedural
This action was filed by Plaintiff Garza on July 1, 2021.
Cross-Complainant filed its original Cross-Complaint on April 5, 2022. After a
prior successful motion to strike was filed by Cross-Defendant,
Cross-Complainant filed its First Amended Cross-Complaint on August 15, 2022. At
the prior hearing on the first motion to strike, this Court indicated to
Cross-Complainant that if certain amendments regarding its requests for
punitive damages and attorney’s fees were made to its Cross-Complaint, then it
could survive a motion to strike. (Opposition at p. 2.) Cross-Defendant filed the
Motion to Strike that is now before the Court on September 21, 2022. Cross-Complainant
filed its opposition on November 21, 2022. Cross-Defendant filed its reply on
November 29, 2022.
Judicial
Notice
Cross-Defendant requests that the
Court take judicial notice of its Certificate of Filing, filed with the Texas
Secretary of State. The Court grants this request.
MOVING
PARTY’S GROUNDS
FOR THE MOTION TO STRIKE
Cross-Defendant
requests that certain references to punitive damages and requests for
attorney’s fees be stricken from the Cross-Complaint.
ANALYSIS
The Motion
to Strike
The Code of Civil Procedure Section 435(b)(1) provides
that “[a]ny 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....” 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
Cross-Defendant requests that the Court strike Cross-Complainant’s
request for punitive damages (Paragraph 23; Count I, Paragraph 31; and Prayer
on all causes of action, p. 12, line 23) from the Cross-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).)
Cross-Complainant has pleaded facts that Mr. Gilbert, a
managing agent for a predecessor in interest of Cross-Defendant, may have
committed fraudulent acts. A motion to strike is not the proper time to assess
the veracity of these claims; the Court must only assess whether sufficient
facts have been pled to support a claim for punitive damages. Cross-Complainant
has pled sufficient facts in this instance to support a claim for punitive damages.
Accordingly, the references to punitive damages in Cross-Complainant’s
Cross-Complaint shall not be stricken from the Cross-Complaint. Cross-Defendant’s
motion to strike as to the references to punitive damages is DENIED.
2. Attorney’s Fees
Cross-Defendant requests that the Court strike all
references and requests for attorney’s fees (Paragraph 22; Count I Paragraph
30; Count II, Paragraph 35; Count III, Paragraph 40; Count IV, Paragraph 43;
and Prayer on all causes of action, p. 12, line 20) from Cross-Complainant’s
Cross-Complaint.
When authorized by contract, statute or law, reasonable
attorney fees are “allowable costs.” (CCP § 1033.5(a)(10).) “Costs” can include
items allowable as “attorneys’ fees” as a prevailing party, if allowable by statute
or contract. (Heritage Engineering Const., Inc. v. City of Industry
(1998) 65 Cal.App.4th 1435, 1441-1442.)
Prentice v. North Amer. Title Guaranty Corp. (1963)
59 Cal.2d 618 gave birth to the “tort-of-another” doctrine in stating “A person
who through the tort of another has been required to act in the protection of
his interests by bringing or defending an action against a third person is
entitled to recover compensation for the reasonably necessary loss of time,
attorney’s fees, and other expenditures thereby suffered or incurred.” (Prentice,
59 Cal.2d at p. 620.)
Cross-Complainant has brought an action against
Cross-Defendant because Cross-Complainant is being sued by Plaintiff Garza.
Cross-Complainant alleges that it brought this action against Cross-Defendant
to protect its interests. Under the tort-of-another doctrine, it appears that,
should Cross-Complainant be successful in its crossclaim against
Cross-Defendant, then Cross-Complainant would be able to recover attorney’s
fees from Cross-Defendant.
Accordingly, Cross-Defendant’s motion to strike
references and requests for attorney’s fees from the Cross-Complaint is DENIED.