Judge: Douglas W. Stern, Case: 23STCV13831, Date: 2023-12-22 Tentative Ruling

Case Number: 23STCV13831    Hearing Date: December 22, 2023    Dept: 68

Betty Chen, et al. vs. V-Stream Aviation Corp., 23STCV13831

Moving Party: Defendant V-Stream Aviation Corp.

Responding Parties: Plaintiffs Betty Chen and Beckie Yue

Background

Plaintiffs Betty Chen and Beckie Yue (Plaintiffs) filed this action against Defendant V-Stream Aviation Corp. (Defendant) with three causes of action for (1) breach of contract, (2) conversion, and (3) intentional misrepresentation. As part of Plaintiffs’ First Amended Complaint, Plaintiffs have requested exemplary (punitive) damages and attorney fees for the Second and Third Causes of Action in their demand for judgment. Defendant filed this motion to strike in order to strike Plaintiffs’ requests for exemplary damages and attorney fees.

Plaintiff entered into a written contract with Defendant for a one-way private jet aircraft trip from Maui Hawaii to Van Nuys California, to be taken on April 15, 2022. The cost of the private jet was $47,600.  (Complaint ¶ 4.)  On April 8, 2022 Plaintiffs notified defendant by email that “we have to cancel the flight due to covid – 19 exposure.”  (Complaint ¶ 6.)  Plaintiffs claim that they were entitled to a refund under the terms of the written agreement.  Hence the breach of contract claim asserted in the first cause of action.

Plaintiffs make allegations regarding their communications after cancellation to receive either a voucher credit for a future flight or a refund of $47,600.  (Complaint ¶ 6.)  Ultimately, no refund or voucher was provided. However, there were various communications that plaintiffs contend give rise to a fraud cause of action.  (Complaint ¶ 6, 7, 8.)  One such claimed “misrepresentation” is that defendant responded to the request for a refund by stating “Eldad will contact you on Monday regarding the refund issue, you can contact him directly.”  (Complaint ¶ 6.)  But Eldad did not contact Plaintiffs.  (Complaint ¶ 8.)

Yet another claimed misrepresentation relates to the cancellation provisions in the contract and the claimed confusion created by those provisions.  (Complaint ¶ 7.)  Finally, Plaintiffs allege that they were promised a refund by defendant’s registered agent, but it was not provided.  (Complaint ¶ 8.)

Defendant argues in its motion that Plaintiffs cannot recover punitive damages because Plaintiffs have not alleged that Defendant acted with malice, fraud, or oppression. Defendant’s motion argues that Plaintiffs cannot recover attorney fees for the breach of contract.

Plaintiffs argue in their opposition that Defendant’s motion should be denied as to the punitive damages because Plaintiffs’ FAC pleads in specific detail with supporting exhibits Defendant’s misrepresentations. Plaintiffs also argue that they are not seeking attorney fees for the breach of contract claim, but rather are seeking them for the conversion and intentional misrepresentation claims.

Defendant’s reply only focuses on the issue of attorney fees and argues that recovery of attorney fees is not permissible for either the conversion or fraud causes of action.

Analysis

1.      Punitive Damages

Plaintiffs have not pled facts which support a claim for punitive damages.  There was a written contract to provide a private flight.  Whether or not the Plaintiffs are entitled to a refund is a matter of contract.  The communications regarding whether a refund would be paid does not give rise to a claim for punitive damages.

Therefore, based on the facts pled in Plaintiffs’ FAC, the motion to strike the punitive damage claim is GRANTED.

2.      Attorney Fees

Civ. Code § 3336 provides as follows:

The detriment caused by the wrongful conversion of personal property is presumed to be:

First—The value of the property at the time of the conversion, with the interest from that time, or, an amount sufficient to indemnify the party injured for the loss which is the natural, reasonable and proximate result of the wrongful act complained of and which a proper degree of prudence on his part would not have averted; and

Second—A fair compensation for the time and money properly expended in pursuit of the property.

Plaintiffs have pointed to the second part of this code section to justify their request for attorney fees for their conversion claim. However, the case law shows that attorney fees are not part of the “fair compensation” contemplated by this section. “Section 3336 of the Civil Code, which sets out the measure of damages in conversion actions, does not expressly provide for attorneys’ fees for the converting of property. It has long been held that such fees are not within the rule of damages provided for by that section…” (Russell v. United Pac. Ins. Co. (1963) 214 Cal.App.2d 78, 91.)

Therefore, Plaintiffs cannot recover attorney fees for their second cause of action for conversion.

For the third cause of action for intentional misrepresentation, courts have held that attorney fees are not recoverable on fraud causes of action related to a contract unless the contract provides for recovery of attorney fees. (See Walters v. Marler (1978) 83 Cal.App.3d 1.) The underlying agreement does not provide for the recovery of attorney fees for breach of contract.

Plaintiffs cannot recover attorney fees for their third cause of action for intentional misrepresentation.

The motion o strike the claim for attorneys fees is GRANTED.

THE PARTIES SHOULD ADDRESS THE QUESTION OF WHETHER LEAVE TO AMEND SHOULD BE GRANTED.

Order

1.      Defendant’s motion to strike Plaintiffs’ request for punitive damages is GRANTED.

2.      Defendant’s motion to strike Plaintiffs’ request for attorney fees is GRANTED.