Judge Elaine Lu, Case 22STCV14368 2023-01-13 Tentative Ruling

On April 29, 2022, Plaintiff Paul Falzon (“Plaintiff”) filed the instant wrongful termination action. On October 24, 2022, Plaintiff filed the operative First Amended Complaint (“FAC”) against Defendants SMG Holdings, Inc. (“SMG Inc.”), SMG Holdings, LLC, (“SMG LLC”), ASM Global (“ASM”), and Steve Goodling (“Goodling”). The FAC asserts four causes of action for (1) Retaliation (Labor Code § 1102.5), (2) Wrongful Termination in Violation of Public Policy, (3) Intentional Interference with Prospective Economic Advantage, and (4) Negligent Interference with Prospective Economic Advantage.

On November 29, 2022, Defendant Goodling filed the instant demurrer and motion to strike portions of the FAC. On December 27, 2022, Plaintiff filed oppositions to the demurrer and motion to strike. On January 6, 2023, Defendant Goodling filed his respective replies.

ASM is a venue and event management company that manages “over 300 stadiums, arenas and convention centers around the world.” (FAC ¶ 11.) AMS’s subsidiary SMC, Inc. and its successor SMC LLC “manage[] and operate[] the venue known as the Long Beach Convention & Entertainment Center (LBCEC) pursuant to a contract between SMG and the City of Long Beach.” (FAC ¶¶ 2-3, 11.) Goodling is the President and Chief Executive Officer of the Long Beach Convention & Visitors Bureau. (FAC ¶ 12.)

ASM, SMC, Inc., and SMC, LLC hired Plaintiff to serve as the Director of Finance, and Senior Accounting and Finance Executive as LBCEC, and Plaintiff reported to the LBCEC’s General Manager Charlie Beirne. (FAC ¶ 13.) Plaintiff had no performance issues and in fact received a substantial salary increase in August 2021. (FAC ¶ 14.)

While serving as Director of Finance, and Senior Accounting and Finance Executive, Plaintiff uncovered that “Goodling was spending public money to buy furniture that he converted to his personal use. Ultimately, Plaintiff calculated that Goodling spent over $1.3 million in public funds on furniture and unapproved purchases.” (FAC ¶ 16.) “Plaintiff determined that there were no purchase orders, no competitive bidding, no vendor selection process, and the City of Long Beach, which owns the LBCEC, was unaware of the full extent of Goodling’s unapproved furniture shopping activities.” (FAC ¶ 17.)

“Goodling committed financial waste in other areas. For example, at one event, the client wanted music played off an iPhone music playlist. Goodling felt this was below standard so he ordered a DJ with a light package that was paid for by the City of Long Beach.” (FAC ¶ 19.) “Goodling spent City of Long Beach money on extravagant holiday lighting displays and expensive landscaping projects. Goodling spent approximately $102,345 for flowers on a rainbow bridge.” (FAC ¶ 20.) “Goodling’s fraudulent purchases, [] were extravagant and wasteful and violated state and local laws and regulations because they had not been preapproved as per the SMG/LBCEC purchasing guidelines.” (FAC ¶ 22.)

“Plaintiff complained internally to Beirne about Goodling operating outside company and city policy. Beirne threatened Plaintiff, saying that if SMG lost the contract to manage the LBCEC a new management company would take over and Beirne and Plaintiff would be terminated. Beirne explained that Goodling’s political influence, i.e., “clout,” with the Mayor and City Council would help ASM / SMG renew the contract without going to a request for proposal (RFP). Beirne made clear that SMG/ASM Management would not care about Goodling’s financial abuse because Steve Goodling was wasting City of Long Beach funds and not SMG/ASM funds. Plaintiff was essentially told to shut up and remain silent about Goodling’s fraud, or else lose his job.” (FAC ¶ 23.)

“In July 2021, after Plaintiff complained again, Beirne said that Plaintiff’s complaints of inappropriate spending and misuse of city funds would be investigated. The City of Long Beach sent a warning letter to ASM about abiding by the City’s purchasing requirements. However, there was no investigation by SMG or ASM at that time. Instead, Goodling and Beirne cornered Plaintiff and threatened him.” (FAC ¶ 24.)

“On August 9, 2021, Plaintiff attended a work-related event in Bogarts Café. After the event, Beirne asked Plaintiff to meet with him and Goodling. In this impromptu meeting, Goodling wanted Plaintiff to apologize for complaining. Goodling said he did not think Plaintiff was ‘on board’ with Goodling’s vision for the LBCEC. Goodling exerted his “clout” with the City and the corporate defendants, SMG and ASM by telling Plaintiff that SMG (and its affiliate/parent, ASM) were making a lot of money on the City contract (as if the profit on the management contract should justify or excuse his shopping sprees). Goodling informed Plaintiff that the contract was up for renewal in an effort to pressure Plaintiff into remaining silent. Goodling further pressured Plaintiff by telling Plaintiff that Plaintiff’s complaints were making ‘things difficult’ for Goodling.” (FAC ¶ 25.)

On “August 17, 2021, Plaintiff met with an auditor and supervisor with the firm of Lance, Soll & Lunghard, the LBCEC External Auditors.” (FAC ¶ 28.) During this audit meeting, “Plaintiff disclosed Goodling’s inappropriate purchasing activities.” (FAC ¶ 28.)

“On September 28, 2021, Beirne called Plaintiff into a termination meeting. Beirne, and McClintock informed Plaintiff that Plaintiff was being terminated due to ‘position elimination.’” (FAC ¶ 30.) “SMG purported to offer Plaintiff a corporate job at SMG’s corporate office in Los Angeles.” (FAC ¶ 31.) However, this was not a legitimate job offer as “[t]he offer was vague[,] [t]he position was temporary[,] [and] [t]he Defendant’s Human Resources Manager has confirmed in a sworn statement that the corporate job offer was pretextual and the termination was retaliatory.” (FAC ¶ 31.) “Plaintiff immediately complained to McClintock that his termination was based on Goodling retaliating against Plaintiff.” (FAC ¶ 32.) Immediately after, on October 22, 2021, Plaintiff was placed on administrative leave. (FAC ¶¶ 31-32.) On October 25, 2021, ASM’s Executive Vice-President, Bob McClintock sent an email announcing to SMG Inc. and SMG LLC employees that Plaintiff had resigned. (FAC ¶ 34.) This was untrue as Plaintiff did not resign. (FAC ¶ 34.) “On October 28, 2021, SMG’s investigator, Ms. Gilkin, finally interviewed Plaintiff in response to Plaintiff’s complaints.” (FAC ¶ 35.)

“Plaintiff was told that he would be terminated, effective November 12, 2021 or the following Monday, November 15, 2021. The termination was finalized, effective November 12, 2021.” (FAC ¶ 36.)

A demurrer can be used only to challenge defects that appear on the face of the pleading under attack; or from matters outside the pleading that are judicially noticeable. (Blank v. Kirwan (1985) 39 Cal 3d 311, 318.) No other extrinsic evidence can be considered (i.e., no “speaking demurrers”). (Ion Equipment Corp. v. Nelson (1980) 110 Cal.App.3d 868, 881.)

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 “give the complaint a reasonable interpretation, and read it in context.” (Schifando v. City of Los Angeles (2003) 31 Cal.4th 1074, 1081.) 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.” (SKF Farms v. Superior Ct. (1984) 153 Cal. App. 3d 902, 905.) “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.)

Motions to strike are used to reach defects or objections to pleadings that are not challengeable by demurrer (i.e., words, phrases, prayer for damages, etc.). (See CCP §§ 435-437.) A party may file a motion to strike in whole or in part within the time allowed to respond to a pleading. However, if a party serves and files a motion to strike without demurring to the complaint, the time to answer is extended. (CCP §§ 435(b)(1), 435(c).)

A motion to strike lies only where the pleading has irrelevant, false, or improper matter, or has not been drawn or filed in conformity with laws. (CCP § 436.) The grounds for moving to strike must appear on the face of the pleadings or by way of judicial notice. (CCP § 437.)

Code of Civil Procedure § 430.41, subdivision (a) requires that “[b]efore filing a demurrer pursuant to this chapter, the demurring party 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.” The parties are to meet and confer at least five days before the date the responsive pleading is due and if they are unable to meet the demurring party shall be granted an automatic 30-day extension. (CCP § 430.41(a)(2).) The demurring party must also file and serve a declaration detailing the meet and confer efforts. (Id.¿at (a)(3).)¿ If an amended pleading is filed, the parties must meet and confer again before a demurrer may be filed to the amended pleading. (Id.¿at (a).) There is a similar meet and confer requirement for motions to strike. (CCP § 435.5.)

Here, Defendant Goodling has fulfilled the meet and confer requirements. (Peterson Decl. ¶¶ 3-4, Exhs. B-C.)[1]

Defendant Goodling demurrers to the causes of action raised against him – i.e., the third and fourth causes of action for intentional interference of prospective economic advantage and negligent interference of prospective economic advantage.

Defendant Goodling asserts that the third and fourth causes of action fail because there is no allegation of independently wrongful conduct committed by Goodling.

“To establish a prima facie case of intentional interference with prospective economic advantage, a plaintiff must demonstrate (1) an economic relationship between the plaintiff and a third party, with a probability of future economic benefit to the plaintiff; (2) the defendant's knowledge of this relationship; (3) intentional and wrongful conduct on the part of the defendant, designed to interfere with or disrupt the relationship; (4) actual disruption or interference; and (5) economic harm to the plaintiff as a proximate result of the defendant's wrongful conduct.” (Overstock.com, Inc. v. Gradient Analytics, Inc. (2007) 151 Cal.App.4th 688, 713.) “With respect to the third element, a plaintiff must show that the defendant engaged in an independently wrongful act.” (San Jose Construction, Inc. v. S.B.C.C., Inc. (2007) 155 Cal.App.4th 1528, 1544.)

“The elements of negligent interference with contract or prospective economic advantage are (1) the existence of a valid contractual relationship or other economic relationship between the plaintiff and a third party containing the probability of future economic benefit to the plaintiff; (2) the defendant’s knowledge (actual or construed) of the relationship; (3) the defendant’s knowledge (actual or construed) that the relationship would be disrupted if the defendant failed to act with reasonable care; (4) the defendant’s failure to act with reasonable care; (5) actual disruption of the relationship; and (6) resulting economic harm.” (Nelson v. Tucker Ellis, LLP (2020) 48 Cal.App.5th 827, 844, Fn. 5.) Similar to a claim for intentional interference with prospective economic advantage, “[f]or negligent interference, a defendant's conduct is blameworthy only if it was independently wrongful apart from the interference itself.” (Lange v. TIG Ins. Co. (1998) 68 Cal.App.4th 1179, 1187.)

“ ‘[A]n act is independently wrongful if it is unlawful, that is, if it is proscribed by some constitutional, statutory, regulatory, common law, or other determinable legal standard .... an act must be wrongful by some legal measure, rather than merely a product of an improper, but lawful, purpose or motive.’ [Citation.]” (San Jose Construction, Inc., supra, 155 Cal.App.4th at p.1545.) As the Supreme Court has noted, “[t]he tort of intentional interference with prospective economic advantage is not intended to punish individuals or commercial entities for their choice of commercial relationships or their pursuit of commercial objectives, unless their interference amounts to independently actionable conduct. [Citation.] We conclude, therefore, that an act is independently wrongful if it is unlawful, that is, if it is proscribed by some constitutional, statutory, regulatory, common law, or other determinable legal standard.” (Korea Supply Co. v. Lockheed Martin Corp. (2003) 29 Cal.4th 1134, 1158–1159.) “The plaintiff must also prove that the interference was wrongful, independent of its interfering character.” (Edwards v. Arthur Andersen LLP (2008) 44 Cal.4th 937, 944.)

Here, the FAC alleges that Goodling misappropriated $1.3 million in funds from the City of Long Beach on furniture and unapproved purchases and committed financial waste by spending the City of Long Beach’s money on extravagant holiday lighting displays and expensive landscaping projects. (FAC ¶¶ 15-20.) While misappropriating funds is an independently wrongful act, this conduct is unrelated to Plaintiff’s alleged harm of being terminated. Rather, the FAC contends that “Defendant Goodling sought to and did influence SMG/ASM to terminate Plaintiff’s employment for retaliatory reasons based on Plaintiff’s complaints.” (FAC ¶ 59; see also FAC ¶ 70, [“Defendant Goodling negligently engaged in threats and meddling and influenced SMG/ASM to terminate Plaintiff’s employment for retaliatory reasons based on Plaintiff’s complaints.”].) The only threats and meddling attributed to Goodling occurred on August 9, 2021 at an impromptu meeting during a work event in Bogarts Café. (FAC ¶ 25.) “In this impromptu meeting, Goodling wanted Plaintiff to apologize for complaining. Goodling said he did not think Plaintiff was ‘on board’ with Goodling’s vision for the LBCEC. Goodling exerted his ‘clout’ with the City and the corporate defendants, SMG and ASM by telling Plaintiff that SMG (and its affiliate/parent, ASM) were making a lot of money on the City contract (as if the profit on the management contract should justify or excuse his shopping sprees). Goodling informed Plaintiff that the contract was up for renewal in an effort to pressure Plaintiff into remaining silent. Goodling further pressured Plaintiff by telling Plaintiff that Plaintiff’s complaints were making ‘things difficult’ for Goodling.” (FAC ¶ 25.) Plaintiff did not work for Goodling but “Goodling exerted substantial control and influence over Plaintiff’s working conditions and workplace environment. Goodling was not happy with Plaintiff because of Plaintiff’s complaints. Goodling made it clear to Plaintiff and SMG/ASM, through his actions and conduct, that Goodling had the power and authority to silence Plaintiff, by retaliating and having Plaintiff terminated from his job. Plaintiff’s direct supervisor, Beirne, sat next to Plaintiff during this meeting and said nothing while Goodling attacked, intimidated and threatened Plaintiff for making complaints about Goodling’s expenditures. Beirne did not defend Plaintiff at all during or after the meeting. It appeared to Plaintiff that Beirne sided with Goodling during Goodling’s attack on Plaintiff.” (FAC ¶ 26.)

While Goodling’s alleged conduct is unethical, Plaintiff fails to allege how this meeting was unlawful as required to state a claim for intentional or negligent interference with economic advantage.

In opposition, Plaintiff cites the Supreme Court’s decision in Reeves v. Hanlon (2004) 33 Cal.4th 1140, and the Court of Appeal opinion in Cleary v. American Airlines, Inc. (1980) 111 Cal.App.3d 443, 446 disapproved of by Foley v. Interactive Data Corp. (1988) 47 Cal.3d 654 disapproved of by Guz v. Bechtel Nat. Inc. (2000) 24 Cal.4th 317.

In Cleary, the plaintiff in relevant part “charged both his employer and certain named employees of the airlinewith the torts of wrongful interference with business relationship and wrongful inducement of breach of contract.” (Cleary, supra, 111 Cal.App.3d at p.446.) The Court of Appeal found that the allegations that “[t]hese employees and American Airlines, according to plaintiff, engaged in a conspiracy to cause his discharge[,]” was sufficient to state an actionable claim. (Cleary, supra, 111 Cal.App.3d at pp.448, 457.)

Plaintiff contends that “nothing more [i]s required.” (Opp. at p.4:16-17.) However, Cleary is not good law on this point. Cleary relied upon Wise v. Southern Pac. Co. (1963) 223 Cal.App.2d 50 for the proposition that one contracting party, by use of a conspiracy theory, could impose liability on another for the tort of interference with contract. However, the Supreme Court subsequently and expressly disproved of Wise in Applied Equipment Corp. v. Litton Saudi Arabia Ltd. (1994) 7 Cal.4th 50.

Similarly, Plaintiff’s reliance on Reeves is misplaced. In Reeves, the Supreme Court affirmed – in relevant part – a bench trial finding in favor of the plaintiff’s interference with at-will employment relations. (Id. at p.1146.) The plaintiff, a law firm, hired two attorneys, Greene and Hanlon who eventually abruptly left, stole clients, employees, trade secrets, destroyed files, and withheld plaintiff’s property. (Id. at p.1145.) The Supreme Court first concluded that “a plaintiff may recover damages for intentional interference with an at-will employment relation under the same California standard applicable to claims for intentional interference with prospective economic advantage.” (Reeves, supra, 33 Cal.4th at p.1152.) The Supreme Court expressly noted that “to recover for a defendant's interference with an at-will employment relation, a plaintiff must plead and prove that the defendant engaged in an independently wrongful act—i.e., an act ‘proscribed by some constitutional, statutory, regulatory, common law, or other determinable legal standard’ [Citation.]” (Id. at p.1152-1153, [quoting Korea Supply Co. v. Lockheed Martin Corp. (2003) 29 Cal.4th 1134, 1158–1159].) The Supreme Court specified that there was unlawful conduct in Reeves warranting the judgment:

Here, it is undisputed that Hanlon and Greene engaged in unlawful and unethical conduct in mounting a campaign to deliberately disrupt plaintiffs' business. (See ante, 17 Cal.Rptr.3d at pp. 293– 294 & fn. 2.) Greene had been chair of plaintiffs' litigation department, and Hanlon had been responsible for over 500 client matters, and both had assumed fiduciary duties to plaintiffs. When the two abruptly resigned without notice, they left no status reports or list of pending matters or deadlines on which they were working. Not only did they leave without providing such information, they acted unlawfully to delete and destroy plaintiffs' computer files containing client documents and forms. Additionally, Hanlon and Greene misappropriated confidential information (see post, pt. B), improperly solicited plaintiffs' clients, and cultivated employee discontent. While the computer files and the confidential information all appear to have pertained to plaintiffs' clients, not their employees, and while Hanlon and Greene waited until after their resignations to offer jobs to plaintiffs' employees, we cannot conclude the trial court abused its discretion in finding that defendants' unlawful and unethical actions were designed in part to interfere with and disrupt plaintiffs' relationships with their key at-will employees.

In short, defendants did not simply extend job offers to plaintiffs' at-will employees. Rather, defendants purposely engaged in unlawful acts that crippled plaintiffs' business operations and caused plaintiffs' personnel to terminate their at-will employment contracts.

Thus, Reeves clearly supports the proposition that one must allege and prove independently wrongful conduct that interfered with a plaintiff’s prospective economic advantage.

Here, no such conduct has been alleged. At most Plaintiff alleges that he was cornered and threatened to apologize by Goodling. (FAC ¶¶ 24-26.) Plaintiff was then separately terminated by his employer. (FAC ¶¶ 29-32.) Again, while Plaintiff describes unethical behavior, Plaintiff fails to allege that these threats were unlawful in themselves in some way– i.e., an ‘proscribed by some constitutional, statutory, regulatory, common law, or other determinable legal standard[.]’ [Citation.]” (Reeves, supra, 33 Cal.4th at pp.1152–1153.)

Accordingly, Defendant Goodling’s demurrer to the third and fourth causes of action is SUSTAINED.

Fourth Cause of Action: Negligent Interference with Prospective Economic Advantage

Defendant Goodling also asserts that the fourth cause of action also fails because Plaintiff cannot establish a duty of care.

As noted above, “[t]he elements of negligent interference with contract or prospective economic advantage are (1) the existence of a valid contractual relationship or other economic relationship between the plaintiff and a third party containing the probability of future economic benefit to the plaintiff; (2) the defendant’s knowledge (actual or construed) of the relationship; (3) the defendant’s knowledge (actual or construed) that the relationship would be disrupted if the defendant failed to act with reasonable care; (4) the defendant’s failure to act with reasonable care; (5) actual disruption of the relationship; and (6) resulting economic harm.” (Nelson, supra, 48 Cal.App.5th at p.844, Fn. 5.) “‘The tort of negligent interference with economic relationship arises only when the defendant owes the plaintiff a duty of care.’ [Citation.]” (LiMandri v. Judkins (1997) 52 Cal.App.4th 326, 348.)

“Duty is not universal; not every defendant owes every plaintiff a duty of care. A duty exists only if ‘ “the plaintiff's interests are entitled to legal protection against the defendant's conduct.” ’ [Citations.]” (Brown v. USA Taekwondo (2021) 11 Cal.5th 204, 213.) “Whether a duty exists is a question of law to be resolved by the court.” (Ibid.)

“The determination whether in a specific case the defendant will be held liable to a third person not in privity is a matter of policy and involves the balancing of various factors, among which are the extent to which the transaction was intended to affect the plaintiff, the foreseeability of harm to him, the degree of certainty that the plaintiff suffered injury, the closeness of the connection between the defendant's conduct and the injury suffered, the moral blame attached to the defendant’s conduct, and the policy of preventing future harm.” (Biakanja v. Irving (1958) 49 Cal.2d 647, 650.)

In Biakanja v. Irving, the Court found that the plaintiff could recover despite a lack of privity where the defendant, a notary public, prepared an improperly attested will, wherein the plaintiff's brother attempted to give his entire estate to the plaintiff. The will was denied probate, and the plaintiff received only his intestate share. (Id. at pp.648-651.) The Supreme Court noted that “the ‘end and aim’ of the transaction was to provide for the passing of [plaintiff’s brother]'s estate to plaintiff. (Id. at p.650.)

Here, Goodling is the President and Chief Executive Officer of the Long Beach Convention & Visitors Bureau. (FAC ¶ 12.) “Plaintiff did not directly work for, or directly report to, Goodling.” (FAC ¶ 26.) Thus, there is no allegation of privity between Plaintiff and Defendant Goodling.

Rather, the FAC alleges that “Goodling also knew that Plaintiff was serving as a finance director overseeing public monies in a fund that Goodling had access to and was misusing for his own personal benefit. As such, Goodling was in a special relationship and owed fiduciary duties to Plaintiff and the general public because Goodling as President/CEO and Plaintiff in his role as Finance Director shared fiscal accountability, loyalty and a special duty of care for the public monies in the subject funds as described in detail above. Goodling owed a special duty to place the interests of City taxpayers and residents and the employees and visitors at the LBCEC and of Plaintiff as the employee directly overseeing the accounting for the funds above Goodling’s personal interests with respect to those funds.” (FAC ¶ 68.)[2] Though these allegations could provide a basis for Goodling to have owed a duty to the City of Long Beach, these allegations fail to provide a basis for a duty by Goodling owed to Plaintiff.

Under the Biakanja factors, as alleged, there is no basis to impose a duty on Goodling. The alleged conduct of misappropriating funds was clearly not intended to affect Plaintiff. As conceded in the FAC, “Goodling was wasting City of Long Beach funds and not SMG/ASM funds.” (FAC ¶ 23.) Nor was Plaintiff harmed by this conduct, the waste of funds itself. Rather Plaintiff was terminated by ASM, SMG, Inc., and SMC, LLC for reporting this conduct. (FAC ¶¶ 30-32.)

Therefore, Defendant Goodling’s demurrer to the fourth cause of action is also SUSTAINED on this additional ground.

Defendant Goodling moves to strike the prayer for punitive damages from the FAC.

California Civil Code section 3294 authorizes the recovery of punitive damages in non-contract cases where “the defendant has been guilty of oppression, fraud, or malice . . . .” (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.” (Id. at (c)(1).) “‘Oppression’ means despicable conduct that subjects a person to cruel and unjust hardship in conscious disregard of that person’s rights.” (Id. at (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.” (Id. at (c)(3).) Punitive damages thus require more than the mere commission of a tort. (See Taylor v. Superior Court (1979) 24 Cal.3d 890, 894-895.)

Moreover, a demand for punitive damages for the commission of any tort requires more than the mere conclusory allegations of “oppression, fraud, and malice.” (Civ. Code § 3294; see Perkins v. Superior Court (1981) 117 Cal. App.3d 1, 6-7.) Rather, “[t]here must be circumstances of aggravation or outrage, such as spite or malice, or a fraudulent or evil motive on the part of Defendant, or such a conscious and deliberate disregard of the interest of others that its conduct may be called willful or wanton.” (Taylor, supra, 24 Cal.3d at pp.894-895, [italics added].)

Here, the Court has sustained the claims against Defendant Goodling. Therefore, there is no basis for punitive damages. Accordingly, Plaintiff’s motion to strike the prayer for punitive damages is GRANTED.

Here, it is unclear whether Plaintiff can successfully amend the complaint. However, this is the first time that a complaint has been sustained against Plaintiff’s complaint. Therefore, the court finds it is proper to allow Plaintiff an opportunity to cure the defects discussed in this order. (See Goodman v. Kennedy (1976) 18 Cal.3d 335, 349; Kong v. City of Hawaiian Gardens Redevelopment Agency (2002) 108 Cal.App.4th 1028, 1037.)

Based on the foregoing, Defendant Steve Goodling’s demurrer to the first amended complaint is SUSTAINED WITH LEAVE TO AMEND.

Setting of OSC re sanctions for failure to file proof of service for 3/13/23 at 8:30 am. Plaintiff’s Counsel is ordered to appear on 3/13/23 at 8:30 am and explain why sanctions (including monetary sanctions of at least $500 and/or dismissal) should not be imposed for failure to serve all named defendants with the operative summons and operative complaint, in compliance with California Rules of Court, Rule 3.720.

If proof of service of the Second Amended Complaint has not been filed at that time, then no later than five days before the OSC hearing, Plaintiff’s Counsel is also to file a declaration explaining the failure to file proofs of service of the Amended summons and Second Amended complaint as to all unserved defendants and explaining any and all efforts undertaken to attempt service of the summons and complaint on all named defendants.

Moving Party is to provide notice of this order and file proof of service of such.

[1] The Court notes that the declarations in support of the demurrer and motion to strike are substantially identical.

[2] “The court does not … assume the truth of contentions, deductions or conclusions of law.” (Aubry v. Tri-City Hospital Dist. (1992) 2 Cal.4th 962, 967.)

Superior Court of California

County of Los Angeles

Department 26