Judge Gail Killefer, Case Number: 23STCV27433, Date: 2024-03-13 Tentative Ruling

MOVING PARTY: Defendants Sitcoproperties,
Inc.; Simicha Borenstein aka Sam Borenstein; LA Housing Outreach LLC

TENTATIVE:
Defendants’ motion
to strike punitive damages is granted with leave to amend. Plaintiff is given __
days leave to amend. OSC re: Amended Complaint set for __. The Case Management
Conference is taken off calendar. Defendants
to give notice.

On
November 8, 2023, James Borrelli (“Plaintiff”) filed a Complaint against
Sitcoproperties, Inc. (“Sitco Properties”); Simicha Borenstein aka Sam
Borenstein (“Borenstein”); LA Housing Outreach LLC (“LA Housing”),
(collectively “Defendants); and Does 1 to 10.

The
Complaint alleges seven causes of action: (1) declaratory relief; and for
damages based on: (2) violation of the Fair Employment and Housing Act (“FEHA”),
(3) violation of the disabled person act, (4) violation of the elder abuse and
dependent adult civil protection act, (5) violation the Los Angeles Tenant
harassment ordinance, (6) violation of the unfair competition law, and (7)
negligence.

On
February 1, 2024, Defendants filed a motion to strike the Plaintiff’s
complaint. Plaintiff opposes the Motion. The matter is now before the court.

The court may
take judicial notice of “official acts of the legislative, executive, and
judicial departments of the United States and of any state of the United
States,” “[r]ecords of (1) any court of this state or (2) any court of record
of the United States or of any state of the United States,” and “[f]acts and
propositions that are not reasonably subject to dispute and are capable of
immediate and accurate determination by resort to sources of reasonably
indisputable accuracy.” (Evid. Code § 452(c), (d), and (h).) “Taking
judicial notice of a document is not the same as accepting the truth of its
contents or accepting a particular interpretation of its meaning.” (Joslin v. H.A.S. Ins. Brokerage (1986) 184 Cal.App.3d 369, 374.)

Plaintiff requests that the Court take judicial notice of
the Statement of Information of Sitcoproperties, Inc., dated 8/26/2020, filed
with the Secretary of State of California (EXHIBIT A).

Discussion

¿Any 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.
(CCP § 435(b)(1); CRC, rule 3.1322(b).) The court may, upon a motion or at any
time in its discretion and upon terms it deems proper: (1) strike out any
irrelevant, false, or improper matter inserted in any pleading; or (2) strike
out all or any part of any pleading not drawn or filed in conformity with the
laws of California, a court rule, or an order of the court. (CCP § 436(a)-(b); Stafford
v. Shultz (1954) 42 Cal.2d 767, 782 [“Matter in a pleading which is not
essential to the claim is surplusage; probative facts are surplusage and may be
stricken out or disregarded”].)¿¿¿¿

“Where the defect raised by a motion to strike or by demurrer
is reasonably capable of cure, leave to amend is routinely and liberally
granted to give the plaintiff a chance to cure the defect in question.” (CLD
Construction, Inc. v. City of San Ramon (2004) 120 Cal.App.4th 1141, 1146.)
The burden is on the complainant to show the Court that a pleading can be
amended successfully. (Goodman v. Kennedy (1976) 18 Cal.3d 335, 348.)¿¿¿

1)
Page 9, line 9: “Mr. Borrelli is
entitled to punitive damages under Civil Code section 3294”

2)
Page 9, line 9-12: “Defendants’ actions
against Mr. Borrelli, considering his age and serious health problems, are
malicious in that they are willful and evidence a conscious disregard for his
rights under FEHA to be granted a reasonable accommodation of his disability.”

3)
Page 9, lines 12-15: “Therefore,
Defendants should be liable for punitive damages to make an example out of them
and to prevent them from discriminating against those members of the public who
come in contact with Defendants in their capacities as landlords and real
estate licensees or, in this case, non-licensees.”

4)
Page 11, lines 7-11: “Defendants acted
with malice, by repeatedly demanding that Mr. Borrelli take a buy-out and move
out of the Apartment or, if he will not do so, prepare to lose his parking and
his sanity during two years of construction at the Building, even though they
are aware of Mr. Borrelli’s age, his disabilities, and their legal obligations
to accommodate Mr. Borrelli’s disabilities.”

5)
Page 11, lines 14-17: “All of
Defendants’ acts alleged in this Complaint were undertaken by Defendants with a
clear profit motive and with a willful and conscious disregard of Mr.
Borrelli’s rights, knowing that his conduct was likely to be harmful to Mr.
Borrelli. Therefore, Defendants are liable to Mr. Borrelli for punitive
damages.”

6)
Page 14, line 18: “For punitive damages
as authorized by Civil Code section 3294.”

7)
Page 15, lines 1-2: “For punitive
damages pursuant to Civil Code section 3294, in an amount according to proof at
trial.”

Defendants assert that Plaintiff’s Complaint fails to allege
malice, fraud, or oppression toward Plaintiff with the requisite specificity to
support a claim for punitive damages.

To state a claim for punitive damages under Civil
Code § 3294, a plaintiff must allege specific facts showing that the defendant
has been guilty of malice, oppression, or fraud. (Smith v. Superior Court
(1992) 10 Cal. App. 4th 1033, 1042.)¿ The basis for punitive damages must be
pled with specificity; conclusory allegations devoid of any factual assertions
are insufficient. (Ibid.)¿¿“Malice” is defined in Civil Code § 3294
(c)(1) as “conduct which is intended by the defendant to cause injury” or
“despicable conduct which is carried on by the defendant with a willful and
conscious disregard of the rights or safety of others.” “Oppression” is defined
as “despicable conduct subjecting a person to cruel and unjust hardship in
conscious disregard of that person’s rights.” (Civil Code § 3294(c)(2).) The
term “despicable” has been defined in the case law as actions that are “base,”
“vile,” or “contemptible.” (Shade Foods, Inc. v. Innovative Products Sales
& Marketing, Inc. (2000) 78 Cal.App.4th 847, 891.) 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.”
(Civil Code § 3294(c)(3).)

The Complaint alleges that Plaintiff is 75 years
old, is recovering from cancer, and lives in Apartment 19 in the Subject
Property. (Compl. ¶¶ 9-10.) Plaintiff’s rent is controlled under the Los
Angeles Rent Stabilization Ordinance (“LARSO”) and cannot be evicted from his
unit except for good cause. (Compl. ¶ 11.) On March 31, 2023, Defendant LA
Housing Outreach purchased the Property and hired Defendant Sitco Properties
and its representative Simcha Bornstein to engage in a scheme to get tenants of
the Building to move out. (Compl. ¶ 13.) Plaintiff alleges that Defendant
Bornstein told all tenants that their homes would be demolished and that they
would have to leave. (Compl. ¶ 14.) There is no allegation the statement was
false or made with malice, oppression, or fraud.

The Complaint further alleges that Defendant Bornstein
tried to convince Plaintiff to give up his tenancy, that Bornstein engaged in
“pressure tactics” and that such discussions were stressful to Plaintiff.
(Compl. ¶¶ 17-19.) Plaintiff, however, fails to provide facts as to the
frequency of such discussions, whether Plaintiff requested that all such
discussions cease, and what specific tactics Borenstein engaged in that made
his conduct malicious, fraudulent, or oppressive. Plaintiff fails to allege
that Bornstein violated the law or acted with malice, fraud, or oppression by
informing Plaintiff of a buyout offer that did not include any disclosures.
(Compl. ¶ 22.)

Based on the allegations above, the court finds
that Plaintiff has failed to plead sufficient facts to show that Bornstein
acted with malice, fraud, or oppression to support a claim for punitive damages
under Civil Code § 3294.

When the defendant is a¿corporation, “the oppression, fraud,
or malice must be perpetrated, authorized, or knowingly ratified by an officer,
director, or managing agent of the¿corporation.” (Wilson v. Southern
California Edison Company (2015) 234 Cal.App.4th 123, 164; see Civ. Code, §
3294(b).) An
individual must be in a corporate policymaking position in order to be
considered a managing agent for the purposes of imposing punitive damages
liability on the corporation. (Myers v. Trendwest Resorts, Inc. (2007)
148 Cal.App.4th 1403, 1437.) A “managing agent” includes “only those corporate
employees who exercise substantial independent authority and judgment in their
corporate decision-making so that their decisions ultimately determine
corporate policy.” (White v. Ultamar (1999) 21 Cal.4th 563, 566.)

The Complaint is
devoid of any facts to show that Defendant Bornstein is a managing agent of
Defendants. The Complaint alleges that Bornstein was hired by Defendant LA
Housing Outreach to act on its behalf as a manager and that Defendant Sitco
Properties ratified the conduct. (Compl. ¶¶ 6, 7, 13.) These allegations are
insufficient to support a claim for punitive damages against Defendant LA
Housing Outreach and Sitco Properties.

Defendants’ motion to strike
punitive damages is granted with leave to amend. Plaintiff is given 30 days
leave to amend. OSC re: Amended Complaint set for __. The Case Management
Conference is taken off calendar. Defendants
to give notice.

[1]
Pursuant
to CCP § 435.5(a), the meet and confer requirement has been met. (Zakaria Decl. ¶ 3, Ex. B.)