Judge: Gary I. Micon, Case: 24CHCV00177, Date: 2024-04-25 Tentative Ruling

Case Number: 24CHCV00177    Hearing Date: April 25, 2024    Dept: F43

Dept. F43

Date: 4-25-24

Case #24CHCV00177, Cole Freeman vs. State Farm Mutual Automobile Insurance Company

Trial Date: N/A

MOTION TO STRIKE

MOVING PARTY: Defendant State Farm Automobile Insurance Company

RESPONDING PARTY: Plaintiff Cole Freeman

RELIEF REQUESTED

Motion to Strike

·         Portions of Paragraph 8 (“said acts of each Defendant was ratified by said Defendant’s co-Defendant managing agents”)

·         Paragraph 9

·         Paragraph 50

·         Item b.(ii) of the prayer (punitive damages)

RULING: Motion to strike is granted in part.

SUMMARY OF ACTION

Plaintiff Cole Freeman’s (Plaintiff) motorhome was vandalized and sustained water damage. Plaintiff filed this action because he alleges that Defendant State Farm Automobile Insurance Company (Defendant) would not cover the full extent of Plaintiff’s losses.

Plaintiff’s complaint alleges four causes of action for (1) declaratory relief; (2) breach of contract; (3) breach of implied covenant of good faith; and (4) bad faith denial of insurance coverage.

Defendant filed its motion to strike on March 4, 2023. Plaintiff opposes Defendant’s motion. Defendant has moved to strike Plaintiff’s request for punitive damages and related allegations.

ANALYSIS

A court may strike from the complaint any irrelevant, false, or improper matter. Under CCP § 435, “[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.” Under CCP § 436(a), “[t]he court may, upon a motion made pursuant to Section 435, or at any time in its discretion, and upon terms it deems proper . . . [s]trike out any irrelevant, false, or improper matter inserted in any pleading.” Under CCP § 436(b), the court may “[s]trike out 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.”

Punitive Damages

Punitive damages are governed by Civ. Code § 3294: “In an action for the breach of an obligation not arising from contract, where it is proven by clear and convincing evidence that the defendant has been guilty of oppression, fraud, or malice, the plaintiff, in addition to the actual damages, may recover damages for the sake of example and by way of punishing the defendant.” (Civ. Code § 3294(a).)

To state a prima facie claim for punitive damages, a complaint must set forth the elements as stated in Civ. Code § 3294. (Coll. Hosp., Inc. v. Superior Court (1994) 8 Cal.4th 704, 721.) “Malice is defined in the statute as conduct 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 725.) Oppression is “despicable conduct that subjects a person to cruel and unjust hardship in conscious disregard of that person’s rights.” (Civ. Code § 3294(c)(2).) Fraud is defined as “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.” (Civ. Code § 3294(c)(3).)

Potter v. Firestone Tire & Rubber Co. (1993) 6 Cal.4th 965, 1004 explained that “punitive damages sometimes may be assessed in unintentional tort actions.” Taylor v. Superior Court (1979) 24 Cal.3d 890, 894-895 noted that “something more than the mere commission of a tort is always required for punitive damages. There must be circumstances of aggravation or outrage, such as spite or malice, or a fraudulent or evil motive on the part of the defendant, or such a conscious and deliberate disregard of the interests of others that his conduct may be called willful or wanton.” Indeed, “punitive damages are proper only when the tortious conduct rises to levels of extreme indifference to the plaintiff’s rights, a level which decent citizens should not have to tolerate.” (Lackner v. North (2006) 135 Cal.App.4th 1188, 1210 (internal quotation omitted).)

The “conclusory characterization of defendant’s conduct as intentional, willful and fraudulent is a patently insufficient statement of oppression, fraud or malice…within the meaning of section 3294.” (Brousseau v. Jarrett (1977) 73 Cal.App.3d 864, 872.)

“It is not sufficient to allege merely that defendant ‘acted with oppression, fraud or malice.’ Rather, plaintiff must allege specific facts showing that defendant’s conduct was oppressive, fraudulent or malicious (e.g., that defendant acted with the intent to inflict great bodily harm on plaintiff or to destroy plaintiff's property or reputation).” (Croskey, et al., Cal. Prac. Guide: Insurance Litigation Ch. 13-C (Thomson Reuters, 2016) ¶ 13:197.2; and see, Anschutz Entertainment Group, Inc. v. Snepp (2009) 171 Cal.App.4th 598, 643 [allegations that defendant’s conduct was “intentional, and done willfully, maliciously, with ill will towards Plaintiffs, and with conscious disregard for Plaintiff's rights” did not satisfy specific pleading requirements].)

First, Defendant argues that Plaintiff’s claim for punitive damages is barred to the extent that any of the requests are based Plaintiff’s breach of contract causes of action pursuant to Civ. Code § 3294, which indicates that punitive damages are for the breach of an obligation “not arising from contract.” The Court agrees that Plaintiff could not recover any punitive damages for the breach of contract causes of action.

Plaintiff argues in opposition that he could recover punitive damages for the tort claims, which he argues are the breach of the implied covenant of good faith cause of action and the bad faith denial of insurance coverage cause of action. The Court agrees that Plaintiff could theoretically recover punitive damages for these causes of action if Plaintiff proved malice, oppression, or fraud.

Next, Defendant argues that the complaint does not plead the punitive damages claim with requisite specificity. Defendant argues that the allegations in Plaintiff’s complaint do not support Plaintiff’s claim that Defendant acted maliciously because Defendant inspected the motorhome on two occasions and even extended coverage for a portion of damages to the motorhome. (Comp., ¶¶ 19-21.) Courts have held that even when it is found that an insurer breached its duty to deal reasonably with an insured, an insurer failing to settle does not establish the quality of intent requisite to an award of punitive damages. (Neal v. Farmers Ins. Exchange (1978) 21 Cal.3d 910, 922.)

In opposition Plaintiff argues that his complaint sufficiently pleads punitive damages. Plaintiff argues that his allegations of motive in Paragraph 26 of the complaint are sufficiently justified by his factual pleadings of the sequence of events, the denial of the claim, and Defendant’s desire to reduce its own financial exposure. Defendant argues in reply that Plaintiff’s allegations in Paragraph 26 regarding inconsistency with the law do not hold weight because Defendant’s denial letter attached to Plaintiff’s complaint does not acknowledge that the water loss was due to vandalism. The Court agrees that Plaintiff’s argument does not have merit. Accordingly, Plaintiff does not allege sufficient allegations to maintain a request for punitive damages.

Finally, Defendant argues that Plaintiff has not alleged facts showing that the malicious conduct was taken or ratified by Defendant’s officers, directors, or managing agents, as required by Civ. Code § 3294 (b) (“With respect to a corporate employer, the advance knowledge [of the unfitness of the employee] and conscious disregard [of the rights or safety of others], authorization, ratification or act of oppression, fraud, or malice must be on the part of an officer, director, or managing agent of the corporation”). Plaintiff vaguely alludes to officers, directors or managing agents in Paragraphs 8 and 9, but these allegations are conclusory and do not provide any real allegations that Defendant’s officers, directors, or managing agents ratified any malicious conduct.

Plaintiff argues in his opposition that he has met the pleading requirements for alleging that Defendant’s actions were ratified. The Court finds that Plaintiff has not met these pleading requirements. Furthermore, there are inconsistencies between Plaintiff’s complaint and the documents attached to Plaintiff’s complaint as to what Defendant’s investigators found to be the source of the water damage.

Based on the foregoing, Defendant’s motion to strike is granted for Plaintiff’s punitive damages request and related allegations (Paragraphs 8 (partial), 9, 50, and item b.(ii) of the prayer).

Plaintiffs are given 30 days leave to amend their complaint.

Moving party to give notice to all parties.