Judge Holly J. Fujie, Case Number: 24STCV20480, Date: 2025-03-25 Tentative Ruling

MOVING PARTY: Defendant State Farm General Insurance Company (“Defendant” or “State Farm”)

RESPONDING PARTY: Plaintiffs Renato Labog (“Dr. Labog”) and Libertad P. Labog (“Mrs. Labog”) (collectively, “Plaintiffs”)

On August 13, 2024, Plaintiffs commenced this action against Defendant State Farm and DOES 1 through 100, inclusive. On November 14, 2024, Plaintiffs filed the operative First Amended Complaint (the “FAC”) asserting causes of action for: (1) Breach of Contract; (2) Bad Faith; (3) Violation of Cal. Bus. & Prof. Code § 17200; (4) Elder Financial Abuse; and (5) Declaratory Relief.

On December 16, 2024, State Farm filed the instant Demurrer with Motion to Strike as to the FAC (the “Demurrer”). On March 11, 2025, Plaintiffs filed an Opposition to the Demurrer. On March 18, 2025, State Farm filed a Reply.

The Court finds that the parties sufficiently met and conferred per the Code of Civil Procedure Sections 430.41 and 435.5.

“The primary function of a pleading is to give the other party notice so that it may prepare its case [citation], and a defect in a pleading that otherwise properly notifies a party cannot be said to affect substantial rights.” (Harris v. City of Santa Monica (2013) 56 Cal.4th 203, 240.)¿

“A¿demurrer¿tests the legal sufficiency of the factual allegations in a complaint.” (Ivanoff v. Bank of America, N.A.¿(2017) 9 Cal.App.5th 719, 725.) The Court looks to whether “the complaint alleges facts sufficient to state a cause of action or discloses a complete defense.” (Id.) The Court does not “read passages from a complaint in isolation; in reviewing a ruling on a demurrer, we read the complaint ‘as a whole and its parts in their context.’ [Citation.]” (West v. JPMorgan Chase Bank, N.A. (2013) 214 Cal.App.4th 780, 804.) The Court “assume[s] the truth of the properly pleaded factual allegations, facts that reasonably can be inferred from those expressly pleaded and matters of which judicial notice has been taken.” (Harris, supra, 56 Cal.4th p. 240.) “The court does not, however, assume the truth of contentions, deductions or conclusions of law. [Citation.]” (Durell v. Sharp Healthcare (2010) 183 Cal.App.4th 1350, 1358.)¿¿¿

¿ A general demurrer may be brought under Code of Civil Procedure section 430.10, subdivision (e) if insufficient facts are stated to support the cause of action asserted or under section 430.10, subdivision (a), where the court has no jurisdiction of the subject of the cause of action alleged in the pleading. All other grounds listed in Section 430.10, including uncertainty under subdivision (f), are special demurrers. Special demurrers are not allowed in limited jurisdiction courts. (Code Civ. Proc., § 92, subd. (c).)¿¿¿

¿ Leave to amend must be allowed where there is a reasonable possibility of successful amendment. (Goodman v. Kennedy (1976) 18 Cal.3d 335, 348.) The burden is on the complainant to show the Court that a pleading can be amended successfully. (Id.)¿¿

Defendant demurs to the third and fourth causes of action of the FAC on the grounds that they fail to state facts sufficient to constitute a cause of action against State Farm.

Third Cause of Action for Violation of Business & Professions Code Section 17200, et seq.

State Farm contends that the third cause of action fails because Plaintiffs have not alleged: (1) they lack an adequate remedy at law and (2) there is an impending threatened injury that would make an injunction appropriate.

“To bring a UCL claim, a plaintiff must show either an (1) ‘unlawful, unfair, or fraudulent business act or practice,’ or (2) ‘unfair, deceptive, untrue or misleading advertising.’ ” (Adhav v. Midway Rent A Car, Inc. (2019) 37 Cal.App.5th 954, 970.) “ ‘Unlawful’ conduct includes any business practice or act forbidden by local, state or federal statutes or by regulations or case law. [Citation].” (Id.) “ ‘a UCL fraud plaintiff must allege he or she was motivated to act or refrain from action based on the truth or falsity of a defendant’s statement, not merely on the fact it was made.’ [Citation].” (Id.) “Prevailing plaintiffs are generally limited to injunctive relief and restitution.” (Cal-Tech Communications, Inc. v. Los Angeles Cellular Telephone Co. (1999) 20 Cal.4th 163, 179.) However, “the general rule is that an injunction may not issue unless the alleged misconduct is ongoing or likely to recur.” (Madrid v. Perot Systems Corp. (2005) 130 Cal.App.4th 440, 464.)

The FAC alleges that a pipe burst under the kitchen sink at Plaintiffs’ residence located at 421 S. Sierra Bonita Ave., Pasadena, CA 91106 (the “Property”) on August 22, 2023, resulting in extensive damage to the Property. (FAC ¶9.) Plaintiffs made a claim to State Farm under their Homeowners Insurance Policy No. 71-ES-C631-0) (the “Policy”), which covers property damage due to water losses. (FAC ¶¶7-9, Ex. A.) Plaintiffs’ claim was denied on or about October 11, 2023 following an investigation by claim adjuster Tyler Trinh (“Trinh”) who secretly recorded Dr. Labog with the intent to entrap him into making statements that could be used to deny the claim. (Id. at ¶¶10-13.)

The FAC further alleges that State Farm engaged in and continues to engage in a pattern of: (1) secretly recording confidential communications with its insureds, including Plaintiffs, without their knowledge or consent as part of its purported investigation of a claim, in violation of California Penal Code 632; and (2) refusing to provide basic information about claims requested by its insureds, including Plaintiffs, on the basis of fabricated privileges and protections. (Id. at ¶¶31-33.) The FAC further alleges that Plaintiffs have no adequate remedy at law to address State Farm’s unlawful, unfair, and fraudulent business acts and practices of secretly recording its insureds and refusing to provide information about claims when requested by insureds, and that therefore, Plaintiffs seek injunctive relief to enjoin State Farm from continuing to engage in unfair competition. (Id. at ¶34.)

The Court finds that the facts alleged in the FAC are sufficient to state a cause of action for Violation of Business and Professions Code Section 17200 against State Farm. Reading the FAC as a whole and taking the allegations as true, one could reasonably infer that State Farm, through its representative, Trinh, concealed the act of illegally recording the conversation with Dr. Labog to uncover information that would be used to deny Plaintiffs’ insurance claim for damages caused by the pipe bursting, which were covered under Plaintiffs’ Policy. One could also reasonably infer that State Farm has continued to engage in this type of illegal conduct with its other policyholders.

Such allegations sufficiently allege the elements of an unlawful business act covered by the UCL. Therefore, the demurrer to the third cause of action is OVERRULED.

With respect to the fourth cause of action, State Farm contends there are no facts that indicate State Farm withheld or misappropriated funds from Plaintiffs for a wrongful use, and the alleged improper recording of Dr. Labog is not and cannot constitute means of withholding or misappropriating funds from Plaintiff for a wrongful use.

“Abuse of an elder or a dependent adult” means any of the following: (1)¿Physical abuse, neglect, abandonment, isolation, abduction, or other treatment with resulting physical harm or pain or mental suffering. (2)¿The deprivation by a care custodian of goods or services that are necessary to avoid physical harm or mental suffering. (3)¿Financial abuse, as defined in Section 15610.30.

“The substantive law of elder abuse provides that financial abuse of an elder occurs when any person or entity takes, secretes, appropriates, or retains real or personal property of an elder adult to a wrongful use or with an intent to defraud, or both.” (Teselle v. McLoughlin (2009) 173 Cal.App.4th 156, 174.) “A wrongful use is defined as taking, secreting, appropriating, or retaining property in bad faith.” (Id.) “Bad faith occurs where the person or entity knew or should have known that the elder had the right to have the property transferred or made readily available to the elder or to his or her representative.” (Id.) Statutory causes of action must be pleaded with particularity. (Covenant Care, Inc. v. Superior Court (2004) 32 Cal.4th 771, 790.)

The FAC alleges that Dr. Labog is 81 years old and Mrs. Labog is 79 years old as of the filing of the FAC. (FAC ¶36.) State Farm owed Plaintiffs a duty to treat them fairly and to not take advantage of them financially due to their advanced age. (Id.) The FAC further alleges that Plaintiffs were contractually entitled to payments from State Farm for the damage caused by the pipe burst under the kitchen sink of their Property (the “Incident”). (FAC ¶39.) State Farm, through its representative, Trinh, engaged in a scheme intended to defraud Plaintiffs by withholding from them funds that Plaintiffs were entitled to receive under the Policy. (Id.) The FAC alleges that Trinh engaged Dr. Labog in a confidential private conversation about the Property and the Incident, and illegally recorded the confidential conversation while asking questions intended to elicit responses that could be used to deny coverage for the claim to withhold insurance funds to which Plaintiffs were entitled under the Policy. (FAC ¶¶7, 40.) The FAC further alleges that State Farm knew or should have known that its conduct in fraudulently deceiving Plaintiffs to deny them benefits to which Plaintiffs were entitled under the Policy would be harmful to Plaintiffs. (Id. at ¶43.)

The elements of a claim for Elder Abuse have been properly alleged in the FAC. Thus, the demurrer to the fourth cause of action is OVERRULED.

“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, but this time limitation shall not apply to motions specified in subdivision (e).” (Code Civ. Proc., § 435, subd. (b)(1).)¿¿ “The court may, upon a motion made pursuant to Section 435, or at any time in its discretion, and upon terms it deems proper: (a) Strike out any irrelevant, false, or improper matter inserted in any pleading.” (Code Civ. Proc., § 436, subd. (a).)¿

Defendant moves to strike the FAC’s references to treble and punitive damages, injunctive relief, and attorneys’ fees in Paragraphs 34, 42, and 45, and in Prayer for Damages Nos. 4 through 6.

“In order to survive a motion to strike an allegation of punitive damages, the ultimate facts showing an entitlement to such relief must be pled by a plaintiff.” (Clauson v. Superior Court (1998) 67 Cal.App.4th 1253, 1255.) The California Civil Code Section 3294, subdivision (a) authorizes punitive damages upon a showing of malice, fraud, or oppression.

Malice is defined as either “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.” (Civ. Code, § 3294, subd. (c)(1).) “Despicable conduct is conduct which is so vile, base, contemptible, miserable, wretched or loathsome that it would be looked down upon and despised by ordinary decent people.” (Mock v. Michigan Millers Mutual Ins. Co. (1992) 4 Cal. App. 4th 306, 331.) Fraud under California Civil Code Section 3294, subdivision (c)(3) “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.” (Civ. Code, § 3294, subd. (c)(3).) The California Civil Code Section 3294, subdivision (2) defines oppression as “despicable conduct that subjects a person to cruel and unjust hardship in conscious disregard of that person’s rights.” (Civ. Code, § 3294, subd. (2).)

Punitive damages thus require more than the mere commission of a tort. (Taylor v. Superior Court (1979) 24 Cal.3d 890, 894-95.) Specific facts must be pled in support of punitive damages. (Hillard v. A.H. Robins Co. (1983) 148 Cal.App.3d 374, 391-392.) A “conclusory characterization of [a] defendant’s conduct as intentional, wilful and fraudulent [is] [a] patently insufficient statement of oppression, fraud, or malice.” (Brousseau v. Jarrett (1977) 73 Cal.App.3d 864, 865.) Facts must be pled to show that a defendant “act[ed] with the intent to vex, injure or annoy, or with a conscious disregard of the plaintiff’s rights.” (Silberg v. California Life Ins. Co. (1974) 11 Cal.3d 452, 462.) “When nondeliberate injury is charged, allegations that the defendant’s conduct was wrongful, willful, wanton, reckless or unlawful do not support a claim for exemplary damages; such allegations do not charge malice.” (G.D. Searle & Co. v. Superior Court (1975) 49 Cal.App.3d 22, 29.) Conduct that is merely negligent will not support a claim for punitive damages. (Tomaselli v. Transamerica Ins. Co. (1994) 25 Cal.App.4th 1269, 1288.)

As discussed above, the FAC states sufficient facts to support the third and fourth causes of action. The FAC alleges that State Farm engaged in and continues to engage in a pattern of (1) secretly and illegally recording confidential communications with its insureds, including Plaintiffs, without their knowledge or consent; and (2) refusing to provide basic information about claims requested by its insureds, including Plaintiffs. (FAC ¶¶31-33.) The FAC further alleges that State Farm engaged in this conduct through its representative, Trinh, with the intent to elicit responses that could be used to deny coverage for the claim made by Plaintiffs to withhold insurance funds to which Plaintiffs were entitled to under their Homeowners Insurance Policy No. 71-ES-C631-0 (the “Policy”). (FAC ¶¶7, 40.)

Thus, the FAC pleads sufficient facts to support a claim for punitive damages and injunctive relief.

Treble damages and attorneys’ fees are recoverable under Welfare & Institutions Code Section 15657.5, which provides: “Where it is proven by a preponderance of the evidence that a defendant is liable for financial abuse, as defined in Section 15610.30, and where it is proven by clear and convincing evidence that the defendant has been guilty of recklessness, oppression, fraud, or malice in the commission of the abuse, in addition to reasonable attorney's fees and costs set forth in subdivision (a), compensatory damages, and all other remedies otherwise provided by law, the limitations imposed by Section 377.34 of the Code of Civil Procedure on the damages recoverable shall not apply.” (Welf. & Inst. Code, § 15657.5, subd. (b) (emphasis added).)

Civil Code Section 3345, subdivision (b) states, in pertinent part: “Whenever the trier of fact makes an affirmative finding in regard to one or more of the factors set forth in paragraphs (1) to (3), inclusive, it may impose a fine, civil penalty or other penalty, or other remedy in an amount up to three times greater than authorized by the statute, or, where the statute does not authorize a specific amount, up to three times greater than the amount the trier of fact would impose in the absence of that affirmative finding.” (Civ. Code, § 3345, subd. (b).) Paragraph 1 of Civil Code Section 3345, subdivision (a) provides redress to senior citizens for UCL claims. As explained above, the FAC alleges that Dr. Labog and Mrs. Labog are 81 and 79 years old, respectively, and are thus covered by the Elder Abuse Act.

As such, the FAC pleads sufficient facts to support a claim for treble damages and attorneys’ fees.

Therefore, the Court DENIES Defendant State Farm General Insurance Company’s Motion to Strike the First Amended Complaint.

Parties who intend to submit on this tentative must send an email to the Court at SMC_DEPT56@lacourt.org as directed by the instructions provided on the court website at www.lacourt.org. If the department does not receive an email and there are no appearances at the hearing, the motion will be placed off calendar.

Hon. Holly J. Fujie

Judge of the Superior Court