Judge Jill Feeney, Case Number: 22STCV27101, Date: 2023-08-24 Tentative Ruling

This is an action for breaches of covenants, conditions, and restrictions; enforcement of equitable servitudes; private nuisance; an accounting; breach of fiduciary duty; and elder abuse arising from a burst pipe which damaged Plaintiffs’ residence. Plaintiffs allege that a water supply flex tub on the exterior of their building burst and caused water to flow into their unit. (TAC ¶6.) Despite contacting Defendant Top of the Mark Homeowners Association, Inc., Defendant failed to remedy the water damage from the burst pipe. (TAC ¶¶6-8.)

1. Page 5, Lines 12-19: “Plaintiffs are informed and believes and on that basis alleges that directors, including Director Ms. Rudd, and each of them, took the action described in this paragraph for their own pecuniary benefit. Directors and Ms. Rudd, suffered no harm as a result of the action, but knew that it would cause harm to Plaintiffs.”

3. Page 6, Lines 18-20: “The conduct of HOA was done in wanton reckless disregard of Plaintiffs’ emotional and financial well-being, and HOA acted with recklessness, fraud and malice in the commission of these acts or failures to act.”

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. (Code Civ. Proc., section 435, subd. (b)(1); Cal. Rules of Court, rule 3.1322, subd. (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. (Code Civ. Proc. section 436, subd. (a)-(b); Stafford v. Shultz (1954) 42 Cal.2d 767, 782.)

In order to state a prima facie claim for punitive damages, a complaint must set forth the elements as stated in the general punitive damage statute, Civil Code section 3294. (College Hospital, Inc. v. Superior Court (1994) 8 Cal.4th 704, 721.) These statutory elements include allegations that the defendant has been guilty of oppression, fraud or malice. (Civ. Code, § 3294, subd. (a).)

“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.” (College Hospital, Inc., supra, 8 Cal.4th at p. 725 [examining Civ. Code § 3294, subd. (c)(1)].) “A conscious disregard of the safety of others may constitute malice within the meaning of section 3294 of the Civil Code. In order to justify an award of punitive damages on this basis, the plaintiff must establish that the defendant was aware of the probable dangerous consequences of his conduct, and that he willfully and deliberately failed to avoid those consequences.” (Taylor v. Superior Court (1979) 24 Cal.3d 890, 895-896.)

“As amended to include [despicable], the statute plainly indicates that absent an intent to injure the plaintiff, ‘malice’ requires more than a ‘willful and conscious’ disregard of the plaintiffs’ interests. The additional component of ‘despicable conduct’ must be found.” (College Hospital, Inc., supra, 8 Cal.4th at p. 725.) The statute’s reference to despicable conduct represents a “new substantive limitation on punitive damage awards.” (Ibid.) 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. Such conduct has been described as ‘having the character of outrage frequently associated with crime.’” (Tomaselli v. Transamerica Ins. Co. (1994) 25 Cal.App.4th 1269, 1287.)

A motion to strike punitive damages is properly granted where a plaintiff does not state a prima facie claim for punitive damages, including allegations that defendant is guilty of oppression, fraud or malice. (Turman v. Turning Point of Cent. California, Inc. (2010) 191 Cal.App.4th 53, 63.) “Mere negligence, even gross negligence, is not sufficient to justify such an award” for punitive damages. (Kendall Yacht Corp. v. United California Bank (1975) 50 Cal.App.3d 949, 958.) The allegations supporting a request for punitive damages must be alleged with specificity. Conclusory allegations without sufficient facts are not enough. (Smith v. Superior Court (1992) 10 Cal.App.4th 1033, 1041-1042.)

“[T]he imposition of punitive damages upon a corporation is based upon its own fault. It is not imposed vicariously by virtue of the fault of others.” (City Products Corp. v. Globe Indemnity Co. (1979) 88 Cal.App.3d 31, 36.) “Corporations are legal entities which do not have minds capable of recklessness, wickedness, or intent to injure or deceive. An award of punitive damages against a corporation therefore must rest on the malice of the corporation’s employees. But the law does not impute every employee’s malice to the corporation. Instead, the punitive damages statute requires proof of malice among corporate leaders: the ‘officer[s], director[s], or managing agent[s].’” (Cruz v. Home Base (2000) 83 Cal.App.4th 160, 167 [citation omitted].) As to ratification, “[a] corporation cannot confirm and accept that which it does not actually know about.’” (Ibid. [citing College Hospital, Inc., supra, 8 Cal.4th at p. 726 [for ratification sufficient to justify punitive damages against corporation, there must be proof that officers, directors, or managing agents had actual knowledge of the malicious conduct and its outrageous character]].)

Here, the TAC alleges that Plaintiffs are residents of 18843 Hatteras Street, Unit 8 in Tarzana, California. (TAC ¶1.) In November 2021, a water supply flex tub on the exterior of the building burst, causing water to flow into Plaintiffs’ unit. (TAC ¶6.) Plaintiffs contacted Defendant about the sewage backup problem and Defendant failed to remedy the issue. (TAC ¶6.) Defendant was responsible for plumbing. (TAC ¶6.) Plaintiffs’ unit remains unfit for human occupation and sustained $100,000 in damages. (TAC ¶7.) Defendant made an insurance claim to its insurance carrier, Travelers, and received payment for the claim, but failed to disburse funds to Plaintiffs to repair the unit. (TAC ¶8.)

Plaintiffs at all times complied with the building’s Declaration of Covenants, Conditions, and Restrictions (“CC&Rs”). (TAC ¶9.) Defendants materially breached the CC&Rs by failing to maintain and repair the common areas and the damage to Plaintiffs’ unit. (TAC ¶11.) Plaintiffs pray for punitive damages under Civ. Code, section 3294 and treble damages under Civ. Code, section 3345.

The allegations in Plaintiff’s’ TAC are substantially the same as the SAC. Plaintiffs added paragraphs 14, 15, and 21. Plaintiffs also modified paragraph 13. Paragraphs 13 and 14 allege that an HOA officer, Irina Rudd was responsible for communicating with Plaintiffs regarding the damage to their unit and deliberately stopped responding once Plaintiffs began demanding the full amount owed for the repairs. (TAC ¶¶13-14.) Rudd knew and continues to know that Plaintiffs are elderly people who have been left by the HOA to live in an uninhabitable unit. (TAC ¶14.) Plaintiff incurred attorney’s fees and costs. (TAC ¶15.) Plaintiffs now allege that the condition of the unit constitutes a private nuisance because a pipe burst and obstructed Plaintiffs’ free use and enjoyment of the unit. (TAC ¶21.)

The new facts in the TAC are not different from the SAC. As before, the TAC at most alleges that Defendant breached its contractual obligations under the CC&Rs by failing to remedy the water damage to Plaintiffs’ unit and failing to disburse insurance funds to Plaintiffs. Although breaching a contractual obligation demonstrates that Defendant acted with conscious disregard for Plaintiffs’ rights, this fact alone does not show intent to harm Plaintiffs, nor does it rise to a level of despicable conduct sufficient to support a demand for punitive damages.

The TAC now names an officer, Irina Rudd, and alleges that Rudd stopped communicating with Plaintiffs regarding the damage to their unit when Plaintiffs demanded the full cost of the repairs despite knowing they were elderly, and the unit was not habitable. Again, although failing to respond to Plaintiffs’ communications despite knowing the unit was uninhabitable demonstrates a conscious disregard of Plaintiffs’ rights, failing to respond to Plaintiffs’ communications does not rise to a level of despicable conduct sufficient to support a demand for punitive damages.

Plaintiffs argue that the facts alleged are sufficient to support a demand for punitive damages because they show Defendant was aware of the probable consequences of their actions and willfully and deliberately failed to avoid those consequences. However, Plaintiffs do not address whether the facts alleged show Defendant’s conduct is despicable.

Defendant’s motion to strike is granted. Because this is the second time the Court has granted a motion to strike on the same issue of punitive damages and Plaintiffs do not present new facts to allege, Plaintiffs’ request for leave to amend is denied.