Superior Court of California 

County of Los Angeles 

Department 78 

 

NOELLE ALADGEM,

Plaintiff, 

vs.

GENESIS GOLD GROUP, INC., et al.

Defendants.  

 

 

  Case No.: 23STCV15472

 

MOTIONS TO STRIKE PUNITIVE DAMAGES FILED BY DEFENDANT GENESIS GOLD GROUP, INC. AND DEFENDANTS JONATHAN ROSE, JACOB DIAZ, AND BRADLEY GARRETT

Defendant Genesis Gold’s motion to strike is GRANTED as to the first, second, and sixth causes of action with leave to amend. 

The motion is DENIED with respect to third through fifth causes of action.

The Individual Defendants’ motion to strike is GRANTED with respect to Defendant Garrett in its entirety. The parties should be prepared to discuss the issue of leave to amend with respect to Defendant Garrett.

The Individual Defendants’ motion to strike is GRANTED as to the first, second, and sixth causes of action with leave to amend with respect to Defendants Rose and Diaz.

The motion is DENIED with respect to third through fifth causes of action.

If Plaintiff wishes to file a first amended complaint, Plaintiff must file and serve the amended complaint within 15 days after the date of this order.

Moving party to provide notice and to file proof of service of such notice within five court days after the date of this order.

I. FACTUAL BACKGROUND   

This is an action for violations of the FEHA, violations of the Labor Code, wrongful termination, negligent hiring, and unfair business practices. Plaintiff alleges that she was employed as a personal assistant to Defendants between October 10, 2022 through February 28, 2023. (Compl., ¶12.) Rose is a co-owner, CEO, CFO, and Secretary of Genesis Gold. (Compl., ¶3.) Diaz and Garrett are co-owners of Genesis Gold and Plaintiff’s supervisors. (Compl., ¶¶4-5.)

On January 26, 2023, another employee, Cory Wetzel, sent Plaintiff an inappropriate picture of himself on Instagram. (Compl., ¶16.) Plaintiff informed two other employees, Giles Kirshner and Jerry Berkowitz, of the incident the next day. (Compl., ¶17.) Defendant Diaz called Kirshner into his office and asked about the incident on February 17, 2023. (Compl., ¶18.) Plaintiff reported the incident to a human resources employee, Harry Meschures, on February 20, 2023. (Compl., ¶19.) Plaintiff reported feeling uncomfortable at work because of Wetzel’s actions and because Diaz knew of the incident and did not speak to her about it. (Compl., ¶20.) Meschures did not believe anything could be done because the incident took place outside of work. (Compl., ¶21.) Plaintiff met with Meschures and Defendant Rose, who confirmed that nothing could be done because the incident took place outside of work. (Compl., ¶22.) Rose informed Plaintiff that he told Wetzel not to do it anymore. (Compl., ¶23.) Rose stated that Plaintiff had enticed Wetzel by accepting a gift from him. (Compl., ¶¶25-26.) Rose offered to allow Plaintiff to work from home, which she accepted. (Compl., ¶¶27-28.) 

Later, Diaz spoke to Plaintiff and informed her that it was illegal to initiate a discussion with her about the incident. (Compl., ¶29.) Diaz was upset that Plaintiff had brought the matter to HR and believed she should have told the owners directly. (Compl., ¶¶29-39.) Diaz stated that the report was mentally draining on him because he feared a lawsuit and that Plaintiff’s complaint was making him uncomfortable as an owner of the company. (Id.)  The next day, Berkowitz informed Plaintiff that she needed to quit. (Compl., ¶¶40-41.) HR then stated Plaintiff could not work from home because Rose stated there were no laptops. (Compl., ¶¶42-43.) Berkowitz then informed Plaintiff that Rose and Diaz ordered employees to avoid her at all costs. (Compl., ¶44.) On February 24, 2023, Plaintiff reported to work and prepared to take employee lunch orders as was part of her duties. (Compl., ¶45.) However, Diaz had already taken all of the lunch orders and excluded Plaintiff. (Compl., ¶45.) On February 28, 2023, Plaintiff quit. (Compl., ¶46.)

II. PROCEDURAL HISTORY 

On July 3, 2023, Plaintiff filed her Complaint against Defendants Genesis Gold Group, Inc. (“Genesis Gold”), Jonathan Rose, Jacob Diaz, and Bradley Garrett.

On September 29, 2023, Genesis Gold filed its motion to strike.

On October 23, 2023, Defendants Rose, Diaz, and Garrett filed their motion to strike.

On October 31, 2023, Plaintiff dismissed the eighth cause of action for unpaid overtime.

III. DISCUSSION

Defendants move to strike Plaintiff’s demands for punitive damages from the Complaint.

Specifically, Genesis Gold moves to strike the following:

1. Page 2, Paragraphs 3-5, which state, “who was personally guilty of oppression, fraud or malice;” 

2. Page 8, Paragraph 59; Page 9, Paragraph 70; Page 10, Paragraph 79; Page 10, Paragraph 88; Page 11, and Paragraphs 94 and 98. Specifically, “all Defendants are guilty of malice and oppression, warranting an assessment of exemplary damages in an amount appropriate to punish said Defendants and to deter others from engaging in similar misconduct;” 

3. Page 17, Line 8; Page 17, Line 20; and Page 18, Lines 4 and 14. Specifically, “For punitive and exemplary damages;”

Defendants Rose, Diaz, and Garrett move to strike the following:

1. Page 17, line 8, prayer no. 4 on the First, Second and Fourth Causes of Action stated in Plaintiff’s Complaint, specifically, “4. For punitive and exemplary damages;” 

2. Page 17, line 20, prayer no. 3 on the Third Causes of Action stated in Plaintiff’s Complaint, specifically, “3. For punitive and exemplary damages;” 

3. Page 18, line 4, prayer no. 4 on the Fifth Cause of Action stated in Plaintiff’s Complaint, specifically, “4. Punitive and exemplary damages;” 

4. Page 18, line 14, prayer no. 4 on the Sixth Cause of Action stated in Plaintiff’s Complaint, specifically, “4. Punitive and exemplary damages;”

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, section 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.) 

“[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]].) 

1. Genesis Gold

Here, Genesis Gold argues that the Complaint does not plead facts sufficient to support a demand for punitive damages because the Complaint contains conclusory, boilerplate allegations. Genesis Gold moves to strike the demand for punitive damages as to the first through sixth causes of action.

Plaintiff concedes that the Complaint does not sufficiently allege punitive damages as to the negligent hiring cause of action.

With respect to the retaliation and wrongful termination causes, the Complaint alleges that after Plaintiff made a complaint to HR about another employee’s unwanted sexual advances, Defendant Diaz reprimanded Plaintiff for going to HR and both Rose and Diaz told other employees to avoid Plaintiff. As a result of the retaliation, Plaintiff quit. The facts alleged show that Diaz and Rose willfully disregarded Plaintiff’s rights as an employee by admonishing her for making a complaint to HR and directing other employees to avoid her in response to her complaint. Although Genesis Gold argues that the Complaint at most alleges that it negligently handled the sexual harassment investigation, the facts alleged state that the company’s CEO and Plaintiff’s supervisor, Rose and Diaz, admonished Plaintiff specifically for making a complaint to HR without regard for her rights as an employee. This conduct also rises to the level of despicable conduct sufficient to support a demand for punitive damages because it would be looked down upon and despised by ordinary people. 

Genesis Gold also argues that the Complaint does not meet the pleading standard for a corporate employer as to the sexual harassment and failure to prevent sexual harassment causes of action because the alleged harassment was committed by Wetzel, that Defendants did not know of Wetzel’s unfitness, and Defendants did not ratify his conduct. Plaintiff argues that the facts are sufficient to support a demand for punitive damages as to the sexual harassment and failure to prevent sexual harassment causes of action because Defendants did not remove Plaintiff or her harasser from the work environment and blamed Plaintiff for the incident. 

The Complaint alleges that Defendants reprimanded Wetzel for the incident and offered to allow Plaintiff to work from home. Therefore, the facts do not show that Defendants ratified Wetzel’s conduct. There are also no facts that Defendants knew of Wetzel’s unfitness. Although Plaintiff argues that Defendants ratified the conduct because they failed to investigate the incident, the Complaint alleges that Defendants did reprimand Wetzel and believed they could not act further because the incident took place outside of work. There being no facts alleging that an officer, director, or managing agent ratified Wetzel’s conduct or knew of Wetzel’s unfitness before the incident, the motion is granted with respect to the causes of action for sexual harassment and failure to prevent sexual harassment.

2. Rose, Diaz, and Garrett

Rose, Diaz, and Garrett (“Individual Defendants”) also move to strike the demands for punitive damages as to the first through sixth causes of action. The Individual Defendants argue that the Complaint does not set forth any facts that would warrant punitive damages.

The motion is granted as to the causes of action for negligent hiring, sexual harassment, and failure to prevent sexual harassment for the same reasons as Genesis Gold’s motion to strike. 

The motion is denied as to the causes of action for retaliation and wrongful termination against Defendants Rose and Diaz because the Complaint states they admonished Plaintiff for making a complaint to HR. The analysis is the same as for Genesis Gold’s motion to strike.

The motion is granted as to Garrett because there are no facts in the Complaint as to Garrett’s conduct. Plaintiff argues that Garrett is liable as an individual under the alter ego doctrine. 

A corporate entity is the alter ego of an individual if (1) there is a sufficient unity of interest and ownership between a corporation and the individual controlling it that the separate personalities of the individual and the corporation no longer exist and (2) treating the acts as those of the corporation alone will sanction fraud, promote justice, or cause an inequitable result. (Misik v. D'Arco (2011) 197 Cal.App.4th 1065, 1072, citing Webber v. Inland Empire Investments, Inc. (1999) 74 Cal.App.4th 884.) Factors that may show a unity of interest include one individual's ownership of all stock in a corporation; use of the same office or business location; commingling of funds and other assets of the individual and the corporation; an individual holding out that he is personally liable for debts of the corporation; identical directors and officers; failure to maintain minutes or adequate corporate records; disregard of corporate formalities; absence of corporate assets and inadequate capitalization; and the use of a corporation as a mere shell, instrumentality or conduit for the business of an individual, among others. (Zoran Corp. v. Chen (2010) 185 Cal.App.4th 799, 811–812.)

Here, the Complaint does not allege any facts about Garrett other than the fact that he was a co-owner of Genesis Gold alongside Rose and Diaz and that he was Plaintiff’s supervisor. Additionally, the Complaint does not allege facts which would show attributing the alleged acts to Genesis Gold would lead to an inequitable result. The Complaint does not adequately plead that Genesis Gold was an alter ego of Defendant Garrett.

Because there are no facts in the Complaint as to Garrett’s conduct, the motion is granted as to Defendant Garrett.

DATED: January 5, 2024

                                                                        ____________________________ 

Hon. Jill Feeney

Judge of the Superior Court