Judge: Joel L. Lofton, Case: 22AHCV00356, Date: 2023-02-23 Tentative Ruling

Case Number: 22AHCV00356    Hearing Date: February 23, 2023    Dept: X

   Tentative Ruling

Judge Joel L. Lofton, Department X

HEARING DATE:     February 23, 2023                               TRIAL DATE: No date set.

CASE:                         IKRUSHER, INC. a California corporation, v. MILE HIGH CURE CORP., a California corporation dba MHC Vape Warehouse; JEREMY CALDWELL, an individual; and DOES 1 through 10, inclusive.  

CASE NO.:                 22AHCV00356

MOTION TO STRIKE

MOVING PARTY:               Defendants Mile High Cure Corp. and Jeremy Caldwell

RESPONDING PARTY:      Plaintiff iKrusher, Inc.

SERVICE:                              Filed January 9, 2023

OPPOSITION:                       Filed February 10, 2023

REPLY:                                   Filed February 15, 2023

RELIEF REQUESTED

            Defendants move to strike Plaintiff’s prayer for punitive damages as well as language alleging Defendants acted with malice, oppression, or fraud.

BACKGROUND

             This case arises out of Plaintiff iKrusher, Inc. (“Plaintiff”) claim that Defendants Mile High Cure Corp., dba MHC Vape Warehouse (“MHC”) and Jeremy Caldwell (“Caldwell”) (collectively “Defendants”) breached an agreement for the sale of 150,000 units of Xenbar-V10-OEM for $510,000. Plaintiff alleges that Defendants have paid $279,275 under the agreement. Plaintiff also alleges that Defendant purportedly returned $36,960 worth of products. However, Plaintiff alleges that the returned products were counterfeit reproductions of Plaintiff’s products. Plaintiff alleges Defendants owe an outstanding sum of $319,275.

            Plaintiff filed a first amended complaint on October 27, 2022, alleging nine causes of action for (1) breach of contract, (2) common count: goods and services rendered, (3) common count: open book account, (4) conversion, (5) fraud, (6) federal trademark infringement and counterfeiting, (7) false designation of origin, (8) trademark infringement, and (9) unfair competition.

TENTATIVE RULING

            Defendants’ motion to strike is granted only as to prayer for relief number 13 as applied to MHC.

            Defendants’ motion to strike is denied as to all other allegations.

LEGAL STANDARD

Any party, within the time allowed to respond to a pleading may serve and file a notice of motion to strike a pleading or any part thereof.  (Code Civ. Proc., § 435, subd. (b)(1).)  The court may, upon a motion, or at any time in its discretion, and upon terms it deems proper, strike any irrelevant, false, or improper matter inserted in any pleading.  (Code Civ. Proc., § 436, subd. (a).)  The court may also strike all or any part of any pleading not drawn or filed in conformity with California law, a court rule, or an order of the court.  (Code Civ. Proc., § 436, subd. (b).)  An immaterial or irrelevant allegation is one that is not essential to the statement of a claim or defense; is neither pertinent to nor supported by an otherwise sufficient claim or defense; or a demand for judgment requesting relief not supported by the allegations of the complaint.  (Code Civ. Proc., 431.10, subd. (b).)  The grounds for moving to strike must appear on the face of the pleading or by way of judicial notice.  (Code Civ. Proc., § 437.)  

DISCUSSION

            Defendants move to strike a variety of allegations on the grounds that the allegations are conclusory and do not provide a basis for recovery of punitive damages.

             Punitive damages may be imposed where it is proven by clear and convincing evidence that the defendant has been guilty of oppression, fraud, or malice.  (Civ. Code, § 3294, subd. (a). “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.” (Turman v. Turning Point of Central California, Inc. (2010) 191 Cal.App.4th 53, 63.)

            “The statute expressly defines the terms—malice, oppression, and conduct—for the purposes of determining the viability of the claim for punitive dam

ages. Malice is defined as ‘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.’ (§ 3294, subd. (c)(1).) Oppression is defined as ‘despicable conduct that subjects a person to cruel and unjust hardship in conscious disregard of that person's rights.’ (§ 3294, subd. (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.’ ” (§ 3294, subd. (c)(3).) (Today’s IV, Inc. v. Los Angeles County Metropolitan Transportation Authority (2022) 83 Cal.App.5th 1137, 1193.)

            A plaintiff seeking punitive damages “must include specific factual allegations showing that defendant's conduct was oppressive, fraudulent, or malicious to support a claim for punitive damages. [Citation.] Punitive damages my not be pleaded generally.” (Today’s IV, Inc. v. Los Angeles County Metropolitan Transportation Authority, supra, 83 Cal.App.5th at p. 1193.)

            Defendants take issue with the fact that Plaintiff’s allegations use the word “or” to seek to allege different possible conduct and argue such allegations are vague and ambiguous. Defendants’ argument lacks merit. “It is well established that ‘a party may plead in the alternative and may make inconsistent allegations.’ ” (Third Eye Blind, Inc. v. Near North Entertainment Ins. Services, LLC (2005) 127 Cal.App.4th 1311, 1323.) In this instance, Plaintiff is not pleading inconsistent allegations and even if it was, the inclusion of the word “or” does not render Plaintiff’s allegations so deficient as to warrant being stricken.

            Defendants also claim that Plaintiff’s claims are too conclusory. The court recognizes that punitive damages may not be pleaded generally. However, “[g]enerally speaking, pleadings are to be liberally construed in favor of the pleader and doubts about the permissible scope of discovery are to be resolved in favor of disclosure.” (Advanced Modular Sputtering, Inc. v. Superior Court (2005) 132 Cal.App.4th 826, 835.) Plaintiff alleges that on March 15, 2022, it received a batch of returned products from Defendants. (FAC ¶ 38.) Plaintiff alleges the returned products were counterfeit reproductions of their products. (Id. ¶ 39.) Plaintiff goes into detail regarding the differences between their products and the counterfeit products. (Id. ¶ 40.)

            Plaintiff’s allegations are sufficient to allege that Defendant engaged in fraudulent conduct to plead a prayer for punitive damages.

            Defendants argue that Plaintiff’s allegations fail because of Civil Code section 3294 (“section 3294”). Section 3294, subdivision (a), provides: “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.” Defendants argue that because a contract is involved in Plaintiff’s allegations, Plaintiff is not entitled to recover punitive damages. However, Plaintiff also alleges a variety of torts, under which punitive damages could be recovered.

            Additionally, section 3294, subdivision (b), which provides, in part: “An employer shall not be liable for damages pursuant to subdivision (a), based upon acts of an employee of the employer, unless the employer . . . with a conscious disregard of the rights or safety of others or authorized or ratified the wrongful conduct for which the damages are awarded or was personally guilty of oppression, fraud, or malice. With respect to a corporate employer, the advance knowledge and conscious disregard, 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 does not address this issue in opposition. In the court’s review of the FAC, Plaintiff does not allege misconduct of an officer, director, or managing agent of MHC. Interestingly, Plaintiff alleges that Defendants were alter egos of each other (FAC ¶ 4) but does not allege Caldwell’s role or position in MHC or ratification by a managing officer.

CONCLUSION

            Defendants’ motion to strike is granted only as to prayer for relief number 13 as applied to MHC.

            Defendants’ motion to strike is denied as to all other allegations.

            Moving Party to give notice

Dated:   February 23, 2023                             ___________________________________

                                                                                    Joel L. Lofton

                                                                                    Judge of the Superior Court

Parties who intend to submit on this tentative must send an email to the court indicating their

intention to submit.  Parties intending to appear are strongly encouraged to appear remotely.  alhdeptx@lacourt.org