Superior Court of California

County of Los Angeles

North Central District

Department B

seda kangani rashidi,

Plaintiff,

state farm general insurance company,

Defendant.

Case No.: 23BBCV00048

Hearing Date: February 2, 2024

[TENTATIVE] order RE:

motion to strike

BACKGROUND

A. Allegations

Plaintiff Seda Kangani Rashidi (“Plaintiff”) is alleged to be the owner of the rental property located at 3755 Mound View, Studio City, California 91604. This action arises out of an insurance claim made by Plaintiff resulting from water loss to the property, which occurred on January 8, 2021, when rainwater entered through the roof of the subject property causing significant damage. Plaintiff alleges that she had an insurance policy with Defendant State Farm General Insurance Company (“Defendant”) and that the water loss was covered under the subject policy. Plaintiff alleges that Defendant failed to fully pay monies due under the policy and eventually stopped communications with her.

The second amended complaint (“SAC”), filed May 16, 2023, alleges causes of action for: (1) breach of contract; (2) breach of duty of good faith and fair dealing – bad faith; and (3) financial elder abuse.

B. Motion on Calendar

On November 22, 2023, Defendant filed a motion to strike portions of the SAC.

On January 22, 2024, Plaintiff filed an opposition brief.

On January 26, 2024, Defendant filed a reply brief.

DISCUSSION

Defendant moves to strike allegations for punitive damages from the SAC in paragraphs 3, 48, 56, 63, 75, 90, 92, 106, 111, 112, 126, and 129, and the prayer for damages at paragraph 3.

A complaint including a request for punitive damages must include allegations showing that the plaintiff is entitled to an award of punitive damages. (Clauson v. Superior Court (1998) 67 Cal.App.4th 1253, 1255.) A claim for punitive damages cannot be pleaded generally and allegations that a defendant acted "with oppression, fraud and malice" toward plaintiff are insufficient legal conclusions to show that the plaintiff is entitled to an award of punitive damages. (Brousseau v. Jarrett (1977) 73 Cal.App.3d 864, 872.) Specific factual allegations are required to support a claim for punitive damages. (Id.)

Civil Code § 3294 authorizes a plaintiff to obtain an award of punitive damages when there is clear and convincing evidence that the defendant engaged in malice, oppression, or fraud. Section 3294(c) defines the terms in the following manner:

(1) "Malice" means 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.

(2) "Oppression" means despicable conduct that subjects a person to cruel and unjust hardship in conscious disregard of that person's rights.

(3) "Fraud" 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.

Further, when the punitive damages are sought against an employer, Civil Code § 3294(b) requires the plaintiff to establish the following:

(1) the employer had advance knowledge of the unfitness of the employee and employed him or her with a conscious disregard of the rights or safety of others or authorized,

(2) the employer ratified the wrongful conduct for which the damages are awarded, or

(3) the employer was personally guilty of oppression, fraud, or malice.

In the Court’s prior ruling on the motion to strike the allegations for punitive damages in the FAC, the Court found: “At most, the allegations [in the FAC] are conclusory that Defendant acted intentionally, maliciously, oppressively, or fraudulently. While Plaintiff alleges that Defendant intended to delay or deny paying policy benefits to Plaintiff, the allegations do not rise to a specific showing that Defendant’s conduct was malicious, oppressive, or fraudulent.” (10/6/23 Order at pp. 7-8.) The Court previously found that Plaintiff’s use of “buzz words” from section 3294 were not sufficient to allege oppression, fraud, or malice. (Id. at p.8.)

In the SAC, Plaintiff alleges that Defendant delayed making payments, delayed in communications with Plaintiff and her counsel, handled the claim oppressively/maliciously/fraudulently, etc., which forced Plaintiff to expend her own funds to return the property to its pre-loss condition and the delays allowed looters and vandals to enter her property, steal property, and cause property damage.

According to the SAC, the subject incident resulting in the water loss to the property occurred on January 28, 2021 and Plaintiff “timely” reported the incident to Defendant. (SAC, ¶¶9-11.) Plaintiff alleges that she retained an attorney on April 28, 2021 to communicate with Defendant and that Plaintiff’s counsel sent numerous letters to Defendant to discuss the loss and claim of damages. (Id., ¶¶15-21.) Defendant’s agent responded on June 5, 2021 and Plaintiff discovered on June 8, 2021 that the property had been vandalized. (Id., ¶22-24.) The parties communicated about finalizing estimates and issuing payment, and the claim was reassigned to another adjuster in June 2021. (Id., ¶¶25-36.) On July 23, 2021, Defendant issued a payment of $30,395.19 for the dwelling repair portion of the claim. (Id., ¶37.) Plaintiff’s counsel continued to contact Defendant to ask for someone to contact him to discuss the claim in August and September 2021. (Id., ¶¶38-44.) On September 23, 2021, Defendant issued a supplemental dwelling payment on their revised estimate in the amount of $13,467.90. (Id., ¶45.) Plaintiff’s counsel continued to contact Defendant in September and October 2021. (Id., ¶¶46-47.) On October 14, 2021, Defendant issued a payout of $74,032.38 for the loss of income portion of Plaintiff’s claim. (Id., ¶48.) Plaintiff’s counsel contacted Defendant in November 2021 for the supplemental dwelling payment and Defendant requested a reinspection of the property, but the parties arrived at the inspection on different dates. (Id., ¶¶49-54.) The parties then underwent the inspection in January 2022 and the inspector’s report was delayed. (Id., ¶¶58-62.) Plaintiff alleges that in February 2022, she was assigned a new adjuster, and another inspection of the property was ordered. (Id., ¶¶63-64.) The parties underwent another inspection and on February 19, 2022, Defendant issued a supplemental payment of $130,825.48 for dwelling repairs and $8,467.62 for loss of income. (Id., ¶68.) In May 2022, the claim was reassigned to a new adjuster and on June 8, 2022, Defendant issued a supplemental payment for the cabinets in the amount of $27,569.55. (Id., ¶¶71-72.) Plaintiff alleges that on June 23, 2022, Defendant sent a “closing letter” to Plaintiff and Defendant refused to pay the entirety of the policy benefits owed under the policy. (Id., ¶¶73-74.)

Plaintiff alleges many delays in the insurance claims process, such that she waited nearly a year and a half until Defendant sent its “closing letter.” While there have been delays in the process of handling Plaintiff’s claims (including re-inspections of the property and new adjusters), Plaintiff has not shown that Defendant acted with malice, or that Defendant intended to cause Plaintiff injury or despicable conduct that was in willful and conscious disregard to the right and safety of Plaintiff. Further, the allegations fail to rise to a showing of oppression, or despicable conduct that subjected Plaintiff to cruel and unjust hardship in conscious disregard of Plaintiff’s rights. Finally, Plaintiff has not alleged facts showing that Defendant acted fraudulently, or made intentional misrepresentations of fact to Plaintiff or her counsel. At most, Plaintiff has alleged that there were some delays and Defendant ultimately decided that a full payout of Plaintiff’s policy was not required. However, this in itself is not sufficient to warrant punitive damages. As alleged, the SAC shows that Defendant was handling Plaintiff’s claim, was putting adjusters on Plaintiff’s claim, required inspections to verify estimates and claims of loss, and paid Plaintiff on her claim numerous times after evaluations and inspections. At this time, the Court does not find that the allegations of the SAC rise to a level of showing that Defendant acted with malice, oppression, and/or fraud to warrant the imposition of punitive damages.

As such, the motion to strike is granted. If Plaintiff discovers facts during the discovery process that may support a showing that punitive damages are warranted, the Court would be inclined at that time to consider where leave to amend the complaint is proper to request punitive damages. However, at this time, the SAC fails to rise to this showing.

CONCLUSION AND ORDER

Defendant State Farm General Insurance Company’s motion to strike allegations for punitive damages is granted without leave to amend.

Defendant shall give notice of this order.

Note: The Court will be handling hearings remotely on February 2, 2024. If you wish to be heard in person, please inform the clerk and your matter will be continued to allow you to appear personally.

DATED: February 2, 2024 ___________________________

John Kralik

Judge of the Superior Court