Judge: Joseph Lipner, Case: 24STCV06157, Date: 2024-07-11 Tentative Ruling

Case Number: 24STCV06157    Hearing Date: July 11, 2024    Dept: 72

SUPERIOR COURT OF CALIFORNIA

COUNTY OF LOS ANGELES

DEPARTMENT 72

TENTATIVE RULING

Defendants Law Office of Greg May and Gregory Thomas May (collectively, the “May Defendants”) move to strike portions of the Complaint filed by Plaintiff Spectrum Holdings and Development, LLC (“Plaintiff”) relating to punitive damages.

The Court GRANTS the motion to strike without leave to amend.  If Plaintiff in the future discovers additional facts justifying a claim of punitive damages, it may file a motion to amend at that time.

Background

This is a legal malpractice case.

Plaintiff is a landlord who sued tenants for unlawful detainer. The tenants prevailed after a jury trial. The jury found that the tenants had breached portions of the lease, but that Plaintiff had waived the breach.

Plaintiff hired a new attorney, Defendant Jeffrey Slott. Slott filed a Notice of Appeal. The tenants obtained an order for attorney’s fees. Slott filed an appeal of the award of attorney’s fees. Plaintiff alleges that Slott should have told Spectrum to pay the fees and did not inform Plaintiff of the risks and benefits of appealing the order for attorney’s fees.

Defendant May is an appellate attorney who was later retained to handle the appeal.

There were alleged problems with the designation of record which had been prepared by Scott. Plaintiff moved to augment the record, but the motion was denied. The appeal was dismissed due to alleged problems with the designation of record. The tenants obtained an order for additional attorney’s fees for defending the appeal.

Plaintiff then filed a contract lawsuit and obtained a judgment against the tenants.

Plaintiff filed this action against Defendants Slott; Law Offices of Jeffrey A. Slott, APC; May; and Law Office of Greg May on March 12, 2024, raising claims for (1) legal malpractice; (2) breach of fiduciary duty; and (3) breach of contract.

The May Defendants filed this motion to strike on May 21, 2024. Plaintiff filed an opposition and the May Defendants filed a reply.

Legal Standard

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(a).) The court may also strike all or any part of any pleading not drawn or filed in conformity with the laws of this state, a court rule, or an order of the court. (Code Civ. Proc., § 436(b).) The grounds for a motion to strike are that the pleading has irrelevant, false or improper matter, or has not been drawn or filed in conformity with laws. (Code Civ. Proc., § 436.) 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

Punitive damages are appropriate when a defendant acted with malice, oppression, or fraud. (Civ. Code, § 3294, subd. (a).) “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.) “In passing on the correctness of a ruling on a motion to strike, judges read allegations of a pleading subject to a motion to strike as a whole, all parts in their context, and assume their truth.” (Ibid.) “In ruling on a motion to strike, courts do not read allegations in isolation.” (Ibid.) Although a plaintiff need only plead ultimate facts, pure conclusions of law are not adequate to survive a motion to strike. (Perkins v. Superior Court (1981) 117 Cal.App.3d 1, 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.) “In passing on the correctness of a ruling on a motion to strike, judges read allegations of a pleading subject to a motion to strike as a whole, all parts in their context, and assume their truth.” (Ibid.) “In ruling on a motion to strike, courts do not read allegations in isolation.” (Ibid.) Conclusory allegations, devoid of any factual assertions, are insufficient to support a conclusion that parties acted with oppression, fraud or malice. (Smith v. Superior Court (1992) 10 Cal.App.4th 1033, 1042.)

“[A] breach of a fiduciary duty alone without malice, fraud or oppression does not permit an award of punitive damages. The wrongdoer must act with the intent to vex, injure, or annoy, or with a conscious disregard of the plaintiff's rights. Punitive damages are appropriate if the defendant's acts are reprehensible, fraudulent or in blatant violation of law or policy. The mere carelessness or ignorance of the defendant does not justify the imposition of punitive damages. …. Punitive damages are proper only when the tortious conduct rises to levels of extreme indifference to the plaintiff's rights, a level which decent citizens should not have to tolerate.” (Flyer's Body Shop Profit Sharing Plan v. Ticor Title Ins. Co. (1986) 185 Cal.App.3d 1149, 1154 [internal citations and quotation marks omitted].)

Plaintiff contends in its opposition that Defendants knowingly concealed material information necessary to make an informed decision. Plaintiff contends that Defendants should have advised Plaintiff that the appeal would have been unsuccessful due to the inadequate designated record, but instead advised Plaintiff to drop the appeal and let it die on its own. (Opposition at p. 2:20-23.) Plaintiff appears to be arguing that Defendants should have advised Plaintiff sooner to abandon the appeal following the designation of record.

The Complaint discloses that the May Defendants were retained after Slott filed both of the appeals. (Complaint ¶¶ 20-23.) Then, on December 19, 2022, Defendants filed the motion to augment the record, but allegedly did not inform Plaintiff of the motion or its results. (Complaint ¶ 24.) Defendants then allegedly advised Plaintiff to drop the appeal and “let it die on its own.” (Complaint ¶ 26.) Defendants allegedly did not inform Plaintiff of the additional attorney fee motion after the appeal and failed to oppose the motion. (Complaint ¶ 31.)

Defendants allegedly advised Plaintiff to move for an offset of the attorney fee awards against the later award in the contract case. (Complaint ¶ 26.) Plaintiff moved for an offset in the contract case, but the motion was denied due to non-mutuality of parties. (Complaint ¶¶ 32, 34.)

Plaintiff argues that the failure to notify Plaintiff about the impact of the inadequate designation of record on the appeal shows that Defendants knowingly concealed material facts from Plaintiff. That inference does not necessarily follow. There is a broad realm of negligent conduct by an attorney that can result in a lack of adequate communication with a client that does not rise to the level of intentional concealment of information. As discussed above, mere carelessness or ignorance does not support a claim for punitive damages – and Plaintiff has not alleged facts above and beyond that.

The Court therefore grants the motion to strike. Plaintiff has made no reference to facts it can allege that would remedy the current issues with the punitive damages claim. If Plaintiff discovers additional facts in the future, it may seek to amend at that time.