Judge Kerry Bensinger, Case 21STCV37594 2023-05-01 Tentative Ruling

On October 12, 2021, plaintiffs Anna Vaserfirer and Arkady Vaserfirer (“Plaintiffs”) filed this action against defendant Uber Technologies, Inc. (“Uber”) arising out of a motor vehicle-pedestrian collision. On January 3, 2023, Plaintiffs amended the complaint to add Rasier, LLC, Rasier-CA, LLC, Avis Rent A Car System, LLC (“Avis”), and Oscar Moquete (“Moquete”) as defendants.

In the First Amended Complaint (“FAC”), Plaintiff asserts causes of action for (1) motor vehicle negligence and (2) general negligence against all defendants and (3) negligent hiring, supervision, and retention and (4) negligent entrustment against Uber and Avis only.

On February 21, 2023, Uber, Rasier, LLC, and Rasier-CA, LLC (hereinafter, “Defendants”) filed this motion to strike Plaintiffs’ request for punitive damages in the FAC.

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); Stafford v. Shultz (1954) 42 Cal.2d 767, 782 [“Matter in a pleading which is not essential to the claim is surplusage; probative facts are surplusage and may be stricken out or disregarded”].) 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.) For the purposes of a motion to strike, the term “pleading” means a demurrer, answer, complaint, or cross-complaint. (Code Civ. Proc., § 435.)

Any party, within the time allowed to respond to a pleading, may serve and file a motion to strike the whole pleading or any part thereof. (Code Civ. Proc., § 435, subd. (b)(1); Cal. Rules of Court, rule 3.1322, subd. (b).) On a motion to strike, the court may: (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., § 436, subds. (a)-(b); Stafford v. Shultz (1954) 42 Cal.2d 767, 782.)

“Before filing a motion to strike . . . the moving party shall meet and confer in person or by telephone with the party who filed the pleading that is subject to the motion to strike for the purpose of determining if an agreement can be reached that resolves the objections to be raised in the motion to strike.” (Code Civ. Proc., § 435.5, subd. (a).) If no agreement is reached, the moving party shall file and serve with the motion to strike a declaration stating either: (1) the means by which the parties met and conferred and that the parties did not reach an agreement, or (2) that the party who filed the pleading failed to respond to the meet and confer request or otherwise failed to meet and confer in good faith. (Code Civ. Proc., § 435.5, subd. (a)(3).)

In ruling on a motion to strike punitive damages, “judges read allegations of a pleading subject to a motion to strike as a whole, all parts in their context, and assume their truth.” (Clauson v. Superior Court (1998) 67 Cal.App.4th 1253, 1255.) To state a prima facie claim for punitive damages, a plaintiff must allege the elements set forth in the punitive damages statute, Civil Code section 3294. (College Hospital, Inc. v. Superior Court (1994) 8 Cal.4th 704, 721 (College Hospital).) Under Civil Code section 3294, subdivision (b), “[a]n employer shall not be eligible for damages pursuant to subdivision (a), based upon acts of an employee of the employer unless 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 or ratified the wrongful conduct for which the damages are awarded or was personally guilty of oppression, fraud, or malice.”

“[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 officers, directors, or managing agents.” (Cruz v. Home Base (2000) 83 Cal.App.4th 160, 167 [cleaned up].)

Further, a plaintiff must assert facts with specificity to support a conclusion that a defendant acted with oppression, fraud, or malice. To wit, there is a heightened pleading requirement regarding a claim for punitive damages. (See Smith v. Superior Court (1992) 10 Cal.App.4th 1033, 1041-1042.) “When nondeliberate injury is charged, allegations that the defendant’s conduct was wrongful, willful, wanton, reckless or unlawful do not support a claim for exemplary damages; such allegations do not charge malice. (Citation omitted.) When a defendant must produce evidence in defense of an exemplary damage claim, fairness demands that he receive adequate notice of the kind of conduct charged against him. (Citation omitted.)” (G. D. Searle & Co. v. Superior Court (1975) 49 Cal.App.3d 22, 29.) In Anschutz Entertainment Group, Inc. v. Snepp (2009) 171 Cal.App.4th 598, 643, the Court of Appeal noted that the plaintiffs’ factual presentation relating to their claim for punitive damages was “insufficient to meet the specific pleading requirement.” (See also Grieves v. Superior Court (1984) 157 Cal.App.3d 159, 166 [“The mere allegation an intentional tort was committed is not sufficient to warrant an award of punitive damages. Not only must there be circumstances of oppression, fraud, or malice, but facts must be alleged in the pleading to support such a claim”].)

Before filing a motion to strike, the moving party shall meet and confer in person or by telephone with the party who has filed the pleading and shall file a declaration detailing their meet and confer efforts. (Code Civ. Proc., § 435.5, subd. (a).) Defendant has satisfied this requirement. (See Belcher Decl.)

According to the FAC, Uber and Avis are engaged in a joint venture program whereby Avis rents vehicles to persons who seek employment as a driver with Uber but do not have a car or insurance. (FAC, ¶ 34.) Under this program, Uber and Avis gave Moquete a vehicle to operate on public streets. (FAC, ¶ 52.) On August, 2, 2021, Moquete used an Avis vehicle to complete seven Uber customer rides. (FAC, ¶ 53.) Shortly after completing his sixth ride request of the day, Moquete was travelling in his vehicle on Fairfax Avenue in Los Angeles. At the same time, Plaintiffs were crossing the street in the crosswalk at the intersection of Fairfax and Waring Avenues in Los Angeles. Moquete plowed into Plaintiff Anna Vaserfirer as her son, Plaintiff Arkady Vaserfirer, … , narrowly escaping the same fate himself. Instead of stopping, Moquete fled the scene. (FAC, ¶ 54.) Upon information and belief, Uber learned of the August 2, 2021 collision and yet continued to employ Moquete following the collision. (FAC, ¶ 56.)

Pursuant to Public Utilities Code section 5445.2, Uber is prohibited from hiring a driver who has been convicted of a violent felony, regardless of the date of conviction. (FAC, ¶¶ 43- 44.) The only way Uber can ensure it is complying with California law is to conduct background checks that are not limited in temporal scope. (FAC, ¶ 44.) Thus, background checks that are limited in temporal scope are wholly insufficient. (FAC, ¶ 45.) Uber hires a third-party background check provider, Checkr, Inc. (“Checkr”), to conduct its background checks on potential drivers. Uber is aware that Checkr’s background checks only examine a driver’s criminal history for the past seven years. Accordingly, Uber knows that its background checks are inadequate, and that Uber is inevitably hiring violent felons as Uber drivers in violation of California law. (FAC, ¶ 46.)

Moquete is but one example. Moquete was convicted of carjacking in 2005 and sentenced to 15 years in prison. Carjacking is a violent felony under Penal Code section 667.5, subdivision (c)(17). (FAC, ¶ 48.) Moquete’s driving history should have clearly disqualified him from driving for Uber. For example, on November 8, 2021, following Moquete’s release from prison, Moquete was convicted of driving over 100 miles per hour on the freeway. In that same year, he was also involved in two separate traffic accidents. (FAC, ¶ 50.) Notwithstanding Moquete’s criminal and driving history, Uber hired him as one of its drivers in direct violation of Public Utilities Code section 5445.2, subdivision (a)(2)(B)(i). (FAC, ¶ 51.)

Defendants seek to strike 38 portions of the FAC across four causes of action. Based upon the allegations presented, Plaintiffs formulate two distinct theories upon which they pursue exemplary damages against Uber: (1) ratification of Moquete’s conduct and (2) Uber’s policy regarding background checks. The Court addresses each in turn.

Defendants seek to strike punitive damages from the FAC because it is devoid of specific and particular factual allegations that Uber, a corporate employer, ratified Moquete’s wrongful conduct. Plaintiffs’ allegation in support of ratification appears in paragraph 56: “Upon information and belief, Uber learned of the August 2, 2021 collision and yet continued to employ Moquete following the collision.”

This allegation fails to meet the heightened pleading standard required to plead a claim for exemplary damages. Plaintiffs fail to plead with specificity the factual circumstances that support the conclusion that a corporate leader (officer, director, or managing agent) knew of Moquete’s conduct and “ratified” Moquete’s conduct. While it is true that “the failure to investigate or respond to charges that an employee has committed an intentional tort or the failure to discharge the employee may be evidence of ratification” and that “[g]enerally, ratification is a question of fact,” Plaintiffs allegations are inadequate to pass muster. Indeed, Plaintiffs fail to describe in any meaningful way what any particular corporate leader knew or did to ratify Moquete’s conduct

Uber makes two arguments. First, the FAC lacks sufficient specificity. Second, because Uber’s policy comports with California law, it support a claim for punitive damages.

Plaintiffs argue the FAC sufficiently alleges that Uber’s background check policy warrants punitive damages. “[A]n inference of corporate malice can be based on the existence of a company policy that willfully, consciously, and despicably disregards the rights and safety of others.” (Butte Fire Cases (2018) 24 Cal.App.5th 1150, 1173.)(Butte Fire). Here, Plaintiffs set forth sufficient allegations that support such an inference. Plaintiffs allege “background checks that are limited in temporal scope are wholly insufficient. Such is the case with Uber’s background check. Uber is aware that Checkr’s background checks only examine a driver’s criminal history for the past seven years. Accordingly, Uber knows that its background checks are inadequate, and that Uber is inevitably hiring violent felons as Uber driver in violation of California law.” (FAC, ¶¶ 45-46.) Plaintiffs further allege that “Moquete is but one example. Moquete was convicted of carjacking in 2005 and sentenced to 15 years in prison. Carjacking is a violent felony under Penal Code section 667.5, subdivision (c)(17).” (FAC, ¶ 48.)

Based on the foregoing, a reasonable trier of fact could infer that Uber’s use of inadequate background checks, and knowledge of the inadequacy, is a willful, conscious, and despicable disregard of Plaintiffs’ rights because that policy allowed a disqualified individual like Moquete to rent a motor vehicle. Moreover, the factual allegation are sufficient to infer that the contract with Checkr was made by a corporate leader. Indeed, in certain circumstances, pinpointing the specific corporate officer may be unnecessary. As the Court of Appeal in Butte Fire stated, “[W]e have no quarrel with the notion than an inference of corporate malice can be based upon the existence of a company policy that willfully, consciously, and despicably disregards the rights and safety of others.” (Id. at 247.) Unlike Plaintiffs’ ratification averment, Plaintiffs’ background-check-policy argument is factually detailed and specific.

Uber argues the motion to strike must be granted because Checkr’s seven year background search complies with California law. Public Utilities Code section 5445.2(a)(3) requires that transportation network company (Uber) “shall not contract with, employ, or retain a driver if the driver has been convicted of any of the following offenses within the previous seven years [categories of crimes not at issue here].” For these categories of crimes, Uber is correct. But Plaintiffs’ allegations involve a different class of individual who have suffered a different category of crime, those listed in section 5445.2(a)(2). For these categories of crimes (including registered sex offenders and persons convicted of violent felonies), the statutory disqualification period is not limited to seven years. Indeed, the statute states that the transportation networking company “shall not contract with, employ, or retain a driver if the driver meets either of the following criteria: [categories of crimes at issue here].” A conviction for a crime listed in section 5445.2(a)(2) is not limited to the past seven years. Plaintiffs’ contentions are not precluded by California law.

Contrary to Defendants’ assertion, Plaintiffs allege that Uber’s background check of Moquete did not comply with California law. Plaintiffs allege, “[p]ursuant to Public Utilities Code section 5445.2, Uber is prohibited from hiring a driver who has been convicted of a violent felony, regardless of that date of conviction.” (FAC, ¶¶ 43- 44.) Further, Plaintiffs allege “Moquete was convicted of carjacking in 2005 and sentenced to 15 years in prison. Carjacking is a violent felony under Penal Code section 667.5, subdivision (c)(17).” (FAC, ¶ 48.) Read together with the allegation that “Uber’s conscious decision to conduct inadequate background checks and/or ignoring its drivers’ driving histories is directly related to Uber’s desire to maximize profits” (FAC, ¶ 84.1), Plaintiffs have sufficiently pled causes of action that seek exemplary damages within the meaning of Civil Code section 3294(b) based upon allegations of malice.

The motion to strike is GRANTED as to the allegations based on Uber’s ratification of Moquete’s conduct. The Court GRANTS leave to amend.

The motion to strike is DENIED as to the allegations based on Uber’s policy of background checks.

Plaintiffs are ordered to file and serve a Second Amended Complaint within 20 days of this ruling.

Defendants Uber Technologies, Inc., Rasier, LLC, and Rasier-CA, LLC are ordered to file and serve their responsive pleading within 30 days of service of the Second Amended Complaint.

Parties who intend to submit on this tentative must send an email to the Court at SSCDEPT27@lacourt.org indicating intention to submit on the tentative as directed by the instructions provided on the court website at www.lacourt.org. Please be advised that if you submit on the tentative and elect not to appear at the hearing, the opposing party may nevertheless appear at the hearing and argue the matter. Unless you receive a submission from all other parties in the matter, you should assume that others might appear at the hearing to argue. If the Court does not receive emails from the parties indicating submission on this tentative ruling and there are no appearances at the hearing, the Court may, at its discretion, adopt the tentative as the final order or place the motion off calendar.

Hon. Kerry Bensinger

Judge of the Superior Court