TENTATIVE RULING

Plaintiff 3602 Shoreheights, LLC’s Motion for Leave to Conduct Discovery of Defendant Amy Chang’s Financial Condition Pursuant to Civil Code section 3295(c) is DENIED.

Plaintiff 3602 Shoreheights, LLC to give notice. 

REASONING

Plaintiff 3602 Shoreheights, LLC (“Plaintiff”) moves the Court for an order permitting pretrial financial discovery of the condition and profits of Defendant Amy Chang (“Chang”) on the ground that a substantial probability exists that Plaintiff will prevail on its claim for punitive damages against Chang.

Civil Code section 3295, subdivision (c), provides that no pretrial discovery by a plaintiff into the financial condition of the defendant shall be permitted unless the Court enters an order permitting such discovery. “Upon motion by the plaintiff supported by appropriate affidavits and after a hearing, if the court deems a hearing to be necessary, the court may at any time enter an order permitting the discovery otherwise prohibited by this subdivision if the court finds, on the basis of the supporting and opposing affidavits presented, that the plaintiff has established that there is a substantial probability that the plaintiff will prevail” on a claim for punitive damages. (Ibid.)

“[B]efore a court may enter an order permitting discovery of a defendant’s financial condition, it must (1) weigh the evidence submitted in favor of and in opposition to motion for discovery, and (2) make a finding that it is very likely the plaintiff will prevail on his claim for punitive damages.” (Jabro v. Superior Court (2002) 95 Cal.App.4th 754, 758.) “In this context, . . . the words ‘substantial probability’” are interpreted “to mean ‘very likely’ or ‘a strong likelihood’ just as their plain meaning suggests.” (Ibid.) It is not sufficient for a plaintiff to merely make a prima facie showing such as would avoid summary judgment. (Id. at p. 759.)

Punitive damages may be recovered upon a proper showing of malice, fraud, or oppression. (Civ. Code, § 3294, subd. (a).) Plaintiff argues that it will prevail on its claim for actual fraud against Chang. “Fraud” is an intentional misrepresentation, deceit, or concealment of a material fact known by defendant, with intent to deprive a person of property, rights or otherwise cause injury. Turman v. Turning Point of Cent. Cal., Inc. (2010) 191 Cal.App.4th 53, 63.)

In support of its argument that it can succeed on a fraud claim against Chang, Plaintiff provides the following evidence: First, Plaintiff points to Defendant Caroline L. To’s interrogatory response stating that she discussed the mold inspection report with Chang and completed Seller Property Questionnaire and Real Estate Transfer Disclosure Statement forms according to instructions from Chang, which included telling To to check the “no” box as it related to past mold issues because the prior mold issue was only a minor one and had been successfully remediated. (Mot., Ross Decl. ¶ 7, Ex. 15; Perlin Decl. ¶ 9, Ex. 48.) Plaintiff also points to a text message showing that To and Chang discussed the questionnaire (Mot., Ross Decl. ¶ 14, Ex. 35), and To and Chang texted each other stating a hope that the tenants, who knew of mold issues, did not run into the property buyer or their agent (ibid.). Plaintiff further points to the mold reports and the questionnaire as evidence of omission of the mold information. (Mot., Ross Decl. ¶¶ 4, 5, Exs. 11, 13; Perlin Decl. ¶ 9, Ex. 48.)

Put simply, Plaintiff’s evidence may support a finding of fraud by the trier of fact, but the Court cannot conclude there is a substantial probability Plaintiff will succeed on its fraud claim based solely on this evidence. The evidence could just as easily be construed by the trier of fact to show that Chang knew there was a prior mold issue, but she believed it had been resolved, and she told To to complete documents in accordance with her belief. Again, there is a chance the trier of fact may hear the evidence provided and find that it shows Chang knew of a mold issue and intentionally concealed it, but it may also hear the evidence provided and find that Chang merely knew there was a prior issue that had since been resolved, i.e., there is no basis to conclude that Chang intentionally concealed a problem known to her because she was under the belief it had been resolved. Accordingly, Plaintiff 3602 Shoreheights, LLC’s Motion for Leave to Conduct Discovery of Defendant Amy Chang’s Financial Condition Pursuant to Civil Code section 3295(c) is DENIED.

Evidentiary Objections

Defendants Compass California Inc. and Chang object to certain statements within the declarations of Robert S. Ross and Barbara Perlin and exhibits thereto. Objection No. 9 is OVERRULED for the purposes of this motion. The Court declines to rule on Objection Nos. 1 to 8 and 10 to 20, as the evidence was not material to the Court’s ruling herein.