Judge Lynne M. Hobbs, Case Number: 21STCV35437, Date: 2024-06-11 Tentative Ruling

Judge: Lynne M. Hobbs, Case: 21STCV35437, Date: 2024-06-11 Tentative Ruling

Case Number: 21STCV35437 Hearing Date: June 11, 2024 Dept: 61

CHEVALIER HARRIS, et al. vs FRANK ELIAS, et al.

TENTATIVE

Defendants Executive Bankers Realty Services, Inc., Antonio Guilar, and Liset Avilar’s Motion for Summary Adjudication is DENIED.

Clerk to give notice.

DISCUSSION

A party may move for summary judgment “if it is contended that the action has no merit or that there is no defense to the action or proceeding.” (Code Civ. Proc. § 437c, subd. (a).) “[I]f all the evidence submitted, and all inferences reasonably deducible from the evidence and uncontradicted by other inferences or evidence, show that there is no triable issue as to any material fact and that the moving party is entitled to judgment as a matter of law,” the moving party will be entitled to summary judgment. (Adler v. Manor Healthcare Corp. (1992) 7 Cal.App.4th 1110, 1119.) A motion for summary adjudication may be made by itself or as an alternative to a motion for summary judgment and shall proceed in all procedural respects as a motion for summary judgment. (Code Civ. Proc. § 437c, subd. (f)(2).)

The moving party bears an initial burden of production to make a prima facie showing of the nonexistence of any triable issue of material fact, and if he does so, the burden shifts to the opposing party to make a prima facie showing of the existence of a triable issue of material fact. (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 850; accord Code Civ. Proc. § 437c, subd. (p)(2).)

Once the defendant has met that burden, the burden shifts to the plaintiff to show that a triable issue of one or more material facts exists as to that cause of action or a defense thereto. (Aguilar, supra, 25 Cal.4th at 850.) The plaintiff may not rely upon the mere allegations or denials of its pleadings to show that a triable issue of material fact exists but, instead, shall set forth the specific facts showing that a triable issue of material fact exists as to that cause of action or a defense thereto. (Ibid.) To establish a triable issue of material fact, the party opposing the motion must produce substantial responsive evidence. (Sangster v. Paetkau (1998) 68 Cal.App.4th 151, 166.)

Defendants Executive Bankers Realty Services, Inc., Antonio Guilar, and Liset Avilar (Defendants) move for summary adjudication of Plaintiffs Freddie and Chevalier Harris’ 15th cause of action for financial elder abuse, and their prayer for punitive damages and attorney fees, on the grounds that there is no evidence of malice or recklessness in any conduct on the part of Defendants, or evidence of corporate ratification required under Civil Code § 3294, subd. (b). (Motion at pp. 10–14.)

Defendants’ argument as to the elder abuse cause of action and the prayer for attorney fees is unpersuasive, as it relies upon authority applicable to claims for physical elder abuse, rather than financial abuse.

[F]inancial abuse of an elder occurs when any person or entity takes, secretes, appropriates, or retains real or personal property of an elder adult to a wrongful use or with an intent to defraud, or both. A wrongful use is defined as taking, secreting, appropriating, or retaining property in bad faith. Bad faith occurs where the person or entity knew or should have known that the elder had the right to have the property transferred or made readily available to the elder or to his or her representative.

(Teselle v. McLoughlin (2009) 173 Cal.App.4th 156, 174, citing Welf. & Inst. Code § 15610.30.)

Notably, there is no requirement that the plaintiff in a financial abuse case prove malice, oppression, fraud, or recklessness. (See Welf. & Inst. Code § 15657.5, subd. (a).) Such a showing may entitle a financial-abuse plaintiff to punitive damages under Civil Code § 3294, and may further alleviate “the limitations imposed by Section 377.34 of the Code of Civil Procedure on the damages recoverable.” (Welf. & Inst. Code § 15657.5, subd. (b).) But the requirements of punitive damages culpability expressly “shall not apply to the recovery of compensatory damages or attorney's fees and costs.” (Welf. & Inst. Code § 15657.5, subd. (c).) Thus a plaintiff may prevail on a financial elder abuse claim even in the absence of malice, oppression, or fraud.

Defendants rely on the case Delaney v. Baker (1999) 20 Cal.4th 23, which explained the standards applicable to claims for physical elder abuse under Welfare & Institutions Code § 15657: “In order to obtain the remedies available in section 15657, a plaintiff must demonstrate by clear and convincing evidence that defendant is guilty of something more than negligence; he or she must show reckless, oppressive, fraudulent, or malicious conduct.” (Delaney, supra, 20 Cal.4th at p. 31.) But neither the Delaney case nor section 15657 address themselves to financial elder abuse, which is at issue in the present case and motion.

Although the motion contains a perfunctory argument that “[t]here is . . . no evidence that Defendants wrongfully obtained, hid or retained Freddie Harris’ property,” there is no evidence cited for this proposition. (Motion at p. 12.) The same sentence appears as an entry in Defendants’ separate statement, but again without any evidentiary attribution. (Separate Statement Nos. 12, 29.) Defendants have therefore not carried their burden of production to show the absence of any triable issue of fact on Plaintiffs’ financial abuse claim.

The motion is therefore DENIED as to the 15th cause of action for financial elder abuse, and to the accompanying prayer for attorney fees.

This leaves, however, Plaintiffs’ prayer for punitive damages under Civil Code § 3294. Punitive damages are allowed in non-contract cases when a defendant is guilty of “oppression, fraud, or malice . . . .” (Civ. Code § 3294, subd. (a).) The terms are defined as:

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.

(Civ. Code § 3294, subd. (c).)

Something more than the mere commission of a tort is always required for punitive damages. (Taylor v. Superior Court (1979) 24 Cal.3d 890, 894.) Proof of negligence, gross negligence, or recklessness is insufficient to warrant an award of punitive damages. (Dawes v. Sup.Ct. (Mardian) (1980) 111 Cal.App.3d 82, 88–89.) Punitive damages may be recovered in an action for negligence or other nonintentional torts if the plaintiff pleads and proves that the defendant acted with the state of mind described as “conscious disregard” of the potential dangers to others. (Pfeifer v. John Crane, Inc. (2013) 220 Cal.App.4th 1270, 1299.) When malice is based on a defendant’s conscious disregard of Plaintiff’s rights, the conduct must be both despicable and willful. (College Hospital v. Superior Court (1994) 8 Cal.4th 794, 713 (“College Hospital”).)

Defendants’ argument as to the punitive damages claim also fails, as they submit no evidence to show the absence of triable issues of fact on any facts necessary for a punitive damages award. Defendants cite Plaintiffs’ interrogatory responses for the proposition that they lack evidence to support their claims, but none of the interrogatories cited concerned punitive damages, and none satisfy Defendants’ burden to show that Plaintiffs lack supporting evidence. Defendants note that Plaintiff’s response to Special Interrogatory No. 24 stated that Defendant Avilar was permitted, in violation of law, to perform the functions of a real estate broker without a license in connection with the sale, including soliciting purchaser, negotiating the sale, offering to sell, taking an offer, discussing price and communicating to buyers about price, making disclosures, and other functions. (Campos Decl. Exh. 2, Nos. 24, 25.) It is unclear, however, what bearing this response has on Plaintiffs’ ability to prove either malice, oppression, or fraud, or to show employer ratification or direction by a managing agent under Civil Code § 3294, subd. (b).

Defendants also cite the response to Interrogatory No. 26, which asked Plaintiffs to state all facts supporting their financial elder abuse claim, to which Plaintiffs responded by stating that Defendants were “aware that Plaintiff Freddie D. Harris was an elder and used [their] position of trust to convince Plaintiffs to purchase the subject property, knowing Plaintiffs needed to immediately move and reside in it,” and further that they “made misrepresentations, and concealed certain material defects about the condition of the subject property as alleged in the Complaint in order to induce Plaintiffs to purchase the subject property.” (Campos Decl. Exh. 2, No. 26.) Defendants are not in doubt as to what these alleged misrepresentations and concealments are, as Defendants note in their separate statement the allegations that Plaintiffs discovered, after close of escrow on the property, that Defendants had previously handled another attempted sale of the property, which had been canceled upon discovery of a damaged foundation and roof leak. (Separate Statement No. 27.)

Accordingly, Defendants have not carried their burden, and the motion is DENIED.