Judge Lynne M. Hobbs, Case Number: 23STCV12802, Date: 2024-10-10 Tentative Ruling

Judge: Lynne M. Hobbs, Case: 23STCV12802, Date: 2024-10-10 Tentative Ruling

Case Number: 23STCV12802 Hearing Date: October 10, 2024 Dept: 61

TOM PROVOST vs ALLSTATE INSURANCE COMPANY, et al.

TENTATIVE

Defendant Ed Carrasco’s Demurrer to the Second Amended Complaint is SUSTAINED without leave to amend.

Defendant Allstate Insurance Company’s Motion to Strike Portions of the Second Amended Complaint is DENIED.

DISCUSSION

I. DEMURRER

A demurrer should be sustained only where the defects appear on the face of the pleading or are judicially noticed. (Code Civ. Pro., §§ 430.30, et seq.) In particular, as is relevant here, a court should sustain a demurrer if a complaint does not allege facts that are legally sufficient to constitute a cause of action. (See id. § 430.10, subd. (e).) As the Supreme Court held in Blank v. Kirwan (1985) 39 Cal.3d 311: “We treat the demurrer as admitting all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law. . . . Further, we give the complaint a reasonable interpretation, reading it as a whole and its parts in their context.” (Id. at p. 318; see also Hahn. v. Mirda (2007) 147 Cal.App.4th 740, 747 [“A demurrer tests the pleadings alone and not the evidence or other extrinsic matters. Therefore, it lies only where the defects appear on the face of the pleading or are judicially noticed. [Citation.]”)

“In determining whether the complaint is sufficient as against the demurrer … if on consideration of all the facts stated it appears the plaintiff is entitled to any relief at the hands of the court against the defendants the complaint will be held good although the facts may not be clearly stated.” (Gressley v. Williams (1961) 193 Cal.App.2d 636, 639.)

“A demurrer for uncertainty is strictly construed, even where a complaint is in some respects uncertain, because ambiguities can be clarified under modern discovery procedures.” (Khoury v. Maly’s of Cal., Inc. (1993) 14 Cal.App.4th 612, 616.) Such demurrers “are disfavored, and are granted only if the pleading is so incomprehensible that a defendant cannot reasonably respond.” (Mahan v. Charles W. Chan Insurance Agency, Inc. (2017) 14 Cal.App.5th 841, 848.)

A demurrer should not be sustained without leave to amend if the complaint, liberally construed, can state a cause of action under any theory or if there is a reasonable possibility the defect can be cured by amendment. (Schifando v. City of Los Angeles, supra, 31 Cal.4th at p. 1081.) The demurrer also may be sustained without leave to amend where the nature of the defects and previous unsuccessful attempts to plead render it probable plaintiff cannot state a cause of action. (Krawitz v. Rusch (1989) 209 Cal.App.3d 957, 967.)

Defendant Ed Carrasco (Carrasco) demurrers to the third cause of action for negligent misrepresentation, on the grounds that the facts alleged in the Second Amended Complaint (SAC) disclose no actual reliance upon any representation made by Plaintiff. (Demurrer at pp. 8–10.)

“The elements of negligent misrepresentation are “(1) the misrepresentation of a past or existing material fact, (2) without reasonable ground for believing it to be true, (3) with intent to induce another's reliance on the fact misrepresented, (4) justifiable reliance on the misrepresentation, and (5) resulting damage.” (National Union Fire Ins. Co. of Pittsburgh, PA v. Cambridge Integrated Services Group, Inc. (2009) 171 Cal.App.4th 35, 50.)

This Court previously sustained Carrasco’s demurrer to the same cause of action with leave to amend, noting the FAC’s allegations that expressly indicated that Plaintiff placed no faith in Carrasco’s initial lowball repair estimate, and had actively sought to disprove it. This Court granted leave to amend based on the arguments made in Plaintiff’s opposition, that other misrepresentations of other facts, not alleged in the FAC, could furnish a different basis for the negligent misrepresentation claim.

Plaintiff’s SAC contains the additional misrepresentation that Carrasco on December 27, 2020, “misrepresented that he would work to quickly and fairly resolve Plaintiff’s claim.” (SAC ¶ 52.) Based on this misrepresentation, Plaintiff took Carrasco’s initial lowball estimate “as a starting point for further negotiations,” thereafter employing contractors to perform estimates of their own in order to adjust the estimate in reliance on Carrasco’s good faith. (SAC ¶¶ 53–54.) Plaintiff also alleges that Carrasco misrepresented that if the upstairs walls and insulation, upon further inspection, need to be removed and repaired, Allstate would pay these extra costs of remediation, when in fact such representations were false. (SAC ¶¶ 55–58.)

Plaintiff’s new allegations are infirm as a matter of law, because other than representations related to a lowball estimate that Plaintiff affirmatively did not rely on, the other alleged misrepresentations consist of negligent promises, not statements of material fact. These allegations, as to whether Carrasco analysis would be fair, or whether Allstate would pay for a given loss, are not potential bases for a negligent misrepresentation claim, because “promises of future performance . . . cannot be the basis for a negligent misrepresentation cause of action. (Nissan Motor Acceptance Cases (2021) 63 Cal.App.5th 793, 823, internal quotation marks omitted.) And as with the prior iteration of the pleading, Plaintiff’s allegations disclose that he disbelieved Carrasco’s estimate at once and sought the advice of other contractors to rebut Carrasco’s estimations, showing a lack of reliance thereon. (SAC ¶¶ 14–20.)

The demurrer to the third cause of action is therefore SUSTAINED without leave to amend.

II. MOTION TO STRIKE

Any party, within the time allowed to respond to a pleading, may serve and file a notice of motion to strike the whole or any part thereof. (Code Civ. Proc., § 435(b)(1)). The notice of motion to strike a portion of a pleading shall quote in full the portions sought to be stricken except where the motion is to strike an entire paragraph, cause of action, count or defense. (California Rules of Court Rule 3.1322.)

The grounds for a motion to strike shall appear on the face of the challenged pleading or form any matter of which the court is required to take judicial notice. (Code Civ. Proc., § 437(a)). The court then may strike out any irrelevant, false, or improper matter inserted in any pleading and strike out 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.) When the defect which justifies striking a complaint is capable of cure, the court should allow leave to amend. (Perlman v. Municipal Court (1979) 99 Cal.App.3d 568, 575.)

Defendant Allstate Insurance Co. (Allstate) moves to strike the FAC’s prayer for punitive damages contained in Plaintiff’s SAC. (Motion at pp. 7–10.)

Punitive damages are allowed in non-contract cases when a defendant is guilty of “oppression, fraud, or malice . . . .” (Civ. Code § 3294.) 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.

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”).)

Although Allstate argues that the allegations in the SAC fall short of the threshold needed to establish malice or oppression, this Court previously ruled that these allegations were “sufficient grounds for punitive damages against Allstate.” (See 3/26/2024 Ruling.) The Court granted Allstate’s motion to strike only because Plaintiff had failed to plead corporate ratification as required under Civil Code § 3294, subd. (b).

That defect has been rectified in the present pleading, which includes an allegation that Allstate’s conduct was directed or ratified by its managers and managing agents. (SAC ¶¶ 46, 67.)

The motion is therefore DENIED.