Judge Marcella O. Mclaughlin, Case Number: 37-2023-00043257-CU-IC-CTL, Date: 2024-06-07 Tentative Ruling

Judge: Marcella O. Mclaughlin, Case: 37-2023-00043257-CU-IC-CTL, Date: 2024-06-07 Tentative Ruling

SUPERIOR COURT OF CALIFORNIA,

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EVENT DATE:

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HALL OF JUSTICE

TENTATIVE RULINGS - June 06, 2024

06/07/2024 09:00:00 AM C-72 COUNTY OF SAN DIEGO

JUDICIAL OFFICER:Marcella O McLaughlin

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Civil - Unlimited Insurance Coverage Demurrer / Motion to Strike 37-2023-00043257-CU-IC-CTL W PENN BUILDING LLC VS ASPEN SPECIALTY INSURANCE COMPANY [IMAGED] CAUSAL DOCUMENT/DATE FILED: Demurrer, 02/13/2024

A. Plaintiff's uncalendared motion to continue the hearing on the demurrers and motions to strike is DENIED. The motion is not properly before the court because plaintiff failed to reserve a hearing date.

See SDSC Local Rule 2.1.19(A) ('Failure to reserve a date for hearing will result in the demurrer, motion, ex parte application, or order to show cause hearing not being heard.'). Moreover, plaintiff has not established good cause for the requested seven-month continuance. This ruling is without prejudice to plaintiff's counsel applying ex parte to advance the hearing date on his motion to be relieved as counsel.

B. Defendant Scottsdale Insurance Company's unopposed demurrer to the complaint is SUSTAINED in part and OVERRULED in part.

Scottsdale's request for judicial notice (ROA 26) is granted as to Exhibit 1 (Evid. Code § 452(d)) and otherwise denied. '[T]he existence of a contract between private parties cannot be established by judicial notice under Evidence Code section 452, subdivision (h).' Gould v. Maryland Sound Industries, Inc. (1995) 31 Cal.App.4th 1137, 1145.

The demurrer based on misjoinder of parties is overruled. 'A demurrer is particularly unsuited to resolving questions of fact regarding misjoinder of parties[.]' Verizon California Inc. v. Board of Equalization (2014) 230 Cal.App.4th 666, 680. Here, the court is unable to conclude from the face of the complaint that the three London Market syndicates are necessary and indispensable parties. See Code Civ. Proc. § 389. Moreover, even if the court takes judicial notice of the existence of the insurance policies, doing so is not the same as accepting the truth of their contents. See Joslin v. H.A.S. Ins.

Brokerage (1986) 184 Cal.App.3d 369, 374; see also Fremont Indemnity Co. v. Fremont General Corp.

(2007) 148 Cal.App.4th 97, 115 ('[A] court cannot by means of judicial notice convert a demurrer into an incomplete evidentiary hearing in which the demurring party can present documentary evidence and the opposing party is bound by what that evidence appears to show.').

The demurrers to counts 1 and 2 are overruled. 'A demurrer must dispose of an entire cause of action to be sustained.' Fremont Indemnity, 148 Cal.App.4th at 119. In this case, as discussed above, the insurance policies are not properly before the court. Moreover, whether Scottsdale acted reasonably in valuing the vandalism loss is a question that cannot be resolved on this limited record. See Ghazarian v. Magellan Health, Inc. (2020) 53 Cal.App.5th 171, 186 ('The reasonableness of an insurer's conduct is typically a question of fact[.]').

The demurrer to count 3 is sustained with leave to amend. Insufficient facts have been pled with the Calendar No.: Event ID: TENTATIVE RULINGS

3088381 15 CASE NUMBER: CASE TITLE: W PENN BUILDING LLC VS ASPEN SPECIALTY INSURANCE COMPANY 37-2023-00043257-CU-IC-CTL required particularity to state a claim for promissory fraud. There are no facts showing how, when, where, to whom, and by what means the alleged misrepresentations were tendered. See West v. JPMorgan Chase Bank, N.A. (2013) 214 Cal.App.4th 780, 793.

C. Scottsdale's unopposed motion to strike portions of the complaint is GRANTED in part and DENIED in part.

The motion is granted with leave to amend as to the request to strike the prayer for punitive damages and the allegation supporting the prayer (paragraphs 25 and 60). In order to state a prima facie claim for punitive damages, a complaint must 'include specific factual allegations showing that defendant's conduct was oppressive, fraudulent, or malicious[.]' Today's IV, Inc. v. Los Angeles County Metropolitan Transportation Authority (2022) 83 Cal.App.5th 1137, 1193. Here, insufficient facts have been pled to establish oppression, fraud, or malice within the meaning of Civil Code section 3294(c). As discussed above, plaintiff has not adequately alleged deceit for purposes of 'fraud.' With respect to 'oppression' and the second prong of 'malice,' the facts pled do not show 'despicable conduct' – i.e., conduct that is 'so vile, base, or contemptible that it would be looked down on and despised by reasonable people.' CACI 3940. Finally, there are no facts showing an intent to injure plaintiff, as required for the first prong of 'malice.' The motion is otherwise denied. The court is not persuaded that the challenged allegations are irrelevant or improper as a matter of law. Moreover, the court has discretion to grant or deny a motion to strike and, even where an allegation may be unwarranted, the court is not required to strike the allegation at the pleading stage and may instead simply deny the request on the merits at a later stage of the case or ignore the allegation. See Clements v. T.R. Bechtel Co. (1954) 43 Cal.2d 227, 242. Here, the court declines to edit or re-write the complaint and will address possible unmeritorious allegations, if necessary, at a later stage of the case. See PH II, Inc. v. Superior Court (1995) 33 Cal.App.4th 1680, 1683 ('[U]se of the motion to strike should be cautious and sparing. We have no intention of creating a procedural 'line item veto' for the civil defendant.').

D. Defendant Aspen Specialty Insurance Company's unopposed demurrer to the complaint is SUSTAINED in part and OVERRULED in part.

As an initial matter, the court declines to consider the declaration of Jeffrey N. Gesell (ROA 17). '[A] demurrer looks only to the face of the pleadings and to matters judicially noticeable and not to the evidence or other extrinsic matter.' Knickerbocker v. City of Stockton (1988 199 Cal.App.3d 235, 239 fn.

Turning to the merits, the demurrer based on misjoinder of parties is overruled. As explained above, the court is unable to conclude from the face of the complaint that the three London Market syndicates are necessary and indispensable parties. See Verizon California, 230 Cal.App.4th at 680; see also Code Civ. Proc. § 389.

The demurrer to count 1 is overruled. The complaint is not uncertain. Moreover, plaintiff has stated sufficient facts to constitute a cause of action for tortious breach of the implied covenant of good faith and fair dealing (bad faith). Whether plaintiff can prove these facts is a question for another day. See Ghazarian, 53 Cal.App.5th at 186.

The demurrer to count 3 is sustained with leave to amend. Insufficient facts have been pled with the required particularity to state a claim for promissory fraud. See West, 214 Cal.App.4th at 793.

E. Aspen's unopposed motion to strike portions of the complaint is GRANTED in part and DENIED in part.

The motion is granted with leave to amend as to the request to strike the prayer for punitive damages and the allegation supporting the prayer (paragraphs 25, 60, and 61). Insufficient facts have been pled Calendar No.: Event ID: TENTATIVE RULINGS

3088381 15 CASE NUMBER: CASE TITLE: W PENN BUILDING LLC VS ASPEN SPECIALTY INSURANCE COMPANY 37-2023-00043257-CU-IC-CTL to establish oppression, fraud, or malice within the meaning of Civil Code section 3294(c). See Today's IV, 83 Cal.App.5th at 1193.

The motion is otherwise denied. The court is not persuaded that the challenged allegations are irrelevant or improper as a matter of law. Moreover, as discussed above in connection with Scottsdale's motion to strike, the court declines to edit or re-write the complaint and will address possible unmeritorious allegations, if necessary, at a later stage of the case. See Clements, 43 Cal.2d at 242; see also PH II, 33 Cal.App.4th at 1683.

F. 'Liberality in permitting amendment is the rule, if a fair opportunity to correct any defect has not been given.' Angie M. v. Superior Court (1995) 37 Cal.App.4th 1217, 1227. Accordingly, plaintiff is granted leave to amend count 3 and the claim for punitive damages. The first amended complaint must be filed and served by June 17, 2024.

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