Judge: Mark A. Young, Case: 22SMCV02578, Date: 2023-08-22 Tentative Ruling

Case Number: 22SMCV02578    Hearing Date: February 7, 2024    Dept: M

CASE NAME:           Franco Carlotto v. 11928 Darlington Ave, LLC, et al.

CASE NO.:                22SMCV02578

MOTION:                 Motion to Strike Portions of Plaintiff’s First Amended Complaint

HEARING DATE:   February 7, 2024

 

Background

 

            Plaintiff leased residential premises from Defendant 11928 Darlington Ave, LLC, the owner and landlord.  Plaintiff alleges Defendant Cirrus Asset Management Inc. was the landlord and property manager of the premises.  Plaintiff alleges that Defendants failed to respond and remediate his complaints of other residents smoking tobacco, marijuana and crack cocaine.  Plaintiff alleges the noxious fumes penetrated and permeated his unit, exposing him to carcinogenic and nuisance chemicals in the air. 

 

            Plaintiff alleges Defendants ultimately moved him to a new unit in response to his complaints.  Plaintiff alleges that even in the new unit he was still exposed to second-hand smoke.  Plaintiffs alleges the new unit also suffered from dangerous defects, including a gas leak.  Plaintiff further alleges a fire erupted at the building in April 2022.  Plaintiff alleges the fire emanated from Unit 107, the same unit that was the source of fumes and tobacco and marijuana smoke before Plaintiff was moved.  Plaintiff alleges no smoke alarms were triggered and no onsite manager warned him of the fire.

 

            Plaintiff also alleges Defendants also failed to respond to the criminal activities at the premises.  Plaintiff alleges residents reported to Defendants repeatedly that there were individuals brandishing weapons in the common area and tenants were dealing drugs to other tenants.  Plaintiff allege there were multiple car breakins in the back of the building as well.  Plaintiff alleges Defendants were aware of these issues but refused to address them properly.  Plaintiff alleges Defendants retaliated against Plaintiff for complaining.  Plaintiff alleges he suffered bodily injury, emotional distress and economic damages due to Defendants’ refusal to address these habitability issues. 

 

            On December 8, 2022, Plaintiff filed a complaint against Defendants.  On August 22, 2023, the Court sustained Defendants’ demurrer to the 5th cause of action for breach of implied covenant of good faith and fair dealing without leave to amend and overruled Defendants’ demurrer to the 7th cause of action for retaliation and 9th cause of action for violation of the UCL.  The Court also granted Defendants’ motion to strike Plaintiff’s claim for punitive damages with 10 days leave to amend and denied it as to Plaintiff’s claim for UCL remedies.

 

            On August 29, 2023, Plaintiff filed the operative First Amended Complaint (FAC) alleging (1) negligence—premises liability; (2) breach of lease; (3) breach of implied warranty of habitability/tenantability; (4) breach of implied covenant of quiet enjoyment; (5) violation of tenant anti-harassment ordinance; (6) retaliation; (7) violation of Proposition 65 (Health & Safety Code §25249.5); and (8) unfair business practices.  On October 2, 2023, Defendants filed the instant Motion to Strike Punitive Damages Allegations. 

 

Legal Standard

 

            “The court may, upon a motion made pursuant to Section 435, or at any time in its discretion, and upon terms it deems proper: (a) Strike out any irrelevant, false, or improper matter inserted in any pleading. (b) 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.” (CCP §436.)  Pursuant to CCP §436, the Court may strike out “any irrelevant, false, or improper matter inserted in any pleading” and/or “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.” (CCP §436.) In ruling on a motion to strike, the allegations in the complaint are considered in context and presumed to be true: “[J]udges 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. Sup.Ct. (Pedus Services, Inc.) (1998) 67 Cal.App.4th 1253, 1255.)

 

            “In an action for the breach of an obligation not arising from contract, where it is proven by clear and convincing evidence that the defendant has been guilty of oppression, fraud, or malice, the plaintiff, in addition to the actual damages, may recover damages for the sake of example and by way of punishing the defendant.”  (CC §3294(a).)

 

            “‘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.”  (CC §3294(c)(1).)  “‘Oppression’ means despicable conduct that subjects a person to cruel and unjust hardship in conscious disregard of that person's rights.”  (CC §3294(c)(2).)

 

            “An employer shall not be liable 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. With respect to a corporate employer, the advance knowledge and conscious disregard, authorization, ratification or act of oppression, fraud, or malice must be on the part of an officer, director, or managing agent of the corporation.” (CC §3294(b).)

 

“Ratification may be established by any circumstantial or direct evidence demonstrating adoption or approval of the employee's actions by the corporate agent. Such ratification may be inferred from the fact that the employer, after being informed of the employee's actions, does not fully investigate and fails to repudiate the employee's conduct by redressing the harm done and punishing or discharging the employee.”  (Fisher v. San Pedro Peninsula Hospital (1989) 214 Cal.App.3d 590, 621 (to plead sexual harassment against employer based on doctor’s conduct, nurse would be required to plead facts in support of employer’s ratification).)  “Ratification” occurs when the employer “demonstrates an intent to adopt or approve” the employee’s wrongful acts, including in failing to intercede in known patterns or to discipline once the misconduct becomes known.  (College Hospital Inc. v. Superior Court (1994) 8 Cal. 4th 704, 726; CACI 3710; C.R. v. Tenet Healthcare Corp. (2009) 169 Cal.App.4th 1094, 1110 (ratification may be demonstrated based on employer’s failure to discharge employee who has committed and failure to investigate or respond to charges that an employee committed an intentional tort).)    

 

Analysis

 

            Defendants argue Plaintiff fails to allege ratification of any alleged acts of malice or oppression.  Defendants argue there are also no allegations of intentional or even reckless conduct.  Defendants argue Plaintiff has only alleged negligence and a breach of contract.  Defendants argue the Court already found in connection with the prior motion to strike that no despicable conduct was alleged and that despicable conduct is still not alleged. 

 

            In opposition, Plaintiff contends punitive damages are sufficiently alleged based on Defendants’ failure to respond to repeated complaints of hazardous conditions and code violations at the premises.  Plaintiff emphasizes that Defendants are his landlords, a special relationship that has supported a finding of outrageous conduct in the context of an IIED cause of action.  Plaintiff argues Defendants’ complete failure to remedy these conditions despite knowledge of their existence and the danger they posed to tenants qualifies as malice and oppression.  Plaintiff also argues Defendants decision to move him into a unit they knew suffered from a gas leak qualifies as malice.  Plaintiff contends that Civil Code §3294(b) does not apply here, because Plaintiff and Defendants were not in an employer-employee relationship.  Finally, Plaintiff argue there is an independent basis for punitive under Civil Code §1942.5.

 

A.     Plaintiff’s complaint sufficiently alleges acts that a reasonable trier of fact could deem “malicious”or “oppressive”

 

            The Court agrees that Civil Code §1942.5(h) is a separate statutory ground for punitive damages.  “Any lessor or agent of a lessor who violates this section shall be liable to the lessee in a civil action for all of the following:…(2) Punitive damages in an amount not less than one hundred dollars ($100) nor more than two thousand dollars ($2000) for each retaliatory act where the lessor or agent has been guilty of fraud, oppression, or malice with respect to that act.”  However, because section 1942.5(h) incorporates the requirement of malice, fraud or oppression, Plaintiff must still allege facts consistent with Civil Code §3294’s malice, fraud or oppression requirement.

           

            Here, Plaintiff has sufficiently alleged Defendants’ intentional retaliation for assertion of his tenant rights.  The Court overruled Defendants’ demurrer to the 6th cause of action for retaliation, confirming the sufficiency of Plaintiff’s allegation that Defendants intentionally and knowingly retaliated against him for asserting his tenant rights under Civil Code §1942.5.  (FAC, ¶27.)  As such, punitive damage are sufficiently pled under Civil Code §1942.5(h)(2). 

 

            Plaintiff also sufficiently alleges facts from which a reasonable trier of fact could find malice under Civil Code §3294(c)(1).  Defendants allegedly maintained multiple hazardous conditions on the subject property, including unchecked criminal activity by residents, brandishing of weapons in common areas, lack of fire alarms, drug use resulting in Plaintiff’s exposure to carcinogenic and noxious fumes, drug dealing, lack of an onsite manager and an apartment with an active gas leak.  (FAC, ¶¶ 11, 27, 29, 34, 60.)  Due to these hazardous conditions, a fire broke out in April 2022 and residents had no warning of the fire due to the lack of any smoke alarms on the premises or an on-site manager.  (FAC, ¶¶ 32, 50-59.)

 

            Plaintiff alleges he informed Defendants in writing of these dangerous conditions, and Defendants failed to remediate them properly, ultimately resulting in a fire from the unit where the alleged drug use was taking place.  (FAC, ¶¶ 17, 18, 23.)  Defendants were also cited by the City for multiple habitability and safety violations.  (FAC, ¶ 41.)  Defendants’ property manager allegedly stated in writing that Defendants would not make the required repairs and would rather leave Plaintiff’s unit to decay to drive him from the unit.  (FAC, ¶ 40.)  These allegations are sufficient to plead malice.  Defendants knew of hazardous conditions at the subject property but refused to remediate them, in part due to a desire to retaliate against Plaintiff and in part due to a conscious disregard for Plaintiff’s rights and safety.  Reasonable minds could conclude based on these facts that Defendants intended “to cause injury to the plaintiff” or that Defendants’ conduct was “despicable conduct which is carried on by the defendant with a willful and conscious disregard of the rights or safety of others,” particularly given the parties’ landlord-tenant relationship.  (Civ. Code § 3294(c)(1).)  As landlords, Defendants’ position gave them the power to damage Plaintiff’s interests, as only Defendants could remediate the hazardous condition issues.  (Stoiber v. Honeychuck (1980) 101 Cal.App.3d 903, 925-926.)

 

            Finally, Civil Code § 3294(b) does not apply.  Plaintiff is not alleging liability based on the acts of Defendants’ employee.  Plaintiff is alleging liability based on Defendants’ policy of not responding to Plaintiff’s complaints and refusing to remediate hazardous conditions.  Even if Civil Code § 3294(b) applied, Plaintiff’s allegations establish authorization or ratification of the wrongful acts based on Defendants’ failure to respond to Plaintiff’s complaints and the City’s citations.  Plaintiff alleges that Defendants’ knowing refusal to comply was stated in writing by its managing agent, a property manager.  (FAC, ¶40.)  The property manager allegedly had the power to decide whether Defendants would perform the repairs required by the City.  (Id.)  These allegations are sufficient to establish that the property manager was a managing agent of Defendants per CC §3294(b), i.e. the manager had substantial discretionary authority over significant aspects of management of the building.  (Davis v. Kiewit Pacific Co. (2013) 220 Cal.App.4th 358, 361 (question of fact existed as to whether defendant’s highest ranking employee on a construction site qualified as a managing agent to hold defendant liable for employee’s acts per CC 3294(b));  White v. Ultramar, Inc. (1999) 21 Cal.4th 563, 566–567 (in employment action, zone manager who was in charge of 85 stores and had significant discretionary authority on how those stores were run on a daily basis qualified as a “managing agent”).)

           

            Defendants’ Motion to Strike Punitive Damages is DENIED.