Judge: Maurice A. Leiter, Case: 23STCV05855, Date: 2024-02-06 Tentative Ruling

Case Number: 23STCV05855    Hearing Date: February 6, 2024    Dept: 54

Hearing Date: February 6, 2024

Department 54, Judge Maurice Leiter

Demurrer to Second Amended Complaint and Motion to Strike

Moving Party: Defendant 2801 Mission Road Properties, LLC

Responding Party: Plaintiffs Evike.com, Inc. And Matrix Airsoft, Inc.

T/R:     DEFENDANT’S DEMURRER IS OVERRULED.

THE MOTION TO STRIKE IS DENIED.

DEFENDANT TO FILE AND SERVE AN ANSWER TO THE SECOND AMENDED COMPLAINT WITHIN 30 DAYS OF NOTICE OF RULING.

DEFENDANT TO NOTICE

If the parties wish to submit on the tentative, please email the courtroom at SMCdept54@lacourt.org with notice to opposing counsel (or self-represented party) before 8:00 am on the day of the hearing.

The Court considers the moving papers, opposition, and reply.

BACKGROUND

On November 6, 2023, Plaintiffs Evike.com, Inc. And Matrix Airsoft, Inc. filed the operative second amended complaint against Defendant 2801 Mission Road Properties, LLC, asserting causes of action for (1) breach of contract; (2) breach of covenant of good faith and fair dealing; (3) intentional interference with contractual relations; (4) intentional interference with prospective economic relations; (5) negligent interference with prospective economic relations; and (6) declaratory relief.

Plaintiffs are commercial tenants of a warehouse owned by Defendant. Plaintiffs allege Defendant has misrepresented that Plaintiffs are in default on lease to prevent Plaintiffs from exercising their option to extend the lease and instead negotiate a new lease.

ANALYSIS

A. Demurrer to Second Amended Complaint

A demurrer to a complaint may be taken to the whole complaint or to any of the causes of action in it.  (CCP § 430.50(a).)  A demurrer challenges only the legal sufficiency of the complaint, not the truth of its factual allegations or the plaintiff's ability to prove those allegations.  (Picton v. Anderson Union High Sch. Dist. (1996) 50 Cal. App. 4th 726, 732.)  The court must treat as true the complaint's material factual allegations, but not contentions, deductions or conclusions of fact or law.  (Id. at 732-33.)  The complaint is to be construed liberally to determine whether a cause of action has been stated.  (Id. at 733.)

Defendant demurs to the third, fourth and fifth causes of action for tortious interference with economic relations on the ground that the lease bars liability for these claims. Defendant relies on Section 8.8 of the lease, which states:

8.8        Exemption of Lessor and its Agents from Liability. Notwithstanding the negligence or breach of this Lease by Lessor or its agents, neither Lessor nor its agents shall be liable under any circumstances for: (i) injury or damage to the person or goods, wares, merchandise or other property of Lessee, Lessee's employees, contractors, invitees, customers, or any other person in or about the Premises, whether such damage or injury is caused by or results from fire, steam, electricity, gas, water or rain, indoor air quality, the presence of mold or from the breakage, leakage, obstruction or other defects of pipes, fire sprinklers, wires, appliances, plumbing, HVAC or lighting fixtures, or from any other cause, whether the said injury or damage results from conditions arising upon the Premises or upon other portions of the building of which the Premises area part, or from other sources or places, (ii) any damages arising from any act or neglect of any other tenant of Lessor or from the failure of Lessor or its agents to enforce the provisions of any other lease in the Project, or (iii) injury to Lessee's business or for any loss of income or profit therefrom. Instead, it is intended that Lessee's sole recourse in the event of such damages or injury be to file a claim on the insurance policy(ies) that Lessee is required to maintain pursuant to the provisions of paragraph 8.

(Compl. Exh. A.)

Defendant points to subsection (iii), reading the section as “Notwithstanding the negligence or breach of this Lease by Lessor or its agents, neither Lessor nor its agents shall be liable under any circumstances for... injury to Lessee's business or for any loss of income or profit therefrom.” Defendant asserts this provision bars any claims for tortious interference.

In opposition, Plaintiff argues that Section 8.8 applies only to personal injury and/or property damage. Plaintiff emphasizes the first subsection, which limits liability for “injury or damage to the person or goods, wares, merchandise or other property of Lessee, Lessee's employees, contractors, invitees, customers, or any other person in or about the Premises...” Plaintiff asserts that subsection (iii) prohibits liability for damages to Plaintiff’s business arising from personal or property injury.

This difference in interpretation cannot be resolved on demurrer.

Defendant’s demurrer is OVERRULED.

B. Motion to Strike

“Any party, within the time allowed to response to a pleading, may serve and file a notice of motion to strike the whole or any part" of that pleading. (CCP § 435(b)(1).) “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 asserted 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.)

Punitive damages are available in noncontract cases where the defendant is guilty of “oppression, fraud, or malice.”  (Civil Code § 3294(a).)  Conclusory allegations are insufficient to support a claim for punitive damages.  (See, e.g., Fisher v. San Pedro Peninsula Hospital (1989) 214 Cal. App. 3d 590, 620.)  However, “the stricken language must be read not in isolation, but in the context of the facts alleged in the rest of petitioner's complaint.”  (Perkins v. Superior Court (1981) 117 Cal. App. 3d 1, 6.)

Defendant moves to strike Plaintiffs’ prayer for punitive damages on the grounds that Plaintiffs have failed to allege malice, fraud, or oppression with specificity, and the allegations amount only to breach of contract. Plaintiff alleges Defendant intentionally and in bad faith misrepresented that Plaintiff had defaulted on the lease to negotiate a new lease. This is sufficient at the pleading stage to support punitive damages.

The motion to strike is DENIED.