Judge: Michael E. Whitaker, Case: 20STCV33743, Date: 2022-12-08 Tentative Ruling

Case Number: 20STCV33743    Hearing Date: December 8, 2022    Dept: 32

PLEASE NOTE:   Parties are encouraged to meet and confer concerning this tentative ruling to determine if a resolution may be reached.  If the parties are unable to reach a resolution and a party intends to submit on this tentative ruling, the party must send an email to the Court at sscdept32@lacourt.org indicating that party’s intention to submit.  The email shall include the case number, date and time of the hearing, counsel’s contact information (if applicable), and the identity of the party submitting on this tentative ruling.  If the Court does not receive an email indicating the parties are submitting on this tentative ruling and there are no appearances at the hearing, the Court may place the motion off calendar or adopt the tentative ruling as the order of the Court.  If all parties do not submit on this tentative ruling, they should arrange to appear in-person or remotely (which is highly encouraged).  Further, after the Court has posted/issued a tentative ruling, the Court has the inherent authority to prohibit the withdrawal of the subject motion and adopt the tentative ruling as the order of the Court. 

NOTE:  TWO TENTATIVE RULINGS BELOW

TENTATIVE RULING - NO. 1

MOTION

Plaintiffs Misty Lynn Newton (Newton), Patrick Joseph Frasier, and Cindy Carvel (collectively, Plaintiffs) sued Defendant EAN Holdings, LLC (EAN) based on a motor vehicle collision between Newton and Defendant Christopher Reeves (Reeves). 

EAN demurs to the second cause of action in the First Amended Complaint (FAC) for negligent entrustment.  EAN also moves to strike Plaintiffs’ claim for punitive damages.  Plaintiffs oppose the motion and demurrer.  EAN replies.

Preliminarily, Plaintiffs argue that EAN’s notice for demurrer is defective and thus should be overruled.  Specifically, Plaintiffs argue that the notice fails to give notice that Defendant is specially demurring pursuant to Code of Civil Procedure section 430.10, subdivision (f) on the grounds of uncertainty.  As EAN points out in its reply, EAN never raised the issue of certainty or Code of Civil Procedure section 430.10, subd. (f) as to the cause of action for negligent entrustment in the demurrer.  Accordingly, the Court shall disregard Plaintiffs’ arguments as to EAN’s special demurrer for uncertainty as moot.

REQUEST FOR JUDICIAL NOTICE

Under Evidence Code section 451, “[j]udicial notice shall be taken of the following: (a) The decisional, constitutional, and public statutory law of this state and of the United States and the provisions of any charter described in Section 3, 4, or 5 of Article XI of the California Constitution…(f) Facts and propositions of generalized knowledge that are so universally known that they cannot reasonably be the subject of dispute. ” (Evid. Code, § 451, subds. (a), (f).)

Under Evidence Code section 452, “[j]udicial notice may be taken of the following matters to the extent that they are not embraced within Section 451: (a) The decisional, constitutional, and statutory law of any state of the United States and the resolutions and private acts of the Congress of the United States and of the Legislature of this state. (b) Regulations and legislative enactments issued by or under the authority of the United States or any public entity in the United States. (c) Official acts of the legislative, executive, and judicial departments of the United States and of any state of the United States (d) Record of (1) any court of this state or (2) any court of record of the United States or of any state of the United States…(g) Facts and propositions that are of such common knowledge within the territorial jurisdictions of the court that they cannot reasonably be the subject of dispute. (h) Facts and propositions that are not reasonably subject to dispute and are capably of immediate and accurate determination by resort to sources of reasonably indisputable accuracy.” (Evid. Code, § 452, subds. (a)-(d), (g), (h).)

The Court “shall take notice of any matter specified in Section 452 if a party requests it and: (a) Gives each adverse party sufficient notice of the request, through the pleadings or otherwise, to enable such adverse party to prepare to meet the request; and (b) Furnishes the court with sufficient information to enable it to take judicial notice of the matter.” (Evid. Code, § 453.)

Here, the Court grants EAN’s request for judicial notice Nos. 1 and 2 per Evidence Code section 452, subdivision (c).  The Court denies EAN’s request for judicial notice No. 3. 

ANALYSIS

1. DEMURRER

“It is black letter law that a demurrer tests the legal sufficiency of the allegations in a complaint.”  (Lewis v. Safeway, Inc. (2015) 235 Cal.App.4th 385, 388.)  In ruling on a demurrer, the court must “liberally construe[]” the allegations of the complaint.  (Code Civ. Proc., § 452.)  “This rule of liberal construction means that the reviewing court draws inferences favorable to the plaintiff, not the defendant.”  (Perez v. Golden Empire Transit Dist. (2012) 209 Cal.App.4th 1228, 1238.)

1. Second Cause of Action: “Negligent Entrustment”

    

   EAN demurs to the second cause of action for negligent entrustment for failure to allege facts sufficient to constitute a cause of action and, again, as being precluded by the Graves Amendment.  In opposition, Plaintiffs argue that the FAC alleges sufficient facts to constitute the cause of action and that the Graves Amendment does not apply.  The Court notes that the Graves Amendment would not preclude a properly stated cause of action for negligent entrustment against EAN as it would be predicated upon EAN’s own negligence rather than a theory of vicarious liability for Reeves’ negligence.  (See 49 U.S.C., § 30106, subd. (a).) 

    

To state a cause of action for negligent entrustment against EAN, Plaintiffs must prove (1) that Reeves negligently operated a vehicle owned by EAN; (2) that EAN knew or should have known that Reeves was incompetent or unfit to drive; (3) that EAN permitted Reeves to use that vehicle; and (4) that Reeves’ incompetence or unfitness harmed Plaintiffs. (Jeld-Wen, Inc. v. Superior Court (2005) 131 Cal.App.4th 853, 863-864.)

Here, the FAC alleges, in relevant part:

• “At all times herein alleged Defendant REEVES was incompetent or unfit to drive the vehicle. Defendant REEVES had collided with the rear end of a vehicle just one month before in the same careless and reckless manner in which he collided with the vehicle driven by Plaintiff Misty Lynn Newton. In addition, Defendant REEVES had received citations for other statutory violations which were of the same type which would cause collisions of the type that are the subject of this lawsuit which established that he was an incompetent or unfit driver.”  (FAC, ¶ 40.)

• “Defendants HOLDINGS LLC EAN and DOES 1 TO 250 knew or should have known that Defendant REEVES was an incompetent or unfit driver and would create an unreasonable risk of danger to persons and property on the public streets and highways, Defendants HOLDINGS LLC EAN and DOES 1 to 250, nevertheless permitted Defendant REEVES to operate their 2017 Dodge Journey SUV on the public streets and highways because Defendant Holdings LLC EAN’s employee (“Employee A”) requested or should have requested Defendant REEVES’s driver’s license and reviewed or should have reviewed it. Employee A in reviewing Defendant REEVES driver’s license knew or should have known that Defendant REEVES numerous citations as well as the same type of prior rear end collisions established his propensity for incompetence or unfitness for driving.” 

•  “In addition, Defendant EAN became aware through its employee that Defendant Reeves was incompetent or unfit to drive because Defendant REEVES, at the time he rented the vehicle, told Employee A of Defendant EAN that he needed to rent the vehicle because he wrecked his own vehicle by crashing into the rear end of a vehicle just one month before.” 

(See FAC, ¶¶ 41-42.)

            EAN argues that because EAN was not required to learn about Reeves’ prior driving history, Reeves’ alleged past driving infractions would not have put EAN on notice of Reeves alleged incompetence to drive a vehicle.  EAN cites to Flores v. Enterprise Rent-A-Car Co. (2010) 188 Cal.App.4th 1055, 1070) in which the Court held, a rental car agency has no duty to conduct an electronic search of the driving records of its customer before entrusting a vehicle to him.  However, EAN fails to address in either its initial motion or its reply Plaintiffs’ allegation that Reeves told an EAN employee that he wrecked his own vehicle by crashing into the rear end of a vehicle just one month before.  Based on this allegation, the Court finds Plaintiffs have proffered sufficient facts to suggest that EAN may have been placed on notice that Reeves was unfit to drive.  As such, the Court overrules EAN’s demurrer to the second cause of action for negligent entrustment.  

2. MOTION TO STRIKE

Any party, within the time allowed to respond to a pleading, may serve and file a motion to strike the whole pleading or any part thereof.  (Code Civ. Proc., § 435, subd. (b)(1); Cal. Rules of Court, rule 3.1322, subd. (b).)  On a motion to strike, the court may: (1) strike out any irrelevant, false, or improper matter inserted in any pleading; or (2) strike out all or any part of any pleading not drawn or filed in conformity with the laws of California, a court rule, or an order of the court.  (Code Civ. Proc., § 436, subds. (a)-(b); Stafford v. Shultz (1954) 42 Cal.2d 767, 782.)

In ruling on a motion to strike punitive damages, “judges 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. Superior Court (1998) 67 Cal.App.4th 1253, 1255.)  To state a prima facie claim for punitive damages, a plaintiff must allege the elements set forth in the punitive damages statute, Civil Code section 3294.  (College Hosp., Inc. v. Superior Court (1994) 8 Cal.4th 704, 721.)  Per Civil Code section 3294, a plaintiff must allege that the defendant has been guilty of oppression, fraud, or malice.  (Civ. Code, § 3294, subd. (a).)   As set forth in the Civil Code,

(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)(1)-(3), emphasis added.) 

Further, a plaintiff must assert facts with specificity to support a conclusion that a defendant acted with oppression, fraud or malice.  To wit, there is a heightened pleading requirement regarding a claim for punitive damages.  (See Smith v. Superior Court (1992) 10 Cal.App.4th 1033, 1041-1042.)  “When nondeliberate injury is charged, allegations that the defendant’s conduct was wrongful, willful, wanton, reckless or unlawful do not support a claim for exemplary damages; such allegations do not charge malice.  When a defendant must produce evidence in defense of an exemplary damage claim, fairness demands that he receive adequate notice of the kind of conduct charged against him.” (G. D. Searle & Co. v. Superior Court (1975) 49 Cal.App.3d 22, 29 [cleaned up].)  In Anschutz Entertainment Group, Inc. v. Snepp, the Court of Appeal noted that the plaintiffs’ assertions related to their claim for punitive damages were “insufficient to meet the specific pleading requirement.”  (Anschutz Entertainment Group, Inc. v. Snepp (2009) 171 Cal.App.4th 598, 643 [plaintiffs alleged “the conduct of Defendants was intentional, and done willfully, maliciously, with ill will towards Plaintiffs, and with conscious disregard for Plaintiff's rights. Plaintiff's injuries were exacerbated by the malicious conduct of Defendants. Defendants' conduct justifies an award of exemplary and punitive damages”]; see also Grieves v. Superior Court (1984) 157 Cal.App.3d 159, 166 [“The mere allegation an intentional tort was committed is not sufficient to warrant an award of punitive damages.  Not only must there be circumstances of oppression, fraud, or malice, but facts must be alleged in the pleading to support such a claim”].) 

Finally, “the imposition of punitive damages upon a corporation is based upon its own fault. It is not imposed vicariously by virtue of the fault of others.” (City Products Corp. v. Globe Indemnity Co. (1979) 88 Cal.App.3d 31, 36.) “Corporations are legal entities which do not have minds capable of recklessness, wickedness, or intent to injure or deceive. An award of punitive damages against a corporation therefore must rest on the malice of the corporation’s employees. But the law does not impute every employee’s malice to the corporation. Instead, the punitive damages statute requires proof of malice among corporate leaders: the officers, directors, or managing agents.” (Cruz v. Home Base (2000) 83 Cal.App.4th 160, 167 [cleaned up].)

EAN argues the complaint fails to allege facts sufficient to establish malice, oppression or fraud on the part of EAN.  The Court agrees.  Here, Plaintiffs allege in pertinent part: 

• “By permitting Defendant REEVES to drive the vehicle with the knowledge that Defendant REEVES was an incompetent and unfit driver, Defendants HOLDINGS LLC EAN and DOES 1 to 250, conduct was despicable because it acted with a willful conscious disregard of the rights and safety of others in order to increase its profit when Defendant EAN gave their permission and consent to Defendant REEVES to use and operate said vehicle on public streets and highways of California, by and through Employee A who checked Defendant REEVES in and became aware of Defendant REEVES prior accidents and citations caused by Defendant REEVES negligence.”

   

• “Defendant EAN’s conduct was despicable because it acted with a willful and conscious disregard of the rights and safety of others when Employee A knew or should have known that Defendant Reeves was incompetent and unfit to drive because of the foregoing facts.”

   

  (See FAC, ¶¶ 43-44.)  The Court finds that Plaintiffs’ allegations that Reeves prior accidents and citations, calling into question Reeves’ competency to operate a vehicle, are insufficient to claim punitive damages against EAN, even if an employee of EAN knew Reeves’ purported unsafe driving history.  In short, Plaintiffs’ allegations lack the factual specificity required, including allegations “of malice among corporate leaders: the officers, directors, or managing agents.” 

   

  CONCLUSION AND ORDER

   

  Therefore, the Court overrules EAN’s demurrer to the second cause of action for negligent entrustment.  

   

  Further, the Court grants EAN’s motion to strike Plaintiffs’ claim and prayer for punitive damages without leave to amend. [1] 

   

  EAN shall file and serve an answer to the amended complaint on or before December 30, 2022. 

   

  EAN shall provide notice of the Court’s rulings and file a proof of service of such.

PLEASE NOTE:   Parties are encouraged to meet and confer concerning this tentative ruling to determine if a resolution may be reached.  If the parties are unable to reach a resolution and a party intends to submit on this tentative ruling, the party must send an email to the Court at sscdept32@lacourt.org indicating that party’s intention to submit.  The email shall include the case number, date and time of the hearing, counsel’s contact information (if applicable), and the identity of the party submitting on this tentative ruling.  If the Court does not receive an email indicating the parties are submitting on this tentative ruling and there are no appearances at the hearing, the Court may place the motion off calendar or adopt the tentative ruling as the order of the Court.  If all parties do not submit on this tentative ruling, they should arrange to appear in-person or remotely (which is highly encouraged).  Further, after the Court has posted/issued a tentative ruling, the Court has the inherent authority to prohibit the withdrawal of the subject motion and adopt the tentative ruling as the order of the Court. 

TENTATIVE RULING - NO. 2

MOTION

Plaintiffs Misty Lynn Newton (Newton), Patrick Joseph Frasier, and Cindy Carvel (collectively, Plaintiffs) sued Defendant Christopher Reeves (Reeves) based on a motor vehicle collision between Newton and Reeves.  Reeves moves to strike Plaintiffs’ claim and for punitive damages.  Plaintiffs oppose the motion.

ANALYSIS

Any party, within the time allowed to respond to a pleading, may serve and file a motion to strike the whole pleading or any part thereof.  (Code Civ. Proc., § 435, subd. (b)(1); Cal. Rules of Court, rule 3.1322, subd. (b).)  On a motion to strike, the court may: (1) strike out any irrelevant, false, or improper matter inserted in any pleading; or (2) strike out all or any part of any pleading not drawn or filed in conformity with the laws of California, a court rule, or an order of the court.  (Code Civ. Proc., § 436, subds. (a)-(b); Stafford v. Shultz (1954) 42 Cal.2d 767, 782.)

In ruling on a motion to strike punitive damages, “judges 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. Superior Court (1998) 67 Cal.App.4th 1253, 1255.)  To state a prima facie claim for punitive damages, a plaintiff must allege the elements set forth in the punitive damages statute, Civil Code section 3294.  (College Hosp., Inc. v. Superior Court (1994) 8 Cal.4th 704, 721.)  Per Civil Code section 3294, a plaintiff must allege that the defendant has been guilty of oppression, fraud, or malice.  (Civ. Code, § 3294, subd. (a).)   As set forth in the Civil Code,

(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)(1)-(3), emphasis added.) 

Further, a plaintiff must assert facts with specificity to support a conclusion that a defendant acted with oppression, fraud or malice.  To wit, there is a heightened pleading requirement regarding a claim for punitive damages.  (See Smith v. Superior Court (1992) 10 Cal.App.4th 1033, 1041-1042.)  “When nondeliberate injury is charged, allegations that the defendant’s conduct was wrongful, willful, wanton, reckless or unlawful do not support a claim for exemplary damages; such allegations do not charge malice.  When a defendant must produce evidence in defense of an exemplary damage claim, fairness demands that he receive adequate notice of the kind of conduct charged against him.” (G. D. Searle & Co. v. Superior Court (1975) 49 Cal.App.3d 22, 29 [cleaned up].)  In Anschutz Entertainment Group, Inc. v. Snepp, the Court of Appeal noted that the plaintiffs’ assertions related to their claim for punitive damages were “insufficient to meet the specific pleading requirement.”  (Anschutz Entertainment Group, Inc. v. Snepp (2009) 171 Cal.App.4th 598, 643 [plaintiffs alleged “the conduct of Defendants was intentional, and done willfully, maliciously, with ill will towards Plaintiffs, and with conscious disregard for Plaintiff's rights. Plaintiff's injuries were exacerbated by the malicious conduct of Defendants. Defendants' conduct justifies an award of exemplary and punitive damages”]; see also Grieves v. Superior Court (1984) 157 Cal.App.3d 159, 166 [“The mere allegation an intentional tort was committed is not sufficient to warrant an award of punitive damages.  Not only must there be circumstances of oppression, fraud, or malice, but facts must be alleged in the pleading to support such a claim”].) 

In Taylor v. Superior Court, the California Supreme Court held:  “We consider whether punitive damages are recoverable in a personal injury action brought against an intoxicated driver.  As will appear, we have concluded that the act of operating a motor vehicle while intoxicated may constitute an act of “malice” under section 3294 if performed under circumstances which disclose a conscious disregard of the probable dangerous consequences.”  (Taylor v. Superior Court (1979) 24 Cal.3d 890, 892 [cleaned up].)  The California high court further held that “[o]ne who voluntarily commences, and thereafter continues, to consume alcoholic beverages to the point of intoxication, knowing from the outset that he must thereafter operate a motor vehicle demonstrates, in the words of Dean Prosser, “such a conscious and deliberate disregard of the interests of others that his conduct may be called wilful or wanton.”  (Id. at p. 899.)  But the California high court also stated, “Although the circumstances in a particular case may disclose similar wilful or wanton behavior in other forms, ordinarily, routine negligent or even reckless disobedience of traffic laws would not justify an award of punitive damages.”  (Id. at pp. 899-900, emphasis added.) 

Preliminarily, Plaintiffs argue that the Court should deny Reeves’ motion to strike punitive damages because it is barred by Code of Civil Procedure section 435.5 subdivision (b).  Pursuant to Code of Civil Procedure section 435.5 subdivision (b): “A party moving to strike a pleading that has been amended after a motion to strike to an earlier version of the pleading was granted shall not move to strike any portion of the pleadings on grounds that could have been raised by a motion to strike as to the earlier version of the pleading.”  However, Reeves was not a party to the initial motion to strike which was heard by the Court on August 10, 2022. (See Minute Order 8/10/22.)  As such, the Court finds the argument unpersuasive. 

Notwithstanding, Reeves moves to strike Plaintiffs’ claim for punitive damages against Reeves because Reeves claims the FAC fails to include factual allegations of fraud, oppression, or malice on the part of Reeves.  The Court agrees.  Here, Plaintiffs allege in pertinent part against Reeves:

• On or about September 4, 2018 Plaintiff Cindy Carvel (“CARVEL”) was a passenger in the vehicle driven by NEWTON who was lawfully traveling northbound on I-110 when all of a sudden and without warning a 2017 Dodge Journey SUV driven by Defendant Brent Christopher Reeves (“REEVES”) hit the vehicle being driven by NEWTON in the rear end causing substantial property damage and inflicting severe physical injury to Plaintiff Cindy Carvel’s body.

• As Misty Lynn Newton was slowing for traffic ahead, Defendant REEVES who was driving at an unsafe speed, in violation of California Vehicle Code section 22350, behind Misty Lynn Newton’s vehicle, was unable to stop and rear-ended the vehicle that Misty Lynn Newton was driving.

• Plaintiffs incorporate Paragraphs 1 through 30, inclusive, of the Preliminary Allegations herein as though set forth in full.

• At all relevant times, all Defendants owed a duty of care to drive prudently, safely and within the bounds of the law, including a duty to exercise reasonable car, reasonable and prudent under the circumstances, while driving a motor vehicle on a roadway including controlling the location and speed of the vehicle as necessary to avoid colliding with any object, person, or vehicle.

• Defendants breached their duty of care owed to Plaintiffs when Defendants operated their vehicle in such a negligent manner so as to cause the accident, as described in this Complaint, in which Plaintiffs suffered wage loss, loss of use of property, hospital and medical expenses, general damage, property damage, loss of earning capacity, and pain and suffering damages. 

• As a direct and proximate result of Defendants’ negligence, tortious conduct, and wrongdoing, Plaintiffs have wage loss, loss of use of property, hospital and medical expenses, general damage, property damage, loss of earning capacity, and pain and suffering damages according to proof at trial.

•  

(See FAC,  ¶¶ 2, 5, 31-34.) 

Based upon the heightened pleading requirements pertaining to claims for punitive damages, the Court finds that Plaintiffs have failed to allege facts sufficient to support a claim for punitive damages against Reeves.  Plaintiffs cannot rely solely on nonspecific allegations amounting to ordinary, routine negligent acts or to reckless disobedience of traffic laws.  

CONCLUSION AND ORDER

Therefore, the Court grants Reeves’ motion to strike Plaintiffs’ claim and prayer for punitive damages without leave to amend. [1] 

Reeves shall file and serve an answer to the amended complaint on or before December 30, 2022. 

Reeves shall provide notice of the Court’s rulings and file a proof of service of such.