Judge: Michael Small, Case: 23STCV07767, Date: 2023-08-15 Tentative Ruling

Inform the clerk if you submit on the tentative ruling. If moving and opposing parties submit, no appearance is necessary.

Case Number: 23STCV07767    Hearing Date: August 15, 2023    Dept: 57

Defendants GW Environmental Consulting Company and Gregory Sean Whitney (collectively, “GWE”) have demurred to two of the three causes of action that Plaintiffs Skylar Wenzel and Joseph Abood have asserted against them.  Those two causes of action are for violation of California’s unfair competition law, Business and Professions Code 17200 (“UCL”), and for intentional interference with Plaintiffs’ contractual relationship with Defendant Carolwood Homeowners Association (“Carolwood HOA”).  The Court is overruling the demurrer as to both causes of action.

As to the UCL cause action, contrary to GWE’s argument in the demurrer, the Plaintiffs have standing under the UCL.  Plaintiffs’ complaint contains sufficient allegations establishing that they were harmed by unfair business practices of GWE.   In turn, the complaint also contains sufficient allegations to establish that GWE engaged in unfair business practices.  As alleged, those practices entail a coordinated, fraudulent scheme between GWE, Carolwood HOA and other Defendants that saw GWE falsely report that Plaintiffs’ condominium unit was significantly contaminated with asbestos.  The complaint alleges that the purpose of GWE’s false report was to enable Carolwood HOA to avoid its obligation to the Plaintiffs to bear the cost of mold remediation following a water leak in the Plaintiffs’ unit.  All told, the allegations of this scheme are set out with sufficient specificity in the Plaintiffs’ complaint to support the proposition that GWE committed fraud, which is a form of unfair business practices that is cognizable under the UCL.  Further, the complaint contains sufficient allegations of the harm to the Plaintiffs as a result of GWE’s unfair business practices -- namely, an extensive delay in the mold remediation of their unit that forced Plaintiffs to relocate to other premises.

Turning to the cause of action for intentional interference with contractual relations, the elements of that cause of action are “(1) a valid contract between plaintiff and a third party; (2) defendant’s knowledge of this contract; (3) defendant's intentional acts designed to induce a breach or disruption of the contractual relationship; (4) actual breach or disruption of the contractual relationship; and (5) resulting damage.” (I-CA Enterprises, Inc. v. Palram Americas, Inc. (2015) 235 Cal.App.4th 257, 289.)  GWE’s demurrer contends that allegations establishing the presence of the second and third elements are missing from the Plaintiffs’ complaint.  The Court disagrees.  The complaint contains sufficient allegations that (a) GWE was aware of Carolwood’s contractual obligation to the Plaintiffs to foot the bill for mold remediation in the Plaintiffs’ unit, and (b) GWE engaged in an intentional act --  the preparation of a knowingly false report of a significant amount of asbestos in the unit – intended to disrupt that obligation.

GWE also has moved to strike Plaintiffs’ request for punitive damages against GWE in the prayer for relief in the complaint, along with the allegations in the complaint that are intended to support that relief.  The Court is denying the motion to strike.  The allegations in the complaint are more than adequate to support a finding that GWE engaged in malicious, oppressive, and fraudulent conduct thereby justifying an award of punitive damages against GWE under Civil Code Section 3294.  The allegations in the complaint also are sufficient to support a finding that GWE is liable for punitive damages based on the acts of its principal, whom the complaint alleges is Defendant Whitney.

In light of the ruling on GWE’s demurrer and motion to strike, GWE is directed to file an answer to the Plaintiffs’ complaint.  The Court will discuss the timing of the answer at the hearing on the demurrer and motion to strike.