Judge: Michael Small, Case: 23STCV20446, Date: 2023-12-12 Tentative Ruling

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

Case Number: 23STCV20446    Hearing Date: February 20, 2024    Dept: 57

Pending before the Court are (1) the demurrer of Defendants CNL Express, Inc, BNK Trading Corp., and Yong Guang Pei ("the Pei Defendants") to the causes of action asserted against them in the First Amended Complaint ("FAC") of Plaintiff Free Sunshine Apparel, Inc dba Blue Buttercup ("FSA"), and (2) the Pei Defendants' motion to strike the allegations of alter ego in the FAC and the FAC's requests for punitive damages and attorney's fees. 

The Pei Defendants' demurrer is sustained with leave to amend as to the causes of action in the FAC for fraud and conspiracy and negligence.  In the Court's view, the allegations in the FAC do not establish essential elements of those causes of action.   The demurrer is overruled as to all of the other causes of action asserted against the Pei Defendants.   The Court will expand upon the bases for these rulings at the hearing on the demurrer.

The PEI Defendants' motion to strike is denied as to the alter ego allegations and the request for punitive damages.   As to alter ego, the allegations in the FAC are sufficient to impose alter ego liability on Defendant Young Guang Pei for the actions of Defendants CNL Express, Inc. and BNK Trading Corp.  As to punitive damages, the FAC's cause of action for conversion is among the causes of action that the Court has determined withstands the demurrer, and punitive damages may be awarded in connection with a finding of liability for conversion.  Further, the Court concludes that the allegations in the FAC are sufficient to support a finding by the jury of malicious and oppressive conduct related to the act of conversion that is necessary for an award of punitive damages.  The motion to strike is granted as to the request for attorney's fees.  In its opposition to the motion to strike, FSA stated that it agreed that attorney's fees are not available on any of its causes of action against the Pei Defendants and it therefore withdrew its request for attorney's fees.