SUPERIOR COURT OF THE STATE OF CALIFORNIA  

FOR THE COUNTY OF LOS ANGELES - CENTRAL DISTRICT 

 

 

I. Background 

Plaintiffs Katie Stone and Sylar Esquivel (“Plaintiffs”) filed this action against defendants Sitanshu Shyam Singh (“Singh”), Uber Technologies Inc., Rasier LLC, and PV Holding Corp. for damages arising from a motor vehicle accident.  The complaint alleges causes of action for (1) negligence against all defendants and (2) unfair/unlawful/fraudulent business practices (Cal. Civ. Code §17200) against Uber Technologies Inc., Rasier LLC, and PV Holding Corp. The complaint includes a prayer for punitive damages.   

Defendant PV Holding Corp. (“PV Holding”) now demurs to the complaint on the grounds that Plaintiffs’ second cause of action fail to state sufficient facts to constitute a claim against it. Additionally, PV Holding moves to strike the prayer for punitive damages. Plaintiffs oppose the motions, and PV Holding filed its replies.     

  

II. Demurrer 

A demurrer is a pleading used to test the legal sufficiency of other pleadings.  It raises issues of law, not fact, regarding the form or content of the opposing party's pleading (complaint, answer or cross-complaint).  (CCP §§ 422.10, 589; see Donabedian v. Mercury Ins. Co. (2004) 116 Cal.App.4th 968, 994.)  It is not the function of the demurrer to challenge the truthfulness of the complaint; and for purposes of the ruling on the demurrer, all facts pleaded in the complaint are assumed to be true.  (Donabedian, 116 Cal.App.4th at 994.) 

A demurrer can be used only to challenge defects that appear on the face of the pleading under attack; or from matters outside the pleading that are judicially noticeable.  (Blank v. Kirwan (1985) 39 Cal.3d 311, 318; Donabedian, supra, 116 Cal.App.4th at 994.)  No other extrinsic evidence can be considered.  (Ion Equip. Corp. v. Nelson (1980) 110 Cal.App.3d 868, 881 [error for court to consider facts asserted in memorandum supporting demurrer]; see also Afuso v. United States Fid. & Guar. Co. (1985) 169 Cal.App.3d 859, 862 [disapproved on other grounds in Moradi-Shalal v. Fireman’s Fund Ins. Cos. (1988) 46 Cal.3d 287] [error to consider contents of release not part of court record].) 

A demurrer can be utilized where the “face of the complaint” itself is incomplete or discloses some defense that would bar recovery.  (Guardian North Bay, Inc. v. Superior Court (2001) 94 Cal.App.4th 963, 971-72.)  The “face of the complaint” includes material contained in attached exhibits that are incorporated by reference into the complaint; or in a superseded complaint in the same action.  (Frantz v. Blackwell (1987) 189 Cal.App.3d 91, 94; see also Barnett v. Fireman’s Fund Ins. Co. (2001) 90 Cal.App.4th 500, 505 [“[W]e rely on and accept as true the contents of the exhibits and treat as surplusage the pleader’s allegations as to the legal effect of the exhibits.”]). 

A demurrer can only be sustained when it disposes of an entire cause of action.  (Poizner v. Fremont General Corp. (2007) 148 Cal.App.4th 97,119; Kong v. City of Hawaiian Gardens Redev. Agency (2003) 108 Cal.App.4th 1028, 1046.) 

B. 2nd C/A Unfair/Unlawful/Fraudulent Business Practices (§17200) 

Plaintiffs bring a cause of action under Business and Professions Code § 17200 (“UCL”).  The UCL defines “unfair competition” as “any unlawful, unfair or fraudulent business act or practice.” (Cal. Bus. and Prof. Code § 17200.) Plaintiffs allege that PV Holding, through its subsidiary Avis, perpetuated a system of putting drivers onto public roadways for financial gain without proof of financial responsibility, and Plaintiffs therefore request PV Holding disgorge profits wrongfully obtained through use of these practices. 

Plaintiffs fail to plead any requisite elements of the UCL to maintain this cause of action. Aside from failing to identify any statute that was violation, Plaintiffs’ UCL claim is defective because damages are unavailable for a UCL violation. The remedies afforded by the UCL include restitution or disgorgement of money wrongfully obtained. (Cel-Tech Communications, Inc. v. Los Angeles Cellular Telephone Co. (1999) 20 Cal.4th 163, 179 (“Prevailing plaintiffs [under the UCL] are generally limited to injunctive relief and restitution.”).) Plaintiffs’ prayer for relief in connection with the UCL include disgorgement and a permanent injunction. However, Plaintiffs state no facts supporting such relief. Further, in this automobile collision case involving a rental vehicle, Plaintiffs have not demonstrated economic injury within the meaning contemplated by the UCL. Plaintiffs plead no facts identifying any property or money inappropriately obtained from Plaintiffs that could be restored as a result of PV Holding’s alleged UCL violations. (See Bus. and Prof. Code § 17203 (courts have authority to make orders or judgments “as may be necessary to restore to any person in interest any money or property, real or personal, which may have been acquired by means of such unfair competition.”).)  

Plaintiffs lack standing to bring a UCL claim. Accordingly, the second cause of action is SUSTAINED without leave to amend. 

 

III. Motion to Strike 

The court may, upon a motion, or at any time in its discretion, and upon terms it deems proper, strike any irrelevant, false, or improper matter inserted in any pleading.  (Code Civ. Proc., § 436, subd. (a); Stafford v. Shultz (1954) 42 Cal.2d 767, 782 [“Matter in a pleading which is not essential to the claim is surplusage; probative facts are surplusage and may be stricken out or disregarded”].)  The court may also strike all or any part of any pleading not drawn or filed in conformity with California law, a court rule, or an order of the court.  (Code Civ. Proc., § 436, subd. (b).)  An immaterial or irrelevant allegation is one that is not essential to the statement of a claim or defense; is neither pertinent to nor supported by an otherwise sufficient claim or defense; or a demand for judgment requesting relief not supported by the allegations of the complaint.  (Code Civ. Proc., § 431.10, subd. (b).)  The grounds for moving to strike must appear on the face of the pleading or by way of judicial notice.  (Code Civ. Proc., § 437.) 

Punitive damages may be imposed where it is proven by clear and convincing evidence that the defendant has been guilty of oppression, fraud, or malice.  (Civ. Code, § 3294, subd. (a).)  “Malice” is conduct intended by the defendant to cause injury to the plaintiff or despicable conduct which is carried on with a willful and conscious disregard of the rights or safety of others.  (Civ. Code, § 3294, subd. (c)(1).)  “‘Punitive damages are proper only when the tortious conduct rises to levels of extreme indifference to the plaintiff’s rights, a level which decent citizens should not have to tolerate.’  [Citation.]”  (Lackner v. North (2006) 135 Cal.App.4th 1188, 1210.) 

“As amended to include [despicable], the [Civil Code section 3294] plainly indicates that absent an intent to injure the plaintiff, ‘malice’ requires more than a ‘willful and conscious’ disregard of the plaintiffs’ interests.  The additional component of ‘despicable conduct’ must be found.”  (College Hospital Inc. v. Superior Court (1994) 8 Cal.4th 704, 725.) (emphasis added.)  The statute’s reference to despicable conduct represents a “new substantive limitation on punitive damage awards.”  (Ibid.)  Despicable conduct is “conduct which is so vile, base, contemptible, miserable, wretched or loathsome that it would be looked down upon and despised by ordinary decent people.  Such conduct has been described as ‘having the character of outrage frequently associated with crime.’”  (Tomaselli v. Transamerica Ins. Co. (1994) 25 Cal.App.4th 1269, 1287.)  Further, “[t]here must be evidence that defendant acted with knowledge of the probable dangerous consequences to plaintiff’s interests and deliberately failed to avoid these consequences.”  (Flyer’s Body Shop Profit Sharing Plan v. Ticor Title Ins. Co. (1986) 185 Cal.App.3d 1149, 1155.) 

Moreover, “[a]n 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.”    

“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.”  (Cruz v. HomeBase (2000) 83 Cal.App.4th 160, 167.)  “ “[T]he punitive damage statute requires proof of malice among corporate leaders: the “officer[s], director[s], or managing agent [s].” [Citation.] This is the group whose intentions guide corporate conduct. By so confining liability, the statute avoids punishing the corporation for malice of low-level employees which does not reflect the corporate “state of mind” or the intentions of corporate leaders. This assures that punishment is imposed only if the corporation can be fairly be viewed as guilty of the evil intent sought to be punished. “ ‘[T]o award [punitive] damages against the master for the criminality of the servant is to punish a man for that of which he is not guilty.’ ” [Citation.]”  (Id.)  “Managing agents” are employees who “exercise [ ] substantial discretionary authority over decisions that ultimately determine corporate policy.”  (Id.)    

PV Holding contends that Plaintiffs have not pled sufficient facts to demonstrate that it acted with conscious disregard or that it had any awareness amounting to despicable conduct. Furthermore, as merely the owner of the vehicle driven by Defendant Singh, PV Holdings aver that any prayer for punitive damages is improper pursuant to Vehicle Code § 17151(b). 

There are no allegations that PV Holding had advance knowledge of Defendant Singh’s alleged history, and that it acted with conscious disregard, authorization, ratification or act of oppression, fraud, or malice. Further, Plaintiff’s contention that PV Holding provided vehicles to unscreened and uninsured drivers is not a sufficient basis for punitive damages.   

Accordingly, the motion to strike the prayer for punitive damages is GRANTED without leave to amend at this time. Should Plaintiffs later discover additional facts to support a claim for punitive damages against PV Holdings, the ruling on this motion will not preclude Plaintiffs from later seeking leave to amend.  

 

IV. Conclusion 

The demurrer to the second cause of action is SUSTAINED without leave to amend. 

The motion to strike punitive damages is GRANTED without leave to amend at this time. However, should Plaintiffs later determine a cognizable basis for punitive damages, Plaintiffs may file a motion for leave to amend the complaint. 

 

Moving Defendant is ordered to give notice.