Judge Peter A. Hernandez, Case Number: 23PSCV00029, Date: 2023-05-26 Tentative Ruling

1. Defendant Res-Care, Inc. dba Brightspring Health Services’ and RSCR California, Inc.’s Demurrer to Complaint is SUSTAINED. The court will hear from counsel for Plaintiff as to whether leave to amend is requested and will require an offer of proof if so.

2. Defendant Res-Care, Inc. dba Brightspring Health Services’ and RSCR California, Inc.’s Motion to Strike Portions of Complaint is DENIED as MOOT in part (i.e., as to Paragraph 54), DENIED in part (i.e., as to Paragraph 64 and Paragraph 6 of Plaintiff’s prayer) and GRANTED in part (i.e., as to Paragraph 65 and Paragraphs 5 and 7 of Plaintiff’s prayer).

Plaintiff Paramount Properties Holding Company, LLC (“Plaintiff”) alleges as follows:

On December 5, 2005, Plaintiff and Defendant RSCR California, Inc. (“RSCR”) entered into a ten year triple-net lease, wherein Plaintiff agreed to lease its 24,350 square foot commercial building and surrounding grounds, located at 200-204 West Paramount Street, Azuza, California (“Premises”) to RSCR in exchange for payment of rent. Defendant Res-Care, Inc. dba Brightspring Health Services (“Res-Care”) is the parent company of RSCR. On December 23, 2015, Plaintiff and RSCR executed the First Amendment to the Lease Agreement (“First Amendment”) that extended the term of the lease through December 31, 2022. The First Amendment contained a termination clause that permitted RSCR to terminate the lease before December 31, 2022 if it gave at least 18 months’ notice and paid an early termination fee. In a letter dated March 31, 2021, RSCR gave notice of its option to terminate the lease early. Plaintiff thereafter inspected the Premises, noted various damages, and demanded, before RSCR vacated the premises, that RSCR make certain repairs. On or about September 19, 2022, RSCR vacated the Premises in a dilapidated condition.

On January 4, 2023, Plaintiff filed a complaint, asserting causes of action against Res-Care, RSCR and Does 1-10 for:

A demurrer may be made on the grounds that the pleading, inter alia, does not state facts sufficient to constitute a cause of action. (Code Civ. Proc., § 430.10, subd. (e).)

When considering demurrers, courts read the allegations liberally and in context. In a demurrer proceeding, the defects must be apparent on the face of the pleading or via proper judicial notice. (Donabedian v. Mercury Ins. Co. (2004) 116 Cal.App.4th 968, 994.) “A demurrer tests the pleadings alone and not the evidence or other extrinsic matters. Therefore, it lies only where the defects appear on the face of the pleading or are judicially noticed.” (SKF Farms v. Superior Court (1984) 153 Cal.App.3d 902, 905 [citations omitted].) At the pleading stage, a plaintiff need only allege ultimate facts sufficient to apprise the defendant of the factual basis for the claim against him. (Semole v. Sansoucie (1972) 28 Cal. App. 3d 714, 721.) “[A] demurrer does not, however, admit contentions, deductions or conclusions of fact or law alleged in the pleading, or the construction placed on an instrument pleaded therein, or facts impossible in law, or allegations contrary to facts of which a court may take judicial knowledge.” (S. Shore Land Co. v. Petersen (1964) 226 Cal.App.2d 725, 732 [citations omitted].)

Res-Care and RSCR demur, pursuant to Code of Civil Procedure § 430.10, subdivision (e), to the third cause of action in Plaintiff’s complaint, on the basis that it fails to state facts sufficient to constitute a cause of action.

A promissory fraud cause of action must allege that “(1) the defendant made a representation of intent to perform some future action, i.e., the defendant made a promise, and (2) the defendant did not really have that intent at the time that the promise was made, i.e., the promise was false.” (Beckwith v. Dahl (2012) 205 Cal.App.4th 1039, 1060.) “To sufficiently plead the first requirement, that the defendant made a promise, the complaint must state facts which show how, when, where, to whom, and by what means the representations were tendered. As for the second requirement, the falsity of that promise is sufficiently pled with a general allegation the promise was made without an intention of performance.” (Id. [internal quotations and citations omitted].)

Further, “[t]he requirement of specificity in a fraud action against a corporation requires the plaintiff to allege the names of the persons who made the allegedly fraudulent representations, their authority to speak, to whom they spoke, what they said or wrote, and when it was said or written.” (Tarmann v. State Farm Mut. Auto. Ins. Co. (1991) 2 Cal.App.4^th 153, 157.)

Plaintiff has alleged that Defendants “leased . . . [the] PREMISES and made a promise to maintain the PREMISES in good condition and to surrender the PREMISES at the conclusion of the tenancy in good condition (Complaint, ¶ 47), that Defendants did not intend to keep this promise when [they] made this promise” (Id., ¶ 48), that they “intended that [Plaintiff] rely on [their] promise” (Id., ¶ 49), that Plaintiff did so reasonably rely on said promise (Id., ¶ 50), that Defendants did not maintain the Premises during their tenancy and did not surrender the Premises in good condition (Id., ¶ 51), that Plaintiff was harmed by Defendants’ conduct (Id., ¶ 52) and that Plaintiffs’ “reliance on DEFENDANTS’ promise was a substantial factor in causing [Plaintiff’s] harm” (Id., ¶ 53).

Plaintiff, however, fails to allege the names of those who made the purported representations, their authority to speak on behalf of Res-Care and/or RSCR, to whom they spoke, what they said or wrote, and when it was said or written.

Pursuant to Code of Civil Procedure section 436, “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 inserted 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.” The grounds for a motion to strike must “appear on the face of the challenged pleading or from any matter of which the court is required to take judicial notice.” (Code Civ. Proc., § 437.)

Res-Care and RSCR move the court for an order striking out the following portions of Plaintiff’s complaint:

3. Paragraph 7 of Plaintiff’s prayer (i.e., “[f]or punitive damages pursuant to California Code of Civil Procedure § 3294 for Fraud alleged in the Third Cause of Action and for Waste as alleged in the Fourth Cause of Action”);

5. Paragraph 6 of Plaintiff’s prayer (i.e., “[f]or treble damages for Waste alleged in the Fourth Cause of Action (California Code of Civil Procedure § 732”); and

6. Paragraph 5 of Plaintiff’s prayer (i.e., “[f]or attorney’s fees allowable under statute or other law”).

At the outset, the motion is summarily denied as moot in part (i.e., as to Paragraph 54), based on the ruling made on the demurrer.

Plaintiff seeks punitive damages in connection with its Fourth Cause of Action for Waste.

Punitive damages may be awarded upon clear and convincing evidence that a defendant has been guilty of oppression, fraud, or malice. (Civ. Code § 3294, subd. (a).)

“Malice” is defined as “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.” (Civ. Code § 3294, subd. (c)(1).)

“Oppression” is defined as “despicable conduct that subjects a person to cruel and unjust hardship in conscious disregard of that person’s rights.” (Civ. Code § 3294, subd. (c)(2).) “Fraud” is defined as “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)(3).)

A “conclusory characterization of defendant’s conduct as intentional, willful and fraudulent is a patently insufficient statement of ‘oppression, fraud, or malice. . .’” (Brousseau v. Jarrett (1977) 73 Cal.App.3d 864, 872.) “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.” (Grieves v. Superior Court (1984) 157 Cal.App.3d 159, 166.)

Plaintiff has failed to allege oppressive, fraudulent or malicious conduct so as to substantiate an entitlement to punitive damages.

Plaintiff seeks treble damages under Code of Civil Procedure § 732 in connection with its Fourth Cause of Action for Waste. Code of Civil Procedure § 732 reads as follows:

If a guardian, conservator, tenant for life or years, joint tenant, or tenant in

There is no requirement that Plaintiff plead that Res-Care’s and/or RSCR’s waste was “willful or malicious.” As Plaintiff notes, whether treble damages are awarded is not a consideration at the pleading stage of a case: “The section is not mandatory in character, and contemplates a showing of wilfulness or maliciousness; whether the damages should be trebled is left to the court's discretion.” (Kanner v. Globe Bottling Co. (1969) 273 Cal.App.2d 559, 568 [emphasis added].)

Res-Care and RSCR’s motion is denied as to Paragraph 64 and as to Paragraph 6 of Plaintiff’s prayer.

California law generally requires that a party to a lawsuit pay its own attorney fees, regardless of whether it prevailed in the action. An exception to this general rule is recognized where a contract, statute or other law specifically authorizes the prevailing party to recover attorney fees. (Baldwin Builders v. Coast Plastering Corp. (2005) 125 Cal.App.4th 1339, 1343 [citations omitted].)

Plaintiff prays “[f]or attorney’s fees allowable under statute or other law” (Prayer, ¶ 5), but fails to allege any statutory or other basis for same.

Plaintiff, in opposition, claims it is entitled to attorney’s fees per Page 10, Section 10, subdivision (d) of the lease (attached as Exhibit 1 to the complaint). Plaintiff, however, did not allege a contractual basis for attorney’s fees in its complaint.

Res-Care and RSCR’s motion is granted as to Paragraph 5 of Plaintiff’s prayer.

[1] The demurrer and motion to strike were filed (and served via mail) on February 21, 2023 and originally set for hearing on April 13, 2023. On February 22, 2023, a “Notice Re: Continuance of Hearing and Order” was filed, wherein the April 13, 2023 scheduled hearing was continued to May 26, 2023; notice was given to counsel.