Judge Randolph M. Hammock, Case Number: 22STCV33895, Date: 2024-05-16 Tentative Ruling

Judge: Randolph M. Hammock, Case: 22STCV33895, Date: 2024-05-16 Tentative Ruling

Plaintiff Denise Birtch alleges she owns the real property at 7101-7103 Flight Ave., Los Angeles, CA, 90045. After purchasing the property, Plaintiff granted a Deed of Trust to Downey Savings and Loan Association to secure an obligation which had the principal sum of $500,000.00. Later, Plaintiff granted a second Deed of Trust to National City Bank to secure an obligation which had the principal sum of $80,000.00. On June 2, 2008, Plaintiff alleges she entered into a modification agreement with Downey which she believed merged the National and Downey obligations into one loan. Plaintiff did not hear from National for the next thirteen years.

Defendants’ Motion to Strike is GRANTED in full. Whether leave to amend is granted or not will depend on whether Plaintiff can make a sufficient offer of proof that she can allege facts to support a request for punitive damages against the corporate defendants, consistent with this ruling.

A motion to strike lies either (1) to strike any irrelevant, false or improper matter inserted in any pleading; or (2) to strike any pleading or part thereof not drawn or filed in conformity with the laws of this state, a court rule or order of court. (CCP § 436.)

Defendants first move to strike Plaintiffs’ references to punitive damages in the Complaint at paragraphs 55, 87, and the Prayer For Relief. (See Notice of Motion.) Defendants argue Plaintiffs have failed to plead specific facts to support an award of punitive damages.

Civil Code § 3294 provides that “[i]n an action for the breach of an obligation not arising from contract where it is proven by clear and convincing evidence that the defendant has been guilty of oppression, fraud, or malice, the plaintiff, in addition to the actual damages, may recover damages for the sake of example and by way of punishing the defendant.”

(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.

“When the defendant is a corporation, ‘[a]n award of punitive damages against a corporation ... must rest on the malice of the corporation's employees. But the law does not impute every employee's malice to the corporation.’ [Citation.] Instead, the oppression, fraud, or malice must be perpetrated, authorized, or knowingly ratified by an officer, director, or managing agent of the corporation. (Civ.Code, § 3294, subd. (b).)” (Wilson v. S. California Edison Co. (2015) 234 Cal. App. 4th 123, 164.)

Plaintiff alleges that she owned the property at 7101-7103 Flight Ave, Los Angeles, CA 90045. (SAC ¶ 20.) After purchasing the property, Plaintiff granted a Deed of Trust to Downey Savings and Loan Association to secure an obligation which had the principal sum of $500,000.00. (Id. ¶ 27.) Later, Plaintiff granted a second Deed of Trust to National City Bank to secure an obligation which had the principal sum of $80,000.00. (Id. ¶ 28.) On June 2, 2008, Plaintiff alleges she entered into a modification agreement with Downey which she believed merged the National and Downey obligations into one loan. (Id. ¶ 29.) Plaintiff did not hear from National for the next thirteen years. (Id.)

On or about December 20, 2021, Plaintiff learned the National obligation was still outstanding when she learned that a Notice of Default was recorded by an alleged assignee of the second Deed of Trust. (Id. ¶ 30.) The Assignment listed Defendant Gulf Harbour as the alleged beneficiary. (Id. ¶ 31.) Plaintiff alleges Defendant Specialized Loan Servicing is Gulf Harbour’s “attorney in-fact and/or agent.” (Id.) Plaintiff alleges that Gulf Harbour “is not licensed or registered to do business in California and has no office and/or address in California,” which “relieves the Plaintiff from any obligation to tender the amount of the debt.” (Id. ¶¶ 31, 32.) On September 29, 2022, a Mikhael Garabed purchased the property at a foreclosure sale. Plaintiff brings causes of action for (1) breach of contract, (2) fraud, (3) unfair business practices, (4) quiet title, and (5) declaratory relief.

Here, Plaintiff has failed to allege the requisite malice, oppression, or fraud perpetrated, authorized, or knowingly ratified by an officer, director, or managing agent of Defendants SLS or Gulf Harbor. Therefore, Plaintiff’s request for punitive damages is improper at this time.

Accordingly, Defendants’ Motion to Strike Punitive Damages is GRANTED. Generally speaking, leave to amend must be allowed where there is a reasonable possibility of successful amendment. (Goodman v. Kennedy (1976) 18 Cal.3d 335, 348.) Plaintiff will have to demonstrate that possibility by means of an offer of proof at the hearing. Otherwise, leave to amend shall be denied.

Defendants also move to strike the fourth cause of action for quiet title. This court previously sustained Defendants’ Demurrer to this cause of action in the First Amended Complaint without leave to amend. (See July 14, 2023, Final Ruling.) Plaintiff then filed a Second Amended Complaint but included the cause of action.

Any party may submit on the tentative ruling by contacting the courtroom via email at Smcdept49@lacourt.org by no later than 4:00 p.m. the day before the hearing. All interested parties must be copied on the email. It should be noted that if you submit on a tentative ruling the court will still conduct a hearing if any party appears. By submitting on the tentative you have, in essence, waived your right to be present at the hearing, and you should be aware that the court may not adopt the tentative, and may issue an order which modifies the tentative ruling in whole or in part.