Judge Randolph M. Hammock, Case Number: 23STCV11054, Date: 2023-07-20 Tentative Ruling

Judge: Randolph M. Hammock, Case: 23STCV11054, Date: 2023-07-20 Tentative Ruling

Case Number: 23STCV11054 Hearing Date: July 20, 2023 Dept: 49

Jarrett Scott v. East LA European Auto Works, et al.

MOTION TO STRIKE COMPLAINT

MOVING PARTY: Defendant Travelers Casualty Insurance Company of America

RESPONDING PARTY(S): Plaintiff Jarrett Scott

STATEMENT OF MATERIAL FACTS AND/OR PROCEEDINGS:

Plaintiff alleges he left his 1970 Chevrolet Chevelle at Defendant East LA European Auto Works for maintenance and repairs. Plaintiff alleges the vehicle was stolen after Defendant left it unattended outside of their locked gate. After the theft, Plaintiff reported the incident to Defendant’s insurer, Defendant Travelers Casualty Insurance Company of America. Travelers eventually offered Plaintiff $129,165.73 to resolve the claim, which Plaintiff accepted on January 5, 2023. Defendant mailed the check and Plaintiff cashed it. However, Plaintiff alleges the Travelers then issued a stop payment on the check and withdrew the funds from Plaintiff’s bank account. Travelers informed Plaintiff they were reopening the investigation and revoking their offer. Plaintiff now brings causes of action for (1) negligence against the body shop and its owner, (2) breach of contract against Travelers, (3) conversion against Travelers, and (4) declaratory relief against all Defendants.

Defendant Travelers now moves to strike portions of Plaintiff’s Complaint. Plaintiff opposed.

TENTATIVE RULING:

Defendant’s Motion to Strike is GRANTED in full.

If no leave to amend is granted, Defendant is to file an Answer to the Complaint within 21 days of this Ruling.

Moving party to give notice.

DISCUSSION:

Motion to Strike

I. Meet and Confer

The Declaration of T. Patrick Long reflects that the meet and confer requirement was satisfied.

II. Legal Standard

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.)

III. Analysis

Defendant moves to strike Plaintiff’s claims for punitive damages at Paragraph 39, Page 6; Paragraph 47, Page 7; Prayer number (1); and Prayer number (3).

A. Punitive Damages Are Not Available for Breach of Contract

Plaintiff seeks punitive damages on his cause of action for breach of contract. (Complaint ¶ 39.) 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.” It is well-settled that “[p]unitive damages are not recoverable in breach of contract actions.” (Purcell v. Schweitzer (2014) 224 Cal. App. 4th 969, 976.)

Here, Plaintiff alleges Defendant breached the contract by issuing a stop order on the check and removing the funds from Plaintiff’s bank account. (Compl. ¶ 37.) Because the cause of action “aris[es] from contract,” punitive damages are unavailable. (§ 3294.)

Accordingly, Plaintiff’s Motion to Strike Punitive Damages at Paragraph 39 is GRANTED, without leave.

B. Punitive Damages Are Available for Conversion

Plaintiff also seeks punitive damages on his cause of action for conversion. (Compl. ¶ 47.) “There is no question that punitive damages may be recovered in an action for conversion.” (Krusi v. Bear, Stearns & Co. (1983) 144 Cal. App. 3d 664, 678.) But Plaintiff still must allege facts of oppression, fraud, or malice. Defendant contends Plaintiff’s allegations are insufficient as a matter of law to support punitive damages.

As defined in Civil Code § 3294(c):

(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.

(2) “Oppression” means despicable conduct that subjects a person to cruel and unjust hardship in conscious disregard of that person’s rights.

(3) “Fraud” means that a defendant intentionally misrepresented or concealed a material fact and did so intended to harm a plaintiff.

After his vehicle was stolen, Plaintiff alleges that Defendant offered to settle the claim for $129,165.73, which Plaintiff accepted. (Compl. ¶ 12.) On January 29, 2023, Plaintiff received a check in the amount of $129,394.73 from Defendant, “which is $229 above the contracted amount” of $129,165.73. (Id. ¶ 17.) Plaintiff cashed the check that same day. (Id. ¶ 18.)

On February 2, 2023, Defendant “issued a stop payment on the check and withdrew the funds from Plaintiff’s bank account.” (Id. ¶ 19.) Plaintiff suspected that Defendant “may have issued the stop payment on the check because of the $229 in additional funds.” (Id. ¶ 20.) When he inquired with Defendant, however, Defendant “stated that their investigation was reopened and that they were revoking their offer and would not be paying PLAINTIFF the settlement funds of $129,165.73.” (Id.) Accordingly, Defendant alleges Defendant “engaged in despicable conduct and acted with willful, reckless, and conscious disregard of the rights of PLAINTIFF, and in doing the things herein alleged were guilty of oppression and malice.” (Id. ¶ 47.)

“[J]udges read allegations of a pleading subject to a motion to strike as a whole, all parts in their context, and assume their truth.” (Clauson v. Sup.Ct. (Pedus Services, Inc.) (1998) 67 CA4th 1253, 1255.) Here, assuming the truth of Plaintiff’s allegations, he has alleged facts—that if true and proven at trial—could amount to malice, oppression or fraud, and therefore support an award of punitive damages. (See CCP § 452 [allegations in pleading “must be liberally construed, with a view to substantial justice between the parties”]; see also Camenisch v. Superior Court (1996) 44 Cal.App.4th 1689, 1699 [noting Courts are given “broad discretion” when ruling on a motion to strike].)

Here, Plaintiff has failed to allege particular facts to support his claim for punitive damages. Standing alone, Plaintiff’s bare allegations that Defendant issued a stop order on its payment is insufficient to allege facts of the requisite malice, oppression, or fraud to support punitive damages.

Moreover, there are no allegations whatsoever to state a valid claim for punitive damages against a corporate defendant, as required by Civil Code § 3294(b).

Accordingly, Defendant’s Motion to Strike is GRANTED in full as to any and all claims for punitive damages.

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 must demonstrate this possibility at the hearing consistent with this ruling. If Plaintiff doesn’t, no leave to amend will be given.

Moving party to give notice.

IT IS SO ORDERED.

Dated: July 20, 2023 ___________________________________

Randolph M. Hammock

Judge of the Superior Court

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.