Judge: Richard Y. Lee, Case: 30-2020-01147823, Date: 2022-08-04 Tentative Ruling
Defendant Recon Industries, Inc. dba California Safety Agency (“Defendant”) filed a Demurrer and Motion to Strike relating the Plaintiff Dien Tran’s (Plaintiff”) Second Amended Complaint.
Plaintiff’s Second Amended Complaint asserts two causes of action against Defendant. Plaintiff asserts his first cause of against Defendant for conversion pursuant to Code of Civil Procedure section 338(c). Plaintiff also asserts his third cause of action against Defendant for violations of Vehicle Code sections 22658(a)(2) and 22658(e)(1).
I. DEMURRER
Defendant brings its Demurrer pursuant to (1) Code of Civil Procedure section 430.10(e) on the grounds that each cause of action fails to state facts sufficient to constitute a cause of action against Defendant and (2) Code of Civil Procedure section 430.10(f) on the grounds that the complaint is uncertain.
Conversion
“Conversion is the wrongful exercise of dominion over the property of another. The elements of a conversion claim are: (1) the plaintiff’s ownership or right to possession of the property; (2) the defendant’s conversion by a wrongful act or disposition of property rights; and (3) damages....” (Hodges v. County of Placer (2019) 41 Cal.App.5th 537, 551.)
Here, the Second Amended Complaint alleges that (1) “Plaintiff owned a box truck, a forklift, materials & equipment (stored inside the box truck);” (2) “Defendants, and each of them, were responsible for both of these vehicles being towed on more than one occasion between June 11, 2017 and August 19, 2017, and ultimately for the vehicles being sold at auction — the box truck on or about September 25, 2017 and the forklift sometime after that. Defendants, and each of them, wrongly withheld possession of the vehicles from plaintiff; they took, detained, and damaged plaintiff’s vehicles, materials, equipment and caused them to be sold at auction;” and (3) “Plaintiff suffered damages in the form of a complete loss, without compensation, of his vehicles, materials, and equipment.” (ROA # 96, SAC, ¶ 20.)
As all the elements have been alleged, this cause of action is sufficiently pleaded against Defendant. As such, the demurrer to the first cause of action for conversion is OVERRULED.
Vehicle Code
Vehicle Code section 22658(a)(2) states: “The owner or person in lawful possession of private property, including an association of a common interest development as defined in Sections 4080 and 4100 or Sections 6528 and 6534 of the Civil Code, may cause the removal of a vehicle parked on the property to a storage facility that meets the requirements of subdivision (n) under any of the following circumstances . . . The vehicle has been issued a notice of parking violation, and 96 hours have elapsed since the issuance of that notice.”
Vehicle Code section 22658(e)(1) states: “An owner or person in lawful possession of private property, or an association of a common interest development, causing the removal of a vehicle parked on that property is liable for double the storage or towing charges whenever there has been a failure to comply with paragraph (1), (2), or (3) of subdivision (a) or to state the grounds for the removal of the vehicle if requested by the legal or registered owner of the vehicle as required by subdivision (f).”
Here, Plaintiff alleges that “Defendants, and each of them, violated Vehicle Code § 22658(a)(2) by failing to give 96-hours of notice on each and every one of the occasions that plaintiff’s box truck and/or forklift were towed, on or about 11, 14, and 23 June, 18 and 19 August 2017.” (ROA # 96, SAC, ¶ 25.)
In addition, Plaintiff alleges that “Plaintiff is further informed and believes that all defendants, and each of them, violated Vehicle Code §§ 22658(d)&(e) [and] are liable to plaintiff under the provisions of said code section.” (ROA # 96, SAC, ¶ 37.)
Plaintiff has sufficiently pleaded that “Defendants, and each of them,” failed to provide a notice of parking violation within 96 hours of towing Plaintiff’s vehicle “on each and every one of the occasions that plaintiff’s box truck and/or forklift were towed, on or about 11, 14, and 23 June, 18 and 19 August 2017.” (ROA # 96, SAC, ¶ 25.) As such, the demurrer to the second cause of action for conversion is OVERRULED.
II. MOTION TO STRIKE
Defendant moves to strike Plaintiff’s claim for punitive damages and attorney’s fees as well as the paragraph alleging that Defendant acted with malice and oppression.
Punitive Damages
“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.) In addition, punitive damages are available in cases involving violations of the Vehicle Code. (See Powerhouse Motorsports Group, Inc. v. Yamaha Motor Corp., U.S.A. (2013) 221 Cal.App.4th 867, 886-88 as modified on denial of reh’g (Dec. 24, 2013).)
“Where a statutory penalty is imposed for a wrongful act, it does not preclude recovery of punitive damages in a tort action where the necessary malice or oppression is shown.” (Turnbull & Turnbull v. ARA Transportation, Inc. (1990) 219 Cal.App.3d 811, 826, reh’g denied and opinion modified (May 16, 1990).) “If the purpose of the penalty is the same as that of punitive damages, however, the plaintiff cannot obtain a double recovery and must elect to have judgment entered in an amount which reflects either the statutory trebling or the compensatory and punitive damages.” (Ibid.)
Pursuant to Civil Code § 3294(a), a plaintiff may seek punitive damages for “oppression, fraud, or malice.” Civil Code section 3294(c) defines “malice” as conduct which is intended to cause injury or despicable conduct carried on with a willful and conscious disregard of the rights or safety of others. Similarly, Civil Code section 3294(c) defines “oppression” as despicable conduct that subjects a person to cruel and unjust hardship in conscious disregard of that person’s rights. “Despicable conduct” is conduct that is “so vile, base, contemptible, miserable, wretched or loathsome that is would be looked down upon and despised by ordinary decent people.” (Lackner v. North (2006) 135 Cal.App.4th 1188, 1210.)
Under California law, to establish malice, it is not sufficient to show that the defendant’s conduct was negligent, grossly negligent, or even reckless, since such findings will not support a claim for punitive damages. (See Flyers Body Shop Profit Sharing Plan v. Ticor Title Ins. Co. (1968) 185 Cal.App.3d 1149, 1154-55.) Further, punitive damages cannot be pled in conclusory terms, instead the facts supporting a claim for punitive damages must be set out clearly, concisely, and with particularity. (See Smith v. Superior Court (1992) 10 Cal.App.4th 1033, 1041-42.)
“Corporations are legal entities which do not have minds capable of recklessness, wickedness, or intent to injure or deceive.” (Cruz v. HomeBase (2000) 83 Cal.App.4th 160, 167.) “An award of punitive damages against a corporation therefore must rest on the malice of the corporation’s employees.” (Id.)
“But the law does not impute every employee’s malice to the corporation.” (Cruz v. HomeBase (2000) 83 Cal.App.4th 160, 167.) “Instead, the punitive damage statute requires proof of malice among corporate leaders: the ‘officer[s], director[s], or managing agent[s].’” (Id.) “Managing agents” are employees who “exercise[] substantial discretionary authority over decisions that ultimately determine corporate policy,” such as those “decisions that set these general principles and rules.” (Id., at pp. 167-68; Roby v. McKesson Corp. (2009) 47 Cal.4th 686, 714-15.)
As stated in Civil Code section 3294(b):
“An 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.” (Civ. Code, § 3294, subd. (b).)
Here, Plaintiff seeks punitive damages against corporate Defendant Recon Industries, Inc. Pursuant to the Second Amended Complaint, Defendant was responsible for Plaintiff’s box truck and forklift “being towed on more than one occasion between June 11, 2017 and August 19, 2017, and ultimately for the vehicles being sold at auction — the box truck on or about September 25, 2017 and the forklift sometime after that.” (ROA # 96, SAC, ¶ 20.)
Plaintiff alleges that Defendants wrongly withheld possession of the vehicles, and the material and equipment contained therein, and damaged the vehicles, and the material and equipment contained therein. (ROA # 96, SAC, ¶ 20.)
Defendant also allegedly failed to give Plaintiff a 96-hour notice each of the five times his vehicles, and the material and equipment contained therein, were towed. (ROA # 96, SAC, ¶ 25.) Allegedly, Defendant did not tow other similarly situated vehicles that parked their cars 24 hours a day in the same complex. (ROA # 96, SAC, ¶ 39.) “Defendant intentionally violated numerous California code sections, intentionally committed various torts, and did this with the express purpose of harassing plaintiff and violating his rights.” (ROA # 96, SAC, ¶ 39.)
While Plaintiff pleaded facts that constitute malice, Plaintiff failed to plead facts sufficient to establish malice among corporate leaders as required under section 3294(b). Accordingly, Defendants’ Motion to Strike the punitive damages is GRANTED with 20 days leave to amend. Page 6, paragraph 39, lines 16-17 and 21-23 and page 7, Prayer for Damages, lines 20-21 are stricken without prejudice as to Defendant Recon Industries, Inc. only.
Attorney’s Fees
Attorney fees incurred in seeking to recover the property are not recoverable, as they are not specifically authorized in the statute. (Haines v. Parra (1987) 193 Cal.App.3d 1553, 1559.)
However, attorney’s fees are available in cases involving violations of the Vehicle Code that are willful. (See Powerhouse Motorsports Group, Inc. v. Yamaha Motor Corp., U.S.A. (2013) 221 Cal.App.4th 867, 886-88 as modified on denial of reh’g (Dec. 24, 2013).) In fact, Vehicle Code section 22658 states that “[t]he remedies, sanctions, restrictions, and procedures provided in this section are not exclusive and are in addition to other remedies, sanctions, restrictions, or procedures that may be provided in other provisions of law, including, but not limited to, those that are provided in Sections 12110 and 34660.” (Veh. Code, § 22658, subd. (p).)
As such, the Motion to Strike Plaintiff’s prayer for attorney’s fees is DENIED as to the Vehicle Code cause of action and GRANTED as to the conversion cause of action.
SERVICE OF SUMMONS ISSUE
In its demurrer and motion to strike, Defendant Recon Industries argues that Plaintiff did not properly serve the summons on Defendant because Plaintiff served an undated and unsigned summons, and his unfiled Third Amended Complaint. Defendant Recon Industries states that the Demurrer and Motion to Strike attack the operative Second Amended Complaint.
“Where a person makes a general appearance, such appearance operates as a consent to jurisdiction of his person.” (City of Riverside v. Horspool (2014) 223 Cal.App.4th 670, 679; Code. Civ. Proc. § 410.50, subd. (a).) “Failure to make a motion to quash constitutes a waiver of the issues of lack of personal jurisdiction, inadequacy of process, inadequacy of service of process, inconvenient forum, and delay in prosecution.” (Code Civ. Proc., § 418.10, subd. (e)(3); Factor Health Management v. Superior Court (2005) 132 Cal.App.4th 246, 251–252 [defendant not permitted to take action that constitutes a general appearance and then negate the effect of that action by a subsequent motion to quash]; see also Royals v. Lu (Cal. Ct. App., July 18, 2022, No. A160985) 2022 WL 2800956, at *14 [holding when a party “made a general appearance in filing and pursuing her own petition, as well as by filing a demurrer, she waived an objection to improper service of summons.”].)
Given the above, Defendant Recon Industries made a general appearance in filing the demurrer and motion to strike, and therefore waived any objection to improper service of summons.
In summary, Defendant Recon Industries, Inc. dba California Safety Agency’s (“Defendant Recon Industries”) Demurrer to the Second Amended Complaint is OVERRULED.
Defendant Recon Industries’ Motion to Strike is DENIED as to page 7, Prayer for Damages, lines 21-22, which reads, “For attorney’s fees…as allowable by law” as such fees relate to Plaintiff’s third cause of action under the Vehicle Code. The Motion to Strike is GRANTED without leave to amend as to page 7, Prayer for Damages, lines 21-22, which reads, “For attorney’s fees…as allowable by law” as such fees relate to Plaintiff’s first cause of action for conversion.
Defendant Recon Industries’ Motion to Strike is GRANTED with 20 days leave to amend. Page 6, paragraph 39, lines 16-17 and 21-23 and page 7, Prayer for Damages, lines 20-21 are stricken without prejudice as to Defendant Recon Industries, Inc. only. Plaintiff has 20 days from the notice of ruling to file an amended complaint as to the punitive damages claims against Defendant Recon Industries, Inc. dba California Safety Agency only.
The leave to amend is limited to the punitive damages claims against Defendant Recon Industries, Inc. dba California Safety Agency. If Plaintiff wishes to file an amended complaint that addresses any other cause of action or factual allegations against any Defendant, Plaintiff must seek leave to amend under a separately noticed motion.
Moving forward, Plaintiff is ordered to follow the formatting requirements as described in California Rules of Court, rules 2.104 and 2.108. Plaintiff must also file a proof of service with the documents filed establishing the means by which the documents were served. (Code Civ. Proc., §§ 1011, 1013, 1013a and 1013b; Cal. Rules of Court, rules 1.21 and 2.251.)
Moving Party to give notice.