Judge: Robert B. Broadbelt, Case: 24STCV09293, Date: 2025-02-27 Tentative Ruling

Case Number: 24STCV09293    Hearing Date: February 27, 2025    Dept: 53

Superior Court of California

County of Los Angeles – Central District

Department 53

MOVING PARTIES:              Defendants LMDG Real Estate Value Fund II Holdings, LLC and Aaron Merriman

RESPONDING PARTIES:    Plaintiffs Mark Lee, Scott Shannon, and Bill Gray

Motion to Strike Punitive Damages

The court considered the moving, opposition, and reply papers filed in connection with this motion.

DISCUSSION

Defendants LMDG Real Estate Value Fund II Holdings, LLC and Aaron Merriman (“Defendants”) move the court for an order striking from the Complaint filed by plaintiffs Mark Lee, Scott Shannon, and Bill Gray (“Plaintiffs”) their prayer for punitive damages and supporting allegations, as set forth on (1) page 13, lines 22-24, (2) page 16, line 22 through page 17, line 2, (3) page 18, lines 5-12, (4) page 20, lines 6-7, (5) page 21, lines 4-12, (6) page 23, lines 6-10, (7) page 24, line 25 through page 25, line 3, (8) page 26, line 26 through page 27, line 1, (9) page 32, lines 18-23, (10) page 33, lines 19-26, (11) page 34, line 25 through page 35, line 6, (12) page 37, lines 2-3, and (13) page 38, line 14.

First, the court finds that Plaintiffs have alleged facts establishing that (1) Defendants are guilty of malice and oppression based on the allegations that they (i) knew that Plaintiff’s unit was the subject of water leaks, mold, and other indicia of slum or substandard housing, which have caused Plaintiffs bodily injury and emotional distress (Compl., ¶¶ 27, 75, 92, 172), but       (ii) elected to sell the subject property “[r]ather than make adequate repairs” (Compl., ¶ 27), “ignored Plaintiffs’ complaints” (Compl., ¶ 29), and “refused [and failed] to repair clearly uninhabitable conditions” “to save money and increase their . . . net income” (Compl., ¶¶ 31, 53), and therefore engaged in despicable conduct that was carried on by Defendants with willful and conscious disregard of the rights and safety of Plaintiffs, and (2) the advance knowledge, conscious disregard, ratification, and act of malice and oppression was on the part of entity defendant LMDG Real Estate Value Fund II Holdings, LLC’s managing agent (Compl., ¶ 51).  (Civ. Code, § 3294, subds. (a), (b), (c)(1), (c)(2).)

Second, the court finds that Plaintiffs’ action does not arise from contract, thereby precluding an award of punitive damages, because Plaintiffs have alleged tort and statutory causes of action for, inter alia, breach of the implied warranty of habitability, nuisance, and violation of Civil Code section 1942.4.  (Civ. Code, § 3294, subd. (a).)  

The court therefore denies Defendants’ motion to strike Plaintiffs’ prayer for punitive damages and supporting allegations.  (Code Civ. Proc., § 436, subd. (a).)

ORDER

            The court denies defendants LMDG Real Estate Value Fund II Holdings, LLC and Aaron Merriman’s motion to strike punitive damages

            The court orders plaintiffs Mark Lee, Scott Shannon, and Bill Gray to give notice of this ruling.

IT IS SO ORDERED.

DATED:  February 27, 2025

_____________________________

Robert B. Broadbelt III

Judge of the Superior Court