Judge: Stephen I. Goorvitch, Case: 23STCV04832, Date: 2023-11-09 Tentative Ruling
Case Number: 23STCV04832 Hearing Date: November 9, 2023 Dept: 39
Kari
Armstrong v. Global Lending Services, LLC, et al.
Case
No. 23STCV04832
Motion
to Strike
Plaintiff
Kari Armstrong (“Plaintiff”) filed this action against Global Lending Services,
LLC (“GLS”) and Loss Prevention Services, LLC (“LPS”) alleging that they
unlawfully repossessed her 2017 Toyota Corolla.
LPS moves to strike the prayer for punitive damages and related
allegations.
Any party,
within the time allowed to respond to a pleading, may serve and file a motion
to strike the whole pleading or any part thereof. (Code Civ. Proc., § 435, subd. (b)(1); Cal.
Rules of Court, rule 3.1322, subd. (b).)
On a motion to strike, the court may: (1) strike out any irrelevant,
false, or improper matter inserted in any pleading; or (2) strike out all or
any part of any pleading not drawn or filed in conformity with the laws of
California, a court rule, or an order of the court. (Code Civ. Proc., § 436, subd. (a)-(b); Stafford v. Shultz (1954) 42 Cal.2d 767,
782.)
To state a
prima facie claim for punitive damages, a plaintiff must allege the elements
set forth in the punitive damages statute, Civil Code section 3294. (Coll.
Hosp., Inc. v. Superior Court (1994) 8 Cal.4th 704, 721.) Per Civil Code section 3294, a plaintiff must
allege that the defendant has been guilty of oppression, fraud or malice. (Civ. Code, § 3294, subd. (a).) “Malice is defined in the statute as conduct
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.”
(Coll. Hosp., Inc. v. Superior
Court (1994) 8 Cal.4th 704, 725.)
“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 Ct. (1984) 157 Cal.App.3d 159, 166, internal citations and
footnotes omitted.)
“[T]he
imposition of punitive damages upon a corporation is based upon its own
fault. It is not imposed vicariously by
virtue of the fault of others.” (City Products Corp. v. Globe Indemnity Co.
(1979) 88 Cal. App. 3d 31, 36.)
“Corporations are legal entities which do not have minds capable of
recklessness, wickedness, or intent to injure or deceive. An award of punitive damages against a
corporation therefore must rest on the malice of the corporation’s
employees. But the law does not impute
every employee’s malice to the corporation.
Instead, the punitive damages statute requires proof of malice among
corporate leaders: the officers,
directors, or managing agents.” (Cruz v. Home Base (2000) 83 Cal. App.
4th 160, 167, internal quotations and citation omitted.)
In this case,
Plaintiff alleges that LPS, a corporate entity, wrongfully repossessed
Plaintiff’s vehicle, and deprived her of the surplus due on her account. (Second Amended Complaint, ¶¶ 53-55.) However, Plaintiff makes only conclusory
allegations: “The top corporate officers of [Defendant] approved and signed the
repossession services agreement between [Global Lending] and [Defendant],
knowing that this was a crime under the Collateral Recovery Act.” (Second Amended Complaint, ¶ 58.) Plaintiff also alleges, “The top corporate
officers of [Defendant] signed the vendor agreement between [Defendant] and One
Way Tow, knowing that this was a crime under the Collateral Recovery Act . . .
.” (Second Amended Complaint, ¶
59.) There are no facts in support of
these allegations. Conclusory
allegations are not sufficient to state a claim for punitive damages. Otherwise, every case would involve a claim
for punitive damages, which is not the law.
Plaintiff asks
the Court to take judicial notice of other lawsuits against LPS as evidence
that LPS’s top management had notice that it was operating unlawfully. A civil complaint merely contains allegations;
it does not provide definitive notice of unlawful activity in the same manner
as a judgment. Plaintiff also concedes
that “LPS then hired a local repossession agency, One Way Tow, as its agent to
physically repossess plaintiff’s car.”
(Second Amended Complaint, ¶ 3.)
Plaintiff does not allege that this local repossession agency lacked a
repossession license. (Ibid.) Plaintiff does not allege that LPS’s
corporate officers knew this outsourcing did not comply with the law or provide
any factual basis for any such knowledge.
Simply, Plaintiff does not allege sufficient facts to establish that
LPS’s top management knew their repossession of her vehicle through a local
repossession agency necessarily violated the law. Plaintiff may have a cause of action for
violation of the Collateral Recovery Act, but not a claim for punitive
damages.
Based upon the
foregoing, the Court orders as follows:
1. LPS’s motion to strike is granted.
2. Because Plaintiff has filed three
complaints and articulates no facts suggesting that an amendment would be
successful, the Court denies leave to amend.
This order is without prejudice to Plaintiff seeking leave to amend if
she develops sufficient facts during discovery.
3. LPS shall file an answer within thirty
(30) days.
4. Counsel for LPS shall provide notice
and file proof of such with the Court.