Judge: Stephen I. Goorvitch, Case: 23STCV10120, Date: 2023-12-06 Tentative Ruling
Case Number: 23STCV10120 Hearing Date: December 6, 2023 Dept: 39
Elaine Johnson v.
Mercury Insurance Company, et al.
Case No.
23STCV10120
Demurrer and
Motion to Strike
Plaintiff
Elaine Johnson (“Plaintiff”) filed this action against the California
Automobile Insurance Company (“Defendant”) asserting causes of action for
breach of contract, breach of the covenant of good faith and fair dealing, and
declaratory relief. Plaintiff also
asserts prayers for punitive damages and attorneys’ fees. Now, Defendant demurs to the declaratory
relief claim and moves to strike the prayers for punitive damages and
attorneys’ fees.
A. Claim for Declaratory Relief
The Court
sustains the demurrer to the declaratory relief claim. The Court agrees with Defendant: A
declaratory relief action is inappropriate when a plaintiff has an adequate
remedy on other causes of action at trial.
(See Hood v. Superior Court (1995) 33 Cal.App.4th
319, 324; California Ins. Guarantee Assn. v. Superior Court (1991) 231
Cal.App.3d 1617, 1624.)
The declaratory relief statute
should not be used for the purpose of anticipating and determining an issue
which can be determined in the main action.
The object of the statute is to afford a new form of relief where needed
and not to furnish a litigant with a second cause of action for the
determination of identical issues.
(General of America Ins. Co.
v. Lilly (1968) 258 Cal.App.2d 465, 470.)
The Court has discretion to decline to issue a declaratory judgment
under these circumstances. (See AICCO,
Inc. v. Insurance Company of North America (2001) 90 Cal.App.4th 579,
590.)
Plaintiff’s
counsel attempts to circumvent this case law by arguing: “[W]hile Plaintiff’s
Breach of Contract and Bad Faith causes of action seek to redress past wrongs
on the part of the insurers, the cause of action for declaratory relief relates
to the future obligations of the parties to the insurance policies.” (Plaintiff’s Opposition, p. 2:16-18.) That is, quite simply, not true. The First Amended Complaint alleges that this
dispute relates to “[a]n actual controversy and dispute,” not a future dispute. (See First Amended Complaint, ¶ 52.) The First Amended Complaint then states:
“Johnson contents that she has incurred a loss of $1,973,520.78 and that her
repair plan will be permitted” and “Insurer on the other hand has failed to
provide a complete cost of repair or adequately investigate the proposed repair
plan by Johnson” and “Insurer has paid $862,330.38 based on a preliminary and
complete investigation of the water damage.”
(First Amended Complaint, ¶¶ 53-54.)
The First Amended Complaint then asks for a declaration concerning this
dispute. (First Amended Complaint, ¶
55.) The First Amended Complaint does
not reference any future obligation amongst the parties requiring an
interpretation of the contract.
Therefore, the demurrer is sustained without leave to amend.
B. Prayer for Punitive Damages
Defendant’s
counsel also moves to strike the prayer for punitive damages. 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.)
The First
Amended Complaint contains only conclusory allegations: “Insurer intended to
and did vex, damage, annoy, and injure Plaintiff. Said conduct was intentional, willful, and
with conscious disregard of Plaintiff’s rights, and was malicious, oppressive
and/or fraudulent under California Civil Code section 3294, thereby entitling
Plaintiff to punitive and exemplary damages against” Defendant. (First Amended
Complaint, ¶ 48.) Plaintiff does not
allege specific facts to support these conclusions. Regardless, the larger problem is that
Plaintiff does not allege specific facts demonstrating that an officer,
director, or managing agent acted with oppression, fraud, or malice. Plaintiff’s counsel does not articulate any
facts suggesting that an amendment would resolve this issue. Therefore, the Court grants the motion to
strike without leave to amend. This
order is without prejudice to Plaintiff’s counsel seeking leave to amend if he
develops sufficient facts during discovery.
C. Prayer for Attorneys’ Fees
Finally,
Plaintiff’s counsel seeks attorneys’ fees.
Plaintiff
alleges no basis for attorney’s fees in the complaint. Nor does Plaintiff’s counsel’s opposition
articulate a contractual or statutory basis for seeking attorney’s fees. Therefore, the motion to strike the prayer
for attorney’s fees is granted without leave to amend.
CONCLUSION AND ORDER
Based
upon the foregoing, the Court orders as follows:
1. The Court sustains Defendant’s demurrer
to the third cause of action without leave to amend.
2. The Court grants Defendant’s motion to
strike the prayers for punitive damages and attorney’s fees without leave to
amend.
3. Defendant shall file an answer within
thirty (30) days.
4. Plaintiff’s counsel has not served
Mercury Insurance Company, in violation of California Rules of Court, rule
3.110(b). Therefore, the Court issues an
Order to Show Cause why monetary sanctions in the amount of $500 or less should
not be imposed against Plaintiff and/or Plaintiff’s counsel, Stephen M.
Sanders, Esq. and/or Jeff G. Coyner, Esq., per the authority of California
Rules of Court, rule 3.110(f) and Code of Civil Procedure section 583.150. The OSC hearing shall be held on February 20,
2024, at 8:30 a.m. at the following location:
Stanley Mosk Courthouse
111 North Hill Street
Department #39 (Goorvitch, J.)
Los Angeles, California 90012
The parties may appear remotely
or in-person. Plaintiff’s counsel may
file a written response and/or may address the issues at the hearing. The Court orders Plaintiff’s counsel to serve
or dismiss Mercury Insurance Company forthwith.
5. Defendant’s counsel shall provide
notice and file proof of such with the Court.