Judge: Virginia Keeny, Case: 22VECV01458, Date: 2023-05-05 Tentative Ruling

Case Number: 22VECV01458    Hearing Date: May 5, 2023    Dept: W

KIMBERLY DAVIS, et al. v. PAIGE HEMMIS, et al.

MOTION TO STRIKE portions of the first amended complaint

Date of Hearing:        May 5, 2023                           Trial Date:       None set.

Department:              W                                            Case No.:        22VECV01458

Moving Party:            Defendants Compass California, Inc. dba Compass (erroneously sued as Compass Realty), Melissa Improta, and Jason Improta

Responding Party:     Plaintiffs Kimberly Davis and Jonathan Davis        

Meet and Confer:      Yes. (Garchie Decl. ¶¶2-4.)

BACKGROUND

On March 9, 2023, Plaintiffs Kimberly Davis and Jonathan Davis filed a first amended complaint against Defendants Paige Hemmis, Jason Short, Ameka Benton, Scott Fields, Hallmark Cards, Inc., Crown Media Holdings, Inc., Paige Hemmis, Inc., Aria Music Group, The Oaks of Calabasas Homeowners Association, Melissa Improta, Jason Improta, and Compass California, Inc. for 1) Intentional Interference with Contract; 2) Negligence; 3) Trespass; 4) Violations of Civil Code § 1798.93; 5) Breach of Fiduciary Duty; 6) Professional Negligence; 7) Unfair Business Practices; 8) Fraudulent Concealment; 9) Negligent Misrepresentation; 10) Fraud; 11) Slander of Title; 12) Constructive Fraud; 13) Wrongful Eviction; 14) Quiet Title; and 15) Conversion.

Plaintiffs allege about September 15, 2019, when Plaintiffs were absent from the subject property, Defendants Hemmis and Short unlawfully entered upon the subject property and remained in possession of the property until early July 2022. While Defendants Hemmis and Short were in possession of the property, Plaintiffs were engaged in a dispute with their mortgage lender, US Bank, related to a settlement agreement that was entered into to address the pay off of a mortgage loan. Plaintiffs further allege at some point prior to September 12, 2019, Defendants Hemmis, Short, Improta and Compass engaged in a conspiracy to attempt to steal title to the Plaintiffs’ home. On this point, Plaintiffs claim Hemmis and Short fraudulently forged a lease that purported to have Kimberly Davis's signature on it. As a result of Defendants’ actions, Plaintiffs have been damaged.

Plaintiff dismissed Defendants Ameka Benton and Scott Fields.

On March 24, 2023, this action was related to Kimberly Davis v. Nationstar, et al. (23VECV01125).

[Tentative] Ruling

Defendants Compass California, Inc. dba Compass (erroneously sued as Compass Realty), Melissa Improta, and Jason Improta’s Motion to Strike is GRANTED WITH LEAVE TO AMEND.

ANALYSIS

Defendants Compass California, Inc. dba Compass (erroneously sued as Compass Realty), Melissa Improta, and Jason Improta (collectively “Real Estate Defendants”) move this court for an order striking the following portions of the Verified First Amended Complaint of Plaintiffs. Defendants seek to strike Plaintiff’s allegations regarding punitive damages.

The court may, upon a motion, or at any time in its discretion, and upon terms it deems proper, strike any irrelevant, false, or improper matter inserted in any pleading. (CCP §436(a).) The court may also strike all or any part of any pleading not drawn or filed in conformity with the laws of this state, a court rule, or an order of the court. (CCP §436(b).)  The grounds for a motion to strike are that the pleading has irrelevant, false or improper matter, or has not been drawn or filed in conformity with laws. (CCP §436.) The grounds for moving to strike must appear on the face of the pleading or by way of judicial notice. (CCP §437.)

California Civil Code section 3294 authorizes the recovery of punitive damages in non-contract cases where “the defendant has been guilty of oppression, fraud, or malice . . . .” (Civ. Code §3294(a).)  “‘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.” (Civ. Code §3294(c)(1).) “Oppression” means despicable conduct that subjects a person to cruel and unjust hardship in conscious disregard of that person’s rights. (Civ. Code §3294(c)(2).) “Fraud” means an intentional misrepresentation, deceit, or concealment of a material fact known to defendant with the intention on the part of defendant of thereby depriving a person of property or legal rights or otherwise causing injury. (Civ. Code 3294(c)(3).)

Real Estate Defendants argue the FAC fails to allege sufficient facts to support punitive damages as required by California law. Specifically, Plaintiffs fail to allege any "despicable conduc that "is so vile, base, contemptible, miserable, wretched or loathsome that it would be looked down upon and despised by ordinary decent people (Mock v. Michigan Millers Mut. Inc. Co. (1992) 4 Cal.App.4th 306, 331.) Further, the FAC fails to properly allege punitive damages against Compass because there are zero allegations that Compass either authorized the actions or subsequently ratified the originally unauthorized acts of the Improtas.

In opposition, Plaintiffs argue they have properly alleged punitive damages for their intentional interference with contract, trespass, breach of fiduciary duty, fraud, slander of title, wrongful eviction, and constructive fraud claims. Plaintiffs contend under each cause of action, they are entitled to punitive damages and have properly alleged such. Moreover, Plaintiffs contend they have properly alleged punitive damages against Compass. As part of the complaint, Plaintiffs have attached a document entitled Mutual General Release of All Claims and Rights, Jason Improta purports to sign a general release releasing all claims against Compass California, and his signature line is entitled “Compass.” Mr. Improta likewise signed lease documents on behalf of Compass. Accordingly, it is clear that the fraudulent, forged lease, is property attributed to Compass and it is signed on their behalf by one of their agents.

The court finds Plaintiffs have sufficiently alleged facts to support a claim for punitive damages. Plaintiffs claim the Real Estate Defendants “were made aware of the Plaintiffs’ long-running dispute with their mortgage lender and thought they could capitalize on same by creating a fraudulent lease with an option to buy that they could use to extract cash and other compensation out of the Plaintiffs’ mortgage lender, or the Plaintiffs themselves.” (FAC ¶¶50, 96.) With this knowledge, Plaintiffs claim the Real Estate Defendants, with the other defendants, wrongfully evicted Plaintiffs from their home and with the intent of remitting the 5% commission to the Real Estate Defendants. (FAC ¶238.) Based on these allegations and Plaintiffs’ other allegations of intent to cause them injury or deprivation of their property, Plaintiffs’ claim for punitive damages is sufficient for the purposes of a motion to strike.

The court notes, however, Plaintiffs have not sufficiently alleged facts to support a claim for punitive damages against Compass. When the defendant is a corporation, “the oppression, fraud, or malice must be perpetrated, authorized, or knowingly ratified by an officer, director, or managing agent of the corporation.” (Wilson v. Southern California Edison Company (2015) 234 Cal.App.4th 123, 164; see Civ. Code § 3294(b).)  Although the documents purport Compass is entering the contract, there is no allegations that entering the contract was perpetrated, authorized, or knowingly ratified by an officer, director, or managing agent of Compass. “The purpose of [Corporations Code section 313] is to allow third parties to rely upon the assertive authority of various senior executive officers of the corporation concerning the execution of any instrument on behalf of the corporation.” (§ 313. Instrument in writing and assignment or endorsement thereof; signatures; validity, West's Ann.Cal.Corp.Code § 313.) This does not support Plaintiffs claim that because Compass entered the agreement, the conduct was ratified by a officer, director, or managing agent of Compass.

Accordingly, Real Estate Defendants’ Motion to Strike is GRANTED WITH LEAVE TO AMEND.