Judge: Virginia Keeny, Case: 24STCV27242, Date: 2025-04-03 Tentative Ruling
Case Number: 24STCV27242 Hearing Date: April 3, 2025 Dept: 45
OHANIAN V. STATE FARM GENERAL
INSURANCE COMPANY
MOTION TO STRIKE PLAINTIFF'S COMPLAINT
Date of Hearing: April 3, 2025 Trial
Date: None Set
Department: 45 Case
No.: 24STCV27242
Moving Party: Defendant,
STATE FARM GENERAL INSURANCE COMPANY
Responding Party: Plaintiff, HARMIK OHANIAN
BACKGROUND
On October 17, 2024, Plaintiff Harmik
Ohanian filed a Complaint against Defendant State Farm General Insurance
Company alleging two causes of action: (1) Breach of Insurance Contract, and
(2) Breach of the Implied Covenant of Good Faith and Fair Dealing.
Plaintiff alleges that he was insured
under a State Farm Homeowners Insurance Policy (Policy No. 75-J2M038-9),
covering his real property located at 10356 Ormond Street, Sunland, California
91040, during the relevant time period of October 1, 2022 to October 1, 2023.
Plaintiff claims that the property sustained substantial damage from a wind and
rainstorm on or about February 25, 2023, and that State Farm failed to issue
payment under the policy despite acknowledging coverage and the scope of
damages.
According to the Complaint, Plaintiff
fulfilled all obligations under the policy, including timely payment of
premiums, and provided documentation supporting his claim. However, Plaintiff
alleges that State Farm improperly denied benefits, failed to investigate the
loss in good faith, unreasonably delayed handling of the claim, and ignored
Plaintiff’s request for appraisal. Plaintiff further alleges that Defendant’s
conduct was unreasonable, in bad faith, and intended to compel Plaintiff to
abandon his valid claim. Plaintiff seeks compensatory and punitive damages,
attorneys’ fees, and other relief as provided by law.
On January 15, 2025, Defendant filed
the instant motion to strike. On March 20, 2025, Plaintiff opposed. On March
26, 2025, Defendant replied.
[Tentative] Ruling
Defendant’s motion to strike is
GRANTED, with leave to amend. If Plaintiff elects to amend the Complaint to
properly allege facts in support of a claim for punitive damages or declaratory
relief, such amendment must be filed and served within 20 days of this Order.
LEGAL
STANDARD
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 moving to strike must appear on the face of the pleading or
from any matter of which the court is required to take judicial notice. (CCP §
437.)
ANALYSIS
Meet and Confer
All motions to strike must be
accompanied by a declaration stating either that: (1) the moving party
met-and-conferred with party that filed the subject pleading, and an agreement
was not reached resolving all objections; or (2) the other party failed to
respond to the meet-and-confer request, or otherwise did not meet-and-confer in
good faith. (CCP § 435.5(a)(3).) Although the Court will not deny a motion to
strike based on noncompliance alone (see id. § 435.5(a)(4)), the Court may
continue the hearing on the motion to strike until satisfactory meet-and-confer
efforts have been made (see id. § 435.5(c)).
Defendant’s counsel Christy
Gargalis attests that they contacted Plaintiff’s counsel by phone and email in
an effort to meet and confer regarding the issues raised in Defendant’s motion.
(Gargalis Decl., ¶ 3.) Counsel further attests that, despite a good faith
effort to initiate a discussion and request a time to confer prior to the
hearing, they were unable to reach Plaintiff’s counsel and no agreement was
reached. (Id.) The Court finds these statements sufficient to
satisfy the meet-and-confer requirements of Code of Civil Procedure § 435.5.
The Court therefore proceeds to rule on the merits of Defendant’s motion.
Motion to
Strike
Defendant moves to strike portions of the Complaint under
Code of Civil Procedure §§ 435 and 436, specifically targeting (1) allegations
supporting punitive damages (Compl., ¶ 83), (2) the prayer for punitive or
exemplary damages (Prayer ¶ 6), and (3) the request for an order requiring
immediate coverage under the policy (Prayer ¶ 8).
Defendant argues that Plaintiff’s punitive damages
allegations are conclusory, unsupported by specific facts demonstrating malice,
oppression, or fraud, and therefore legally insufficient under California law.
Defendant contends that the Complaint alleges, at most, a contractual dispute
and purportedly unreasonable claim handling, which are not enough to sustain a
claim for punitive damages. Defendant emphasizes that punitive damages are
disfavored and only available in the clearest cases involving intentional or
egregious misconduct, which have not been alleged here. (Toole v. Richardson
Merrill, Inc. (1967) 251 Cal.App.2d 689.)
Additionally, Defendant challenges Plaintiff’s prayer for
immediate policy coverage as improper. Defendant asserts that Plaintiff has not
pled a cause of action for declaratory relief, nor alleged facts to support any
entitlement to an “order effective immediately.” Defendant further notes that
declaratory relief is prospective and not intended to address past wrongs, and
Plaintiff’s claims, if successful, would be fully remedied by monetary damages.
In opposition, Plaintiff contends that all allegations must
be read in context and presumed true at the pleading stage. Plaintiff
emphasizes that pleadings are to be construed liberally to achieve substantial
justice. “[J]udges read allegations of a pleading subject to a motion to strike
as a whole, all parts in their context, and assume their truth” (Clauson v.
Superior Court (Pedus Services, Inc.) (1998) 67 Cal.App.4th 1253,
1255).
Plaintiff maintains that he has pled sufficient specific
facts to support a claim for punitive damages. He argues that the Complaint
includes detailed allegations showing that Defendant acted with malice,
oppression, and fraud in handling a covered insurance claim. These include:
·
State Farm’s acknowledgment of coverage
yet refusal to issue timely payment.
·
Repeated delays and failure to provide
updates after receiving extensive documentation, estimates, and inspections
confirming substantial water damage.
·
A claim evaluation process that was
allegedly inconsistent, intentionally obstructive, and contrary to the
evidence—including photographs, repair estimates, and admissions by State
Farm’s own adjuster.
Plaintiff also points to Defendant’s failure to respond to
the invocation of the Policy’s appraisal clause and its pattern of delay and
denial despite clear coverage and loss, arguing that such conduct demonstrates
a deliberate intent to cause harm and coerce Plaintiff into abandoning his
claim. Plaintiff asserts this conduct rises to the level of oppression and
malice necessary under Civil Code § 3294 to support punitive damages.
As to the prayer for an “order requiring State Farm to
provide coverage… effective immediately,” Plaintiff argues the request is
consistent with the nature of his claims and not improper at the pleading
stage. However, Plaintiff notes that even if the Court finds any portion of the
Complaint deficient, leave to amend should be granted in accordance with
California’s liberal amendment policy.
In reply, Defendant reiterates that Plaintiff’s allegations
do not meet the legal threshold required to support a claim for punitive
damages. Plaintiff’s opposition relies heavily on conclusory statements and
general allegations of unreasonable claims handling. However, under California
law, punitive damages are not available simply because an insurer denies a
claim or engages in a coverage dispute. The law requires specific factual
allegations showing that the defendant acted with malice, oppression, or fraud—conduct
that is intentional, egregious, or done with a willful disregard of the
insured’s rights. The Complaint, even when taken as a whole, fails to allege
facts establishing this level of culpability. Instead, Plaintiff sets forth a
narrative of delay and disagreement over scope and payment, which, at most,
describes negligence or bad faith—neither of which is sufficient under Civil
Code § 3294.
Defendant further argues that Plaintiff’s reliance on case
law involving egregious and factually distinct conduct is misplaced. The
authorities cited in opposition involved clear, specific, and outrageous
conduct, supported by factual detail, none of which is present here. Plaintiff’s
use of terms such as “intentional,” “willful,” and “oppressive” are merely
legal conclusions unsupported by concrete facts demonstrating the state of mind
required for punitive damages.
Additionally, Defendant maintains that Plaintiff’s prayer
for “an order requiring State Farm to provide coverage… effective immediately”
is improper and should be stricken. Plaintiff has not pled a cause of action
for declaratory relief, nor does the Complaint present a case where declaratory
relief would be appropriate. California law is clear that declaratory relief is
prospective in nature and cannot be used to adjudicate past wrongs where
monetary damages are available and adequate. Here, Plaintiff’s claims, if
proven, sound entirely in breach of contract and bad faith—both of which are
redressable through monetary relief. Thus, the request for immediate coverage
lacks a legal basis and should not be allowed to remain in the Complaint.
Civ. Code § 3294(a) provides that a plaintiff may recover
punitive damages in non-contract cases “where it is proven by clear and
convincing evidence that the defendant has been guilty of oppression, fraud, or
malice.”
“Malice” is defined as “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” is
“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” is “an intentional misrepresentation, deceit, or concealment of a
material fact known to the defendant with the intention on the part of the
defendant of thereby depriving a person of property or legal rights or
otherwise causing injury.” (Civ. Code § 3294(c)(3).)
“According to the definitions provided in section 3294(c), a
plaintiff may not recover punitive damages unless the defendant acted with
intent or engaged in ‘despicable conduct.’ ” (In re First Alliance Mortgage Co. (9th Cir. 2006) 471 F.3d 977, 998
[applying California law].) “ ‘Despicable conduct’ is conduct which 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 Mutual Ins. Co. (1992) 4 Cal.App.4th 306,
331 [quoting BAJI 14.72. 1 (1989 rev.)].) “Such conduct has been described as
‘[having] the character of outrage frequently associated with crime.’ ” (American Airlines, Inc. v. Sheppard, Mullin,
Richter & Hampton (2002) 96 Cal.App.4th 1017, 1050-51 [quoting Taylor v. Superior Court (1979) 24
Cal.3d 890, 894].) “[R]ecklessness alone is insufficient to sustain an award of
punitive damages . . . .” (Lackner v. North (2006) 135 Cal.App.4th
1188, 1211 [citation omitted].)
Under Civ. Code § 3294(b), “[a]n employer shall not be
liable for [punitive] damages . . . 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(b).)
“To support punitive damages, the complaint asserting one of
those causes of action must allege ultimate facts of the defendant’s
oppression, fraud, or malice.” (Cyrus v.
Haveson (1976) 65 Cal.App.3d 306, 316-17.) “[C]onclusory characterization
of defendant’s conduct as intentional, willful and fraudulent is a patently
insufficient statement of ‘oppression, fraud,
or malice, express or implied,’ within the meaning of [Civil Code §
3294].” (Brousseau v. Jarrett (1977)
73 Cal.App.3d 864, 872.)
Defendant argues that Plaintiff’s allegations in support of
punitive damages are conclusory and fail to plead specific facts demonstrating
malice, oppression, or fraud as required by Civil Code § 3294. The Court
agrees. Allegations of unreasonable claims handling and delay in processing
insurance claims, even if accepted as true, do not rise to the level of
“despicable conduct” or demonstrate the highly culpable state of mind required
to support a punitive damages claim. (Mock, supra, 4 Cal.App.4th
at 331; Lackner, supra, 135 Cal.App.4th at 1211.)
Plaintiff’s reliance on characterizations such as “intentional,” “willful,” and
“oppressive” without supporting factual detail amounts to legal conclusions.
Moreover, Plaintiff has not alleged any facts showing that
any officer, director, or managing agent of State Farm personally committed,
authorized, or ratified any oppressive, fraudulent, or malicious conduct as
required by Civil Code § 3294(b) in order to impose punitive damages liability
on a corporate defendant.
The Court also finds that Plaintiff’s prayer for an “order
requiring State Farm to provide coverage… effective immediately” is improper. The Complaint does not allege facts that would
support such relief. Plaintiff’s claims sound in breach of contract and bad
faith, for which monetary damages are the appropriate remedy. Thus, the prayer
for immediate coverage is not supported by the pleadings and must be stricken.
CONCLUSION
Accordingly, Defendant’s motion to strike is GRANTED, with leave
to amend. If Plaintiff elects to amend the Complaint to properly allege facts
in support of a claim for punitive damages or declaratory relief, such
amendment must be filed and served within 20 days of this Order.