Judge William A. Crowfoot, Case Number: 24NNCV00778, Date: 2024-08-05 Tentative Ruling

Judge: William A. Crowfoot, Case: 24NNCV00778, Date: 2024-08-05 Tentative Ruling

On April 5, 2024, Christine Groff (“Groff”) and Robert Allen (“Allen”) (collectively, “Plaintiffs”) filed this action against defendants Progressive Casualty Insurance (“Progressive”), United Financial Casualty Company (“Defendant”), Kendall Rosen (“Rosen”), and Patricia “Corrine” Garcia (“Garcia”) (collectively, “Defendants”).

Plaintiffs filed the operative First Amended Complaint (“FAC”) on June 4, 2024. The FAC asserts causes of action for: (1) breach of contract and (2) breach of implied covenant of good faith and fair dealing. Plaintiffs allege that on or about September 11, 2018, they were injured in a motor vehicle accident caused by an uninsured motorist, Elizabeth Cebrero (“Cebrero”). Plaintiffs allege that on or about September 2, 2020, they served Defendants with a demand for arbitration. On or about December 30, 2021, they made a settlement demand in the amount of Plaintiffs’ uninsured motorist policy limit. Defendants allegedly failed to act in good faith by failing and refusing to conduct a prompt, full, fair, and thorough investigation of Plaintiffs’ claims and unreasonably withheld monetary benefits owed to them under the terms of their applicable insurance policy.

On July 9, 2024, Defendant filed this demurrer to the FAC’s second cause of action for breach of the implied covenant of good faith and fair dealing. Defendant also filed a motion to strike the FAC’s prayer for punitive damages and other allegations.

A demurrer tests the legal sufficiency of the pleadings and will be sustained only where the pleading is defective on its face. (City of Atascadero v. Merrill Lynch, Pierce, Fenner & Smith, Inc. (1998) 68 Cal.App.4th 445, 459.) “We treat the demurrer as admitting all material facts properly pleaded but not contentions, deductions or conclusions of fact or law. We accept the factual allegations of the complaint as true and also consider matters which may be judicially noticed. [Citation.]” (Mitchell v. California Department of Public Health (2016) 1 Cal.App.5th 1000, 1007; Del E. Webb Corp. v. Structural Materials Co. (1981) 123 Cal.App.3d 593, 604 [“the facts alleged in the pleading are deemed to be true, however improbable they may be”].) Allegations are to be liberally construed. (Code Civ. Proc., § 452.) In construing the allegations, the court is to give effect to specific factual allegations that may modify or limit inconsistent general or conclusory allegations. (Financial Corporation of America v. Wilburn (1987) 189 Cal.App.3rd 764, 769.)

A demurrer may be brought if insufficient facts are stated to support the cause of action asserted. (Code Civ. Proc., § 430.10, subd. (e).) “A demurrer for uncertainty is strictly construed, even where a complaint is in some respects uncertain, because ambiguities can be clarified under modern discovery procedures.” (Khoury v. Maly’s of California, Inc. (1993) 14 Cal.App.4th 612, 616.) A demurrer for uncertainty will be sustained only where the complaint is so bad that the defendant cannot reasonably respond. (Code Civ. Proc., § 430.10, subd. (f).)

Where the complaint contains substantial factual allegations sufficiently apprising defendant of the issues it is being asked to meet, a demurrer for uncertainty will be overruled or plaintiff will be given leave to amend. (Williams v. Beechnut Nutrition Corp. (1986) 185 Cal.App.3d 135, 139, fn. 2.)

Any party, within the time allowed to respond to a pleading may serve and file a notice of motion to strike the whole or any part thereof. (Code Civ. Proc., § 435, subd. (b)(1).) 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. (Code Civ. Proc., § 436, subd. (a); Stafford v. Shultz (1954) 42 Cal.2d 767, 782 [“Matter in a pleading which is not essential to the claim is surplusage; probative facts are surplusage and may be stricken out or disregarded”].) The court may also strike all or any part of any pleading not drawn or filed in conformity with California law, a court rule, or an order of the court. (Code Civ. Proc., § 436, subd. (b).) An immaterial or irrelevant allegation is one that is not essential to the statement of a claim or defense; is neither pertinent to nor supported by an otherwise sufficient claim or defense; or a demand for judgment requesting relief not supported by the allegations of the complaint. (Code Civ. Proc., § 431.10, subd. (b).) The grounds for moving to strike must appear on the face of the pleading or by way of judicial notice. (Code Civ. Proc., § 437.)

The elements of an action for the breach of the implied covenant of good faith and fair dealing in the insurance context are: (1) insurer obligated under policy to first or third party; (2) implied duty; (3) unreasonable breach of that duty; and (4) causation of at least economic damages. (Love v. Fire Exchange (1990) 221 Cal.App.3d 1136, 1151; Waters v. United Services Auto. Ass’n (1996) 41 Cal.App.4th 1063, 1079.) Defendant demurs to Plaintiffs’ second cause of action for breach of the covenant of good faith and fair dealing on the grounds that Plaintiffs fail to allege substantive facts showing that the delay in paying policy benefits was unreasonable. However, Defendant does not cite to any cases indicating that Plaintiffs must plead any particular elements with specificity. Plaintiffs adequately allege that “[t]o assist defendants in effectuating a prompt fair and equitable settlement of [their] claim, [they] included with the demand pertinent medical record and reports supporting their claims for damages.” (FAC, ¶ 11.) Plaintiffs also allege that Defendant “failed and refused to conduct a prompt, full, fair and thorough investigation of [their] claims” and “unreasonably withheld monetary benefits owed to [Plaintiffs] under the terms of the [applicable insurance policies].” (FAC, ¶ 13.) These facts are sufficient at the pleading stage to plead an unreasonable breach of the covenant of good faith and fair dealing. Defendant also inappropriately argues that there is a “genuine” dispute that precludes any finding of bad faith by claiming that Plaintiffs “consistently failed to provide bills, invoices and records, substantiating their injuries and damages.” (Demurrer, p. 4.) However, this claim goes outside the four corners of the FAC and therefore cannot be considered on this demurrer. Accordingly, the demurrer to the Second Cause of Action is OVERRULED.

Defendant moves to strike Plaintiffs’ prayer for punitive damages as well as Paragraphs 15, 16, 25, 26, 28, and 31. A motion to strike punitive damages is properly granted where a plaintiff does not state a prima facie claim for punitive damages, including allegations that defendant is guilty of oppression, fraud or malice. (Turman v. Turning Point of Cent. California, Inc. (2010) 191 Cal.App.4th 53, 63.) The allegations supporting a request for punitive damages must be alleged with specificity; conclusory allegations without sufficient facts are not enough. (Smith v. Superior Court (1992) 10 Cal.App.4th 1033, 1041-1042.)

Plaintiffs’ allegations of oppression, fraud, and/or malice are too generalized and conclusory to support a claim for punitive damages. Furthermore, Plaintiffs fail to allege any basis for imposing punitive damages on a corporate defendant because there are no officers, directors, or managing agents who are alleged to have either committed any fraudulent, malicious, or oppressive act, or ratified such acts of an employee.

Even so, Defendant’s motion to strike overreaches in attempting to strike certain paragraphs of the FAC which include factual allegations in their entirety. Accordingly, the motion to strike is only GRANTED IN PART as to the following:

- “with a conscious disregard of their rights, with an intent to harm plaintiffs” in Paragraph 15, 4:1-2;

- “with intent to harm plaintiffs and with conscious disregard for plaintiffs’ rights” in Paragraph 25, 5:18-19;

Defendant’s motion to strike is GRANTED in part. Leave to amend is not granted at this time but if Plaintiffs later determine that there are facts which exist to support a claim for punitive damages, Plaintiffs may file a motion for leave to amend.

William A. Crowfoot

Judge of the Superior Court

Parties who intend to submit on this tentative must send an email to the Court at ALHDEPT3@lacourt.org indicating intention to submit on the tentative as directed by the instructions provided on the court website at www.lacourt.org. Please be advised that if you submit on the tentative and elect not to appear at the hearing, the opposing party may nevertheless appear at the hearing and argue the matter. Unless you receive a submission from all other parties in the matter, you should assume that others might appear at the hearing to argue. If the Court does not receive emails from the parties indicating submission on this tentative ruling and there are no appearances at the hearing, the Court may, at its discretion, adopt the tentative as the final order or place the motion off calendar.