Judge Yolanda Orozco, Case 19STCV39721 2023-03-06 Tentative Ruling

Judge: Yolanda Orozco, Case: 19STCV39721, Date: 2023-03-06 Tentative Ruling

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**Tentative rulings on Motions for Summary Judgment will only be available for review in the courtroom on the day of the hearing.

Case Number: 19STCV39721 Hearing Date: March 6, 2023 Dept: 31

MOTION TO STRIKE

TENTATIVE RULING

Defendants’ Motion to Strike is GRANTED WITHOUT LEAVE TO AMEND as to Plaintiff’s request for attorney’s fees, Treble Damages under Code of Civil Procedure section 1029.8 and costs under Stearman v. Centex Homes (2000) 78 Cal.App.4th 611 (2000) as to Defendants Stephen B. Clark a/k/a Steve Clark and Compass California, Inc. only.

Defendants’ request to strike punitive damages as to Compass California, Inc. only is GRANTED WITH 30 DAYS LEAVE TO AMEND and DENIED as to Defendant Stephen B. Clark.

Background

On November 4, 2019, Plaintiff David Phillips filed the instant action against Defendants Charles Joseph Vaillancourt (“Charles”); Patrick D. Vaillancourt (“Patrick”); Vaillancourt Development; Westward; Stephen B. Clark aka Steve Clark; Compass California, Inc. (“Compass”); and Does 1 through 50. The Complaint asserts causes of action for:

1) Breach of Contract (against Charles);

2) Intentional Misrepresentation (against Charles, Patrick, Vaillancourt Development, Westward, and Does 1-10);

3) Intentional Misrepresentation (against Clark, Compass, and Does 21-30);

4) Negligent Misrepresentation (against Clark, Compass, and Does 21-30);

5) Negligence (against Charles, Patrick, Vaillancourt Development, Westward, and Does 1-10);

6) Breach of Express Warranty (against Charles, Patrick, Vaillancourt Development, Westward, and Does 1-10);

7) Breach of Implied Warranty (against Charles, Patrick, Vaillancourt Development, Westward, and Does 1-10);

8) False Advertising; and

9) Unfair Business Practices.

On November 13, 2020, Vallaincourt Development filed a First Amended Cross-Complaint (“FAXC”) against Star Electric Services, Inc.; Travis Gillette’s Custom Carpentry; Burgmeier Construction, Inc; Randy Johnston; R&G Construction, Inc.; Remove It Restoration, Inc.; Roy Brothers Drilling, Inc.; Auggie Air; R&R Waterproofing, Inc.; Norcool, Inc. dba Status Climate Green; Aaron Neubert Architects, Inc.; Subsurface Designs, Inc.; Taylor Brothers Architectural Products, Inc.; Section Garage Doors; De La Rosa Glass Shop; Sherwin Williams; P. Erie Waterproofing, Inc.; Rosales Bros Roofing, Inc.; M P Construction; J A Schroyer Construction, Inc.; and Roes 1 through 500. The FAXC asserts causes of action for:

1) Total Indemnity;

2) Equitable Indemnity;

3) Implied Indemnity;

4) Contractual Indemnity;

5) Breach of Contract – Additional Insured;

6) Breach of Contract – Defense;

7) Breach of Implied Warranty;

8) Breach of Express Warranty;

9) Declaratory Relief; and

10) Negligence.

On June 25, 2029, Cross-Defendant Sales Depot, Inc. filed a Cross-Complaint against Zoes 1 to 10 for:

1) Equitable Indemnity;

2) Apportionment of Fault;

3) Declaratory Relief, and

4) Comparative Negligence.

On December 07, 2022, Cross-Defendant Rosales Bros. Roofing, Inc. filed a Cross-Complaint against Zoes 1-250 for:

1) Equitable Indemnity;

2) Express Indemnity;

3) Breach of Express and Implied Warranties;

4) Breach of Written Contract;

5) Negligence – Count 1;

6) Contribution;

7) Declaratory Relief re: Duty to Defend;

8) Declaratory Relief re: Duty to Indemnify; and

9) Breach of Written Contract – Additional Insurance

On January 23, 2023, Defendants Stephen B. Clark a/k/a Steve Clark and Compass California, Inc. (hereinafter “Broker Defendants”) filed a Motion to Strike Plaintiff’s Complaint.

Plaintiff filed opposing papers on February 21, 2023.

Broker Defendants filed a reply on February 27, 2023

MEET AND CONFER

Before filing a demurrer or motion to strike, the moving party must meet and confer in person or by telephone with the party who filed the pleading to attempt to reach an agreement that would resolve the objections to the pleading. (Code Civ. Proc., §§ 430.41, 435.5.) “Any determination by the court that the meet and confer process was insufficient shall not be grounds to overrule or sustain a demurrer.” (Code Civ. Proc., § 430.41, subd. (a)(4).)¿

the meet and confer requirement has been met. (Anast Decl. ¶¶ 2-5, Ex. 1.)

Legal Standard

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 of Civ. Proc., § 435(b)(1); Cal. Rules of Court, rule 3.1322(b).) The court may, upon a motion or at any time in its discretion and upon terms it deems proper: (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 of Civ. Proc., § 436, subds. (a)-(b); 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”].)

“Where the defect raised by a motion to strike or by demurrer is reasonably capable of cure, leave to amend is routinely and liberally granted to give the plaintiff a chance to cure the defect in question.” (CLD Construction, Inc. v. City of San Ramon (2004) 120 Cal.App.4th 1141, 1146.) The burden is on the complainant to show the Court that a pleading can be amended successfully. (Goodman v. Kennedy (1976) 18 Cal.3d 335, 348.)¿

DISCUSSION

Defendants Stephen B. Clark a/k/a Steve Clark and Compass California, Inc. (hereinafter “Broker Defendants”) filed a Motion to Strike the following portions of Plaintiff’s Complaint:

1) Page 17, lines 26-28: “Plaintiff is therefore entitled to recover punitive damages from the [sic] Clark, Compass, and Does 21-30 in an amount to be determined at trial.”

2) Page 21, lines 11-12: “On all causes of action, for treble damages on the amount of damages assessed pursuant to Code of Civil Procedure section 1029.8.”

3) Page 21, lines 14-15: “On the second and third causes of action, for punitive damages in an amount sufficient to punish Defendants and deter them from engaging in similar conduct in the future.”

4) Page 21, lines 17-18: “For the costs of investigating problems caused by Defendants’ negligence, pursuant to Stearman v. Centex Homes, 78 Cal.App.4th 611 (2000).”

5) Page 21, lines 19-20: “For attorneys’ fees provided by the Purchase Agreement, and as

provided by law including but not limited to Code of Civil Procedure section 1029.8.”

Request to Strike Attorney’s Fees

Broker Defendants seek to strike Plaintiff’s request for attorney’s fees. Plaintiff asserts that under the Purchase Agreement, Plaintiff is allowed to recover attorney’s fees for Breach of Contract against Defendant Charles Joseph Vaillancourt. Plaintiff admits that Broker Defendants are not a party to the Purchase Agreement. Similarly, the first cause of action for breach of contract is not asserted against Broker Defendants and none of the causes of action asserted against Broker Defendants (third, fourth, eights, and ninth causes of action) seek attorney’s fees from Broker Defendants. Therefore, Plaintiff argues that Broker Defendants’ request to strike attorney’s fees is unwarranted.

The Court GRANTS Broker Defendants’ request to strike attorney’s fees from Plaintiff’s Complaint as to Broker Defendants only.

Request to Strike Treble Damages under Code of Civil Procedure § 1029.8 and Stearman Fees

Defendant seeks to strike the following:

2) Page 21, lines 11-12: “On all causes of action, for treble damages on the amount of damages assessed pursuant to Code of Civil Procedure section 1029.8.”

4) Page 21, lines 17-18: “For the costs of investigating problems caused by Defendants’ negligence, pursuant to Stearman v. Centex Homes, 78 Cal.App.4th 611 (2000).”

Plaintiff asserts that the request for treble damages under Code of Civil Procedure section 1029.8 does not apply to Broker Defendants because Plaintiff does not allege they are unlicensed. Plaintiff also asserts that the request for Stearman fees and treble damages stem from Plaintiff’s negligence cause of action, which is not asserted against Broker Defendants, but against Builder Defendants.

The Court finds that since Plaintiff seeks to pursue treble damages and Stearman fees against Builder Defendants and not Broker Defendants, Broker Defendants’ request to strike the treble damages and Stearman costs as to Broker Defendants is proper and the request is GRANTED.

Request to Strike Punitive Damages

To state a claim for punitive damages under Civil Code section 3294, a plaintiff must allege specific facts showing that the defendant has been guilty of malice, oppression or fraud. (Smith v. Superior Court (1992) 10 Cal. App. 4th 1033, 1042.) The basis for punitive damages must be pled with specificity; conclusory allegations devoid of any factual assertions are insufficient. (Id.) “Fraud” means 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, subd. (c).)

“Punitive damages are recoverable in those fraud actions involving intentional, but not negligent, misrepresentations.” (Alliance Mortgage Co. v. Rothwell (1995) 10 Cal.4th 1226, 1241.) Moreover, “no claim for compensatory or punitive damages can be recovered in a UCL action” only disgorgement of money or property obtained by means of an unfair business practice. (Zhang v. Superior Court (2013) 57 Cal.4th 364, 376.)

Plaintiff’s Complaint alleges that Broker Defendants intentionally misrepresented in the sale and marketing of the subject property, that the subject property was built by licensed contractors who were fourth and fifth generation builder Westward, despite the fact that Westward did not exist at the time the representations were made. (Compl. ¶¶ 18, 23, 62.) Plaintiff then reasonably relied on the representation of Broker Defeats in purchasing the subject property only to discover defects in the construction of the subject property. (Compl. ¶¶ 31, 66.)

Plaintiff pled with specificity the representations Broker Defendants are alleged to have made including that Defendants Clark and Compass were agents of the Vaillancourt Defendant and listed and marked the subject property as being “built by 4th and 5th generation builders Westward” as seen on website advertising the property.” (Compl. ¶¶ 18, 19.) Defendant Clark as an agent for Compass during an open house in or around July 2017 represented to Plaintiff that the subject property was constructed “in a first-class professional manner by a licensed, highly skilled, experienced and well-known general contractor named ‘Westward.’” (Compl. ¶ 20.) On August 2017, Defendant Clark repeated the representation to Plaintiff’s real estate agent, Adam Sires. (Compl. ¶ 21.)

Accordingly, the Court finds that Plaintiff has specifically pled facts to show fraud within the meaning of section 3294 of the Code of Civil Procedure to justify a claim for punitive damages against Defendant Clark.

However, the Court agrees that more facts are required to sustain a claim for punitive damages against Defendant 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).)

Here, Plaintiff fails to allege that Defendant Clark or any other employee or agent of Defendant Compass was an officer, director, or managing agent of Defendant who perpetrated or ratified the fraudulent conduct Plaintiff alleges. Accordingly, the Court agrees that Plaintiff has failed to plead punitive damages as to Defendant Compass but not Defendant Clark.

The motion to strike punitive damages as to Defendant Compass is GRANTED WITH LEAVE TO AMEND. The motion to strike punitive damages as to Defendant Clark is DENIED.

Conclusion

Defendants’ Motion to Strike is GRANTED WITHOUT LEAVE TO AMEND as to Plaintiff’s request for attorney’s fees, Treble Damages under Code of Civil Procedure section 1029.,8 and costs under Stearman v. Centex Homes (2000) 78 Cal.App.4th 611 (2000) as to Defendants Stephen B. Clark a/k/a Steve Clark and Compass California, Inc. only.

Defendants’ request to strike punitive damages as to Compass California, Inc. only is GRANTED WITH 30 DAYS LEAVE TO AMEND and DENIED as to Defendant Stephen B. Clark.

Moving party to give notice.