2018-00227835-CU-BC

Calley Wheeler vs. Elena Garbuzova

Nature of Proceeding: Motion to Strike

Filed By: Levy, David M.

Defendants’ Elite Norcal Corporation (“Elite”) and Miroslava Derkach motion to strike portions of Plaintiffs’ Calley Wheeler and Michael Whitley complaint is ruled upon as follows.

Plaintiffs allege causes of action for negligence, breach of contract and fraud [but not fraud against these moving defendants]. Only the negligence cause of action is alleged against moving defendants. Plaintiffs allege that they entered into a residential purchase agreement (“RPA”) in February 2016. Defendant Miroslava Derkach is alleged to have been the realtor working on behalf of Defendant Elite [listing agency/agent]. Defendants represented non-moving Defendant Elena Garbuzova in the transaction.

Defendants correctly note that Plaintiffs improperly served their opposition. Nonetheless, the Court considers the opposition as Defendants were able to file a complete reply. Sacramento Local Rule 2.31(C).

Plaintiffs allege that the listing for the property advertised the property as having a few additions that were in the process of being permitted. (Comp. ¶ 12.) Plaintiffs allege that as part of the RPA, non-moving Defendant Elena Garbuzova represented that the additions were permitted and if not she would be responsible for getting the proper permits using non-moving Defendant Brent Deming’s [Deming] design. (Id.) Ms. Garbuzova allegedly represented that it the additions could not be permitted she would buy back the house. (Id.) During escrow Mr. Deming allegedly represented that he was a licensed contractor and that the County had the plans and the permits would follow. (Id. ¶ 13.) Deming allegedly presented Plaintiffs with false County forms showing the permitting process was underway. Plaintiffs allege that the additions have not been permitted. (Id.)

Defendants first move to strike Plaintiffs’ allegations in ¶ 25 of the first cause of action

for negligence alleging that Defendants acted with gross negligence. The Court may strike out any irrelevant, false, or improper matter inserted in a pleading or all or any part of a pleading not drawn of filed in conformity of the laws of the state, a court rule, or order of the court. (CCP § 436(a)-(b).) A motion to strike challenges portions of a cause of action that are substantively defective on the face of the complaint. (PH II, Inc. v. Superior Court (1995) 33 Cal.App.4th 1680, 1682-83. Defendants argue that Plaintiffs have failed to allege any facts demonstrating that Defendants’ conduct constitutes gross negligence. Generally, absent a statutory basis for such, there is no independent cause of action for gross negligence, but it is subsumed within the negligence claim. (Eriksson v Nunnink (2011) 191 Cal.App.4th 826, 856, n.18; City of Santa Barbara v. Superior Court (2007) 41 Cal.4th 747, 779-780.) “Gross negligence is pleaded by alleging the traditional elements of negligence: duty, breach, causation, and damages.” (Rosencrans v. Dover Images, Ltd. (2011) 192 Cal.App.4th 1072,

1082.) “However, to set forth a claim for ‘gross negligence’ the plaintiff must allege extreme conduct of the part of the defendant.” (Id.) “The conduct alleged must rise to the level of ‘either a ‘want of even scant care’ or ‘and extreme departure from the ordinary standard of conduct.’” (Id. [citations omitted].) Generally whether a defendant was grossly negligent is a question of fact. (Jimenez v. 24 Hour Fitness USA, Inc. (2015) 237 Cal.App.4th 546, 555.) Here, Plaintiff has alleged that Defendant Miroslava Derkach “failed to disclose critical issues with the construction work on the property” and the “true status and lack of permitting in relation to additions.” (Comp. ¶¶ 5, 17.) Defendant Elite is alleged to have failed to ensure that Miroslava Derkach “disclosed to Plaintiffs critical issues with the construction work on the property” and failed to supervise Ms. Derkach and “ensure that all material defects in the property were fully disclosed to Plaintiffs.” (Id. ¶¶ 6, 18.) Plaintiffs allege that Defendants’ conduct in this regard was grossly negligent in that it demonstrated a lack of any care or an extreme departure from what a reasonably careful person would do. (Id. ¶ 25.)

The Court would note that Plaintiffs first alleged that non-moving Defendant Ms. Garbuzova represented that the property was fully permitted but later appears to allege that all Defendants made such representation. (Id. ¶¶ 12, 19.) The Court must accept Plaintiffs’ allegations as true and whether or not Plaintiffs can prove Defendants’ actions constituted a lack of care or an extreme departure from the ordinary standard of care is not relevant. Again, as discussed above, gross negligence differs from ordinary negligence only in degree not in kind and whether Defendants were grossly negligent is a question of fact. The Court will not on a motion to strike determine as a matter of law that Plaintiffs have not alleged facts demonstrating gross negligence. Moreover, motions to strike are disfavored. As noted, Courts considering such motions must presume the allegations contained therein are true and must consider those allegations in context. (Clauson v Superior Court (1998) 67 Cal.App.4th 1253, 1255.) The use of the motion to strike should be cautious and sparing. It should not be a procedural “line item veto” for the civil defendant. (PH II, Inc. v. Superior Court (1995) 33 Cal. App. 4th 1680, 1683.) As a result, the motion to strike the reference to gross negligence is denied.

Defendants next move to strike the prayer for punitive damages. The motion is granted. In order to plead an entitlement to punitive damages a plaintiff must allege that the defendant is guilty of “oppression, fraud, or malice.” (Civil Code §3294(a).) “Malice” under Civil Code §3294(c)(1) means conduct intended to injure the plaintiff or despicable conduct by the defendant with a willful and conscious disregard of others. Malice “based on a conscious disregard of the plaintiff’s rights, requires proof that the defendant’s conduct is ‘despicable’ and ‘willful.’” (Lackner v. North (2006) 135

Cal.App.4th 1188, 1211.) “‘[D]espicable’ connotes conduct that is ‘…so vile, base, contemptible, miserable, wretched or loathsome that it would be looked down upon and despised by ordinary decent people.’” (Id. [citations omitted].) Despicable conduct includes “that which is in blatant violation of law or policy.” (American Airlines, Inc. v. Sheppard, Mullin, Richter, & Hampton (2002) 96 Cal.App.4th 1017, 1050.) Indeed, “[e]ven ‘nonintentional torts’ may form the basis for punitive damages when the conduct constitutes conscious disregard of the rights or safety of other. [citation omitted] ‘Nonintentional conduct comes within the definition of malicious acts punishable by the assessment of punitive damages when a party intentionally performs an act from which he knows, or should know, it is highly probable harm will result.’ [citation omitted].” (Skf Farms v. Superior Court (1984) 153 Cal.App.3d 902, 907.) The addition of the criterial adjective “despicable” was a significant substantive limitation on the recovery of punitive damages (along with the elevation of the burden of proof), as it is a “powerful term.” (College Hospital, Inc. v. Superior Court (1994) 8 Cal.4th 704, 725.) On the continuum of conduct, it is toward the extreme, eliciting adjectives such as vile or base and rousing the contempt or outrage of reasonable people. (American Airlines, Inc. v. Sheppard, Mullin, Richter & Hampton (2002) 96 Cal.App.4th 1017, 1050-1051.) Defendant’s alleged behavior falls short of this level of outrage.

The allegations described above are simply insufficient to demonstrate that Defendants acted with oppression, fraud or malice. Plaintiffs have alleged that Defendants failed to make certain disclosures regarding the property. But Plaintiffs specifically alleges that Defendants’ conduct in this regard was negligent. (Comp. ¶¶ 17-25.) They did not, as they argue in opposition, allege that Defendants intentionally failed to make the disclosures. “Defendants negligently represented to the

Plaintiffs that the property was fully permitted and the additions were viable additions to the property.” (Id. ¶ 19 [emphasis added].) Again, Defendants are only named in the negligence cause of action. They are not named in the fraud cause of action. At most Plaintiffs have alleged facts showing that Defendants’ conduct was negligent, perhaps grossly negligent. Simple negligence cannot support an award of punitive damages (Grieves v. Superior Court, supra, 157 Cal. App.3d at 166-168) nor can “gross negligence” (Woolslrum v. Mailloux (1983) 141 Cal.App.3d Supp. 1, 10; G. D. Searle & Co. v. Superior Court (1975) 49 Cal.App.3d 22, 31.). Plaintiffs are incorrect that gross negligence can support punitive damages. The cited cases deals with whether certain non-intentional conduct can be considered malicious not whether gross negligence can support a request for punitive damages. (Taylor v. Superior Court (1979) 24 Cal.3d 890, 896.) Non-intentional conduct can only support a punitive damage award if the defendant intentionally performs an act, and that act is of such severity and shocking character that it warrants the same treatment as that accorded willful misconduct. (Nolin v. National Convenience Stores, Inc. (1979) 95 Cal.App.3d 279.) None of the allegations against Defendants in the complaint amount to oppression, malice or fraud. The motion to strike the prayer for punitive damages is granted.

Finally Defendants move to strike Plaintiffs’ request for attorneys’ fees. The motion is granted. Here, Defendants are only named in the negligence cause of action. There are no allegations Plaintiffs entered into a contract with Defendants which allowed for recovery of fees. In addition there are no citations to a statute allowing for fees.

Plaintiffs’ argument in opposition that Defendants signed the RPA which provided for fees is not relevant here as there are no such allegations in the complaint.

As a result, the motion to strike is denied as to the gross negligence allegations in ¶ 25 and granted with leave to amend as to the prayer for punitive damages and attorneys’ fees as against Defendants.

Leave to amend is given as this is the first challenge to the complaint.

The notice of motion does not provide notice of the Court’s tentative ruling system as required by Local Rule 1.06(D). Counsel for Defendants is ordered to notify Plaintiffs’ counsel immediately of the tentative ruling system and to be available at the hearing, in person or by telephone, in the event Plaintiffs’ counsel appears without following the procedures set forth in Local Rule 1.06(B).

Where leave was given, Plaintiffs may file and serve an amended complaint no later than July 5, 2018. Defendants shall file and serve their responses within 30 days thereafter, 35 days if the amended complaint is served by mail as modified by the CCP § 430.41 extension as necessary.