(1) Motion to Strike First Amended Cross-Complaint (FAXC) (2) CMC

Tentative Ruling: The motion by plaintiff/cross-defendant BP West Coast Products, LLC (“BP”) to strike portions of the FAXC is GRANTED, in part, and DENIED, in part, as follows:

(1) Denied as to punitive damages allegations. Sufficient facts are alleged to support punitive damages.

(2) Denied as to the purported request for monetary damages allegations as the 3rd COA for violation of Business and Professions Code section 17200 properly alleges restitution.

(3) Granted as to time-barred fraud allegations. Cross-complainants failed to oppose the motion on this issue. Leave to amend denied.

Cross-defendant’s answer to be filed and served within 10 days. Counsel for moving party to give notice.

Punitive Damages Allegations: A claim for punitive damages must be pled with factual specificity. (Brousseau v. Jarrett (1977) 73 Cal.App.3d 864, 872.) Plaintiff must plead sufficient facts establishing oppression, fraud or malice as defined in Civil Code section 3294(c). Allegations that defendant acted “with oppression, fraud and malice” are merely legal conclusions. Likewise, “despicable conduct” is a conclusion.

Here, the FAXC seeks punitive damages on the 1st COA for fraud. MP did not demur to the fraud claim so it must be assumed for purposes of this motion that the fraud claim is sufficiently alleged. A fraud claim alone supports a prayer for punitive damages. (Civ. Code, § 3294(c); Stevens v. Sup.Ct. (St. Francis Med. Ctr.) (1986) 180 Cal.App.3d 605, 610.) The issue is whether plaintiff has alleged sufficient facts under section 3294(b). That statute provides:

An employer shall not be liable for damages pursuant to subdivision (a), 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.

Here, the fraud COA is based on a fraudulent and deceitful scheme by cross-defendant to illegally and dishonestly retaliate against cross-complainant from and after late 2008 to put cross-complainant out of business due to cross-complainant’s refusal to extend the term of its franchise and business relationships with BP beyond the slated termination date of those relationships on or about 8-24-13 (FAXC at ¶ 40.) Aside from the “general allegations common to all causes of action” section of the FAXC, the misconduct supporting the fraud claim is identified in paragraph 41.

The FAXC complies with Civil Code section 3294(b) because the FAXC alleges misconduct by an officer, director or managing agent of BP. (See FAXC at ¶ 15J, ¶ 41-45.) An act of oppression, fraud or malice, by officer, director or managing agent is sufficient to impose liability on corporate employer for punitive damages, without any additional showing of ratification by employer.” (Civ. Code, § 3294(b); Kelly-Zurian v. Wohl Shoe Co. (1994) 22 Cal.App.4th 397, 420.) Whether cross-complainant can actually prove the allegations is a different matter, not at issue in this motion. Accordingly, the Court denies the motion to strike on this issue.

Request for Monetary Damages: The 3rd COA for violation of Business and Professions Code section 17200 alleges that as a result of cross-defendants’ improper actions, Nick Inc. is entitled to restitution of “at least $136,189.34 (i.e., $120,489.34 + $3,000 (RETALIX deposit) + $12,700 (security deposit)).” (FAXC at ¶ 63, ¶ 3 of the Prayer.)

The 1st COA for fraud seeks damages of at least $136,189.34. (FAXC at ¶ 48, and ¶ 1 of the Prayer.)

The 2nd COA for breach of the implied covenant of GFFD alleges damages in the same amount as the 3rd COA, i.e., “damages of at least $136,189.34 (i.e., $120,489.34 + $3,000 (RETALIX deposit) + $12,700 (security deposit)).” (FAXC at ¶ 57, ¶ 2 of the Prayer.)

Given the description of the amounts sought, it appears to be properly sought restitution. The deciding factor is not a comparison between the amounts sought in one cause of action versus the amounts sought in another cause of action. It is the nature of the relief sought.

Business and Professions Code section 17203 enables the court to: “. . . make such orders or judgments . . . as may be necessary to prevent the use or employment by any person of any practice which constitutes unfair competition . . . or as may be necessary to restore to any person in interest any money or property, real or personal, which may have been acquired by means of such unfair competition.” (Emphasis added.)

Here, the FAXC alleges that the $120,489.34 is money which BP overcharged Nick, Inc. and/or which Nick, Inc. overpaid to BP for fuel. (FAXC at ¶ 37.) The $3,000 is alleged to be for a mandatory deposit on the RETALIX software that allegedly failed to work (FAXC at ¶ 31, ¶ 34-35, ¶ 37.) The $12,700 is alleged to be for return of a security deposit on Nick, Inc.’s BP/Arco account (FAXC at ¶ 34-35, ¶ 37.)

This is restitution. Cross-complainant merely seeks the return of monies paid to cross-defendant acquired through the alleged unfair, unlawful, and fraudulent business practices. (FAXC at ¶ 63.) The Court denies the motion to strike on this issue.

Time-barred Fraud Allegations: The opposition does not respond to this argument by MP, and thus appears to concede the issue. Therefore, the Court is inclined to grant the motion on this issue, and deny leave to amend since this issue was not opposed.