30-2016-855698

Hicks VS Alladawi

Plaintiffs’ Motion to Leave to Conduct Pre-Trial Discovery re: Defendants’ Financial Condition

Plaintiffs Veronica Lynn Hicks and Condos Etc. Inc. seek leave of court to conduct pre-trial discovery as to the financial condition of Defendants Michael Ahmad Alladawi and Umbrella Capital Group Inc. (dba The Plaza Group Realty), on the ground that there is a substantial probability Plaintiffs will prevail on their claims for punitive damages under the First Amended Complaint filed on 10/11/16. (Civ. Code 3295.)

The court DENIES Plaintiffs’ motion for the reasons set forth below.

A. Defendant Umbrella Capital Group Inc.

DENIED as to Defendant Umbrella.

Defendants argue correctly that Plaintiffs cannot conduct pretrial discovery as to Defendant Umbrella, as a matter of law, because none of the punitive damage claims are directed at Umbrella.

Plaintiffs’ SAC alleges three claims. The only claim directed at Umbrella is the second cause of action for violation of Bus. & Prof. Code 17200, but punitive damages are not available under that claim. The only permissible remedies are restitution and injunctive relief. (Kwikset Corp. v. Superior Court (2011) 51 Cal.4th 310, 337.)

Punitive damages are available, in theory, under the first cause of action for slander per se and under the third cause of action for IIED, but those claims are only directed at the individual Defendant Alladawi. They are not directed at the corporate Defendant Umbrella.

B. Plaintiff Condos Etc. Inc.

DENIED as to Plaintiff Condos Etc.

The court notes sua sponte that punitive damages are available only under the first and third causes of action. However, it seems doubtful that corporate Plaintiff Condos, which is not a natural person, may maintain the third cause of action for IIED or recover damages for intentional infliction of emotional distress. (Cf. Tan Jay Internat’l Ltd. v. Canadian Indem. Co. (1988) 198 Cal.App.3d 695, 706-707 [shareholder may recover emotional distress damages for harm to him personally, but not for harm to corporation].)

C. Defendant Alladawi: 3rd COA for IIED

DENIED as to the 3rd cause of action for IIED

Plaintiff Hicks testifies that she was the victim of IIED, based on Alladawi’s relentless campaign of slanderous attacks on her personal and business reputation, and also based on two additional incidents. (Hicks Decl. at ¶ 10.)

On 4/28/16, as she was walking on the sidewalk in front of The Plaza building where she lives and works, Alladawi charged at her in his Range Rover, threatening her physically and yelling at her.

On 5/7/16, as she was walking her dogs at The Plaza, she passed Alladawi and his friend who were sitting in front of a restaurant. As she passed them, Alladawi began loudly growling at her like a dog, to embarrass and humiliate her in front of his colleagues and neighbors who were in the area.

However, in Opposition, Alladawi denies that he ever made any slanderous statements about her, and that if he did they were truthful, and that the two incidents on 4/28/16 and 5/7/16 never happened. (Alladawi Decl. at ¶¶ 14-15, 22, at Ex. A to Mariam Decl.; see generally Alladawi Depo. at Ex. D to Mariam Decl.)

Two representatives of Action Property Management, Ashley Cardo and Doug Moore were present at the executive meeting on 5/3/16 and at the regular session meeting on 5/19/16, and they also testify that Alladawi never made any slanderous statements about Hicks. (See generally Cardo and Moore Decls. At Exs. B and C to Mariam Decl.)

Both current Board member Barbara Yin and former Board member John Warren testify in support of Hicks, confirming that Alladawi did make defamatory statements about Hicks at the general meeting and also at the Board meeting, after Cardo and Moore were asked to leave and while Cardo and Moore were not present. Cardo and Moore do not address this allegation except to say that they were both present for the entire meeting.

In Opposition, Alladawi presents his own testimony and additional evidence, including emails, to show that Yin and Warren are friends of Hicks and do not particularly like Alladawi, so that they might be biased against him. Alladawi also presents compelling evidence that even if he did make the slanderous statements, they were not defamatory because they may very well have been true. (Ex. N to the Mariam Decl., consisting of complaints, claims, and charges from 3 clients against Hicks and Condos Etc. on file with the BRE.)

Finally, neither party presents any videotape or audiotape recordings to resolve the conflicting testimony.

Accordingly, the court finds that Plaintiff Hicks has failed to meet her burden for two reasons. First, Plaintiff Hicks has failed to show that the allegedly slanderous statements that Alladawi made were false.

In order to establish slander per se, the Plaintiff must show and the trial court must find that the statement falls into one of the four statutory categories enumerated in Civil Code 46. In this case, that requirement is satisfied because the alleged statements that Plaintiff was being investigated by the Cal. Bureau of Real Estate and that she engaged in unethical conduct as a realtor would tend to injure her business reputation. (Regalia v. Nethercutt Collection (2009) 172 Cal.App.4th 361, 368-369; Civ. Code 46 (3).)

However, Plaintiff must also show that the slanderous accusations were defamatory. (Ibid.) An essential element of defamation is that the publication was of a false statement of fact. (Ringler Associates Inc. v. Maryland Cas. Co. (2000) 80 Cal.App. 4th 1165, 1181-1182.)

Here, Plaintiff does not appear to present any evidence to prove that the alleged slanderous remarks were false. Her own declaration does not appear to establish that she has not engaged in unethical behavior or that she is not and has not been under investigation by the BRE. Furthermore, Plaintiff does not carry her burden to present evidence in the form of devoid discovery responses, to show that Defendant does not possess or cannot reasonably obtain needed evidence to show that he has acted unethically and/or is being investigated by the DRE.

Second, even assuming such statements would have been false (if made), Hicks fails to present sufficient evidence to establish either by a preponderance of the evidence, or by clear and convincing evidence that Alladawi actually made the alleged slanderous and defamatory statements. In Opposition, Alladawi has presented sufficient evidence to call into question the allegation that he ever made slanderous statements or engaged in any hostile or harassing behavior directed at Hicks that would constitute an IIED.

Accordingly, the court finds that Hicks has failed to show a substantial probability of prevailing on her IIED claim and on her claim for punitive damages in connection therewith.

D. Defendant Alladawi: 1st COA for Slander Per Se

For the same reasons set forth above in section C, in connection with the slander and defamation analysis, the court finds that Plaintiff Hicks has failed to show a substantial probability of prevailing on her claim for slander per se and on her claim for punitive damages in connection therewith.

Finally, there is no evidence that any of the allegedly slanderous remarks were directed against Condos Etc., and even assuming they were so directed, the same analysis in section C above demonstrates that Condos Etc. has failed to carry its burden to show a substantial probability of prevailing on its punitive damage claims.

E. Alter Ego Allegations

In Reply, Plaintiffs argue that even though Umbrella is not a named Defendant expressly identified in the captions to the first and third causes of action, nevertheless Umbrella is an alter ego of Alladawi as alleged in the FAC.

However, this argument fails for two reasons. First, the FAC is defective and not properly pled. If Plaintiffs are seeking damages against Umbrellas under the alter ego doctrine as to the first and third causes of action, then Plaintiffs should have expressly stated that the first and third causes of action were also directed at Umbrella and those claims should have expressly alleged that Umbrella’s liability was based on the alter ego doctrine.

As it stands, the SAC fails to properly put Defendants on notice that Umbrella is being sued under the first and third causes of action. Failing to expressly state that those claims are directed against Umbrellas is essentially a due process violation due to the lack of proper notice. So Plaintiffs cannot obtain relief against Umbrella under the first and third causes of action for purposes of this motion.

While it is true that Plaintiffs set forth alter ego allegations at paragraph 7 of the FAC, and while it is true that Plaintiffs incorporate paragraphs 1-20 and 1-47 into their first and third causes of action, nevertheless, such a form of pleading is highly disfavored because the court and the opposing parties must guess at which preceding paragraphs are relevant and how they are relevant.

If Plaintiffs intended to sue Umbrellas under the first and third causes of action, they should have expressly named Umbrella in the captions of those claims and should have expressly referenced the alter ego allegations in paragraph 7, to make their intentions clear. As it stands, neither the court nor Defendants had any notion that the first and third causes of action were supposedly directed against Umbrella.

F. Truth

In Reply, Plaintiffs argue that none of the three letters written to the BRE were ever actually investigated and all three had been rejected over two years earlier. Plaintiffs make a compelling argument that the slanderous remarks were untrue or that Alladawi had no reasonable basis to believe they were true and never investigated them before making them.

However, this issue is moot because Plaintiffs fail to carry THEIR initial burden to prove that the charges were false and fail to carry their initial burden to prove that the allegedly slanderous statements were actually made. So the court need not reach the question of whether Defendant has proven that they were true or whether Defendant has prove that they were subject to the common interest privilege.

G. Defendants’ Request for Monetary Sanctions.

DENIED.

Under Civ. Code section 3295, Defendants are not entitled to recover monetary sanctions as a prevailing party, for several reasons.

First, Civ. Code 3295 contains no express mention of monetary sanctions and makes no express reference to CCP 2023.010, et seq.

Second, by way of contrast the CCP sections dealing with motions to compel initial and further discovery responses expressly cite to CCP 2023.010, et seq. (See e.g., CCP 2030.290 (c); 2030.300 (d); 2031.300 (c); 2031.310 (h).)

Third, Civ. Code 3295 is not a discovery statute, it is not part of the Civil Discovery Act set forth in Title 4, Chapters 1-20, sections 2016 et seq. of the CCP. Civ. Code 3295 does not govern the nuts and bolts of propounding written discovery, or moving to compel or seeking protective orders therefrom.

Fourth, CCP 2023.010 expressly states that it only applies to misuses of the discovery process, CCP 2023.020 expressly applies only to discovery motions, and CCP 2023.030 only applies to the chapters governing discovery motions or other provisions of title 4. Civ. Code 3295 is not part of title 4 and is not among the CCP sections governing discovery. It is not a method of propounding or compelling discovery.

Defendant shall serve notice of this ruling.