Case Number: BC643403 Hearing Date: August 22, 2018 Dept: 3

DENISE AVCHEN,

Plaintiff(s),

vs.

SAKS BEVERLY HILLS, LLC, ET AL.,

Defendant(s).

CASE NO: BC643403

[TENTATIVE] ORDER GRANTING MOTION FOR LEAVE TO AMEND

Dept. 3

1:30 p.m.

August 22, 2018

1. Allegations of the Complaint

Plaintiff, Denise Avchen filed this action against Defendants, Saks Beverly Hills, LLC, Saks & Company, LLC, and Kone, Inc. for injuries sustained when an escalator stopped suddenly.

2. Motion for Leave to Amend

Plaintiff moves for leave to amend her complaint to include a prayer for punitive damages.

a. Plaintiff’s Position

Plaintiff’s proposed prayer for punitive damages is premised on allegations that Defendants knew the escalator had a tendency to stop suddenly, and failed to repair the escalator. Specifically, Plaintiff seeks to add the following allegations to the complaint:

16. The conduct of Defendants was intended by those Defendants to cause injury to Plaintiff, or was despicable conduct carried on by the Defendant with a willful and conscious disregard of the rights of Plaintiff, or subjected Plaintiff to cruel and unjust hardship in conscious disregard of Plaintiff’s rights, such as to constitute malice, oppression or fraud under California Civil Code §3294, thereby entitling Plaintiff to punitive damages in an amount appropriate to punish or set an example of Defendants. This conduct includes, but is not limited to the following acts and omissions:

17. Defendants knew that the escalator on which Plaintiff was injured (“Subject Escalator”) had suddenly and unexpectedly stopped no fewer than eight times between July 19, 2015, and June 10, 2016. On June 18, 2016, the Subject Escalator suddenly and unexpectedly stopped a ninth time in less than one year, causing grievous injury to Plaintiff as described above.

18. The Saks Defendants had no policies and/or provided no training to their employees to document or report escalator failures, unless an escalator could not be restarted by employees of the Saks Defendants, thus making it impossible to fully document, investigate, and remedy issues with the Subject Escalator.

19. On or about May 9, 2016, over one month before Plaintiff’s injury, Defendants obtained actual knowledge of the specific issue that caused Plaintiffs fall, when Defendant Kone determined that the Subject Escalator had stopped for at least the sixth time in less than one year due to the “step up thrust switch.”

20. Despite their knowledge of at least eight prior sudden, unexpected, and dangerous failures of the escalator that injured Plaintiff, Defendants took no measures to prevent injuries to patrons of the Subject Location, such as Plaintiff. The Saks Defendants did not request and the Kone Defendants did not recommend any service on these occasions other than restarting the escalator. So long as the escalator could be restarted, no further inquiry was made into why it had so many sudden, unexpected, and dangerous failures in less than one year.

21. The device that injured Plaintiff, the upthrust switch could have been easily repaired by Defendants in a matter of minutes, but Defendants failed to make such repairs in the month and year prior to Plaintiffs injury.

b. Defendants’ Position

Defendants oppose the motion, arguing (a) the proposed allegations fail to show despicable conduct as a matter of law, and (b) the proposed allegations do not include charging allegations against an officer, manager, and/or director of the entity defendants.

c. Law Governing Leave to Amend

The court may, in furtherance of justice, and on such terms as may be proper, allow a party to amend any pleading. CCP §§473 and 576. Judicial policy favors resolution of all disputed matters between the parties and, therefore, leave to amend is generally liberally granted. Ordinarily, the court will not consider the validity of the proposed amended pleading in ruling on a motion for leave since grounds for a demurrer or motion to strike are premature. However, the court does have discretion to deny leave to amend where a proposed amendment fails to state a valid cause of action as a matter of law and the defect cannot be cured by further amendment. California Casualty General Ins. Co. v. Superior Court (1985) 173 Cal.App.3d 274, 281.

d. Fraud, Malice, or Oppression

Civil Code §3294 permits imposition of punitive damages in cases involving fraud, malice, or oppression. At issue in this case is whether or not Plaintiff can adequately plead that Defendants acted with malice, as Plaintiff does not suggest she can plead fraud and/or oppression. §3294 defines malice to include conduct which is intended by the defendant to cause injury to the plaintiff or despicable conduct which is carried on by the defendant with a willful and conscious disregard of the rights or safety of others.

Plaintiff discusses the applicability of Nolin v. National Convenience Stores, Inc. (1979) 95 Cal.App.3d 279, 282 concerning whether and when a plaintiff can plead recovery of punitive damages in connection with a negligence action. Nolin was also a slip and fall case. The slip and fall occurred near a gas pump at one of the defendant’s shops. The plaintiff sought imposition of punitive damages on the basis that the defendant knew there was an ongoing problem with one of the pumps spilling gasoline in the area, and chose not to repair the problem in order to save money. Evidence was introduced showing that the manager of the store had discussed the problem with the area supervisor, and had discussed problems with prior slip and fall incidents. The manager placed warning signs in the area where the spills often occurred, but the area supervisor had the signs taken down because they were unsightly and might discourage business. The manager also advised patrons of the spills over the loudspeaker, but the area supervisor did not permit this practice to continue either. Based on the foregoing evidence, the jury imposed punitive damages; the court of appeals affirmed. Notably, this decision was prior to the amendment to §3294 in the late eighties to require “despicable conduct” when proving malice as a result of conscious disregard of the health or safety of others; it appears, however, that on the facts presented, the court of appeals would have found the conduct despicable.

Plaintiff also relies on Pennar v. Falk (1984) 153 Cal.App.3d 858, 846 to support her assertion that she can state a claim for punitive damages based on Defendants’ knowledge of the problems with the elevator. The trial court in Penner granted a motion to strike the plaintiff’s prayer for punitive damages without leave to amend. The court of appeals reversed. The primary allegations upon which the prayer were based were as follows:

That within two years before August 5, 1980, various crimes had been committed on the premises, in the neighborhood, in said apartments, and in the approaches, entrances, and common areas thereof, including the garages, laundry room, hallways, walkways, and gateways, including trespass, robbery, burglary, physical assault, battery, rape, murder, prostitution, vandalism and other crimes against persons and property. Notwithstanding defendants’ awareness thereof, tenants had requested that defendants repair, place or replace a door or gate for the entrances to said premises and defendants refused and/or failed to do so; tenants had complained to defendants that unauthorized persons were often in the building and defendants failed or refused to exclude said persons or prevent their access, repeated acts of burglary and auto vandalism had occurred in the apartment units and the parking area of said apartment and tenants notified defendants of said events and requested that the security facilities be installed, repaired or replaced so as to prevent access by intruders and defendants failed and/or refused to take action, and tenants of said building had warned and complained to defendants that unless repairs or replacements to the security measures were made, someone would become the victim of criminal attack on the premises, and defendants failed and/or refused to make said repairs;

Defendants do not address Penner and do not cite any contrary authority concerning the issue of imposition of punitive damages based on a defendant’s knowledge of defects on its premises. The Court finds the allegations concerning Defendants’ knowledge of problems with the escalator, which carries implicit understanding of danger, coupled with refusal to repair same for over a year, are sufficient, at the pleading stage, to state a claim for punitive damages; it would be up to the trier of fact to determine whether this constitutes “malice” as defined by law.

e. Authorization and/or Ratification

Defendants also argue the proposed prayer for punitive damages is insufficiently pled on the ground that Plaintiff failed to adequately plead corporate authorization and/or ratification. §3294(b) 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.

Any reply to the opposition was due on or before 8/15/18. The Court has not received a reply at this time. §3294(b) requires an officer, manager, or director of the employer defendant to authorize or ratify the conduct that justifies punitive damages. Plaintiff has not made the necessary allegations.

Leave to amend, however, should only be denied if the Court finds the proposed amended pleading suffers from a fatal defect that could not be cured with further leave to amend. This defect could potentially be cured through further leave to amend, and therefore the instant motion for leave to amend is granted. The ruling is without prejudice to Defendants’ right to challenge the pleading when it responds to the FAC.

Plaintiff is ordered to file and serve a separate copy of the First Amended Complaint within five days. Defendants shall have 30 days from service plus additional time per code if not served personally to file a responsive pleading.

Plaintiff is ordered to give notice.