2018-00232401-CU-BC

Ifeanyi Ezeani vs. Restpadd Health Corp.

Nature of Proceeding: Motion to Strike

Filed By: Ullrich, Gabriel

Defendant Restpadd Health Corp.’s motion to strike punitive damages from Plaintiff Ifeanyi Ezeani’s complaint is denied.

In this action Plaintiff alleges causes of action for breach of contract, breach of the implied covenant of good faith and fair dealing, wrongful termination in violation of public policy, unjust enrichment, violations of the Labor Code and violation of Business & Professions Code § 17200.

Plaintiff alleges that Defendant owns psychiatric facilities and that non-moving Defendants Okechukwu Nwangburkua and Iheoma Nwangburkua were owners, officers and managing agents. (Comp. ¶ 15.) Plaintiff alleged that he worked as the CEO and that as part of his employment agreement, in addition to his $150,000 salary, he was to be paid $36,000 per year for each additional facility that he opened or acquired on Defendant’s behalf. (Id. ¶ 18.) He alleged that at the time he was terminated, he was in the process of opening a new facility and that the Nwangburkuas were aware of these efforts. (Id.) He alleged that he was terminated on February 7, 2018 due to “structural and administrative changes” just before the new facility was set to open in May 2018 so that Defendant could avoid paying him his $36,000 bonus. (Id.) Plaintiff seeks punitive damages in connection with his third cause of action for wrongful termination in violation of public policy.

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. “Oppression” is “despicable conduct that subjects a person to cruel and unjust hardship in conscious disregard of that person’s rights.” (Civil Code § 3294(c)(2).) 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.)

Defendant argues that no facts are alleged to demonstrate that it acted with oppression, fraud, or malice. Plaintiff contends that he has adequately alleged facts to show malice and oppression.

Here, the Court agrees that, for pleading purposes, sufficient facts are alleged to demonstrate malice. As noted in Roby v. McKesson, Corp., (2009) 47 Cal.4th 686, 712, “In a civil case not arising from the breach of a contractual obligation, the jury may award punitive damages “where it is proven by clear and convincing evidence that the defendant has been guilty of oppression, fraud, or malice.” (Civ. Code, § 3294, subd.

(a).) “Malice” is defined as intentional injury or “despicable conduct which is carried on by the defendant with a willful and conscious disregard of the rights or safety of others.” (Id., § 3294, subd. (c)(1).) “Oppression” is defined as “despicable conduct that subjects a person to cruel and unjust hardship in conscious disregard of that person’s rights.” (Id., § 3294, subd. (c)(2).)” As set forth above, malice may consist of conduct intended to injure the plaintiff. “In the ordinary ex delicto action, therefore, involving intentionally wrongful conduct, the evidence sufficient to establish the tort is usually sufficient to support punitive damages.” (Tomaselli v. Transamerica, Inc. Co. (1994)

25 Cal.App.4th 1269, 1286.) Again, Plaintiff seeks punitive damages in connection with his cause of action for wrongful termination in violation of public policy. An employee’s action for wrongful termination is ex delicto and subjects the employer to tort liability. ( Tameny v. Atlantic Richfield Co. (1980) 27 Cal.3d 167, 176.) Indeed, in Tameny, the Supreme Court noted at-will employees may recover tort damages from their employers if they can show they were discharged in contravention of fundamental public policy. (Tameny, supra, 27 Cal. 3d at p. 177.) Here, Plaintiff has alleged that he was terminated just prior to the new facility being opened in May 2018. He alleged that he would have received a $36,000 bonus for the new facility being opened, that Defendants were aware of Plaintiff’s efforts in opening the facility and terminated him to avoid paying the bonus which he had earned. He alleged that Defendants intended to injure him. (Comp. ¶ 35.) Plaintiff has thus alleged facts showing intentional conduct by Defendant intended to injure him which is sufficient for pleading purposes to constitute malice.

Defendant’s citation to Scott v. Phoenix Schools, Inc. (2009) 175 Cal.App.4th 702, 716 does not change the result. Defendant points to the language from the case stating that “termination for an improper reason” was “insufficient to support a finding of despicable conduct, because such action is not vile, base or contemptible.” (Id.) That case is inapposite because it did not involve a pleading challenge and instead involved a challenge to a jury’s verdict awarding the employee punitive damages and the trial court’s denial of the employer’s motion for judgment notwithstanding the verdict. The appellate court stated that “wrongful termination, without more, will not sustain a finding of malice or oppression.” (Id. at 717.) The employee, a preschool director, had been terminated for informing the parents of a prospective student that the school had no room for the child based on staffing ratio regulations. She claimed she was terminated for refusing to admit the child even though to do so would have violated the staffing regulations. The court stressed that there was “no evidence that the [employer] attempted to hide the reason it terminated [the employee]” or engaged in “a program of unwarranted criticism to justify her termination.” (Id.) Here, the alleged facts are different. It is not only an allegation that Plaintiff was terminated for an improper reason, but also that he was terminated so that Defendant could avoid paying him the $36,000 bonus and therefore intended to injure him. In any event, again, Scott did not involve a pleading challenge and was concerned with the sufficiency of the evidence presented at trial.

In reply Defendant argues that plaintiff’s opposition reveals that he is simply seeking punitive damages for a breach of a contractual obligation which is not permitted. Not so; while Plaintiff has alleged that Defendants failed to pay him a bonus he was due, he is not seeking Plaintiff punitive damages in connection with a breach of contract claim but rather a wrongful termination in violation of public policy claim. As discussed above, this is a tort claim and punitive damages are available.

The motion is denied.

Given the above, the Court need not address Plaintiff’s alternate arguments regarding whether the conduct is also despicable (e.g., the alternate definition of malice) and/or constitutes oppression.