Case Number: BC511665    Hearing Date: September 05, 2014    Dept: B

13. BC511665
MARGARITA GRANA v DR. STEPHAN V. YACOUBIAN
Demurrer and Motion to Strike

The Second Amended Complaint alleges that the Plaintiff suffered personal injuries when a defective hip replacement was placed in her body by Dr. Stephan Yacoubian. The Plaintiff seeks damages from Defendant, DJO Global, Inc., because it designed and manufactured the defective product.

There are 12 causes of action in the Second Amended Complaint:
1) Negligence
2) Products Liability – Strict Liability – Manufacturing Defect
3) Products Liability – Strict Liability – Design Defect
4) Products Liability – Strict Liability – Failure to Warn
5) Products Liability – Failure to Adequately Test
6) Products Liability – Breach of Express Warranty
7) Products Liability – Breach of Implied Warranty
8) Products Liability – Breach of Implied Warranty of Fitness for a Particular Purpose
9) Fraudulent Concealment
10) Intentional Misrepresentation
11) Negligent Misrepresentation
12) Products Liability – Negligence Recall/Retrofit

This hearing concerns the demurrer and motion to strike filed by Defendant, DJO Global, Inc.

1. Demurrer to Fifth Cause of Action for Products Liability – Failure to Adequately Test
The Defendant argues that this cause of action does not exist under California law. The Plaintiff states in her opposition, at page 1, line 21, that she has agreed to remove her fifth cause of action. Since the Plaintiff does not oppose the demurrer, the cause of action should be and is removed by demurrer.

Accordingly, the Court sustains the demurrer to the fifth cause of action without leave to amend.

2. Demurrer to Twelfth Cause of Action for Products Liability – Negligence Recall/Retrofit
The Defendant argues that this cause of action does not exist as a separate cause of action. In the twelfth cause of action, the Plaintiff alleges that the Defendants should have known that the product, which was the DJO Pressfit Acetabular Hip System, was dangerous and that the Defendants were negligent by failing to recall or warn of the dangers in the product.
Under California law, when the manufacturer becomes aware of dangers after the product has been on the market, the manufacturer has a duty to warn of the danger and a duty to conduct an adequate retrofit campaign. Lunghi v. Clark Equipment Co. (1984) 153 Cal.App.3d 485, 494. A negligence claim can be based on the failure to meet the standard of reasonable care with regard to either of these duties. Id. at 494. The failure to conduct an adequate retrofit campaign may constitute a separate negligence claim from a claim based on a defective design. Hernandez v. Badger Construction Equipment Co. (1994) 28 Cal.App.4th 1791, 1827.
California Civil Jury Instructions, instruction 1223 identifies the elements for a claim based on this law, i.e., a claim for negligence in the recall or retrofit of a product:

1) the defendant manufactured, distributed, or sold the product;
2) the defendant knew or reasonably should have known that the product was dangerous or was likely to be dangerous when used in a reasonably foreseeable manner;
3) the defendant became aware of this defect after the product was sold;
4) the defendant failed to recall, retrofit, or warn of the danger of the product;
5) a reasonable manufacturer, distributor, or seller under the same or similar circumstances would have recalled or retrofitted the product;
6) the plaintiff was harmed; and
7) the defendant’s failure to recall or retrofit the product was a substantial factor in causing the plaintiff’s harm.

This review of California law reveals that a claim for negligence in the recall or retrofit of a product is a recognized cause of action. Accordingly, this is not grounds for a demurrer.
The Defendant also argues that the claim is already made in the first cause of action for negligence. This appears to be an attempt to argue that the twelfth cause of action is duplicative of the first. Under California law, there are grounds for a demurrer to a cause of action that adds nothing to a complaint by way of fact or theory. Rodrigues v. Campbell Industries (1978) 87 Cal. App. 3d 494, 501.
A comparison of the first and twelfth causes of action reveals that the first cause of action is based on the claim that the Defendants were negligent in the design, manufacturing, and distribution of the product. The twelfth cause of action is based on the claim that the Defendants were negligent in the recall or retrofit of the products. The causes of action are based on different facts. The first is based on allegations that the Defendant was negligent when it was designing, manufacturing, and distributing its product. This is separate and distinct from the claim in the twelfth cause of action that after the product was sold, the Defendant was negligent in failure to recall or retrofit the product. Further, as noted above, case law finds that the failure to conduct an adequate retrofit campaign is a separate negligence claim from a claim based on a defective design. Hernandez v. Badger Construction Equipment Co. (1994) 28 Cal.App.4th 1791, 1827. Since the twelfth cause of action is based on different facts and a different legal theory, it is not duplicative.

Therefore, the Court overrules the demurrer to the twelfth cause of action.

2. Motion to Strike
The Defendant argues that the Plaintiff has not complied with the requirements of Civil Code section 3294(b) to seek an award of punitive damages from a corporate employer. Under CCP section 436, the Court may strike any improper remedy from a pleading.
A complaint including a request for punitive damages must include allegations showing that the plaintiff is entitled to an award of punitive damages. Clauson v. Superior Court (1998) 67 Cal. App. 4th 1253, 1255. Under Civil Code section 3294, a plaintiff may recover an award of punitive damages on a showing that the defendant acted with malice, oppression, or fraud. Civil Code section 3294 defines these terms in the following manner. “Malice” means 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. “Oppression” means despicable conduct that subjects a person to cruel and unjust hardship in conscious disregard of that person’s rights. “Fraud” means an intentional misrepresentation, deceit, or concealment of a material fact known to the defendant with the intention on the part of the defendant of thereby depriving a person of property or legal rights or otherwise causing injury.
In addition, Civil Code section 3294(b) requires a plaintiff seeking to obtain punitive damages from a defendant for the acts of the defendant’s employees to show the following:

1) that the defendant had advance knowledge of the unfitness of the employee and that the defendant employed the employee with a conscious disregard of the rights or safety of others;
2) that the defendant authorized or ratified the wrongful conduct for which the damages are awarded; or
3) that the defendant was personally guilty of oppression, fraud, or malice.

When the defendant is a corporate employer, Civil Code section 3294(b) requires 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.
A claim for punitive damages cannot be pleaded generally and allegations that a defendant acted “with oppression, fraud and malice” toward plaintiff are insufficient legal conclusions. Brousseau v. Jarrett (1977) 73 Cal.App.3d 864, 872.

A review of the Second Amended Complaint reveals that the Plaintiff seeks an award of punitive damages in the ninth cause of action for fraudulent concealment, the tenth cause of action for intentional misrepresentation, and the eleventh cause of action for negligent misrepresentation. These causes of action plead that the Defendants are “guilty of malice, oppression and fraud” and that “based on information and belief” the upper management was aware and approved and adopted the actions and omissions that caused damages to the Plaintiff.
This is insufficient to show that the Plaintiff is entitled to an award of punitive damages against the Defendant because the Plaintiff pleads legal conclusions that are not supported by the particular facts needed to support a punitive damages claim. There are no allegations identifying an officer, director, or managing agent. There are no allegations identifying the actions and omissions that “upper management” approved and adopted. There are no allegations identifying the manner in which the “upper management” approved and adopted the unidentified actions and omissions, e.g., the manner in which they ratified the alleged fraudulent conduct pleaded in the ninth, tenth, and eleventh causes of action.

Accordingly, the Court grants the Defendant’s motion to strike because the Plaintiff has not pleaded the particular facts needed to support her claim for punitive damages against a corporate employer.

In her opposition, the Plaintiff admits that she has no facts to support her claim, e.g., she states on page 4, at lines 25 to 27, that she is “informed and believes” that the conduct was ratified by unknown officers, directors, or managing agents. Since the Plaintiff has no facts to support her claim for punitive damages, the Court does not grant leave to amend, at this time. Instead, the Plaintiff should file a motion to seek leave to file an amended complaint, if she discovers any facts supporting a claim for punitive damages.

Finally, the Court notes that the Defendant’s attorney, Matthew Nugent, filed a declaration to state facts demonstrating that the Plaintiff’s proof of service is not accurate. The Plaintiff’s attorney indicated in the proof of service that the opposition papers had been served by e-mail. Mr. Nugent states that he did not receive a copy of the motion; instead, he received an unsigned electronic draft of the motion.
Further, Mr. Nugent states that there is no agreement to accept service by e-mail. CRC rule 2.251 authorizes service by e-mail only by consent of the parties. Finally, Mr. Nugent states that the Plaintiff’s counsel has filed other papers by e-mail and has failed to provide notice in a timely manner. All parties must comply with the requirements for serving papers in the State of California and the failure to comply with these rules may result in the Court refusing to consider the papers in the future. See e.g., CRC rule 3.1300(d).