| Winifred O’Jibway, et al. v. Right At Home Inc. | CASE NO. 113CV248054 | |
| DATE: 14 November 2014 | TIME: 9:00 | LINE NUMBER: 7 |
This matter will be heard by the Honorable Judge Socrates Peter Manoukian in Department 19 in the Old Courthouse, 2nd Floor, 161 North First Street, San Jose. Any party opposing the tentative ruling must call Department 19 at 408.808.6856 and the opposing party no later than 4:00 PM Thursday 13 November 2014. Please specify the issue to be contested when calling the Court and counsel.
On 14 November 2014, the motion of Plaintiffs permitting discovery of Defendant Right At Home Inc.’s financial records and information was argued and submitted.
Defendants filed formal opposition to the motion.[1]
All parties are reminded that all papers must comply with Rule of Court 3.1110(f).[2]
- Statement of Facts.
This case arises from a dispute between an in-home elderly care company and their former clients. Defendant Right At Home, Inc. (“Right At Home”) is an agency that employs around two hundred caregivers to provide in-home, non-medical, companionship services to seniors. Defendant Gene Lennon (“Lennon”) is the CEO and owner of Right At Home. Plaintiffs Martin and Denise Goldberg are a married couple who hired Defendants to provide companionship services to Denise’s 96 year-old mother, Plaintiff Winifred O’Jibway.
Plaintiff O’Jibway moved in with her daughter and son-in-law in December of 2011. After researching several elderly care agencies, Plaintiffs hired Defendants on 13 January 2012. Plaintiffs contend that before entering into a contract, Right At Home assured them that they always do background checks on their employees, their caregiver would have a valid driver’s license, and the caregiver would be well trained to care for the client.
Defendants sent caregiver Maria De La Rosa (“De La Rosa”) to Plaintiffs home. Before sending De La Rosa to Plaintiffs home as a caregiver, Right At Home enlisted the services of Accurate Background, Inc. to run a background check. The check revealed that in 1994 De La Rosa had her license suspended for six months for “influence of alcohol or drugs,” and in 2009 she was convicted of misdemeanor driving with a suspended license. Right At Home contends these convictions were irrelevant to her role as companion because the parties agreed beforehand that De La Rosa was not to drive Plaintiff O’Jibway at any time.
De La Rosa worked as the Plaintiffs’ caregiver for over 9 months without incident, and the Plaintiffs reported being pleased with the level of service provided. However, in late December of 2012, Plaintiffs began to notice items were missing from their home. Specifically, jewelry, cash, alcohol, and prescription pills had been stolen from the Plaintiffs’ home. After the police were called, De La Rosa confessed to taking the items and she was arrested.
When the Plaintiffs called Right At Home to report the incident, they were informed that De La Rosa had previously been accused of stealing from another client. Defendants’ employee records revealed that in November of 2011, two months before her employment commenced with the Plaintiffs, Right At Home received a report from a client who believed De La Rosa had taken $200 cash from her elderly mother. The client fired Right At Home following the incident. Despite these accusations, De La Rosa’s employment was not terminated, and no recorded disciplinary action was taken.
In Plaintiffs’ discussions with Defendants following the December 2012 incident, Defendant Lennon informed the Plaintiffs of De La Rosa’s criminal history and suspended driver’s license. This was the first time Plaintiffs ever heard of De La Rosa’s criminal past.
On 17 June 2013, Plaintiffs filed a claim against the Defendants Right At Home and Gene Lennon alleging: breach of contract; negligent hiring, training, supervision and retention; negligent infliction of emotional distress; fraudulent misrepresentation and concealment; negligent misrepresentation; conversion; financial abuse of an elder; and unfair business practices. In their complaint, Plaintiffs seek both compensatory and punitive damages.
On 2 August 2013, Defendants filed an answer generally denying all allegations and asserting twenty-three affirmative defenses.
- Discovery Dispute.
The present discovery action was filed on 10 October 2014. That same day, Plaintiffs served Defendants with a notice of motion, and declarations and memorandum of points and authorities in support of the motion.
In their moving papers, Plaintiffs contend that they have alleged facts sufficient to show a “substantial probability” that they will prevail on the claim for punitive damages pursuant to Cal. Civ. Code section 3295(c). Specifically, the Plaintiffs argue that Defendants’ actions with regard to caregiver De La Rosa constituted recklessness, malice, oppression and fraud pursuant to Cal. Civ. Code section 3294. Thus, they seek a court order permitting them to undertake discovery of the financial condition of the Defendants.
On 31 October 2014, Defendants filed and served papers opposing Plaintiffs’ motion. In the opposition papers, Defendants argue Plaintiffs failed to prove their case “to the degree required to move to a discussion of punitive damages.” Specifically, Defendants argue Plaintiffs failed to prove an absolute entitlement to actual damages, making it inappropriate to grant pre-trial discovery into the financial condition of the Defendants. Moreover, Defendants claim Plaintiffs also failed to assert sufficient facts to show malice, fraud, or oppression as defined by Cal. Civ. Code section 3294. Defendants conclude that pre-trial discovery into their financial condition cannot be granted until a jury makes the necessary factual determinations to prove actual liability.
III. Analysis.
Cal. Civ. Code § 3294 authorizes recovery of punitive damages in noncontract cases where the defendant has been guilty of oppression, fraud, or malice, express or implied. (Civ. Code §3294(a).) As used in the section, “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.” (Civ. Code §3294(c)(1).) “Oppression” means “despicable conduct that subjects a person to cruel and unjust hardship in conscious disregard of that person’s rights.” (Civ. Code §3294(c)(2).) “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.” (Civ. Code §3294(c)(3).)
The California Supreme Court in Taylor v. Superior Court explained that malice under section 3294 could be proven either expressly or by implication. (Taylor v. Superior Court (1979) 24 Cal.3d 890, 894 citing (Bertero v. National General Corp. (1974) 13 Cal. 3d 43, 66).) The “malice” required by section 3294 “implies an act conceived in a spirit of mischief or with criminal indifference towards the obligations owed to others.” (Id. citing (Ebaugh v. Rabkin (1972) 22 Cal.App.3d 891, 894).) Punitive damages are permitted where the defendant’s wrongdoing is “intentional and deliberate, and has the character of outrage frequently associated with crime.” (Taylor, 24 Cal.3d at 894.)
Something more than the mere commission of a tort is required for a grant of punitive damages. (Id.) Circumstances of aggravation or outrage must exist. (Id.) These can be shown by malice, a fraudulent motive, or a conscious and deliberate disregard of the interests of others sufficient to deem the conduct “willful” or “wanton.” (Id. at 894-895.) A “conscious disregard of the safety of others” may also constitute malice within the meaning of section 3294. (Id. at 895.) In order to justify an award of punitive damages on this basis, a plaintiff must prove the defendant was aware of the “probable dangerous consequences” of the conduct in question, and he or she “willfully and deliberately” failed to avoid those consequences. (Id. at 895-896.)
Section 3294 also permits punitive damages “for the sake of example” to deter future conduct of the same nature at issue in the case. (Id. at 897.) However, ordinarily, routine negligent or even reckless acts would not justify an award of punitive damages. (Id. at 900.)
Typically, no pretrial discovery into the financial condition of a plaintiff may be permitted unless the court enters an order permitting such discovery. (Civ. Code §3295(c).) The court may enter an order allowing the pretrial discovery if the court finds, on the basis of the supporting and opposing evidence presented, that the plaintiff established a substantial probability he or she will prevail on the section 3294 claim. (Id.)
Before a trial court can enter an order permitting discovery of the financial condition of the defendant, the court must “(1) weigh the evidence presented by both sides, and (2) make a finding that it is very likely the plaintiff will prevail on his claim for punitive damages.” (Jarbo v. Superior Court (2002) 95 Cal.App.4th 754, 755.) Section 3295 is intended to “protect defendants from being pressured into settling nonmeritorious cases in order to avoid divulging their financial privacy in civil discovery.” (Id. at 757 quoting (Sen. Kenneth L. Maddy, letter to Governor Edmund G. Brown, Jr., Sept. 2, 1980, p. 4.).)
- Plaintiffs’ Allegation of Malice, Fraud, and Oppression
Plaintiffs’ complaint alleges punitive damages are appropriate because Defendant was guilty of malice, fraud and oppression. The declaration of Plaintiffs’ counsel Todd P. Emanuel filed 10 October 2014 includes 8 exhibits. Defendants did not raise any objections to the Plaintiffs’ exhibits.
Defendants’ opposition brief asserts Plaintiffs’ cannot show, by clear and convincing evidence, that Defendants acted with malice and therefore punitive damages are not warranted. The declaration of Defedants’ counsel Joann M.O. Rangel filed 31 October 2014 contains 4 exhibits. Plaintiffs did not raise any objections to Defendants’ exhibits.
This Court will consider each exhibit contained in the Plaintiffs’ and Defendants’ papers.
Plaintiffs’ base their allegations of malice, fraud, and oppression on the following alleged facts: (1) “Right At Home was indifferent to whether De La Rosa was qualified to care for Winnie and Right At Home cannot find any documentation regarding a criminal background check at the time she was hired”[3]; (2) Defendants “failed to disclose that it was unlawful for De La Rosa to drive a motor vehicle as her license was suspended”[4]; and (3) “Defendants’ deployed De La Rosa to Plaintiffs’ home knowing she was accused of stealing from a prior client.”[5]
- De La Rosa’s Qualifications, Background Check, and Suspended Driver’s License
Right At Home contends they voluntarily perform annual background checks on employees.[6] Exhibit A to Defendants’ motion is a copy of the Accurate Background, Inc. background check on Maria De La Rosa ordered on 2 January 2012. This background check was conducted almost a year before Plaintiffs retained Defendants’ services, but more than 16 months after the hiring of De La Rosa.[7]
The allegations that Defendants’ failure to conduct a background check on De La Rosa at her time of hiring is irrelevant to this motion. Evidence is relevant and material if it has a tendency to prove or disprove any disputed fact that is of consequence to the determination of the action. (Evid. Code §210.) Here, the fact of consequence is whether Defendants’ obtained all the necessary background information on De La Rosa before sending her to provide companionship services to the Plaintiffs. Defendants presented sufficient evidence to show a background check was conducted on De La Rosa prior to her deployment to Plaintiffs home. Whether the Accurate background check was sufficient is a question for the trial jury to answer. Thus, the January 2012 background check is insufficient to support a claim for pretrial discovery of Defendants’ financial condition.
Plaintiffs also assert that De La Rosa’s prior conviction for driving on a suspended license rendered her unfit to work as a caregiver. Defendants argue only a jury can resolve this issue. This Court agrees with Defendants that De La Rosa’s prior conviction is insufficient to show a “substantial probability” that Defendants will prevail on their claim for punitive damages.
Defendants’ Exhibit B is the 18 April 2014 deposition of Denise Goldberg. On page 20 of the deposition, Mrs. Goldberg states, “I told them [Right At Home] I wasn’t – I did not want someone specifically to drive my mother from place to place, because I wanted to do those things. I needed someone to be a companion to her…”[8]
Defendants’ Exhibit D is the 11 December 2013 deposition of Gene Lennon. On page 181 of the deposition, Mr. Lennon is asked about the forms Right At Home routinely fill-out if a caregiver is expected to drive a client as part of their assigned job duties. In reference to these forms, Mr. Lennon states, “once we assign a caregiver to a client if there are running of errands, using their own car, there is another form that is signed by the client and someone from the company. And if the caregiver is to drive the client’s car in the performance of those duties, then there is another form releasing – authorizing us to be able to drive the client’s car.”[9]
Plaintiffs have presented no evidence that either of the forms mentioned by Defendant Lennon were filled-out prior to the assignment of De La Rosa to Plaintiffs’ home. This fact, coupled with the statements made by Plaintiff Denise Goldberg during her deposition, indicates that caregiver De La Rosa was not expected to drive Plaintiff O’Jibway as part of her regular job duties. Moreover, Plaintiffs presented no evidence that De La Rosa ever drove Plaintiff Winifred in the ten months that she worked for the Goldbergs. Thus, the fact that Defendants never disclosed De La Rosa’s suspended driver’s license is insufficient to show Plaintiffs are “very likely” to win on their claim for punitive damages.
Plaintiffs also argue that Defendants assured them De La Rosa would be capable of driving if needed, and she would have a valid driver’s license. However, Plaintiffs’ moving papers fail to prove this fact with the level of certainty necessary to win their motion.
In support of their allegation, Plaintiffs offer the declarations of Denise and Martin Goldberg.[10] The moving papers do not include any admission by the Defendants regarding this fact or any documentation on behalf of Right At Home indicating De La Rosa would be available to drive Plaintiff O’Jibway. Only a jury can determine whether this fact is true, and this Court cannot make such a determination based on the evidence presented. Thus, the declarations of Denise and Martin Goldberg regarding De La Rosa’s driving capabilities cannot, on their own, prove Plaintiffs would likely be awarded punitive damages at trial.
- Defendants’ Assignment of De La Rosa Following Accusations of Theft
Plaintiffs argue that Defendants acted with malice, fraud, and oppression when they assigned De La Rosa to work at Plaintiffs’ home following prior allegations of theft against her. Plaintiffs’ Exhibit 4 is a copy of a “Caregivers Documented Events,” authored by Right At Home and provided to Plaintiffs during discovery. The document, recorded by Right At Home, describes the complaint lobbied against De La Rosa on 28 November 2011.[11]
Aileen Hartunian, the granddaughter of Helen Tabibian, made the complaint. Plaintiffs’ Exhibit 5 is a declaration of Aileen Hartunian verifying and restating the facts contained in Exhibit 4. Ms. Hartunian retained Right At Home’s services for her elderly grandmother.[12] In September of 2011, De La Rosa was assigned to Ms. Tabibian’s home.[13]
Plaintiffs’ Exhibits 4 and 5 describe two incidents that occurred while De La Rosa was working for Helen Tabibian. In the first reported incident, Hartunian states De La Rosa drove her grandmother to the bank where she withdrew $200, and then to Target to do some shopping.[14] When they returned, the $200 was missing from Ms. Tabibian’s purse.[15] Regarding the second incident, Ms. Hartunian stated her grandmother came out of her bathroom to find De La Rosa in her bedroom near a small suitcase containing Ms. Tabibian’s purse and personal documents.[16] De La Rosa had no business being in the bedroom at that time, and when asked what she was doing there, she stated she was “looking for the phone.”[17] Aileen Hartunian also reported disclosing these incidents to Defendant Lennon in early 2012 following a dispute over her bill.[18]
Exhibit 4 shows an office note dated 30 November 2011. The note shows that Right At Home informed De La Rosa she was not to return to Ms. Tabibian’s home, but does not specify any further action taken.[19] Plaintiffs’ Exhibit 3 is a copy of the Gene Lennon deposition transcript recorded on 11 December 2013. In the deposition, Defendant Lennon declares he is the “person most knowledgeable” (“PMK”) to answer questions surrounding both the incident of the present litigation and Right At Home’s policies and procedures for investigating complaints involving employees.[20]
The following are excerpts from Defendant Lennon’s deposition that discuss the actions taken by Right At Home following the Hartunian complaint:
“Q: Okay. On the November 28, 2011, incident there was a complaint – are you aware of any complaints that were made against Maria De La Rosa to the Company?
A: I am.
Q: And what complaint was that?
A: There was money missing.[21]
Q: Do you know how the complaint was handled?
A: No, I do not.
Q: Was it ever brought to your attention personally?
A: No.
Q: Was the October 24th, 2011, complaint ever brought to your attention personally?
A: No.
Q: Do you know if any follow-up investigation occurred for either of these events?
A: No.
Q: Do you know if anyone ever went to the client who was involved in the November 28, 2011, home to follow up on what had occurred?
A: No.[22]
Q: Do you know if employee De La Rosa was removed from that client’s home?
A: No, I do not.
Q: Do you know if employee De La Rosa was disciplined in any way for either of these occurrences?
A: No.[23]
Q: To the best of your knowledge, if she had been disciplined or put on probation, would there be documentation in her personnel file of the company?
A: Yes.[24]
Q: So how are accusations handled that either there is not enough supporting evidence or it’s unknown whether the accusation is true or not, how are those handled?
A: Verbally with the caregiver.[25]
Q: If there is no evidence to support the accusation in the client’s complaint, the caregiver is not disciplined?
A: Correct.[26]
Q: And you said you inform the caregiver of the accusation. Do you ask them any other questions?
A: No.
Q: You don’t interview them on the matter?
A: We bring it up to them and let them know. We don’t quiz them or ask if they have any input. If they volunteer it, then we record what they volunteer.
Q: Do you allow subsequent clients where that caregiver is placed knowledge of those accusations?
A: No.[27]
Q: Do you take any further preventative measures to try and find out if the accusations could be true?
A: No.[28]”
Defendants presented no evidence opposing the above facts stated in the Lennon Deposition.
This Court believes the evidence in the moving papers may be sufficient to award punitive damages based on Defendants’ assignment of caregiver De La Rosa to Plaintiffs’ home following allegations of theft against her. However, this Court does not find an award of punitive damages is “substantially probable” as to require pretrial discovery into Defendants financial condition.
As previously mentioned, section 3294 defines “oppression” as “despicable conduct that subjects a person to cruel and unjust hardship in conscious disregard of that person’s rights.” (Civ. Code §3294(c)(2).) “Fraud” is defined as “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.” (Civ. Code §3294(c)(3).)
Plaintiffs have not shown that Defendants are “very likely” to prove fraud or oppression in this case. Based on the facts presented in the moving papers, there is little showing that Defendants acted to subject the Plaintiffs to “cruel and unjust hardship” or that they specifically withheld the previous complaints about caregiver De La Rosa from Plaintiffs with the intent of causing them harm. Rather, Defendants neglected to properly investigate the November 2011 complaint against De La Rosa, and instead reassigned her to another client. While this act undoubtedly resulted in harm to the Plaintiffs, this Court cannot say that a jury would likely find the action to be anything more than negligence. Defendants employ more than 200 caretakers. Right At Home easily could have sent someone else to Plaintiffs’ home, and did not need De La Rosa to provide services to the Plaintiffs.
Additionally, Plaintiffs have not proven express malice. Express malice is defined as “conduct which is intended by the defendant to cause injury to the plaintiff.” (Civ. Code §3294(c)(1).) There is no showing that Defendants assigned De La Rosa to Plaintiffs’ home with the intent that she steal from them. However, as previously mentioned, the “malice” required by section 3294 can be implied. A “conscious disregard of the safety of others” can constitute implied malice if the plaintiff can prove the defendant was aware of the “probable dangerous consequences” of the conduct in question, and he or she “willfully and deliberately” failed to avoid those consequences. (Taylor, 24 Cal.3d. at 895-896.)
Defendants were aware of allegations of theft against caregiver De La Rosa, however these allegations were unsubstantiated. No police report was filed, no charges were brought up, and Aileen Hartunian took no further action. Moreover, De La Rosa had no history of physical violence of verbal abuse of her clients, making it difficult for Plaintiffs to show a “conscious disregard” for Plaintiff O’Jibway’s safety. While Defendants may have been negligent in failing to investigate the theft matter further before sending De La Rosa to work for the Plaintiffs, something more than the mere commission of a tort is required for a grant of punitive damages. (Id. at 894.) Circumstances of aggravation or outrage must exist. (Id.)
Section 3295 was enacted to assure defendants are not pressured into settling cases to protect their financial privacy in civil discovery. (Jarbo, 95 Cal.App.4th. at 757 quoting (Sen. Kenneth L. Maddy, letter to Governor Edmund G. Brown, Jr., Sept. 2, 1980, p. 4.).) The privacy rights of the Defendants cannot be overcome absent a showing by the Plaintiffs that they are “very likely” to obtain punitive damages at trial. While a trial jury might find punitive damages are warranted in this case, the evidence presented by the Plaintiffs does not meet their burden of proving it is a “substantial probability.” Thus, pretrial discovery into Defendants’ financial condition is not appropriate at this time.
- Order.
Plaintiffs’ motion for pretrial discovery of Defendants’ financial records and information is DENIED.
| ____________________________
DATED: |
________________________________________________
HON. SOCRATES PETER MANOUKIAN Judge of the Superior Court County of Santa Clara |
[1] “The failure to file a written opposition or to appear at a hearing or the voluntary provision of discovery shall not be deemed an admission that the motion was proper or that sanctions should be awarded.” Rule of Court 3.1348(b).
[2] “Each exhibit must be separated by a hard 81/2 x 11 sheet with hard paper or plastic tabs extending below the bottom of the page, bearing the exhibit designation. An index to exhibits must be provided. Pages from a single deposition and associated exhibits must be designated as a single exhibit.”
[3] Plaintiffs’ Memorandum of Points and Authorities, Pg. 8.
[4] Plaintiffs’ Memorandum of Points and Authorities, Pg. 11.
[5] Plaintiffs’ Memorandum of Points and Authorities, Pg. 9.
[6] Defendants’ Memorandum of Points and Authorities, Pg. 2.
[7] Defendants’ Memorandum of Points and Authorities, Pg. 3.
[8] Defendants’ Exhibit B, Denise Golberg Deposition, Pg. 20, Ln. 3-6.
[9] Defendants’ Exhibit D, Gene Lennon Deposition, Pg. 181, Ln. 16-22.
[10] Plaintiffs’ Exhibit 6, ¶4; Plaintiffs’ Exhibit 7, ¶5.
[11] Plaintiffs’ Exhibit 4, Right At Home “Caregiver Documented Events”.
[12] Plaintiffs’ Exhibit 5, Declaration of Aileen Harunian, ¶1.
[13] Plaintiffs’ Exhibit 5, Declaration of Aileen Harunian, ¶5.
[14] Plaintiffs’ Exhibit 4; Plaintiffs’ Exhibit 5 ¶7.
[15] Plaintiffs’ Exhibit 4; Plaintiffs’ Exhibit 5 ¶7.
[16] Plaintiffs’ Exhibit 4; Plaintiffs’ Exhibit 5 ¶7.
[17] Plaintiffs’ Exhibit 4; Plaintiffs’ Exhibit 5 ¶7.
[18] Plaintiffs’ Exhibit 5 ¶9.
[19] Plaintiffs’ Exhibit 4.
[20] Plaintiffs’ Exhibit 3, Gene Lennon Deposition (Lennon Depo.), Pg. 13, Ln. 2-6; Pg. 67, Ln. 9-14.
[21] Plaintiffs’ Exhibit 3, Lennon Depo., Pg. 121, Ln. 7-13.
[22] Plaintiffs’ Exhibit 3, Lennon Depo., Pg. 121, Ln. 25; Pg. 122, Ln. 1-14.
[23] Plaintiffs’ Exhibit 3, Lennon Depo., Pg. 122, Ln. 19-24.
[24] Plaintiffs’ Exhibit 3, Lennon Depo., Pg. 123, Ln. 2-5.
[25] Plaintiffs’ Exhibit 3, Lennon Depo., Pg. 137, Ln. 12-16.
[26] Plaintiffs’ Exhibit 3, Lennon Depo., Pg. 137, Ln. 23-25; Pg. 138, Ln. 1-3.
[27] Plaintiffs’ Exhibit 3, Lennon Depo., Pg. 138, Ln. 15-24.
[28] Plaintiffs’ Exhibit 3, Lennon Depo., Pg. 138, Ln. 25; Pg. 139, Ln. 1-2.
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