Case Number: BC513242    Hearing Date: July 30, 2014    Dept: 58

JUDGE ROLF TREU
DEPARTMENT 58
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Hearing Date: Wednesday, July 30, 2014
Calendar No: 6
Case Name: Michaelian, et al. v. Sherle Wagner International, et al.
Case No.: BC513242
Motion: Motion to Strike
Moving Party: Defendants Sherle Wagner International, 839 N. La Cienega Realty LLC, and Tara Rosenbaum
Responding Party: Plaintiffs Yafa Soofer Michaelian and Noorola/Yafa Soofer Family Trust
Notice: OK

Tentative Ruling: Motions to strike is denied. Defendants Sherle Wagner International, 839 N. La Cienega Realty LLC, and Tara Rosenbaum to answer by 8/11/14.
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Background –
On 6/25/13, Plaintiffs Yafa Soofer Michaelian (as trustee) and Noorola/Yafa Soofer Family Trust filed this action against Defendants Sherle Wagner International, Sherle Design, Tara Rosenbaum, and 839 N. La Cienega Realty LLC arising out of the alleged damages resulting from renovations to neighboring property. On 7/18/13, prior to the appearance of any defendant, Plaintiffs filed a First Amended Complaint which asserted causes of action for (1) negligence, (2) negligent retention, (3) trespass, and (4) nuisance. Additionally, the FAC named Carlos Stuardo Ovalle, NWGC Inc., and Ming-Yang Yeh as additional defendants. On 8/22/13, Plaintiffs voluntarily dismissed Ovalle without prejudice. On 1/15/14, this action was assigned to this Court. On 3/27/14, Plaintiffs filed Doe Amendments naming Sean Knibb, Knibb Design Corporation, and Michael Satoh as Does 1-3 respectively.

On 4/24/14, the Court sustained motions to strike filed by Sherle Wagner International, 839 N. La Cienega Realty LLC, and Tara Rosenbaum (“Owner Defendants”) and NWGC, Inc. as to punitive damages with leave to amend. On 5/9/14, Plaintiff filed a Second Amended Complaint which omitted Yeh as a defendant.

On 6/30/14, NWGC filed an application for determination of good faith settlement. On 7/10/14, Knibb, Knibb Design, and Satoh filed an application for determination of good faith settlement. Trial is set for 8/5/14; FSC for 7/30/14.

Motions to Strike –
Owner Defendants move to strike Plaintiffs’ claim for punitive damages which is claimed in the 1st and 3rd COAs (SAC ¶¶ 36, 49). “In order to survive a motion to strike an allegation of punitive damages, the ultimate facts showing an entitlement to such relief must be pled by a plaintiff. In passing on the correctness of a ruling on a motion to strike, judges read allegations of a pleading subject to a motion to strike as a whole, all parts in their context, and assume their truth. In ruling on a motion to strike, courts do not read allegations in isolation.” Clauson v. Superior Court (1998) 67 Cal.App.4th 1253, 1255 (citations omitted).

On 4/24/14, the Court concluded that Plaintiffs’ factual allegations were sufficient to support malice or oppression. See College Hospital Inc. v. Superior Court (1994) 8 Cal.4th 704, 725; Civil Code § 3294(c)(2); Mock v. Michigan Millers Mutual Ins. Co. (1992) 4 Cal.App.4th 306, 331. However, the Court concluded that Plaintiffs failed to allege facts to support advance knowledge, authorization, ratification, or act on the part of an officer, director, or managing agent for the entity defendants (Civil Code § 3294(b)).

1. Factual Allegations of the SAC
Renovations took place at a building owned by Owner Defendants (“839 Building”) which is adjacent to Plaintiffs’ building (“833 Building”). ¶¶ 16-17. The driveway of the 839 Building was demolished, which caused damaged to the wall of the 833 Building caused by Defendants’ vehicles and construction equipment running into and across Plaintiffs’ building: despite Plaintiffs’ protests, Defendants continued their conduct. ¶ 18. Additionally, construction traffic caused deep scratches to the 833 Building’s wall: Defendants did not repair the damages despite promising to do so. ¶ 19. Lastly, the 839 Building’s water drainage was also sloped and directed towards the 839 Building, and gravel has been placed to hide the runoff and accumulation of water. ¶¶ 20-21, 24-25.

2. Malice or Oppression
To the extent Owner Defendants argue that there are insufficient facts alleged to support Plaintiffs’ claim for punitive damages, the Court again disagrees. As with the FAC, Plaintiffs allege that the demolition of the 839 Building’s driveway was done without regard to the 833 Building (SAC ¶ 18) and that the 839 Building’s water drainage was deliberately designed to the detriment of the 833 Building (id. ¶¶ 20-21, 24-25, 29-30). This is sufficient to support malice or oppression.

3. Entity Liability
Owner Defendants argue that Plaintiffs fail to distinguish between the defendants and fail to allege specific acts as to Owner Defendants. While correct, Owner Defendants fails to cite to authorities that require such specific facts at the pleading stage. Owner Defendants’ reliance on J.R. Norton Co. v. General Teamsters, Warehousemen & Helpers Union (1989) 208 Cal.App.3d 430, 444-45, is misplaced because that case concerned the sufficiency of a jury’s finding after trial and did not discuss pleading requirements.

The Court granted the previous motion to strike because Plaintiffs failed to allege facts as to support liability against the entity defendants pursuant to Civil Code § 3294(b). The Court noted the Plaintiffs’ failure to distinguish between the conduct of the defendants, but did not conclude that Plaintiffs were required at the pleading stage to allege specific acts as to each defendant.

The SAC makes clear that Plaintiffs protested defendants’ conduct (SAC ¶ 18); that Plaintiffs contacted defendants who failed to repair the damages as promised (id. ¶¶ 19-20, 23, 26); that defendants refused to communicate with Plaintiffs by hanging up the telephone anytime these issues were raised (id. ¶ 27); and that defendants have pursued ongoing construction activities despite Plaintiffs’ repeated demands for repairs and redesigns (id. ¶ 28). Because Plaintiffs allege that all defendants owned, maintained, managed, operated, and provided the construction services for the 839 Building (id. ¶¶ 15-16), the new factual allegations in the SAC are sufficient at the pleading stage to support entity liability under Civil Code § 3294(b).

Ruling –
The motion to strike is denied. Owner Defendants to answer by 8/11/14.