Case Name: Richard D. Soukoulis v. Diana A. Southern, et al.
Case No.: 2018-CV-326154

Motion to Strike Punitive Damages Allegations in the First Amended Complaint by Defendants Diana A. Southern and Richard Southern

Factual and Procedural Background

This is a property dispute involving use of an easement. Plaintiff Richard D. Soukoulis (“Plaintiff”) is the owner of residential property located at 21296 Cinnabar Hills Road in San Jose, California. (First Amended Complaint [“FAC”] at ¶ 1.) Defendants Diana A. Southern and Richard Southern, individually and as trustees of the Southern Family Revocable Trust dated 4-15-2003 (collectively, “Defendants”), are owners of real property located at 21283 Cinnabar Hills Road in San Jose, California. (Id. at ¶ 2.)

Cinnabar Hills Road is a roadway parcel (the “Roadway Parcel”) extending from the base of Bertram Road, in Santa Clara, California. (FAC at ¶ 5.) The Santa Clara County Recorder’s Office recognizes the Roadway Parcel as a recorded 30 foot wide non-exclusive Ingress and Egress easement with a stated purpose of allowing passage to Plaintiff and the community to the homes and properties off the Roadway Parcel. (Ibid.)

Ingress and egress easements and related codes exist primarily for the purpose of ensuring that roads remain free and clear, and are of sufficient width to accommodate vehicles, including emergency vehicles, which must be able to access all of the properties they serve. (FAC at ¶ 8.) Accordingly, the recording of roadway easements places everyone on notice of their existence and parameters, and prohibits any person from, among other things, altering, constructing and/or maintaining any encroachments upon these easements, and otherwise prohibits persons from interfering with the use of the easement by its co-owners. (Ibid.)

In violation of easement requirements and prohibitions, Defendants have altered the Roadway Parcel easement, and constructed and/or continue to maintain various and significant encroachments upon the Roadway Parcel, including by maintaining a private wrought iron fence in the easement, which deprive Plaintiff and other co-owners of their easement rights, while usurping easement property for Defendants’ private and exclusive use. (FAC at ¶ 9.)

Plaintiff has contacted Defendants on several occasions to inform them of their encroachments, and to request that they voluntarily clear them. (FAC at ¶ 10.) Defendants have admitted that they are encroaching onto the Roadway easement, which is confirmed by their own engineers and land surveyors survey. (Ibid.) Despite their admissions, Defendants have refused and continue to refuse to remove their encroachments and comply with the terms of the easement restrictions, thus necessitating Court intervention. (Ibid.)

On April 5, 2018, Plaintiff filed a Complaint against Defendants setting forth causes of action for: (1) quiet title; (2) declaratory and injunctive relief; and (3) specific performance. Defendants thereafter filed a motion to strike punitive damages allegations which was granted by the Court with leave to amend.

On September 10, 2018, Plaintiff filed the operative FAC against Defendants alleging the same causes of action.

Motion to Strike Punitive Damages Allegations

Currently before the Court is Defendants’ motion to strike the punitive damages allegations in the FAC. Plaintiff filed written opposition. Defendants filed reply papers.

Request for Judicial Notice

In support of the motion, Defendants request judicial notice of the following: (1) Court’s Order Granting the Motion to Strike Punitive Damages Allegations in the Complaint filed on August 23, 2018 (Exhibit A); (2) Plaintiff’s Opposition to Defendants’ Motion to Strike filed on August 6, 2018 (Exhibit B); (3) County of Santa Clara, Office of the Sheriff, Response to California Public Records Request, dated November 12, 2018 (Exhibit C); and (4) Declaration of Andrew Castricone Regarding Meet and Confer Requirements Before Filing Motion to Strike in Response to FAC filed on October 5, 2018 (Exhibit F).

Here, Exhibits A, B, and F are proper subjects for judicial notice as they constitute records of the superior court under Evidence Code section 452, subdivision (d). (See Stepan v. Garcia (1974) 43 Cal.App.3d 497, 500 [the court may take judicial notice of its own file].) The Court declines to take judicial notice of Exhibit C as Defendants seek to rely on the truth of matters submitted in the document. (See Herrera v. Deutsche Bank National Trust Co. (2011) 196 Cal.App.4th 1366, 1375 [“While courts take judicial notice of public records, they do not take notice of the truth of matters stated therein.”].)

Accordingly, the request for judicial notice is GRANTED as to Exhibits A, B, and F. The request is DENIED as to Exhibit C.

Legal Standard

A court may strike out any irrelevant, false, or improper matter asserted in a pleading. (Code Civ. Proc., § 436, subd. (a).) A court may also strike out all or any part of a pleading not filed in conformity with the laws of the State of California. (Code Civ. Proc., § 436, subd. (b).) The grounds for a motion to strike shall appear on the face of the challenged pleading or from any matter of which the court is required to take judicial notice. (Code Civ. Proc., § 437, subd. (a).)
Punitive Damages Law

Defendants move to strike Plaintiff’s allegations regarding punitive damages. Pursuant to Civil Code section 3294, punitive damages may be recovered “where it is proven by clear and convincing evidence that the defendant has been guilty of oppression, fraud, or malice.” Plaintiff contends Defendants acted with malice.

Malice is defined by section 3294, subdivision (c)(1) as “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.” “Despicable conduct” is conduct that is “ ‘so vile, base, contemptible, miserable, wretched or loathsome that it would be looked down upon and despised by most ordinary decent people.’ ” (Mock v. Michigan Millers Mutual Ins. Co. (1992) 4 Cal.App.4th 306, 330.) Such conduct has been described as having the character of outrage frequently associated with crime. (Tomaselli v. Transamerica Ins. Co. (1994) 25 Cal.App.4th 1269, 1287.) “Conscious disregard” means “ ‘that the defendant was aware of the probable dangerous consequences of his conduct, and that he willfully and deliberately failed to avoid those consequences.’ ” (Hoch v. Allied-Signal, Inc. (1994) 24 Cal.App.4th 48, 61.) In other words, the defendant must “have actual knowledge of the risk of harm it is creating and, in the face of that knowledge, fail to take steps it knows will reduce or eliminate the risk of harm.” (Ehrhardt v. Brunswick, Inc. (1986) 186 Cal.App.3d 734, 742.)

The California Supreme Court addressed the then existing malice requirement in Taylor v. Superior Court (1979) 24 Cal.3d 890 (Taylor). In that case, the court affirmed that a conscious disregard for the rights or safety of others may constitute malice within the meaning of section 3294, but clarified that, “In order to justify an award of punitive damages on this basis, the plaintiff must establish that the defendant was aware of the probable dangerous consequences of his conduct, and that he willfully and deliberately failed to avoid those consequences.” (Taylor, supra, at pp. 895-896.) In doing so, the Taylor court approved of the Supreme Court’s earlier conclusion in G.D. Searle & Co. v. Superior Court (1975) 49 Cal.App.3d 22 (G.D. Searle & Co.) that mere reckless disregard or misconduct cannot be enough to sustain an award of punitive damages because, “ ‘The central spirit of the exemplary damage statute, the demand for evil motive, is violated by an award founded upon recklessness alone.’ ” (Taylor, supra, at p. 895; G.D. Searle & Co., supra, at p. 32.)

The Legislature later refined the definition of “malice” by adding the terms “despicable” and “willful.” (See Lackner v. North (2006) 135 Cal.App.4th 1188, 1211 (Lackner) [“As amended, malice, based upon a conscious disregard of the plaintiff’s rights, requires proof that the defendant’s conduct is ‘despicable’ and ‘willful’ ”].) “By adding the word ‘willful’ to the ‘conscious-disregard’ prong of malice, the Legislature has arguably conformed the literal words of the statute to existing case law formulations. (See [Taylor], supra, 24 Cal.3d at pp. 895-896 [malice involves awareness of dangerous consequences and a willful and deliberate failure to avoid them].) However, the statute’s reference to ‘despicable’ conduct seems to represent a new substantive limitation on punitive damage awards. Used in its ordinary sense, the adjective ‘despicable’ is a powerful term that refers to circumstances that are ‘base,’ ‘vile,’ or ‘contemptible.’ [Citation.] As amended to include this word, the statute plainly indicates that absent an intent to injure the plaintiff, ‘malice’ requires more than a ‘willful and conscious’ disregard of the plaintiffs’ interests. The additional component of ‘despicable conduct’ must be found.” (College Hospital, Inc. v. Super. Ct. (1994) 8 Cal.4th 704, 725.)

“Because punitive damages are imposed ‘for the sake of example and by way of punishing the defendant’ (§ 3294, subd. (a)), they are typically awarded for intentional torts such as assault and battery, false imprisonment, intentional infliction of emotional distress, defamation, nuisance intentionally maintained, fraud, trespass, conversion, civil rights violations, insurer’s breach of covenant of good faith, wrongful termination and job discrimination, and products liability cases.” (Lackner, supra, 135 Cal.App.4th at p. 1212.) By contrast, “cases involving unintentional torts are far fewer and the courts have had to consider various factors in determining whether the defendant’s conduct was despicable. Thus, punitive damage awards have been reversed where the defendant’s conduct was merely in bad faith and overzealous [citations], or the defendant took action to protect or minimize the injury to the plaintiff.” (Ibid.)

Analysis

“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. [Citations.] 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. [Citations.] In ruling on a motion to strike, courts do not read allegations in isolation. [Citation.]” (Clauson v. Super. Ct. (1998) 67 Cal.App.4th 1253, 1255.)

In California, the general rule is that a complaint must contain only allegations of ultimate facts as opposed to allegations of evidentiary facts or of legal conclusions or arguments.” (Burke v. Super. Ct. (1969) 71 Cal.2d 276, 279, fn. 4.) However, a complaint is not insufficient simply because ultimate facts are intermingled with conclusions of law. (Krug v. Meeham (1952) 109 Cal.App.2d 274, 277.) Nor is it proper to strike a prayer for punitive damages simply because the averments of the complaint are mostly conclusory and subject to being stricken. (See Perkins v. Super. Ct. (1981) 117 Cal.App.3d 1, 6 (Perkins).)

“What is important is that the complaint as a whole contain sufficient facts to apprise the defendant of the basis upon which the plaintiff is seeking relief. [Citations.] The stricken language must be read … in the context of the facts alleged in the rest of petitioner’s complaint. Taken in context, the words ‘wrongfully and intentionally’ [may] describe a knowing and deliberate state of mind from which a conscious[] disregard of petitioner’s rights might be inferred-a state of mind which would sustain an award of punitive damages. [Citations.]” (Perkins, supra, 117 Cal.App.3d at p. 6.) Similarly, “[t]he allegation that defendants were guilty of ‘oppression, fraud, and malice’ … is not objectionable when sufficient facts are alleged to support the allegation. [Citation.]” (Id. at pp. 6-7.)

As stated above, the Court previously granted Defendants’ motion to strike punitive damages allegations in the Complaint. (See Request for Judicial Notice [“RJN”] at Ex. A.) The punitive damages allegations were set forth in paragraphs 17 and 25 of the Complaint in support of the claims for quiet title and specific performance. Paragraph 17 provides:

“Defendants have actual and constructive notice of the existence of the Roadway Parcel easement. In committing the acts described herein, Defendants acted maliciously, willfully, and oppressively, thereby entitling Plaintiff to recover punitive damages in an amount according to proof.”

(See Complaint at ¶ 17.)

Similarly, paragraph 25 states:

“In committing the acts described herein, Defendants acted maliciously, willfully, and oppressively, thereby entitling Plaintiff to recover punitive damages in an amount according to proof.”

(See Complaint at ¶ 25.)

The Court struck these allegations as they were mere conclusions and thus insufficient to establish a basis for punitive damages. (See RJN at Ex. A.) Plaintiff thereafter amended his pleading to include additional facts to support his claim for punitive damages. Once more these allegations are set forth in paragraphs 17 and 25 in the FAC in support of the claims for quiet title and specific performance. The punitive damage allegations in these paragraphs are identical and provide the following:

“In committing the acts described herein, Defendants have acted and continue to act maliciously, willfully, and oppressively, thereby entitling Plaintiff to recover punitive damages in an amount according to proof. In particular, Defendants’ conduct constitutes ‘malice’ under Civil Code § 3294 in that their wrongful and purposeful encroachments upon the Roadway Parcel easement reflect a willful and conscious disregard for the safety of others. This is reflected in the fact that Defendants, with full and actual knowledge of the existence and parameters of the Roadway Parcel easement, and with full and actual knowledge that they are encroaching upon the Roadway Parcel easement, have refused and continue to refuse to remove their encroachments. Defendants continue to refuse to remove their encroachments despite the fact that their own engineers and land surveyors survey admits to their encroachments, and despite being informed to remove their encroachments by the Santa Clara County Sheriff. As previously alleged, ingress and egress easements and related codes (including State and Local Codes and Regulations, the State Fire Code, and Emergency Vehicle Access Code) exist primarily for the purpose of ensuring that roads remain free and clear, and are of sufficient width to accommodate vehicles, including emergency vehicles, which must be able to readily access all of the properties they serve. Defendants’ encroachments are impeding and restricting the ability of vehicles, including emergency vehicles, from readily accessing the homes and families that reside in the community. Despite being aware of these health and safety concerns, and the probable dangerous consequences of their conduct, Defendants are willfully and deliberately failing to avoid these consequences.”

(See FAC at ¶¶ 17, 25.)

Defendants first argue the punitive damages allegations are false as the Sheriff or any other Santa Clara County official never informed them of any alleged encroachment to be removed for health and safety concerns. This argument however is improper as it is predicated on Exhibit C to Defendants’ request for judicial notice which was denied by the Court as stated above. Even if the Court were to rely on Exhibit C, the document itself does not affirmatively establish that Plaintiff’s allegations are false. In summary, Exhibit C provides that deputies responded to a property dispute with the neighbors. The document does not stand for the proposition that the Sheriff or any other Santa Clara County official never informed Defendants about encroachments on the easement.

In addition, Defendants contend the amended allegations do not support a basis for punitive damages. As stated above, Plaintiff’s punitive damages allegations are based on malice. In this context, there are no facts alleging that Defendants intended to cause injury to Plaintiff. Plaintiff however has included allegations that Defendants willfully and maliciously engaged in conduct by refusing to remove their encroachments. Defendants participated in such conduct despite knowing that it would restrict the ability of emergency vehicles from readily accessing homes and families that reside in the community and thus raising potential health and safety concerns. Despite this awareness, Defendants willfully and deliberately failed to avoid these consequences. While there are legal conclusions incorporated in paragraphs 17 and 25, the Court concludes there are sufficient factual allegations to support a basis for punitive damages to overcome a motion to strike. (See Perkins, supra, 117 Cal.App.3d at pp. 6-7.)

Disposition

The motion to strike punitive damages allegations is DENIED.