Case Number: BC536255 Hearing Date: June 09, 2014 Dept: 34

Moving Party: Defendant Darrell G. Winfrey (“Winfrey” or “defendant”)

Resp. Party: Plaintiff Peter Dille (“plaintiff”)

Defendant’s motion to strike is DENIED.

BACKGROUND:

Plaintiff commenced this action on 2/13/14 against defendants for: (1) fraud; (2) negligent misrepresentation; (3) breach of oral contract; (4) conversion; and (5) common count for money had and received. In August 2011 plaintiff received a phone call from Winfrey asking if plaintiff wanted to invest in building a studio that would be rented out for various uses. (Compl., ¶ 14.) Plaintiff then met with defendants at the place where the studio would be built and Winfrey made representations about the studio and its profits. (Id., ¶¶ 17-20.) Plaintiff then gave defendant Alexander $25,000.00 in exchange for a 40% partnership in the studio venture. (Id., ¶¶ 23-24.) After plaintiff requested a refund of his check, defendant returned the $25,000.00 check to plaintiff. (Id., ¶¶ 25-26.) Winfrey then represented that plaintiff could invest $12,500.00 in exchange for a 50% ownership in the venture, and plaintiff agreed and wrote a check for $12,500.00. (Id., ¶ 27.) Following this initial investment, Winfrey continued to solicit additional funds from plaintiff for various expenses. (Id., ¶¶ 28-29.) By February 27, 2012, plaintiff had invested approximately $100,820.00 with defendants for various improvements to equipment. (Id., ¶ 30.) Plaintiff alleges that the improvements have not been made, the funds were not used as defendants represented they would be used, and the studio was never built and has never generated income. (Id., ¶¶ 31-33.) Defendants have kept plaintiff’s money despite his requests for them to return the money. (Id., ¶ 34.)

ANALYSIS:

Defendant seeks to strike plaintiff’s requests for punitive damages.

The standard of proof for recovery of punitive damages is “clear and convincing” evidence of malice, fraud, or oppression. (Civil Code § 3294(a).) Under Civil Code 3294(c),

[¶] (1) ‘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. [¶] (2) ‘Oppression’ means despicable conduct that subjects a person to cruel and unjust hardship in conscious disregard of that person’s rights. [¶] (3) ‘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 determining whether a complaint states facts sufficient to sustain punitive damages, the challenged allegations must be read in context with the other facts alleged in the complaint. Further, even though certain language pleads ultimate facts or conclusions of law, such language when read in context with the facts alleged as to defendants’ conduct may adequately plead the evil motive requisite to recovery of punitive damages.” (Monge v. Superior Court (1986) 176 Cal.App.3d 503, 510.) The inquiry is generally fact specific to the nature of the claim raised and the context in which the damages are sought, but “the critical element is an ‘evil motive’ of the defendant.” (Ibid.) “‘Punitive damages are proper only when the tortious conduct rises to levels of extreme indifference to the plaintiff’s rights, a level which decent citizens should not have to tolerate.'” (American Airlines v. Sheppard (2002) 96 Cal.App.4th 1017, 1051.)

Plaintiff alleges that defendants made misrepresentations about the studio business which caused plaintiff to give defendants over $100,000.00. (See Compl., ¶¶ 17-20, 27-30.) These representations were false because defendants did not use the money for the represented expenses, the studio was never built, and the studio never generated income. (Id., ¶¶ 31-33.) Defendants have not returned plaintiff’s money despite his requests for them to do so. (Id., ¶ 34.) These allegations are sufficient to establish that defendants engaged in fraud. These facts support plaintiff’s first and fourth causes of action. (See id., ¶¶ 36-59, 79-86.) Therefore, plaintiff sufficiently supports the requests for punitive damages.

Accordingly, defendant’s motion to strike is DENIED.