Plush Transportation, LLC vs. Pep Boys, LLC

Defendant’s special demurrer on the ground of uncertainty is overruled. (See, Cal. Rules of Ct., Rule 3.1113(a) [“The court may construe the absence of a memorandum as an admission that the motion or special demurrer is not meritorious and cause for its denial and, in the case of a demurrer, as a waiver of all grounds not supported.”].)

“The elements of fraud, which give rise to the tort action for deceit, are (a) misrepresentation (false representation, concealment, or nondisclosure); (b) knowledge of falsity (or ‘scienter’); (c) intent to defraud, i.e., to induce reliance; (d) justifiable reliance; and (e) resulting damage.” (Lazar v. Superior Court (1996) 12 Cal.4th 631, 638.)

The essential elements for intentional misrepresentation are (1) a misrepresentation, (2) knowledge of falsity, (3) intent to induce reliance, (4) actual and justifiable reliance, and (5) resulting damage. (Chapman v. Skype Inc. (2013) 220 Cal.App.4th 217, 230- 231.)

Every element of fraud must be pleaded with specificity. The particularity requirement for fraud requires the pleading of facts showing how, when, where, to whom, and by what means the representations were made. (Stansfield v. Starkey (1990) 220 Cal. App. 3d 59, 73.) This is to provide the defendant with notice and to give the court enough information to assess whether there is a foundation for the charge of fraud. (Committee on Children’s Television, Inc. v. General Foods Corp. (1983) 35 Cal. 3d 197, 216.)

The requirement of specificity in a fraud action against a corporation requires the plaintiff to allege the names of the persons who made the allegedly fraudulent representations, their authority to speak, to whom they spoke, what they said or wrote, and when it was said or written. (Tarmann v. State Farm Mut. Auto. Ins. Co. (1991) 2 Cal.App.4th 153, 157.) Nonetheless, “[l]ess specificity is required when it appears from the nature of the allegations that the defendant must necessarily possess full information concerning the facts of the controversy.” (Committee on Children’s Television, 35 Cal. 3d at 216 [citation and internal quote marks omitted].)

Plaintiff did not allege sufficient facts with the required specificity to state this cause of action. Accordingly, the demurrer is sustained with 15 days leave to amend.

MOTION TO STRIKE FAC

General legal authority

Pursuant to Code of Civil Procedure section 436, the Court may:

(a) Strike out any irrelevant, false, or improper matter inserted in any pleading. (b) Strike out all or any part of any pleading not drawn or filed in conformity with the laws of this state, a court rule, or an order of the court.

“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).)

“[J]udges read allegations of a pleading subject to a motion to strike as a whole, all parts in their context, and assume their truth.” (Clauson v. Superior Court (1998) 67 Cal.App.4th 1253, 1255.)

Punitive damages

Plaintiff may recover exemplary damages in an action for the breach of an obligation not arising from contract if Plaintiff proves by clear and convincing evidence that Defendants are “guilty of oppression, fraud, or malice.” (Civ. Code § 3294, subd. (a).) Malice is defined 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.” (Civ. Code § 3294, subd. (c)(1).)

Oppression is defined as “despicable conduct that subjects a person to cruel and unjust hardship in conscious disregard of that person’s rights.” (Civ. Code § 3294, subd. (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, subd. (c)(3).)

Punitive damages cannot be pled in conclusory terms, instead the facts supporting a claim for punitive damages must be set out clearly, concisely, and with particularity. (Smith v. Superior Court (1992) 10 Cal.App.4th 1033, 1041-1042.) However, “it has long been recognized that ‘(t)he distinction between conclusions of law and ultimate facts is not at all clear and involves at most a matter of degree.’” (Perkins v. Superior Court (1981) 117 Cal.App.3d 1, 6.) “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.” (Id.)

In ruling on a motion to strike, the Court should “read allegations of a pleading subject to a motion to strike as a whole, all parts in their context, and assume their truth.” (Clauson v. Superior Court (1998) 67 Cal.App.4th 1253, 1255; See Perkins, 117 Cal.App.3d at 6 [“stricken language must be read not in isolation, but in the context of the facts alleged in the rest of petitioner’s complaint.”].)

“An employer shall not be liable for damages pursuant to subdivision (a), based upon acts of an employee of the employer, unless the employer had advance knowledge of the unfitness of the employee and employed him or her with a conscious disregard of the rights or safety of others or authorized or ratified the wrongful conduct for which the damages are awarded or was personally guilty of oppression, fraud, or malice. With respect to a corporate employer, 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.” (Civ.

Code, § 3294, subd. (b); see, Wilson v. Southern California Edison Co. (2015) 234 Cal.App.4th 123, 164, citing Cruz v. HomeBase (2000) 83 Cal.App.4th 160, 167 [“When the defendant is a corporation, ‘[a]n award of punitive damages against a corporation...must rest on the malice of the corporation’s employees.’”].)

As discussed above, Plaintiff did not allege sufficient facts to state the third cause of action for fraud. Accordingly, Defendant’s motion to strike paragraphs 57-60 is moot.

Plaintiff has not alleged sufficient facts with the required specificity to show malice, fraud, or oppression and did not allege sufficient facts to support punitive damages against an entity. Accordingly, the motion to strike paragraphs 71 and 72 and the prayer for exemplary and punitive damages is granted with 15 days leave to amend.

Defendant shall give notice.