Anne Fristoe, MD vs Mikki Reilly et al
Anne Fristoe, MD vs Mikki Reilly et al
Case Number
21CV04616
Case Type
Hearing Date / Time
Mon, 10/02/2023 - 10:00
Nature of Proceedings
Motion: Summary Judgment
Tentative Ruling
Anne Fristoe, M.D. vs. Mikki Reilly, et al.
Hearing Date: October 2, 2023
HEARING: Defendants’ Motion For Summary Judgment Or, In the Alternative, Summary Adjudication
ATTORNEYS: For Plaintiff Anne Fristoe, M.D.: Kevin Gerry, The Law Offices of Kevin Gerry
For Defendants Mikki Reilly and Fitness Transform: Matthew Olufs, Law Office of Matthew Olufs
TENTATIVE RULING:
The motion for summary judgment or, in the alternative, summary adjudication of defendants Mikki Reilly and Fitness Transform, LLC, is denied.
Background:
The second amended complaint for damages and injunctive relief (the SAC) filed by plaintiff Ann Fristoe, M.D. (Fristoe) on February 6, 2023, is the operative pleading in this matter. As alleged in the SAC, on January 10, 2020, Fristoe hired Mikki Reilly (Reilly) and Fitness Transform (collectively, defendants) pursuant to a contract for health studio services as defined in Civil Code section 1812.80 et seq. (the contract), to provide Fristoe with instruction, training and assistance in physical culture, body building, exercising, reducing, and figure development, and for Fristoe’s use of the facilities of a health studio, gymnasium, or other facility. (SAC, ¶ 7.) Defendants failed to provide Fristoe with a copy of the contract at the time Fristoe signed the contract as required by Civil Code section 1812.82, and with a copy of the contract that complies with the type size, cancellation notice, payment limitations, and other content requirements under Civil Code sections 1812.84, 1812.85, and 1812.86. (Id. at ¶¶ 8-13.)
In March 2020, and thereafter, defendants eliminated or substantially reduced the scope of the facilities that were described in the contract. (SAC, ¶ 14.) In March and April 2020, defendants charged Fristoe for facilities that were closed and sessions that were cancelled. (Id. at ¶¶ 15-16.) In August, September, and October of 2020, defendants charged Fristoe for closed facilities and cancelled sessions after receiving a notice of cancellation of the contract from Fristoe. (Id. at ¶¶ 17-19.)
On October 15, 2021, Financial Credit Network, Inc. (FCN) filed a lawsuit to enforce its rights in the contract pursuant to an assignment of the contract to FCN by defendants. (SAC, ¶ 24.) Defendants did not provide Fristoe with a notice of assignment of the contract to FCN. (Id. at ¶¶ 20, 23.) On January 17, 2021, Fristoe disputed in a writing to FCN the existence of any debt and requested a verification of the existence of any such debt. (Id. at ¶ 25.) FCN failed to provide an adequate or timely verification of the validity of the Fristoe’s debt. (Ibid.)
As a result of defendants’ and FCN’s acts and omissions as alleged in the SAC, and described above, Fristoe suffered injury and damages including monetary damages. (SAC, ¶¶ 29, 33, 39, 42, 44, 47, 50 [as to FCN only].) In the SAC, Fristoe requests injunctive relief. (Id. at p. 11, l. 10- p. 13, l. 28.)
The SAC asserts six causes of action: (1) unfair competition (against Reilly, Fitness Transform, and FCN); (2) breach of contract (against Reilly, Fitness Transform, and FCN); (3) conversion (against Reilly, Fitness Transform, and FCN); (4) common count (against Reilly, Fitness Transform, and FCN); (5) violation of Health Studio Services Act (Civ. Code, § 11812.80 et seq.) (against Reilly, Fitness Transform, and FCN); and (6) violation of Fair Debt Collection Practices Act (Civ. Code, § 1788.17) (against FCN only).
On March 8 and 15, 2023, FCN filed, respectively, an answer to the SAC and a first amended answer to the SAC generally denying its allegations and asserting thirteen affirmative defenses. On June 15, 2023, defendants filed their answer to the SAC generally denying its allegations and asserting sixteen affirmative defenses.
Court records reflect that on April 25, 2023, FCN filed a notice of a settlement (the notice of settlement) entered into by Fristoe and FCN and an application for good faith determination of the settlement (the application). On May 23, 2023, the Court entered an order (the order) granting the application. Court records further reflect that on June 7, 2023, Fristoe filed a request for dismissal of the complaint with prejudice as to FCN only.
Defendants have filed a motion for summary judgment or, in the alternative, summary adjudication of the first, second, third, fourth, and fifth causes of action alleged in the SAC, and of Fristoe’s claim for injunctive relief and punitive damages, on the grounds that Fristoe received the benefit of the bargain under the contract and therefore has not suffered an actual injury or loss of money or property as a result of any action taken by defendants, and that Fristoe filed this action with unclean hands and is therefore not entitled to injunctive relief. Fristoe opposes the motion.
Fitness Transform cancelled all in-person training sessions during the months of April, May, and June 2020 in response to Governor Newsom’s Executive Order N-33-20. (Opp. Sep. Stmt., UMF No. 18 & evidence cited therein.) At Fristoe’s request, on April 17, 2020, the amount of $1,040 was refunded to Fristoe by Fitness Transform due to Covid restrictions placed upon Fitness Transform’s business facilities. (Id. at UMF No. 8 & evidence cited therein.) No payments were made by Fristoe to Fitness Transform during the months of May, June, or July 2020. (Id. at UMF No. 9 & evidence cited therein.)
On July 1, 2020, Fristoe re-commenced in-person services with Fitness Transform. (Opp. Sep. Stmt., UMF No. 19 & evidence cited therein.) The amount of $1,040 was paid by Fristoe to Fitness Transform on August 19, 2020, as payment for services provided in July 2020. (Id. at UMF No. 10 & evidence cited therein.) On August 30, 2020, Fristoe sent an email to Reilly terminating the contract. (Id. at UMF No. 20 & evidence cited therein.) The amount of $1,040 was paid by Fristoe to Fitness Transform on September 19, 2020, as a recurring payment for services provided in August 2020. (Id. at UMF No. 11 & evidence cited therein.)
A recurring payment of $1,040 was paid by Fristoe to Fitness Transform on October 19, 2020, which was thereafter disputed by Fristoe. (Opp. Sep. Stmt., UMF No. 12 & evidence cited therein.) The amount of $1,040 was refunded by Fitness Transform to Fristoe on December 29, 2020, to reconcile the disputed October 19, 2020, payment. (Id. at UMF No. 13 & evidence cited therein.)
Fitness Transform provided a diet and nutrition plan to Fristoe. (Opp. Sep. Stmt., UMF No. 15 & evidence cited therein.) In January, February, March, July, and August of 2020, Fitness Transform provided to Fristoe personalized exercise planning and consultation and one-on-one private training sessions at a private fitness facility. (Id. at UMF Nos. 16 & 17 & evidence cited therein.) From January 2020 through December 2020, the total amount of $5,200 was paid by Fristoe to Fitness Transform, including all payments and refunds. (Id. at UMF No. 14 & evidence cited therein.) Plaintiff is not owed any additional one-one-one training sessions from defendants. (Id. at UMF No. 28 & evidence cited therein.)
On March 16, 2021, defendants referred the balance of the contract to FCN for collections. (Opp. Sep. Stmt., UMF No. 21 & evidence cited therein.) On October 15, 2021, FCN filed with this court a complaint for collections against Fristoe as case number 21CV04130 (the FCN action), which was later dismissed. (Id. at UMF No. 22 & evidence cited therein.) On November 22, 2021, Fristoe filed the present action. (Id. at UMF No. 23 & evidence cited therein [not reasonably disputed on this point.)
The above summary is not intended to be exhaustive, and the Court has considered all admissible evidence offered in support of and in opposition to defendants’ motion.
Analysis:
A motion for summary judgment “shall be granted if all the papers submitted show that there is no triable issue as to any material fact and that the moving party is entitled to judgment as a matter of law.” (Code Civ. Proc. § 437c, subd. (c).) “From commencement to conclusion, the moving party bears the burden of persuasion that there is no genuine issue of material fact and that he is entitled to judgment as a matter of law.” (Aguilar v. Atlantic Richfield Co. (2001) 25 Cal.4th 826, 845, 850 (Aguilar).)
A defendant moving for summary judgment bears the burden of persuasion that “one or more elements of the cause of action, even if not separately pleaded, cannot be established, or that there is a complete defense to the cause of action.” (Code Civ. Proc., § 437c, subd. (p)(2); Aguilar, supra, 235 Cal.4th at p. 850, 853 [defendant is not required to conclusively negate the element that defendant contends the plaintiff cannot establish].) A moving defendant also bears an initial burden of production to make a sufficient prima facie showing of the nonexistence of any triable issue of material fact. (Aguilar, supra, 25 Cal.4th at pp. 845, 850-851.)
If a moving defendant carries its burden of production, this “causes a shift, and the [plaintiff] is then subjected to a burden of production of his own to make a prima facie showing of the existence of a triable issue of material fact.” (Aguilar, supra, 25 Cal.4th at p. 850.) The plaintiff must set forth specific facts showing that a triable issue of material fact exists. (Code Civ. Proc., § 437c, subd. (o).) If the plaintiff cannot meet its burden of proof regarding an essential element of plaintiff’s case, defendant will be entitled to judgment as a matter of law. (Saelzler v. Advanced Group 400 (2001) 35 Cal.4th 763, 780-781.) However, there is no obligation by the plaintiff to establish anything unless and until the defendant has by affidavit stated facts establishing every element necessary to sustain a judgment in its favor. (Consumer Cause, Inc. v. SmileCare (2001) 91 Cal.App.4th 454, 468.)
A triable issue of fact exists “if, and only if, the evidence would allow a reasonable trier of fact to find the underlying fact in favor of the party opposing the motion in accordance with the applicable standard of proof.” (Aguilar, supra, 25 Cal.4th at p. 850.) “In ruling on the motion, the court must ‘consider all of the evidence’ and ‘all’ of the ‘inferences’ reasonably drawn therefrom [citation], and must view such evidence [citations] and such inferences [citations], in the light most favorable to the opposing party.” (Id. at p. 843.) Furthermore, the court “may not weigh the evidence or conflicting inferences and must deny the motion if there is a single issue of material fact in dispute.” (Cates v. California Gambling Control Com. (2007) 154 Cal.App.4th 1302, 1308.)
Motions for summary adjudication “proceed in all procedural respects as a motion for summary judgment.” (Code Civ. Proc., § 437c, subd. (f)(2); Oroville Hospital v. Superior Court (2022) 74 Cal.App.5th 382, 399.) “A party may move for summary adjudication as to one or more causes of action within an action, one or more affirmative defenses, one or more claims for damages, or one or more issues of duty….A motion for summary adjudication shall be granted only if it completely disposes of a cause of action, an affirmative defense, a claim for damages, or an issue of duty.” (Code Civ. Proc., § 437c, subd. (f)(1).)
The pleadings frame the issues to be considered on a motion for summary judgment. (Laabs v. City of Victorville (2008) 163 Cal.App.4th 1242, 1253.) Therefore, to meet their burden, defendants must adduce evidence negating the theories of liability alleged in the FAC. (Hedayati v. Interinsurance Exchange of the Automobile Club (2021) 67 Cal.App.5th 833, 846.)
(1) Motion For Summary Adjudication of the Fifth Cause of Action for Violation of Civil Code section 1812.80 et seq.
In the fifth cause of action, Fristoe alleges that defendants’ conduct described above violated Civil Code section 1812.80 et seq. (the Act). (Note: Undesignated statutory references herein are to the Civil Code unless otherwise stated.) Under section 1812.81, a “contract for health studio services” includes contracts for “instruction, training or assistance in physical culture, body building, exercising, reducing, figure development, or any other such physical skill, or for the use by an individual patron of the facilities of a health studio, gymnasium or other facility used for any of the above purposes….” (Civ. Code, § 1812.81.) The parties do not effectively dispute that the contract is one for health studio services as defined in the Act. It is also undisputed that, from January 2020 through December 2020, Fristoe paid the amount of $5,200 to Fitness Transform for services provided in January, February, March, July, and August 2020.
Defendants contend that because Fristoe paid for the services provided by Fitness Transform in January, February, March, July, and August 2020 at the agreed-upon contract rate of $1,040 per month, Fristoe received the benefit of the parties’ bargain. Therefore, defendants argue, Fristoe cannot establish that she sustained any actual injury or loss to money or property due to defendants’ alleged conduct. Defendants further contend that, because Fristoe cannot establish that she suffered actual damages as a result of any violation of the Act by defendants, Fristoe may not recover actual or treble damages under the Act.
The Act provides that “[]no contract for health studio services shall require payment by the person receiving the services or the use of the facilities of a total amount in excess of … [¶] [¶] four thousand four hundred dollars ($4,400), inclusive of initiation or initial membership fees and exclusive of interest or finance charges.” (Civ. Code, § 1812.86, subd. (a) & (c).) In their moving papers, defendants do not address this provision of the Act which limits the amount that Fristoe may be required to pay for the services.
The undisputed facts demonstrate that the amount of $5,200 paid by Fristoe for five months of services provided by Fitness Transform as further discussed above exceeds the payment limitation provided in section 1812.86, subdivision (c). Defendants fail to explain, with reasoned legal or factual argument, why Fristoe’s payment to Fitness Transform of an amount that exceeds the Act’s express payment limitation does not constitute actual damages or an injury in fact resulting from an overpayment for the services provided over a period of five months. In addition, defendants offer no evidence to show that they corrected the failure to comply with the Act within 30 days after Fristoe signed the contract by, for example, reducing the monthly charge provided in the contract to comply with the Act’s payment limitation. (See Civ. Code, § 1812.94, subd. (b).)
Defendants cite Beck v. Arthur Murray, Inc. (1966) 245 Cal.App.2d 976 (Beck) to support their contention that Fristoe’s actual damages represent the difference between the amount Fristoe paid for the services and the value of those services. However, the separate statement does not include any facts showing the reasonable value of the services. (See San Diego Watercrafts, Inc. v. Wells Fargo Bank, N.A. (2002) 102 Cal.App.4th 308, 313, internal citations and quotation marks omitted [“if it is not set forth in the separate statement, it does not exist”].) Therefore, defendants have not met their burden to present evidence from which a reasonable trier of fact could find that the amount paid by Fristoe represents the reasonable value of the services provided to Fristoe in January, February, March, July, and August 2020. In addition, because defendants offer no evidence to demonstrate the reasonable value of the services provided to Fristoe for which Fristoe was charged $5,200, there exist triable issues of material fact. (Beck, supra, 245 Cal.App.2d at p. 982 [because the “record [was] devoid of evidence as to the reasonable value of the instruction which plaintiff did receive, that issue must be retried”].)
For all reasons discussed above, defendants have failed to meet their burden to show that Fristoe cannot prove she suffered actual damages in order to establish a violation of the Act as alleged in fifth cause of action of the SAC. For this same reason, defendants have failed to meet their burden to show that Fristoe cannot establish a claim for treble damages under the Act. Therefore, the Court will deny defendants’ motion for summary adjudication of the fifth cause of action.
(2) Motion for Summary Adjudication of the First Cause of Action for Unfair Competition
Regarding the first cause of action for unfair competition alleged in the SAC, “[the] term ‘unfair competition’ is broadly defined by section 17200 of the Business and Professions Code to include ‘any unlawful, unfair or fraudulent business act or practice.’ ” (Gregory v. Albertson’s, Inc. (2002) 104 Cal.App.4th 845, 850-851, citation omitted.) “A business practice constitutes unfair competition if it is forbidden by any law, ‘be it civil or criminal, federal, state, or municipal, statutory, regulatory, or court-made’ [citation] or if it is unfair, that is, if it ‘ “ ‘offends an established public policy or ... is immoral, unethical, oppressive, unscrupulous or substantially injurious to consumers.’ ” ’ [Citation.]” (Id. at p. 854.)
A cause of action for unfair competition under Business and Professions Code section 17200 et seq. (the UCL) may be established independent of a contractual relationship between the parties and the “the quantum of lost money or property necessary to show standing is only so much as would suffice to establish injury in fact[.]” (Kwikset Corp. v. Superior Court (2011) 51 Cal.4th 310, 324 (Kwikset).) Accordingly, “[i]f a party has … proven a personal, individualized loss of money or property in any nontrivial amount, he or she has also … proven injury in fact.” (Id. at p. 325 [also observing that the California Supreme Court has found standing where plaintiffs paid an overcharge or paid more than they otherwise would have because of the defendant’s business practices].)
Defendants assert the same arguments discussed above to support their contention that Fristoe cannot establish a cause of action for unfair competition under the UCL because Fristoe cannot prove she incurred an economic injury or money damages as a result of defendants’ conduct. The same analysis applies. For all reasons discussed above, defendants have failed to meet their burden to demonstrate that Fristoe cannot establish an injury in fact or loss of money. (Kwikset, supra, 51 Cal.4th at p. 325 [“economic injury is itself a form of injury in fact”].) Therefore, to the extent defendants’ conduct violates the Act’s payment limitation discussed above, defendants have also failed to demonstrate that Fristoe cannot establish an unlawful business act or practice for purposes of establishing a claim under the UCL. (Klein v. Earth Elements, Inc. (1997) 59 Cal.App.4th 965, 969 [“[v]irtually any law can serve as the predicate for a section 17200 action”].)
The SAC includes a request for injunctive relief requiring defendants to, among other things, cease and desist from using the contract and to undertake various other actions in order to purportedly comply with the Act. (See SAC, p. 11, l. 8-p. 13, l. 28.) A reasonable interpretation of the SAC demonstrates that Fristoe’s claim for injunctive relief is based on Fristoe’s claim that defendants have violated the UCL. “Under the UCL, damages cannot be recovered, and plaintiffs are generally limited to restitution and injunctive relief.” (Safeway, Inc. v. Superior Court (2015) 238 Cal.App.4th 1138, 1147.)
Defendants further assert that because Fristoe cannot prove her cause of action for unfair competition, Fristoe also cannot establish a claim for injunctive relief. As defendants have failed to meet their burden to demonstrate that Fristoe cannot establish a cause of action for violation of the UCL for reasons further discussed above, defendants have also failed to show that Fristoe cannot sustain a claim for injunctive relief under the UCL.
For all reasons discussed above, defendants have failed to meet their burden to show that Fristoe cannot establish an injury in fact or economic injury for purposes of proving a claim for unfair competition under the UCL. Therefore, the Court will deny defendants’ motion for summary adjudication of the first cause of action for unfair competition and of Fristoe’s claim for injunctive relief.
(3) Motion for Summary Adjudication of the Second Cause of Action
In the second cause of action alleged in the SAC, Fristoe asserts a claim for breach of the contract. “[T]he elements of a cause of action for breach of contract are (1) the existence of the contract, (2) [Fristoe’s] performance or excuse for nonperformance, (3) defendant's breach, and (4) the resulting damages to [Fristoe].” (Oasis West Realty, LLC v. Goldman (2011) 51 Cal.4th 811, 821.) “[T]he very existence of a contract is what gives rise to the duty to perform, and [] damages generally flow from the breach of that duty[.]” (Piedmont Capital Management, L.L.C. v. McElfish (2023) 94 Cal.App.5th 961.)
In the second cause of action, Fristoe alleges that defendants’ violation of the Act renders the contract void and unenforceable under section 1812.91, which provides that “[a]ny contract for health studio services which does not comply with the applicable provisions of this title shall be void and unenforceable as contrary to public policy.” (Civ. Code, § 1812.91.) Defendants contend that if the contract is void, then Fristoe cannot demonstrate the existence of a valid contract. Therefore, defendants argue, Fristoe cannot prove the first element of the second cause of action for breach of the contract.
Illegal contracts include those which are “[c]ontrary to an express provision of law[.]” (Civ. Code, § 1667, subd. (1); Mason v. Hosta (1984) 152 Cal.App.3d 980, 987.) Though courts generally will not enforce an illegal contract, “in some cases ‘effective deterrence is best realized’ by enforcing the plaintiff’s claim or allowing some other remedy because ‘the forfeiture resulting from unenforceability [of the contract] is disproportionately harsh considering the nature of the illegality.’ [Citations.] ‘In each such case, how the aims of policy can best be achieved depends on the kind of illegality and the particular facts involved.’ [Citation.] Thus, for example, ‘when the Legislature enacts a statute forbidding certain conduct for the purpose of protecting one class of persons from the activities of another, a member of the protected class may maintain an action notwithstanding the fact that he has shared in the illegal transaction.’ [Citation] The protective purpose of the statute is realized by allowing the plaintiff, who is not in pari delicto, to enforce the contract or maintain his action against a defendant within the class primarily to be deterred. [Citation.]” (Yuba Cypress Housing Partners, Ltd. v. Area Developers (2002) 98 Cal.App.4th 1077, 1082-1083.) Moreover, to the extent the contract is severable, the legal portion may be enforced. (MKB Management, Inc. v. Melikian (2010) 184 Cal.App.4th 796, 803.)
The undisputed facts here show that the purpose of the contract, which was to provide health studio services to Fristoe, was not itself illegal. In addition, the purpose of the Act is to “safeguard the public against fraud, deceit, imposition and financial hardship, and to foster and encourage competition, fair dealing, and prosperity in the field of health studio services by prohibiting or restricting false or misleading advertising, onerous contract terms, harmful financial practices, and other unfair, dishonest, deceptive, destructive, unscrupulous, fraudulent, and discriminatory practices by which the public has been injured in connection with contracts for health studio services.” (Civ. Code, § 1812.80, subd. (b).) The undisputed facts demonstrate that Fristoe, who was a customer of Fitness Transform who purportedly provided health studio services in connection with the contract, is within the class of persons protected by the Act. Defendants have adduced no evidence to demonstrate that Fristoe was in pari delicto with regard to defendants’ alleged violation of the Act’s payment limitations or that the contract is not severable. For these reasons, and to realize the protective purpose of the Act, Fristoe may enforce her cause of action for breach of contract notwithstanding whether the contract is void.
Defendants further contend that, for the same reasons discussed above, Fristoe received the bargained for services at the bargained for price and therefore cannot prove that she suffered harm or damages in order to sustain a claim for breach of the contract. The same analysis applies. For all reasons discussed above, defendants have failed to meet their burden to demonstrate that Fristoe cannot show that she incurred damages as a result of defendants’ conduct. Therefore, the Court will deny defendants’ motion for summary adjudication of the second cause of action for breach of contract alleged in the SAC.
(4) Motion for Summary Adjudication of the Third and Fourth Causes of Action
In the third and fourth causes of action alleged in the SAC, Fristoe asserts claims for, respectively, conversion and common counts. To establish a cause of action for conversion, a plaintiff must prove “(1) the plaintiff's ownership or right to possession of the property; (2) the defendant's conversion by a wrongful act or disposition of property rights; and (3) damages.” (Burlesci v. Petersen (1998) 68 Cal.App.4th 1062, 1066.) “Money may be the subject of conversion if the claim involves a specific, identifiable sum[.]” (Welco Electronics, Inc. v. Mora (2014) 223 Cal.App.4th 202, 209.)
“A common count is not a specific cause of action, … rather, it is a simplified form of pleading normally used to aver the existence of various forms of monetary indebtedness, including that arising from an alleged duty to make restitution under an assumpsit theory. [Citations.]” (McBride v. Boughton (2004) 123 Cal.App.4th 379, 394-395.) The essential elements of a common count are “ ‘(1) the statement of indebtedness in a certain sum, (2) the consideration, i.e., goods sold, work done, etc., and (3) nonpayment.’ [Citation.]” (Farmers Ins. Exchange v. Zerin (1997) 53 Cal.App.4th 445, 460.)
Defendants’ motion for summary adjudication of the third and fourth causes of action is also based on defendants’ contention that Fristoe received the benefit of the bargain under the contract and therefore cannot demonstrate an economic injury, debt, or damages resulting from defendants’ conduct. The same analysis applies. For all reasons discussed above, the Court will deny defendants’ motion as to the third and fourth causes of action alleged in the SAC.
(5) Fristoe’s Claim for Punitive Damages
In the SAC, Fristoe asserts a claim for punitive damages in connection with the third cause of action for conversion. (SAC, Prayer for Relief ¶ 4.) The claim for punitive damages is separate from the claim for treble damages under Civil Code section 1812.94. (Id. at ¶ 2.) Defendants contend that Fristoe cannot prove that they engaged in conduct that would support a claim for punitive damages.
Punitive damages may be awarded in an action for conversion provided the plaintiff makes the required showing. (Krieger v. Pacific Gas & Electric Co. (1981) 119 Cal.App.3d 137, 148; Haigler v. Donnelly (1941) 18 Cal.2d 674, 681.) Under Civil Code section 3294, subdivision (a), punitive damages are recoverable where it is shown by clear and convincing evidence that the defendant acted with malice, oppression, or fraud. “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, subd. (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, subd. (c)(2).) While the term “despicable” is not defined in Civil Code section 3294, subdivision (c), the term includes “circumstances that are ‘base,’ ‘vile,’ or ‘contemptible.’ [Citation.]” (College Hospital Inc. v. Superior Court (1994) 8 Cal.4th 704, 725.) “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, subd. (c)(3).)
Taking the allegations of the third cause of action for conversion together and in context, Fristoe alleges that the defendants knowingly and intentionally charged Fristoe for services that they knew would not be provided to Fristoe, both before and after Fristoe provided a notice of cancellation. Accordingly, in the third cause of action, Fristoe effectively alleges a claim for intentional theft of money.
Defendants contend that the undisputed facts do not establish any conduct that would support a claim for punitive damages. Though the undisputed facts demonstrate the amount Fristoe paid for five months of services provided by Fitness Transform as further discussed above, the evidence offered by defendants also demonstrates that, as alleged in the SAC, the amount Fristoe was charged for the services exceeds the Act’s payment limitation and that Fristoe was charged for services after Fristoe terminated the contract. (Sep. Stmt., UMF Nos. 12 & 20 & evidence cited therein.) In addition, though defendants assert that Fristoe cannot prove a claim for punitive damages because Fristoe received five months of services for which Fristoe was charged pursuant to the contract, the undisputed facts also demonstrate that, as also alleged in the SAC, defendants referred the balance of the contract to FCN for collections notwithstanding whether the amount charged for the services exceeded the Act’s payment limitation or that, according to defendants, Fristoe paid for the services she purportedly received. (Id. at UMF No. 21.)
Notwithstanding that the undisputed facts demonstrate that Fristoe was charged for five months of services at the contract rate and was provided a refund on December 29, 2020, wholly absent from the separate statement are any facts demonstrating defendants’ intent, among other things. Therefore, defendants have failed to produce evidence to demonstrate that a reasonable jury would not find it more likely than not that defendants acted intentionally, maliciously, or knowingly in charging Fristoe for services after Fristoe cancelled the contract or in referring the matter to FCN. Defendants also present no factual or legal argument showing why Fristoe cannot prove that defendants acted with the requisite malice, knowledge, or intent.
In addition, defendants’ blanket assertions that there exist no facts showing conduct sufficient to sustain a claim for punitive damages constitute conclusions of fact and law and argumentative matter. Therefore, defendants’ mere assertions are insufficient to sustain a judgment in defendants’ favor. (Colvig v. KSFO (1964) 224 Cal.App.2d 357, 365-366 [affidavit failed to state sufficient evidentiary facts necessary to establish every element to sustain judgment in defendant’s favor]; accord, West v. Sundown Little League of Stockton, Inc. (2002) 96 Cal.App.4th 351, 363 [motion for summary judgment requires evidentiary support].)
For all reasons discussed above, defendants have failed to meet their burden to demonstrate that Fristoe cannot establish conduct by defendants that constitutes malice, oppression, or fraud. Therefore, the Court will deny the motion for summary adjudication of Fristoe’s claim for punitive damages.
As defendants have not met their burden to demonstrate that the action has no merit for all reasons discussed above, the Court will also deny defendants’ motion for summary judgment. (Code Civ. Proc., § 437c, subd. (a).)
(6) Defendants’ Request for Judicial Notice
In support of the motion, defendants request judicial notice of an Agreement of Settlement and Mutual General Release (the settlement agreement) entered into by Fristoe and FCN, the notice of settlement, the application, and the order. (RFJN, p. 2 & Exhs. A-C.)
Although it is unnecessary for the Court to take judicial notice of the notice of settlement, application, and order because these documents were filed or entered in the present action, the Court will grant defendants’ request for judicial notice of the notice of settlement, the application, and the order. (Evid. Code, § 452, subd. (d)(1).) Judicial notice of these documents does not extend to the truth of facts contained in these documents that are subject to dispute or to any hearsay or irrelevant matter contained in these documents. (Johnson & Johnson v Superior Court (2011) 192 Cal.App.4th 757, 768.)
Regarding the settlement agreement, judicial notice may be taken of “[f]acts and propositions that are not reasonably subject to dispute and are capable of immediate and accurate determination by resort to sources of reasonably indisputable accuracy.” (Evid. Code, § 452, subd. (h).) Therefore, the court may take judicial notice of the settlement agreement provided “there is and can be no factual dispute concerning [its] contents.” (Performance Plastering v. Richmond American Homes of California, Inc. (2007) 153 Cal.App.4th 659, 666, fn. 2.)
In support of her opposition to the present motion, Fristoe asserts an objection to defendants’ undisputed material fact no. 25 regarding the content of a covenant contained in the settlement agreement. Therefore, it appears there exists a factual dispute concerning the contents of the settlement agreement. Moreover, the settlement agreement and its contents are not relevant to the issues presented in the motion as more fully discussed above. (See Evid. Code, § 350; Mangini v. R. J. Reynolds Tobacco Co. (1994) 7 Cal.4th 1057, 1063, overruled on other grounds in In re Tobacco Cases II (2007) 41 Cal.4th 1257, 1276.) For these reasons, the Court will deny defendants’ request for judicial notice of the settlement agreement.
(7) Fristoe’s Evidentiary Objections
Fristoe submits objections to the matters stated in defendants’ undisputed material fact nos. 15, 16, 17, 23, 25, 26, and 27. The Court rules only on objections to evidence that are material to its disposition of the motion. (Code Civ. Proc., § 437c, subd. (q).) Fristoe’s objections to defendants’ undisputed material fact nos. 15 through 17, 26, and 27 are overruled.
(8) Procedural Problems
There exist numerous procedural problems with the moving papers which caused the Court to expend more time and effort than would otherwise be necessary to determine the motion.
Papers submitted in support of a motion must comply with the formatting requirements of the California Rules of Court. Specifically, exhibits must be electronically bookmarked in accordance with California Rules of Court, rule 3.1110(f). Electronic bookmarks are important to the Court to find specific pages in voluminous documents. Attached to defendants’ memorandum in support of the motion are 21 exhibits totaling 180 pages. There are no electronic bookmarks for any of the exhibits submitted in support of the motion.
Moreover, “[i]f evidence in support of or in opposition to a motion exceeds 25 pages, the evidence must be separately bound and must include a table of contents.” (Cal. Rules of Court, rule 3.1350(g).) Though the exhibits submitted by defendants in support of the motion exceed 25 pages, defendants have failed to submit the exhibits separately and failed to include a table of contents.
California Rules of Court, rule 2.104, requires that all papers filed “must be prepared using a font size not smaller than 12 points.” The memorandum in support of the motion appears to use a font size that is 11 points, making the memorandum difficult to read.
In addition, though defendants request summary judgment or adjudication of each cause of action alleged in the SAC as further discussed above, the separate statement submitted in support of the motion fails to separately identify each cause of action, claim for damages, or issue of duty that are the subject of the motion and each supporting material fact with respect to each cause of action, claim for damages, or issue of duty. (Cal. Rules of Court, rule 3.1350(d)(1).) Defendants’ failure to comply with the separate statement requirements impeded the Court’s ability to efficiently determine the motion.
Furthermore, with their reply papers defendants have submitted a reply separate statement, a supplemental declaration that contains information and one exhibit that could and should have been included with the moving papers, and an additional request for judicial notice. Neither the statute nor court rules permit a party moving for summary judgment or adjudication to submit a reply separate statement nor is a moving party permitted to submit new or additional evidence with its reply papers. (Cal. Rules of Court, rule 3.1350(c); Code Civ. Proc., § 437c, subd. (b)(4); Nazir v. United Airlines, Inc. (2009) 178 Cal.App.4th 243, 252.) Therefore, defendants’ reply separate statement and the additional or new evidence submitted with defendants’ reply papers is improper and will be disregarded by the Court. Even if the Court were to consider these improper new or additional matters, they do not change the Court’s analysis or ruling.
There also exist procedural problems with the papers opposing the motion. Though the evidentiary objections submitted by Fristoe in support of her opposition to the motion are in a format that substantially complies with California Rules of Court, rule 3.1354(b), the Court has no record of Fristoe submitting a proposed order with the objections as required by California Rules of Court, rule 3.1354(c). Therefore, Fristoe has failed to comply with California Rules of Court, rule 3.1345(c).
Counsel is reminded of their obligation to comply with statutory requirements and the California Rules of Court. (See Cal. Rules of Court, rule 2.30(b).