Pieter Meijer et al vs SMAnytime Inc et al

Case Number

23CV02105

Case Type

Hearing Date / Time

Fri, 06/07/2024 - 10:00

Nature of Proceedings

Motion to Strike

Tentative Ruling

For the reasons set forth herein, defendants’ motion to strike punitive damages portions of plaintiffs’ complaint is denied.

Background:

This action commenced on May 16, 2023, by the filing of the complaint by plaintiffs Pieter Meijer and Dianne Meijer against defendants Caughell Enterprises, Inc. dba ServiceMaster Anytime (“ServiceMaster”), Leon Santos, Anthony Bushey, Pat Geier, Travis Code, Louie Ordaz, Tyler Westover, and Ryan Cansler for (1) Breach of Contract; (2) Fraud; and (3) Elder Abuse.

As alleged in the complaint:

Plaintiffs are the owners of real property located at 4970 La Ramada Drive, Santa Barbara. (Complaint, ¶ 1) ServiceMaster is a business entity holding itself out as a licensed contractor and disaster restoration company. (Id., at ¶ 2.) Santos, Bushey, Geier, Cole, Ordaz, Westover, and Cansler worked for ServiceMaster at all times relevant to the complaint. (Id., at ¶¶ 3-9.)

On February 20, 2019, plaintiffs discovered a water leak at their residence. (Complaint, ¶ 11.) On February 21, 2019, plaintiffs called a carpet cleaner to set up an appointment to come look at the carpet situation and were informed that they needed more than just their carpets dried out, and that they should call their insurance company. (Id., at ¶ 12.)

On February 22, 2019, plaintiffs contacted their insurance company which, in turn, contacted ServiceMaster. (Complaint, ¶ 13.) ServiceMaster showed up the same day and provided plaintiffs with dehumidifiers and high-velocity air movers to remove moisture from the air of plaintiffs’ home. (Ibid.) ServiceMaster also provided plaintiffs with a Work Authorization, which had no price listed on it. (Ibid.)

On February 26, 2019, plaintiffs’ insurance carrier sent an estimator to inspect the damage. (Complaint, ¶ 15.) The insurance estimator informed plaintiffs that if plaintiffs chose one of their preferred vendors, they would guarantee the work for three years on repairs and five years on replacement. (Ibid.) At that time, Bushey assured plaintiffs that plaintiffs would be very happy with ServiceMaster’s quality and workmanship, and that if plaintiffs were not happy, the defendants would correct any items that plaintiffs were unsatisfied with. (Ibid.) Based on the representations, plaintiffs decided to work with ServiceMaster. (Ibid.)

At that time, February 26, 2019, plaintiffs asked Cansler and Bushey how long plaintiffs would need to be out of their home and were told that the project would not take more than a couple of months. (Complaint, ¶ 16.) Plaintiffs evacuated their home on March 25, 2019. (Id., at ¶ 17.)

Part of ServiceMaster’s project was to pack plaintiffs’ belongings from the property so that defendants could perform the work. (Complaint, ¶ 18.) The packing was performed on March 25, 2019, by several ServiceMaster employees. (Ibid.) The items were to be stored until project completion. (Ibid.) Ordaz informed plaintiffs that every one of plaintiffs’ items would be inspected for damage before being packed and removed from the property. (Ibid.) Ordaz represented that if there was a damaged item, it had to be reported, documented, and signed-off on by plaintiffs and ServiceMaster. (Ibid.) During the packing, there was only one item brought to plaintiffs’ attention and documented. (Ibid.)

In June 2019, on reliance on representations made by defendants, plaintiffs entered into a written agreement with ServiceMaster for disaster restoration at the property. (Complaint, ¶ 19.) Following inquiry by Dianne Meijer, Ordaz contacted Cole and then reported that ServiceMaster would put in a supplement to have all furniture and plaintiffs’ other items unpacked and put in their proper place when the restoration was complete. (Id., at ¶ 20.) Cole represented that the supplement was approved by plaintiffs’ insurance carrier and that it often happens when people are elderly or have disabilities, of which plaintiffs had both. (Ibid.) Ordaz, Cole, Cansler, and Bushey again assured plaintiffs that the project would take no longer than a couple of months. (Ibid.)

Plaintiffs moved into a hotel and eventually moved into several different hotels while they were excluded from their home. (Complaint, ¶ 21.)

During the project, there were “a multitude of problems, errors, mistakes and deficiencies in the workmanship at Plaintiff’s  home” including scheduling errors, work being done at the property for someone else’s project without plaintiffs’ knowledge or approval, doors being improperly installed, tape stuck to walls that had just been painted, bedroom blinds being over sprayed, supplies and equipment being left, misstatements as to the status of completion of portions of the project, areas of the house being left completely unfinished, repeatedly being told the project would be completed shortly, failing to clean the property from construction debris, baseboards not being correct, not painting the kitchen, bullnoses into the kitchen and dining room never sanded and painted, finish work not being done, and many other issues. (Complaint, ¶ 22.)

Plaintiffs were not allowed to return home until June 1, 2020, which was 477 days away from their home. (Complaint, ¶ 23.)

On March 3, 2020, plaintiffs were informed that the pack in to bring their belongings back to their home would start on March 17, 2020, but the move back did not start until May 26, 2020. (Complaint, ¶ 24.) When plaintiffs started unpacking the boxes and inspecting the furniture, plaintiffs discovered that there was damage to the items and to furniture. (Ibid.) Despite the damage, Ordaz insisted that plaintiffs sign an Alacrity Services Certificate of Satisfaction Authorization to Pay so that ServiceMaster could submit it to the insurance company for payment. (Complaint, ¶ 25.) When plaintiffs refused to sign, due to the considerable damage, Cole insisted, and eventually plaintiffs signed due to the intense pressure to do so. (Ibid.)

Plaintiffs continued to attempt to get ServiceMaster to finish the job, repair the harm that ServiceMaster employees caused, and get ServiceMaster to respond to plaintiffs’ concerns in a meaningful fashion. (Complaint, ¶ 26.) During the project, ServiceMaster employees would disappear numerous times, with no communication, and plaintiffs would have to constantly reach out to Bushey but would only get excuses. (Id., at ¶ 27.) Bushey told plaintiffs that if ServiceMaster did not respond quickly and start other bigger jobs for insurance companies, ServiceMaster would lose business and that plaintiffs’ project was not considered a priority. (Ibid.)

After being provided paperwork, at their request, plaintiffs determined that they were being charged for things that were never done or completed. (Complaint, ¶ 28.)

Defendants’ representations were made intending to induce plaintiffs to rely on the representations, plaintiffs did rely on the representations, the representations were false, and defendants did not intend to perform the work agreed, and plaintiffs suffered damages. (Complaint, ¶¶ 34-43.)

Plaintiffs seek, among other relief, exemplary/punitive damages as to the fraud cause of action and the elder abuse cause of action.

On November 6, 2023, defendants filed their original answer to the complaint, asserting a general denial and six affirmative defenses. On March 19, 2024, defendants filed their first amended answer to the complaint, asserting a general denial and 31 additional affirmative defenses. The first amended answer also corrected the names under which two of the defendants were named in the complaint.

On March 26, 2024, defendants filed the present motion to strike punitive damages from the complaint. Defendants argue that punitive damages are not proper under Code of Civil Procedure section 436. (Notice of Motion, p. 2, ll. 7-8.)

Plaintiffs oppose the motion.

Analysis:

“The court may, upon a motion made pursuant to Section 435, or at any time in its discretion, and upon terms it deems proper: (a) Strike out any irrelevant, false, or improper matter inserted in any pleading.” (Code Civ. Proc., § 436.) “Irrelevant matter” includes a “demand for judgment requesting relief not supported by the allegations of the complaint.” (Code Civ. Proc., § 431.10, subds. (b)(3), (c).) “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.)

“In order to state a prima facie claim for punitive damages, a complaint must set forth the elements as stated in the general punitive damage statute, Civil Code section 3294. [Citation.] These statutory elements include allegations that the defendant has been guilty of oppression, fraud or malice. (Civ. Code, § 3294, subd. (a).) “ ‘ “Malice” ’ ” is defined in the statute as conduct “ ‘intended by the defendant to cause injury to plaintiff, or despicable conduct that is carried on by the defendant with a willful and conscious disregard for the rights or safety of others.’ ” (Civ. Code, § 3294, subd. (c)(1); [Citation].) “ ‘ “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).) “ ‘ “Fraud” ’ ” is “ ‘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).)” (Turman v. Turning Point of Central California, Inc. (2010) 191 Cal.App.4th 53, 63.)

“The question is whether defendants’ conduct may be characterized as “ ‘despicable.’ ‘Despicable conduct’ has been described as conduct which is “ ‘ “. . . so vile, base, contemptible, miserable, wretched or loathsome that it would be looked down upon and despised by ordinary decent people.” ’ ” [Citations.] “ ‘Such conduct has been described as ‘[having] the character of outrage frequently associated with crime.’ ” [Citation.] As well stated in Flyer’s Body Shop Profit Sharing Plan v. Ticor Title Ins. Co. (1986) 185 Cal.App.3d 1149 . . .: “ ‘[A] breach of a fiduciary duty alone without malice, fraud or oppression does not permit an award of punitive damages. [Citation.] . . . Punitive damages are appropriate if the defendant’s acts are reprehensible, fraudulent or in blatant violation of law or policy. The mere carelessness or ignorance of the defendant does not justify the imposition of punitive damages. . .. 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.” ’ ” [Citation.]” (American Airlines, Inc. v. Sheppard, Mullin, Richter & Hampton (2002) 96 Cal.App.4th 1017, 1050-1051.)

“In addition to the requirement that the operative complaint set forth the elements as stated in section 3294, it must include specific factual allegations showing that defendant’s conduct was oppressive, fraudulent, or malicious to support a claim for punitive damages. (Brousseau v. Jarrett (1977) 73 Cal.App.3d 864, 872.)  Punitive damages may not be pleaded generally. (Ibid.)” (Today’s IV, Inc. v. Los Angeles County Metropolitan Transportation Authority (2022) 83 Cal.App.5th 1137, 1193.)

“[F]raud must be pled specifically; general and conclusory allegations do not suffice. . . . This particularity requirement necessitates pleading facts which show how, when, where, to whom, and by what means the representations were tendered.” (Lazar v. Superior Court (1996) 12 Cal.4th 631, 645.)

“Less specificity should be required of fraud claims “ ‘when ‘it appears from the nature of the allegations that the defendant must necessarily possess full information concerning the facts of the controversy,’ ” [citation]; “ ‘[e]ven under the strict rules of common law pleading, one of the canons was that less particularity is required when the facts lie more in the knowledge of the opposite party. . . .’ ” [Citation.] (Alfaro v. Community Housing Improvement System & Planning Assn., Inc. (2009) 171 Cal.App.4th 1356, 1384.)

Allegations of “knowledge” and “intent” are allegations of facts, which are sufficiently alleged through use of the term. (See City of Pomona v. Superior Court (2001) 89 Cal.App.4th 793, 803 [“Allegations of the defendant’s knowledge and intent to deceive may use conclusive language.”].)

Punitive damages are recoverable for fraud actions involving intentional misrepresentation. (Alliance Mortgage Co. v. Rothwell (1995) 10 Cal.4th 1226, 1241.) “[F]raud alone is an adequate basis for awarding punitive damages.” (Glendale Fed. Sav. & Loan Assn. v. Marina View Heights Dev. Co. (1977) 66 Cal.App.3d 101, 135.)

Of import is that defendants did not demur to the fraud cause of action or the elder abuse cause of action. The existence of the causes of action alone are sufficient grounds for denying the motion to strike.

Plaintiffs allege, as set forth above, specific instances of knowing and intentional misrepresentations, intending that plaintiffs would act on the misrepresentations. Plaintiffs also allege reliance and damages.

To the extent that defendants argue the merits of the case and claim that the alleged facts do not raise to the level of maliciousness required to support punitive damages: that is not a consideration for determining how to rule on a motion to strike. The court is not to weigh the facts at the pleading stage. The court is only with defects that appear on the face of the pleading.

Likewise, defendants’ argument that punitive damages are unavailable because the “gravamen of plaintiffs’ complaint is in contract” is insufficient to grant a motion to strike. Plaintiffs do not seek punitive damages related to their breach of contract claim and a determination as to whether all of plaintiffs’ claims are based on the alleged breach of contract would require the court to improperly weigh facts.

Reading the complaint as a whole, its subparts in context, and assuming the truth of the allegations, plaintiffs have pled sufficient facts to support their prayer for punitive damages. They have included specific details regarding the how, when, where, to whom, and by what means the representations were tendered necessary for pleading entitlement to seek punitive damages.

“Whether to award punitive damages if the requirements of Civil Code section 3294, subdivision (a) are satisfied and the amount of such an award are questions committed to the trier of fact.” (Uzyel v. Kadisha (2010) 188 Cal.App.4th 866, 923-924.)

If plaintiffs are successful in proving their case, a trier of fact could certainly conclude that defendants’ conduct was despicable and award punitive damages. The motion to strike will be denied.