Daisy Razo v. Cottage Medial Foundation, et al

Case Number

25CV04948

Case Type

Hearing Date / Time

Wed, 12/03/2025 - 10:00

Nature of Proceedings

Motion of Defendants Cottage Medical Foundation and Santa Barbara Cottage Hospital to Strike Allegations of Punitive Damages

Tentative Ruling

For Plaintiff Daisy Razo: Daniel A. Reisman, Erin Reisman, Reisman & Reisman

 

For Defendants Cottage Medical Foundation and Santa Barbara Cottage Hospital: Puneet K. Sandhu, Pazzani & Sandhu LLP

RULING

For all the reasons stated herein, Defendants’ motion to strike allegations of punitive damages is denied.

Background

On August 8, 2025, Plaintiff Daisy Razo filed her complaint against Defendants Cottage Medical Foundation and Santa Barbara Cottage Hospital (Defendants) alleging six causes of action for: (1) discrimination based on disability in violation of the California Fair Employment and Housing Act (FEHA); (2) failure to reasonably accommodate a disability in violation of the FEHA; (3) failure to engage in a timely good faith interactive process in violation of the FEHA; (4) retaliation in violation of the FEHA; (5) failure to prevent and remedy discrimination in violation of the FEHA; and (6) wrongful termination in violation of public policy.

As alleged in the complaint:

Defendants hired Plaintiff in or about September 2024 as a medical assistant. (Complaint, ¶ 5.)

During her employment, Plaintiff suffered from one or more disabilities as defined under the FEHA, including but not limited to depression. (Complaint, ¶ 6.) Her disabilities limited her ability to work, which is a major life activity. (Ibid.)

On or about December 18, 2024, Plaintiff required and requested a temporary leave of absence as an accommodation. (Complaint, ¶ 7.) Plaintiff provided Defendants an expected return to work date of January 29, 2025. (Ibid.)

Rather than accommodate Plaintiff, Defendants terminated her for pretextual reasons on or about January 15, 2025. (Complaint, ¶ 8.)

The above-recited actions of Defendants, and each of them, were done with malice, fraud, oppression, and in reckless disregard of Plaintiff’s rights. (Complaint, ¶ 13.) Additionally, and on information and belief, a director, officer, or managing agent engaged in, authorized, or ratified the conduct. (Ibid.) Accordingly, Plaintiff is entitled to an award of punitive damages. (Ibid.)

Plaintiff realleges the assertions in paragraph 13 at several other places within the complaint. (Complaint, ¶¶ 18, 26, 30, 34, 38.)

Plaintiff seeks relief including “[f]or punitive damages in an amount appropriate to punish [d]efendants, and each of them, and deter others from engaging in similar misconduct.” (Complaint, p. 6, ll. 18-19.)

On September 29, 2025, Defendants filed a motion to strike allegations of punitive damages contained in the complaint. Defendants request that the Court strike paragraphs 13, 18, 26, 30, 34, and 38, in their entirety. Additionally, Defendants request that the Court strike page 6, lines 18-19 (“For punitive damages in an amount appropriate to punish Defendants, and each of them, and deter others from engaging in similar misconduct;”). This motion is opposed.

Analysis

Defendants argue that Plaintiff has not alleged facts sufficient to meet the requirements for an award of punitive damages under Civil Code section 3294 and, in addition, there are no allegations establishing that Defendants ratified conduct by its employees such that punitive damages would be appropriate.

Plaintiff argues in opposition that the issue of punitive damages is a question of fact. Moreover, Courts should not strike punitive damage allegations except in unusual cases. Plaintiff argues the case law cited by Defendants is distinguishable.

“Any party, within the time allowed to respond to a pleading may serve and file a notice of motion to strike the whole or any part thereof ….” (Code Civ. Proc., § 435, subd. (b)(1).) “The Court may, upon a motion made pursuant to [s]ection 435, or at any time in its discretion, and upon terms it deems proper … [s]trike out any irrelevant, false, or improper matter inserted in any pleading.” (Code Civ. Proc., § 436.) “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.” (Clauson v. Superior Court (1998) 67 Cal.App.4th 1253, 1255.”)

“In an action for the breach of an obligation not arising from contract, where it is proven by clear and convincing evidence that the Defendant has been guilty of oppression, fraud, or malice, the Plaintiff, in addition to the actual damages, may recover damages for the sake of example and by way of punishing the Defendant.” (Code Civ. Proc., § 3294, subd. (a).) “Not only must there be circumstances of oppression, fraud or malice, but facts must be alleged in the pleading to support such a claim.” (Grieves v. Superior Court (1984) 157 Cal.App.3d 159, 166.)

“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.” (Code Civ. Proc., § 3294, subd. (b).)

“Civil Code section 3294, subdivision (b) does not authorize an award of punitive damages against an employer for [its] employee’s wrongful conduct. It authorizes an award of punitive damages against an employer for the employer’s own wrongful conduct. Liability under subdivision (b) is vicarious only to the extent that the employer is liable for the actions of its officer, director or managing agent in hiring or controlling the offending employee, in ratifying the offense or in acting with oppression, fraud or malice.” (Weeks v. Baker & McKenzie (1998) 63 Cal.App.4th 1128, 1154–1155.)

A complaint alleging employment discrimination under FEHA must allege facts that “rise to the level of malice, oppression or fraud necessary under [Civil Code] section 3294 to state a claim for punitive damages.” (Turman, supra, 191 Cal.App.4th at pp. 64.) “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. [Citation.] ‘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.’ [Citation.] ‘Oppression’ means ‘despicable conduct that subjects a person to cruel and unjust hardship in conscious disregard of that person’s rights.’ [Citation.] ‘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.’ [Citation.]” (Id. at p. 63.)

The operative complaint in Turman alleged “disparate treatment related to [the employer’s] given reason for her termination that women could no longer work alone at night, and hostile work environment based on [gender-based] abuse [by the residents in a treatment facility].” (Turman, supra, 191 Cal.App.4th at p. 57.) In Turman, the “amended complaint … allege[d] facts sufficient to state a cause of action for gender discrimination, [but it] fail[ed] to state facts sufficient to support allegations that respondent acted with malice, oppression or fraud, as required by statute. Appellant persist[ed] that the punitive damages allegations [were] adequately pled, relying primarily on the underlying facts associated with the cause of action for gender discrimination. However, as pled in [that] complaint, such facts [did] not rise to the level of malice, oppression or fraud necessary under [Civil Code] section 3294 to state a claim for punitive damages.” (Id. at pp. 63-64.)

In Monge v. Superior Court (1986) 176 Cal.App.3d 503, 507 (Monge), a demand for punitive damages was permitted where it was alleged that the Defendant employer’s officers refused to investigate a complaint of sexual harassment and “[t]hey also engaged upon a systematic course of retaliation by ‘creat[ing] an intimidating, hostile and offensive working environment for each of the [p]laintiffs’ that ‘changed the [p]laintiffs’ working environment, hours, lunch and other privileges, and demoted the [p]laintiffs to lesser positions, all in retaliation against the [p]laintiffs for their complaints regarding sexual harassment.’ As a result of Defendants’ conduct, [a Plaintiff], who was pregnant, was hospitalized for tension and emotional distress. [Another Plaintiff] … suffered emotional distress and, eventually, [Plaintiffs] were ‘forced to resign’ because of the retaliatory actions by Defendants.”

Here, the complaint sufficiently alleges that Defendants intentionally caused injury to Plaintiff by terminating her after she requested a leave of absence because of a mental health diagnosis. (Complaint, ¶¶ 5-8.) “Rather than accommodate Plaintiff, Defendant terminated her for pretextual reasons on or about January 15, 2025.” (Complaint, ¶ 8.) Assuming the truth of these allegations and read in context with the entire complaint, Defendants intended to cause injury to Plaintiff because of her mental health disability. Turman is distinguishable because the theory of liability in Turman was based on a policy required by a federal contract and ostensibly designed to protect employees from abuse, and not necessarily directed at the female employee in that case. (Turman, supra, 191 Cal.App.4th at pp. 56-57.)

Plaintiff alleges that “on information and belief, a director, officer, or managing agent engaged in, authorized, or ratified the conduct.” (Complaint, ¶ 13.) “It is a generally accepted rule ...‘[i]n order to state a cause of action against Defendant for a wrong committed by his servant, the ultimate fact necessary to be alleged is that the wrongful act was in legal effect committed by Defendant. This may be alleged either by alleging that Defendant by his servant committed the act, or, without noticing the servant, by alleging that Defendant committed the act.’ [Citations].” (C.R. v. Tenet Healthcare Corp. (2009) 169 Cal.App.4th 1094, 1112.) “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, supra, 176 Cal.App.3d at p. 510.)

For all the foregoing reasons, Defendants’ motion to strike punitive damages is denied.