Case Number: BC689809 Hearing Date: October 01, 2018 Dept: 73
10/1/18
Dept. 73
Rafael Ongkeko, Judge presiding
GALINA NATALOUKHINA v. WILSHIRE BORGATA OWNERS ASS’N., ET AL. (BC689809)
Related (lead): BC644986 (Braunstein v. Kim, et al.); BC646266 (State Farm Gen. Ins. v. Kim, et al.); and BC658642 (Truck Ins. Exch. V. Tyco, etc., et al.)
DEMURRER TO SAC and MOTION TO STRIKE OF DEFENDANTS WILSHIRE BORGATA and BLN Property Management (both filed 7/20/18)
TENTATIVE RULING
Defendants’ demurrer to Plaintiff’s Second Amended Complaint is OVERRULED.
Defendants’ motion to strike portions of Plaintiff’s Second Amended Complaint is DENIED.
Defendants’ answer to the SAC shall be filed and served no later than Oct. 11, 2018.
DISCUSSION (Please note: Unfortunately, the court’s tentative ruling website, which is the source of this version, is not able to show certain formatting that may be contained in the original, such as the court’s use of footnotes (here, no footnotes), boldface, italics, or the underscoring of text or case citations. Footnotes, if any, are added to the text at the end of the document. A hard copy will be available for the parties to review in court before the hearing.)
Defendants once again demur to Plaintiff’s claims for negligence per se (3rd), private nuisance (5th), and breach of fiduciary duty (7th). Defendants move to strike Plaintiff’s complaint as to punitive damages and attorneys’ fees.
C/A 3: Negligence Per Se
Defendants demur to Plaintiff’s negligence per se cause of action because, other than alleging violation of Civil Code section 4775, it alleges the same conduct purported in her negligence claim, i.e., negligent failure to maintain the sprinkler system. Plaintiff does not address Defendant’s argument, but only asserts that she alleges facts sufficient to constitute negligence per se.
Plaintiff’s third cause of action for negligence per se is based on allegations that: (1) per Civil Code section 4775, Defendant Wilshire owed Plaintiff a duty to repair, replace, and maintain the common areas of the condominiums, including the sprinklers, as it affected the unit and to take reasonable steps to prevent calamities of this type; (2) repair of the common areas is required by Defendant Wilshire’s CC&Rs (attached as Exhibit B); (3) Defendant Wilshire breached the statutory duty by failing to repair, replace, and maintain the common areas, including common sprinkler plumbing, such that damage was caused to the unit and its contents as a result of the calamities of this type and its aftermath; (4) a sprinkler malfunctioned in the condominiums, which caused water to flow into Plaintiff’s unit and damage to the unit that required restoration costs and loss of use of enjoyment of the unit; (5) section 4775 was intended to protect calamities of this type; and (6) Plaintiff was and is a member of the class section 4775 was intended to protect. (See SAC, ¶¶ 7, 20, 21.)
In contrast, Plaintiff’s fourth cause of action for negligence is based on allegations that: (1) all Defendants owed Plaintiff a duty of care to take steps to prevent, detect, prevent and/or correct unreasonably unsafe or hazardous conditions and risks of harm in and around the common area as it affected the unit; (2) Defendants knew, or through proper training and exercise of reasonable care, should have known the sprinkler malfunction caused damage to Plaintiff’s unit and its content; (3) Defendants breached the duty of care by negligently controlling, managing, inspecting, repairing and/or attempting to repair, maintain, and clean the common areas and plumbing such that damage was caused to Plaintiff’s unit; and (4) Defendants failed to correct or otherwise address that damage (e.g., not paying Plaintiff the $91,949.75 insurance proceeds recovered from Farmers), which caused Plaintiff to suffer further damages. (See SAC, ¶¶ 23, 24, 10, 15.)
As noted I their first demurrer, although Defendants are correct that negligence per se is not a separate “cause of action” in the sense of alleging a different violation of a primary right, Plaintiff nevertheless can allege negligence per se as a separate count of negligence. Indeed, Plaintiff needs to do so if she wishes to rely on statutory violations to show a breach of the duty of care. (Landeros v. Flood (1996) 17 Cal.3d 399, 413; Millard v. Biosources (2007) 156 Cal.App.4th 1338, 1353.) Further, Plaintiff’s third cause of action is against Defendant Wilshire only, while her fourth cause of action for negligence is against Defendant Wilshire and Defendant BLN Property Management. Plaintiff’s third cause of action involves Civil Code section 4775 and the HOA’s CC&Rs.
Defendants’ demurrer to Plaintiff’s third cause of action for negligence per se is OVERRULED.
C/A 5: Private Nuisance
Defendants demur to Plaintiff’s private nuisance claim because it is duplicative of the fourth cause of action for negligence.
“The essence of a private nuisance is an interference with the use and enjoyment of land.” (Friends of H Street v. City of Sacramento (1993) 20 Cal.App.4th 152, 160.) Thus to allege a cause of action for private nuisance, the plaintiff must allege injury specific to the use and enjoyment of his land. (See Adams v. MHC Colony Park Limited Partnership (2014) 224 Cal.App.4th 601, 610.) “[B]ecause of the broad definition of nuisance, whether a cause of action is viable depends on the facts of each case.” (See El Escorial Owners’ Association v. DLC Plastering, Inc. (2007) 154 Cal.App.4th 1337, 1348.) A nuisance claim is a negligence claim if the negligence and nuisance causes of action rely on the same facts about lack of due care. (Id. at 1348-1349 [holding the nuisance claim would be tried as a negligence claim because it was “merely a clone” of the negligence cause of action]; Van Zyl v. Spiegelberg (1969) 2 Cal.App.3d 367, 372 [“Accordingly, what plaintiff seeks is to recover in damages under the same state of facts but under different theories of recovery, that is, private nuisance and negligence. In such a case there is but one cause of action.”].)
In El Escorial, the appellate court found the plaintiff’s nuisance and negligence claims were the same because they factually did not differ and sought the same monetary relief. (El Escorial Owners’ Assn., supra, 154 Cal.App.4th. at 1349 [“A cause of action alleging a continuing nuisance is usually accompanied by a request for an injunction. But Escorial only sought the same monetary relief that it requested in its first cause of action.”].) Here, the nuisance and negligence claims are similar. (Compare SAC, ¶ 23, 24, with ¶¶ 26, 27.) Both the nuisance and negligence claims appear to arise out of the Defendant’s duty and failure to maintain the sprinkler system. However, because Plaintiff seeks an order to abate the nuisance (see SAC, Prayer, ¶ vi), her private nuisance claim is not duplicative. Defendants’ demurrer to the fifth cause of action is OVERRULED.
C/A 7: Breach of Fiduciary Duty
Defendants demur to the breach of fiduciary duty claim because the homeowner association and the unit owner constitute a landlord tenant relationship and there is no fiduciary duty owed in that relationship.
To plead a cause of action for breach of fiduciary duty, a plaintiff must allege facts showing the existence of a fiduciary duty owed to that plaintiff, a breach of that duty and resulting damage. (Pellegrini v. Weiss (2008) 165 Cal.App.4th 515, 524.) A fiduciary duty is founded upon a special relationship imposed by law or under circumstances in which “confidence is reposed by persons in the integrity of others” who voluntarily accept the confidence. (Tri-Growth Centre City, Ltd. v. Silldorf, Burdman, Duignan & Eisenberg (1989) 216 Cal.App.3d 1139, 1150.) “[B]efore a person can be charged with a fiduciary obligation, he must either knowingly undertake to act on behalf and for the benefit of another, or must enter into a relationship which imposes that undertaking as a matter of law.” (City of Hope Nat’l Med. Ctr. v. Genentech (2008) 43 Cal.4th 375, 386.) “[I]n recognition of the increasingly important role played by private homeowners’ associations in such public-service functions as maintenance and repair of public areas and utilities, street and common area lighting, sanitation and the regulation and enforcement of zoning ordinances, the courts have recognized that such associations owe a fiduciary duty to their members.” (Cohen v. Kite Hill Community Assn. (1983) 142 Cal.App.3d 642, 650–651.)
Plaintiff’s breach of fiduciary duty claim alleges: (1) Directors of Defendant Wilshire owed a fiduciary duty to Plaintiff not to exercise their powers to gain pecuniary benefits for themselves by causing Plaintiff harm; (2) Defendants breached that duty by refusing to use the money due to Plaintiff from the insurance claim with Farmers towards repairing Plaintiff’s unit; (3) Defendants also breached the duty by withholding money owed to Plaintiff or, alternatively repairing Plaintiff’s unit, thus leaving Plaintiff with an unfit, uninhabitable, unsafe, and unhealthful unit for human occupation; (4) Plaintiff is informed and believes that the directors’ conduct was taken for their own pecuniary benefit; (5) Plaintiff requested the insurance proceeds to repair the unit, but Defendants have not provided Plaintiff with money or otherwise used the money to repair the unit; (6) Defendants’ withholding of $91,949.75 was wrongful and intentional, constituting oppression, malice, and fraud. (See SAC, ¶¶ 34-38.)
Citing Frances T. v. Village Green Owners Assn. (1986) 42 Cal.3d 490, 513, Defendants argue the relationship between a homeowner associations is akin to that of a landlord and tenant. Citing Howe v. Pioneer Mfg. Co. (1968) 262 Cal.App.2d 330, Defendants claim there is no fiduciary duty in the landlord tenant relationship. As a result, Defendants conclude that there is no breach of fiduciary duty that arises from failure to repair or for negligent repairs. Defendants assert that it is the Board of Directors that owes a fiduciary duty to unit owners and Defendant Wilshire. Because Plaintiff is not suing the directors and this is not a derivative lawsuit, Defendants argue Plaintiff’s claim fails. Defendants also argue that the business judgment rule protects the directors from liability. In opposition, Plaintiff argues a homeowners association has a fiduciary relationship with its members. Citing Civil Code section 5800, which protects directors from personal liability, Plaintiff rebuts Defendants’ contention that she must sue the Board of Directors. In reply, Defendants maintain their argument.
Defendants’ argument is based entirely on the assumption that breach of fiduciary duty causes of action against homeowners associations must be analyzed in the context of landlord tenant and the assumption that there is no fiduciary relationship between landlord and tenant. Both assumptions are wrong.
First, courts have characterized owners associations in various ways. In some cases, associations have been characterized as mini-governments. (E.g., Cohen v. Kite Hill Community Assn. (1983) 142 Cal.App.3d 642 [holding association to a governmental standard to avoid arbitrary granting of the equivalent of a zoning variance in a case where the association permitted the construction of a fence that blocked the view of a neighbor in violation of the declaration of covenants and restrictions].) In other cases associations are characterized as a business. (E.g., O’Connor v. Village Green Owners Assn. (1983) 33 Cal. 3d 790 [analogizing condominium association to a business establishment and prohibiting association from enforcing an adults-only restriction].) And in some instances, associations and unit owners are analyzed under the landlord tenant standards. (E.g., Frances T. v. Village Green Owners Assn. (1986) 42 Cal.3d 490, 514 [holding association to a landlord’s standard of care as to residents’ safety in the common areas].) Defendants have failed to establish that the landlord tenant relationship is the only manner in which this case can be held. Unlike Frances, where the claim was based on the association and board’s failure to maintain lighting in common areas resulting in the plaintiff’s rape and robbery, Plaintiff’s breach of fiduciary duty claim is about Defendant Wilshire’s failure to provide Plaintiff with the insurance money to repair her unit and the assertion that the board of directors kept the money for their pecuniary benefit.
Second, Defendants do not cite any authority that establishes there is no fiduciary relationship between landlord and tenant. Neither Frances nor Howe hold so. In fact, Frances cites Howe only to support its statement that “a landlord and tenant do not generally stand in a fiduciary relationship.” (Frances, supra, 42 Cal.3d at 514, italics added.) Defendant’s conclusion that there is no relationship in this instance is thus unpersuasive. Moreover, the issue of whether a fiduciary relationship existed between Plaintiff and Defendant Wilshire is a question of fact that cannot be determined on demurrer. As a result, Defendants’ demurrer to Plaintiff’s seventh cause of action for breach of fiduciary duty is OVERRULED.
To the extent that Defendants argue Plaintiff does not have standing because this is a derivative claim, Defendants fail to properly raise the issue and thus it is not considered.
Motion to Strike
The court may, upon a motion, or at any time in its discretion, and upon terms it deems proper, strike any irrelevant, false, or improper matter inserted in any pleading. (Code Civ. Proc., § 436, subd. (a).) The court may also strike 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. (Code Civ. Proc., § 436, subd. (b).) In determining whether to strike portions of a pleading, courts do not read allegations in isolation. (Clauson v. Superior Court (1998) 67 Cal.App.4th 1253, 1255.) Rather, “judges read allegations of a pleading subject to a motion to strike as a whole, all parts in their context, and assume their truth.” (Ibid.) When the defect which justifies striking a complaint is capable of cure, the court should allow leave to amend. (Perlman v. Municipal Court (1979) 99 Cal.App.3d 568, 575.)
Defendants move to strike portions of the SAC relating to punitive damages and attorneys’ fees.
Punitive Damages
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. (College Hospital, Inc. v. Superior Court (1994) 8 Cal.4th 704, 721.) These statutory elements include allegations that the defendant has been guilty of oppression, fraud or malice. (Civ. Code, § 3294, subd. (a).) A demand for punitive damages for the commission of any tort requires more than the mere allegation of the “wrongfully and intentionally,” “oppression, fraud, and malice.” (Perkins v. Superior Court (1981) 117 Cal.App.3d 1, 6-7.) The allegations of fact must, in their totality, describe a state of mind and a motive that would sustain an award of punitive damages. (Ibid.) The mere allegation that an intentional tort is committed is insufficient to warrant an award of punitive damages. (Grieves v. Superior Court (1984) 157 Cal.App.3d 159, 166.) Not only must there be circumstances of oppression, fraud, or malice, but facts must be alleged in the pleading to support such a claim. (Ibid.) As relevant here, 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).) To justify an award of punitive damages on this basis of “conscious disregard” at least in the context of another’s safety, a plaintiff must establish that the defendant was aware of the probable dangerous consequences of his conduct, and that defendant wilfully and deliberately failed to avoid those consequences. (Taylor v. Superior Court (1979) 24 Cal.3d 890, 895-896.) Malice can be proved either expressly (by direct evidence probative on the existence of hatred or ill will) or by implication (by indirect evidence from which the jury may draw inferences). (Id. at 894.)
In McDonell v. American Trust Co. (1955) 130 Cal.App.2d 296, the court concluded that plaintiff failed to plead a basis for an award of punitive damages where plaintiff alleged the following: “In wilfully failing to repair” said defective condition of the premises with reference to the roof and roof drains “after having received due notice of the dangerous condition thereof,” and “having knowledge of the fact that said defective conditions could cause damage and injury to the property and persons of the tenants,” defendants were “guilty of wilful misconduct in their wilful and wanton neglect for the safety and health of the plaintiffs,” and were also “guilty of a conscious disregard to the persons, rights and property of the plaintiffs by continually failing and refusing to repair the defective conditions as aforesaid.” (McDonell, supra, 130 Cal.App.2d at 298-299, 301.) The court examined the “gist” of the allegations and found that “[c]alling this a ‘wilful’ failure to repair was not the same as saying defendant acted with a wrongful personal intent to injure or in reckless disregard of the rights of others.” (Id. at 300.)
The SAC alleges that the sprinkler malfunction damaged Plaintiff’s unit, including a sewage backup problem and extensive water damage. (SAC ¶ 7.) The SAC further alleges: (1) Defendants caused the building sprinkler to go off on February 26, 2016, and failed to remedy the extensive water damage from the sprinkler malfunction problem (SAC ¶ 10); (2) Defendants failure to remedy the problem rendered Plaintiff’s unit unfit, uninhabitable, unsafe, and unhealthful for human occupation (SAC ¶ 13), and caused Plaintiff to suffer over $200,000 in damages (SAC ¶ 9); (3) Farmers Insurance (Defendants’ property insurance carrier) paid Defendants’ claim for damages to the unit, but Defendants never repaired any of the damages (SAC ¶ 10); (4) Defendants knew or should have known of the damage to the unit and its contents caused by the sprinkler malfunction (SAC ¶ 23); (5) Defendant Wilshire chose not to repair for their own pecuniary benefit despite knowing that it would cause harm to Plaintiff (SAC ¶ 35); (6) Plaintiff requested the insurance proceeds to repair her unit and Defendants knew that Plaintiff would be forced to live in an unfit, uninhabitable, unsafe, and unhealthful unit without it (SAC ¶ 36); (7) Plaintiff has been forced to live in an unfit, uninhabitable, unsafe, and unhealthful for human occupation unit for over two years (SAC ¶ 36) ; (8) Defendants were aware of the probable dangerous consequences of its conduct, but willfully and deliberately failed to avoid these consequences; (9) the withholding of the insurance proceeds was done wrongfully and intentionally and Defendants are guilty of oppression, fraud, and malice (SAC ¶ 37); and (10) Defendants’ conduct was done with an intent to harm Plaintiff or was undertaken with a conscious disregard for Plaintiff’s rights and is so despicable or fraudulent in nature such as to warrant an award of punitive damages under Civil Code section 3294 (SAC ¶ 39).
Plaintiff has alleged sufficient facts to support that Defendants acted with a wrongful personal intent to injure or in reckless disregard of Plaintiff. Although Defendants argue that Plaintiff does not allege facts as to how Defendants knew the actions would harm, it the allegations read as a whole create an inference that the failure to repair a unit after a sprinkler malfunction that caused plumbing problems and water damage would result in harm to the unit owner. At this stage of the pleadings, it is sufficient.
Defendants’ motion to strike Plaintiff’s punitive damages is thus DENIED.
Attorney Fees
Defendants move to strike portions of the complaint regarding attorney fees because Plaintiff has not shown entitlement to fees under statute or contract. Even if Plaintiffs failed to allege a valid basis to support attorneys’ fees, unsupported attorneys fee allegations need not be stricken pursuant to a motion to strike, since later discovery may reveal a basis for their recovery. (Camenisch v. Superior Court (1996) 44 Cal.App.4th 1689, 1699.)
Defendants’ motion to strike Plaintiff’s request for attorneys’ fees is thus DENIED.
Unless waived, notice of ruling by Plaintiff.