Case Number: BC585059    Hearing Date: July 13, 2017    Dept: 37

CASE NAME:                       Kingston v. Shammas et al.

CASE NO.:                            BC585059

HEARING DATE:                 7/13/17

DEPARTMENT:                   37

CALENDAR NO.:                 11

TRIAL DATE:                        None

NOTICE:                                OK

SUBJECT:                             Demurrer and Motion to Strike

DEMURRING/MOVING      Defendant State Farm Mutual Automobile Insurance

Party                                       Company

OPPOSING PARTY:           Plaintiff Gregory Kingston

COURT’S TENTATIVE RULING

Defendant State Farm Mutual Automobile Insurance Company (“State Farm”)’s demurrer to the third cause of action for breach of the implied covenant of good faith and fair dealing is OVERRULED.  The court GRANTS the motion to strike the allegations and prayer for punitive damages (paragraph 22 and prayer, paragraph 11) and the prayer for attorney’s fees (paragraph 9), in each case with 20 days leave to amend. In so doing, the court notes that Plaintiff may seek attorney’s fees as an item of damages in connection with the third cause of action. Counsel for Defendant State Farm to give notice.

STATEMENT OF THE CASE

As alleged in the First Amended Complaint (“FAC”), this action arises out of an alleged automobile accident between Plaintiff Gregory Kingston (“Kingston”) and Defendants Sabrina Shammas, Abraham Shammas, and Malek Shammas (collectively “Shammas Defendants”).  Kingston alleges that on or about June 12, 2013, his automobile was negligently hit by an automobile driven by the Shammas Defendants and that he suffered bodily injuries which resulted in medical and other related expenses.  (FAC ¶¶ 5-6, 12.)  Plaintiff alleges that he had an insurance contract with State Farm Mutual Automobile Insurance Company (“State Farm”) that covered medical expenses for injuries incurred while driving a vehicle.  (FAC ¶ 10.)  The FAC further alleges that despite receiving Kingston’s timely insurance claim, State Farm refused to pay on his policy and thus breached the contract.  (FAC ¶¶ 14-15.)  Kingston alleges that State Farm’s refusal to perform its duties under the insurance contract is a breach of the implied covenant of good faith and fair dealing.  (Ibid.)  Kingston further alleges that State Farm’s refusal was “in bad faith, malicious, intentional, and designed to harm plaintiff, and/or was intended to cause injury” (FAC ¶ 22), or alternatively, constituted “despicable conduct carried on with a willful and conscious disregard of the rights or safety of others and subjected Plaintiff to a cruel and unjust hardship in conscious disregard of Plaintiff’s rights. . .”  (Ibid.)

In the FAC, Kingston alleges three causes of action: (1) negligence against the Shammas Defendants; (2) breach of contract against State Farm; and (3) breach of the implied covenant of good faith and fair dealing against State Farm.

State Farm now demurrers to the third cause of action for breach of the implied covenant of good faith and fair dealing on the grounds that Kingston has failed to state facts sufficient to state a cause of action.  Defendant State Farm additionally moves to strike Plaintiff’s request for attorney’s fees (paragraph 9 of the FAC Prayer) and the request for punitive damages (Paragraph 22 of the FAC and Paragraph 11 of the FAC Prayer).

DEMURRER

 

I.          Legal Standard

 

A demurrer is an objection to a pleading, the grounds for which are apparent from either the face of the complaint or a matter of which the court may take judicial notice.  ( Code Civ. Proc., § 430.30, subd. (a); see also Blank v. Kirwan (1985) 39 Cal.3d 311, 318.)  The purpose of a demurrer is to challenge the sufficiency of a pleading “by raising questions of law.”  (Postley v. Harvey (1984) 153 Cal.App.3d 280, 286.)  The court “treat[s] the demurrer as admitting all material facts properly pleaded, but not contentions, deductions or conclusions of fact or law . . . .” (Berkley v. Dowds (2007) 152 Cal.App.4th 518, 525.)  “In the construction of a pleading, for the purpose of determining its effect, its allegations must be liberally construed, with a view to substantial justice between the parties.”  ( Code Civ. Proc., § 452; see also Stevens v. Superior Court (1999) 75 Cal.App.4th 594, 601.)  “When a court evaluates a complaint, the plaintiff is entitled to reasonable inferences from the facts pled.”  (Duval v. Board of Trustees (2001) 93 Cal.App.4th 902, 906.)  The general rule is that the plaintiff need only allege ultimate facts, not evidentiary facts.  (Doe v. City of Los Angeles (2007) 42 Cal.4th 531, 550.)  “All that is required of a plaintiff, as a matter of pleading, even as against a special demurrer, is that his complaint set forth the essential facts of the case with reasonable precision and with sufficient particularity to acquaint the defendant with the nature, source and extent of his cause of action.”  (Rannard v. Lockheed Aircraft Corp. (1945) 26 Cal.2d 149, 156-157.)

 

II.         Discussion

 

An insurance company breaches the implied covenant of good faith and fair dealing when the insurer “unreasonably and in bad faith withholds payments of the claim of its insured. . . .”  (E.g., Egan v. Mutual of Omaha Ins. Co. (1979) 24 Cal.3d 809, 818.)  “[T]he insurer, when determining whether to settle a claim, must give at least as much consideration to the welfare of its insured as it gives to its own interests.”  (Ibid.)  “If the conduct of the insurer in denying coverage was objectively reasonable, its subjective intent is irrelevant.”  (CalFarms Ins. Co. v. Krusiewicz(2005) 131 Cal.App.4th 273, 287.)

 

Defendant contends that the FAC fails to allege that State Farm’s conduct was unreasonable and argues that Plaintiff thus fails to state a cause of action for bad faith.  (Demurrer 4-5.)  Liberally construing the pleadings, as the court must on demurrer, the court finds that Plaintiff has at least inferentially alleged that State Farm’s conduct in denying his claim was unreasonable.

 

In the FAC, Plaintiff alleges that State Farm breached the implied covenant of good faith and fair dealing by failing to perform its duties pursuant to the contract.  (FAC ¶ 20.)  Plaintiff pleads that this failure “was in bad faith, malicious, intentional and designed to harm plaintiff, and/or was intended to cause injury to the Plaintiff, or in the alternative, was despicable conduct carried on with a willful and conscious disregard of the rights or safety of others and subjected Plaintiff to a cruel and unjust hardship in conscious disregard of Plaintiff’s rights. . . .”  (FAC ¶ 22.)  In other words, by alleging malice, bad faith, intent to harm, and despicable conduct carried on with a willful and conscious disregard of Plaintiff’s rights, Plaintiff also is inferentially alleging that the results obtained, i.e. denial of his claim, was unreasonable and without proper cause.  For present purposes and at this stage of the litigation, this is sufficient.  (See Duval v. Board of Trusteessupra, 93 Cal.App.4th at p. 906.)

 

Plaintiff will need to prove that State Farm objectively acted unreasonably or without cause in denying his claim, once an evidentiary record exists and Defendant’s conduct is evaluated in the context of that record.  (SeeCalFarm Ins. Co. v. Krusiewiczsupra, 131 Cal.App.4th at p. 286 [“[B]efore an insurer can be found to have acted tortiously (i.e., in bad faith), for its delay or denial in the payment of policy benefits, it must be shown that the insurer acted unreasonably or without proper cause.  [Citations]”], emphasis in original.)  At this time, however, the court OVERRULES demurrer to the third cause of action for breach of the implied covenant of good faith and fair dealing.

 

MOTION TO STRIKE

 

Code of Civil Procedure, section 436 provides in relevant part:

 

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.

(a)  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.

 

( Code Civ. Proc., § 436, subd. (a).)

 

I.          Punitive Damages

 

Section 3294 provides, in relevant part, that a plaintiff may seek punitive damages “[i]n 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”  (Civ. Code, § 3294.)

 

To survive a motion to strike a claim of punitive damages, “the ultimate facts showing an entitlement to such relief must be pled by a plaintiff.”  (Clausonsupra, 67 Cal.App.4th at p. 1255; accord, Blegen v. Superior Court (1981) 125 Cal.App.3d 959, 963.)  “Pleading in the language of the statute is not objectionable when sufficient facts are alleged to support the allegation.”  (Perkins v. Superior Court (1981) 117 Cal.App.3d 1, 6-7.)  However, a plaintiff’s “conclusory characterization of defendant’s conduct as intentional, willful and fraudulent is a patently insufficient statement of ‘oppression, fraud, or malice, express or implied, within the meaning of section 3294.”  (Brousseau v. Jarrett (1977) 73 Cal.App.3d 864.)

 

A request for punitive damages in a complaint “must be read not in isolation, but in the context of the facts alleged in the rest of petitioner’s complaint.  (Mot. Opp. 3, citing Perkins v. Superior Court (1981) 117 Cal.App.3d 1, 6.) Here, however, the FAC does not allege any facts regarding State Farm’s alleged breach other than a conclusory statement that it “was in bad faith, malicious, intentional and designed to harm plaintiff, and/or was intended to cause injury to the Plaintiff, or in the alternative, was despicable conduct carried on with a willful and conscious disregard of the rights or safety of others and subjected Plaintiff to a cruel and unjust hardship in conscious disregard of Plaintiff’s rights. . . .”  (FAC ¶ 22.)  Plaintiff’s allegations are insufficient to support his request for punitive damages.  (See Brousseau v. Jarrett (1977) 73 Cal.App.3d 864.)  Accordingly, the court GRANTS Plaintiff’s motion to strike paragraph 22 and paragraph 11 of the Prayer, which is the request for punitive damages, with 20 days leave to amend.

 

II.         Attorneys’ Fees

 

State Farm contends that Plaintiff has alleged no basis to recover attorney’s fees for the second cause of action for breach of contract.  (Mot. 7, citing Code Civ. Proc., § 1021 [“Except as attorney’s fees are specifically provided for by statute, the measure and mode of compensation of attorneys and counselors at law is left to the agreement, express or implied, of the parties. . . .”].)  Plaintiff did not respond to State Farm’s argument in his opposition.  As Plaintiff has not alleged the existence of a contract providing for an award of attorney’s fees to the prevailing party or any other statutory authority warranting the imposition of such fees, the court GRANTS Defendant’s motion to strike the attorney’s fees request in paragraph 9 of the prayer, with 20 days leave to amend.

 

Defendant State Farm acknowledges that attorney fees are recoverable on an action for breach of the implied covenant of good faith and fair dealing to the extent those fees were incurred to obtain the benefits under the policy.  (Mot. 6, citing Brandt v. Superior Court (1985) 37 Cal.3d 813, 817.).  Accordingly, this ruling does not preclude Plaintiff from seeking attorney’s fees as an item of damages to the extent appropriate. This would be included in the damages sought in paragraph 3 of the prayer.