Defendant Robin Hood Montessori, Inc.’s demurrer to Plaintiff Stephanie Sperber’s Complaint is overruled.
Special Demurrer for Uncertainty
The court overrules the special demurrer for uncertainty. (Code Civ. Proc., § 430.10, subd. (f)). “A demurrer for uncertainty is strictly construed, even where a complaint is in some respects uncertain, because ambiguities can be clarified under modern discovery procedures.” (Khoury v. Maly’s of California, Inc. (1993) 14 Cal.App.4th 612, 616.) Errors and confusion created by “the inept pleader” are to be forgiven if the pleading contains sufficient facts entitling plaintiff to relief. (Saunders v. Cariss (1990) 224 Cal.App.3d 905, 908.) A party attacking a pleading on “uncertainty” grounds must specify how and why the pleading is uncertain, and where that uncertainty can be found in the challenged pleading. (Fenton v. Groveland Community Services Dept. (1982) 135 Cal.App.3d 797, 809, disapproved on other grounds in Katzberg v. Regents of the University of California (2002) 29 Cal.4th 300.) Here, all the causes of action are not so unintelligible that Defendant cannot reasonably respond. Any ambiguities can be clarified through discovery. (Lickiss v. Financial Industry Regulatory Authority (2012) 208 Cal.App.4th 1125, 1135; Khoury v. Maly’s of California, Inc., supra, 14 Cal.App.4th at p. 616.)
First Cause of Action for Fraud
The elements for fraud are: (1) misrepresentation; (2) knowledge of falsity; (3) intent to defraud (that is, to induce reliance on the representation); (4) justifiable reliance and (5) resulting damage. (Cicone v. URS Corp (1986) 183 Cal.App.3d 194, 200.) Every element of fraud must be pleaded with specificity. The particularity requirement for fraud requires the pleading of facts showing how, when, where, to whom, and by what means the representations were made. (Stansfield v. Starkey (1990) 220 Cal. App. 3d 59, 73.) This is to provide the defendant with notice and to give the court enough information to assess whether there is a foundation for the charge of fraud. (Committee on Children’s Television, Inc. v. General Foods Corp.(1983) 35 Cal. 3d 197, 216.) The requirement of specificity in a fraud action against a corporation requires the plaintiff to allege the names of the persons who made the allegedly fraudulent representations, their authority to speak, to whom they spoke, what they said or wrote, and when it was said or written. (Tarmann v. State Farm Mut. Auto. Ins. Co. (1991) 2 Cal.App.4th 153, 157.) Nonetheless, “[l]ess specificity is required when it appears from the nature of the allegations that the defendant must necessarily possess full information concerning the facts of the controversy.” (Committee on Children’s Television v. General Foods Corp., supra,, 35 Cal.3d at p. 216 [citation and internal quote marks omitted].)
Plaintiff alleges the following representations were false: (1) infant center is only for children between the ages of three months old to two years old; (2) preschool side is for children who are two years old and older; (3) the tuition rate for children who attend the preschool side is lower than the tuition rate for children who attend the infant center; and (4) Plaintiff was required to pay the infant rate tuition for “Jane Doe” in August due to a failure to fully transition “Jane Doe” out of the infant room. (Complaint, ¶¶ 55-58.) The first statement was made by Ramona in July 2014 to Plaintiff when Ramona showed that Defendant had an infant room during a tour of Defendant’s facility. (Complaint, ¶ 7.) Defendant referred to children between 3 to 24 months on its website and in its documents. (Complaint, ¶ 18.) Plaintiff alleges sufficient facts to support her claim for fraud. (Complaint, ¶¶ 7, 18, 46, 55, 60-63.)
Second Cause of Action for Deceit by Concealment
The elements for a cause of action for deceit by concealment are: (1) the defendant must have concealed or suppressed a material fact, (2) the defendant must have been under a duty to disclose the fact to the plaintiff, (3) the defendant must have intentionally concealed or suppressed the fact with the intent to defraud the plaintiff, (4) the plaintiff must have been unaware of the fact and would not have acted as he did if he had known of the concealed or suppressed fact, and (5) as a result of the concealment or suppression of the fact, the plaintiff must have sustained damage. (Boschma v. Home Loan Center, Inc.(2011) 198 Cal.App.4th 230, 248.)
“A duty to speak may arise in four ways: it may be directly imposed by statute or other prescriptive law; it may be voluntarily assumed by contractual undertaking; it may arise as an incident of a relationship between the defendant and the plaintiff; and it may arise as a result of other conduct by the defendant that makes it wrongful for him to remain silent.” (SCC Acquisitions Inc. v. Central Pacific Bank (2012) 207 Cal.App.4th 859, 864.) “In transactions which do not involve fiduciary or confidential relations, a cause of action for non-disclosure of material facts may arise in at least three instances: (1) the defendant makes representations but does not disclose facts which materially qualify the facts disclosed, or which render his disclosure likely to mislead; (2) the facts are known or accessible only to defendant, and defendant knows they are not known to or reasonably discoverable by the plaintiff; (3) the defendant actively conceals discovery from the plaintiff. (Warner Constr. Corp. v. City of Los Angeles (1970) 2 Cal.3d 285, 294.)
Plaintiff alleges Defendant failed to disclose and concealed the following facts: (1) that Defendant would continue to charge the infant rate tuition after children turned two years old; (2) that Defendant would keep children in the infant room after they turned two years old; and (3) that Defendant would continue to charge the infant rate tuition after children moved to the preschool side. (Complaint, ¶¶ 73-75.) Plaintiff alleges Defendant made some representations regarding age and tuition, but did not disclose certain facts that materially qualify when children were moved to the preschool side or that Plaintiff would continue to pay the higher tuition after moving Jane Doe to the preschool side. Plaintiff alleges sufficient facts to support this cause of action. (Complaint, ¶¶ 66-75, 79, 83-85.)
Third Cause of Action for Violation of Business and Professions Code Section 17200
Business and Professions Code section 17200, et seq. (“UCL”) prohibits unfair competition, including unlawful, unfair, or fraudulent business acts. (Cel-Tech Comm., Inc. v. Los Angeles Cellular Tele. Co. (1999) 20 Cal.4th 163, 180.) A UCL action is equitable in nature and damages cannot be recovered. (Id. at pp. 179-180.) To state a UCL claim, Plaintiffs must allege acts or injuries within the terms of Business and Professions Code section 17200. It requires a person to have suffered injury in fact and have lost money or property as a result of unfair competition in order to have standing for a UCL cause of action. (Pfizer Inc. v. Superior Court (2010) 182 Cal.App.4th 622, 630.)
The UCL does not proscribe specific activities, but broadly prohibits any unlawful, unfair, or fraudulent business act or practice and unfair, deceptive, untrue or misleading advertising. The UCL governs anti-competitive business practices as well as injuries to consumers, and has as a major purpose the preservation of fair business competition. By proscribing “any unlawful business practice,” the UCL “borrows” violations of other laws and treats them as unlawful practices that the unfair competition law makes independently actionable. Because the UCL is written in the disjunctive, it establishes three varieties of unfair competition-acts or practices which are unlawful, or unfair, or fraudulent. In other words, a practice is prohibited as “unfair” or “deceptive” even if not “unlawful” and vice versa.” (Puentes v. Wells Fargo Home Mortgage, Inc. (2008) 160 Cal.App.4th 638, 643-644.)
Plaintiff alleged sufficient facts that Defendant engaged in a fraudulent practice by not transitioning Jane Doe to the preschool side after turning 2, despite Defendant’s representations that the infant side was for children 3 months to 24 months and by charging Plaintiff the higher tuition through January 2017 even if Jane Doe was transferred to the preschool side in August or September 2016. (Complaint, ¶¶ 18, 94, and 100.)
MOTION TO STRIKE PORTIONS OF THE COMPLAINT
Defendant’s motion to strike certain portions of Plaintiff’s Complaint is granted in part with 15 days leave to amend, and denied in part.
Defendant seeks to strike: (1) “An award of punitive damages pursuant to California Civil Code § 3294.” (Complaint, at 12:12); (2) “An award of statutory penalties as allowed by law.” (Complaint, at 12:13); and (3) “…and reasonable attorney fees…” (Complaint, at 12:15)
A plaintiff may recover punitive/exemplary damages in an action for the breach of an obligation not arising from contract if he or she proves by clear and convincing evidence that the defendant is acted with “oppression, fraud, or malice.” (Civ. Code, § 3294, subd. (a).) 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).) Oppression is defined as “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 defined as “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).)
Punitive damages cannot be pled in conclusory terms, instead the facts supporting a claim for punitive damages must be set out clearly, concisely, and with particularity. (Smith v. Superior Court (1992) 10 Cal.App.4th 1033, 1041-1042.) However, “it has long been recognized that ‘(t)he distinction between conclusions of law and ultimate facts is not at all clear and involves at most a matter of degree.’” (Perkins v. Superior Court (1981) 117 Cal.App.3d 1, 6.) “What is important is that the complaint as a whole contain sufficient facts to apprise the defendant of the basis upon which the plaintiff is seeking relief.” (Ibid.) In ruling on a motion to strike, the Court should “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; see Perkins v. Superior Court,117 Cal.App.3d at p. 6 [“stricken language must be read not in isolation, but in the context of the facts alleged in the rest of petitioner’s complaint.”].)
In addition, “[w]hen the defendant is a corporation, ‘[a]n award of punitive damages against a corporation…must rest on the malice of the corporation’s employees.’” (Wilson v. Southern California Edison Co. (2015) 234 Cal.App.4th 123, 164 [citing Cruz v. HomeBase (2000) 83 Cal.App.4th 160, 167].)
Plaintiff’s request for punitive damages is supported by the first and second causes of action for fraud and deceit by concealment. As discussed above, Plaintiff alleged sufficient facts to plead these two causes of action and as such, Plaintiff alleged sufficient facts to seek punitive damages. Accordingly, the motion to strike the prayer for punitive damages is denied.
Plaintiff has not alleged sufficient facts to recover statutory penalties. Although Plaintiff’s opposition states that the request for statutory penalties relates to Defendant’s violations of the California Code of Regulations and the license Defendant holds, referencing paragraphs 87-92 of the Complaint, Plaintiff’s Complaint does not sufficiently allege which statutory penalties would be allowed by the law. Accordingly, the motion to strike the prayer for award of statutory penalties is granted with 15 days leave to amend.
Plaintiff has not alleged sufficient facts to support her request for attorney’s fees. Code of Civil Procedure section 1021.5 permits a court, upon motion, to award attorneys’ fees to a successful party if the action “resulted in the enforcement of an important right affecting the public interest.” However, Plaintiff has not alleged sufficient facts to show that Defendant’s alleged misconduct goes beyond Plaintiff. No facts are alleged that any other parent, child, member of the public is affected by Defendant not placing a child who turned 25 months into the preschool side or that any other parent is paying the infant side tuition when their child is in the preschool side. Accordingly, the motion to strike the prayer for reasonable attorney fees is granted with 15 days leave to amend.
The 1/20/2017 Case Management Conference is continued to 3/17/2017 at 9 am.
Defendant shall give notice of the rulings and of the continued Case Management Conference.