This case was last updated from Los Angeles County Superior Courts on 08/17/2020 at 06:58:22 (UTC).

SOUTHWEST LAW CENTER, A PROFESSIONAL CORPORATION AKA SOUTHWEST LEGAL GROUP VS LUCERO MIRAMONTES, ET AL.

Case Summary

On 06/26/2019 SOUTHWEST LAW CENTER, A PROFESSIONAL CORPORATION AKA SOUTHWEST LEGAL GROUP filed a Property - Other Property Fraud lawsuit against LUCERO MIRAMONTES. This case was filed in Los Angeles County Superior Courts, Spring Street Courthouse located in Los Angeles, California. The Judge overseeing this case is WENDY CHANG. The case status is Pending - Other Pending.

Case Details Parties Documents Dockets

 

Case Details

  • Case Number:

    *******6143

  • Filing Date:

    06/26/2019

  • Case Status:

    Pending - Other Pending

  • Case Type:

    Property - Other Property Fraud

  • County, State:

    Los Angeles, California

Judge Details

Judge

WENDY CHANG

 

Party Details

Plaintiffs and Cross Defendants

SOUTHWEST LAW CENTER A PROFESSIONAL CORPORATION AKA SOUTHWEST LEGAL GROUP

SOUTHWEST LAW CENTER AKA SOUTHWEST LEGAL GROUP

SOUTHWEST LAW CENTER

LOPEZ JR. ANTHONY R.

Defendants

ACCIDENT CENTER

MIRAMONTES LUCERO

DISCOVERY DIAGNOSTICS INC.

Cross Plaintiff

DANIEL POWERS MD. INC. DBA DISCOVERY DIAGNOSTICS INC. A CORPORATION

Attorney/Law Firm Details

Plaintiff and Cross Defendant Attorneys

LOPEZ ANTHONY R JR.

SMITH JR. L. DEAN

Defendant and Cross Plaintiff Attorney

GOLDSTEIN NEAL

 

Court Documents

Minute Order - Minute Order (Hearing on Motion to Strike (not anti-SLAPP) - without Demurrer)

8/12/2020: Minute Order - Minute Order (Hearing on Motion to Strike (not anti-SLAPP) - without Demurrer)

Proof of Personal Service - Proof of Personal Service

7/31/2020: Proof of Personal Service - Proof of Personal Service

Notice Re: Continuance of Hearing and Order - Notice Re: Continuance of Hearing and Order

6/17/2020: Notice Re: Continuance of Hearing and Order - Notice Re: Continuance of Hearing and Order

Demurrer - without Motion to Strike - Demurrer - without Motion to Strike

6/3/2020: Demurrer - without Motion to Strike - Demurrer - without Motion to Strike

Notice Re: Continuance of Hearing and Order - Notice Re: Continuance of Hearing and Order

4/17/2020: Notice Re: Continuance of Hearing and Order - Notice Re: Continuance of Hearing and Order

Notice of Rejection Default/Clerk's Judgment - Notice of Rejection Default/Clerk's Judgment

2/13/2020: Notice of Rejection Default/Clerk's Judgment - Notice of Rejection Default/Clerk's Judgment

Summons - Summons on Amended Complaint (1st)

2/24/2020: Summons - Summons on Amended Complaint (1st)

Amended Complaint - Amended Complaint

2/24/2020: Amended Complaint - Amended Complaint

Opposition (name extension) - Opposition Plaintiff's Opposition to Defendant Daniel Powers, M.D. dba Discovery Diagnostics, Inc. 's Demurrer

1/21/2020: Opposition (name extension) - Opposition Plaintiff's Opposition to Defendant Daniel Powers, M.D. dba Discovery Diagnostics, Inc. 's Demurrer

Reply (name extension) - Reply Reply in Support of Demurrers

1/27/2020: Reply (name extension) - Reply Reply in Support of Demurrers

Notice of Rejection Default/Clerk's Judgment - Notice of Rejection Default/Clerk's Judgment

12/12/2019: Notice of Rejection Default/Clerk's Judgment - Notice of Rejection Default/Clerk's Judgment

Request (name extension) - Request REQUEST FOR ENTRY OF DEFAULT

12/12/2019: Request (name extension) - Request REQUEST FOR ENTRY OF DEFAULT

Civil Case Cover Sheet - Civil Case Cover Sheet

10/15/2019: Civil Case Cover Sheet - Civil Case Cover Sheet

Proof of Personal Service - Proof of Personal Service

10/24/2019: Proof of Personal Service - Proof of Personal Service

Proof of Service by Substituted Service - Proof of Service by Substituted Service

9/26/2019: Proof of Service by Substituted Service - Proof of Service by Substituted Service

Proof of Service by Substituted Service - Proof of Service by Substituted Service

8/19/2019: Proof of Service by Substituted Service - Proof of Service by Substituted Service

Summons - Summons on Complaint

6/26/2019: Summons - Summons on Complaint

First Amended Standing Order - First Amended Standing Order

6/26/2019: First Amended Standing Order - First Amended Standing Order

24 More Documents Available

 

Docket Entries

  • 06/29/2022
  • Hearing06/29/2022 at 10:30 AM in Department 26 at 312 North Spring Street, Los Angeles, CA 90012; Order to Show Cause Re: Failure to File Proof of Service

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  • 01/11/2021
  • Hearing01/11/2021 at 10:30 AM in Department 26 at 312 North Spring Street, Los Angeles, CA 90012; Hearing on Demurrer - without Motion to Strike

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  • 12/23/2020
  • Hearing12/23/2020 at 08:30 AM in Department 26 at 312 North Spring Street, Los Angeles, CA 90012; Non-Jury Trial

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  • 08/12/2020
  • DocketMinute Order (Hearing on Motion to Strike (not anti-SLAPP) - without Demurrer)

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  • 08/12/2020
  • DocketCertificate of Mailing for (Hearing on Motion to Strike (not anti-SLAPP) - without Demurrer) of 08/12/2020; Filed by: Clerk

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  • 08/12/2020
  • DocketHearing on Motion to Strike (not anti-SLAPP) - without Demurrer scheduled for 08/12/2020 at 10:00 AM in Spring Street Courthouse at Department 26 updated: Result Date to 08/12/2020; Result Type to Held

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  • 07/31/2020
  • DocketProof of Personal Service; Filed by: SOUTHWEST LAW CENTER (Plaintiff); SOUTHWEST LAW CENTER, A PROFESSIONAL CORPORATION aka SOUTHWEST LEGAL GROUP (Cross-Defendant); As to: Daniel Powers, MD., Inc., (Cross-Complainant); LUCERO MIRAMONTES (Defendant); ACCIDENT CENTER (Defendant) et al. Service Cost: 77.00; Service Cost Waived: No

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  • 07/16/2020
  • DocketReply TO DEFENDANT'S OPPOSITION TO MOTION T STRIKE PUNITIVE DAMAGES; Filed by: SOUTHWEST LAW CENTER, A PROFESSIONAL CORPORATION aka SOUTHWEST LEGAL GROUP (Cross-Defendant)

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  • 07/10/2020
  • DocketOpposition to Motion to Strike Punitive Damages); Filed by: Daniel Powers, MD., Inc., (Cross-Complainant)

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  • 06/17/2020
  • DocketNotice Re: Continuance of Hearing and Order; Filed by: Clerk

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32 More Docket Entries
  • 09/26/2019
  • DocketProof of Service by Substituted Service; Filed by: SOUTHWEST LAW CENTER, A PROFESSIONAL CORPORATION aka SOUTHWEST LEGAL GROUP (Plaintiff); Service Cost: 50.00; Service Cost Waived: No

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  • 08/19/2019
  • DocketProof of Service by Substituted Service; Filed by: SOUTHWEST LAW CENTER, A PROFESSIONAL CORPORATION aka SOUTHWEST LEGAL GROUP (Plaintiff); As to: ACCIDENT CENTER (Defendant); Proof of Mailing Date: 08/16/2019; Service Cost: 62.00; Service Cost Waived: No

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  • 07/02/2019
  • DocketNon-Jury Trial scheduled for 12/23/2020 at 08:30 AM in Stanley Mosk Courthouse at Department 94

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  • 07/02/2019
  • DocketOrder to Show Cause Re: Failure to File Proof of Service scheduled for 06/29/2022 at 08:30 AM in Stanley Mosk Courthouse at Department 94

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  • 07/02/2019
  • DocketCase assigned to Hon. Wendy Chang in Department 94 Stanley Mosk Courthouse

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  • 06/26/2019
  • DocketComplaint; Filed by: SOUTHWEST LAW CENTER, A PROFESSIONAL CORPORATION aka SOUTHWEST LEGAL GROUP (Plaintiff); As to: LUCERO MIRAMONTES (Defendant); ACCIDENT CENTER (Defendant); DISCOVERY DIAGNOSTICS, INC. (Defendant)

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  • 06/26/2019
  • DocketCivil Case Cover Sheet; Filed by: SOUTHWEST LAW CENTER, A PROFESSIONAL CORPORATION aka SOUTHWEST LEGAL GROUP (Plaintiff); As to: LUCERO MIRAMONTES (Defendant); ACCIDENT CENTER (Defendant); DISCOVERY DIAGNOSTICS, INC. (Defendant)

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  • 06/26/2019
  • DocketSummons on Complaint; Issued and Filed by: SOUTHWEST LAW CENTER, A PROFESSIONAL CORPORATION aka SOUTHWEST LEGAL GROUP (Plaintiff); As to: LUCERO MIRAMONTES (Defendant); ACCIDENT CENTER (Defendant); DISCOVERY DIAGNOSTICS, INC. (Defendant)

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  • 06/26/2019
  • DocketNotice of Case Assignment - Limited Civil Case; Filed by: Clerk

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  • 06/26/2019
  • DocketFirst Amended Standing Order; Filed by: Clerk

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Tentative Rulings

Case Number: 19STLC06143    Hearing Date: January 19, 2021    Dept: 31

DEMURRER IS SUSTAINED.

Background

On June 26, 2019, Plaintiff Southwest Law Center filed the instant Complaint for Interpleader against Defendants Lucero Miramontes; Accident Center; Daniel Powers, M.D. dba Discovery Diagnostics, Inc. (erroneously sued as Discovery Diagnostics, Inc.); and Does 1 through 30. 

On October 15, 2019, Defendant Daniel Powers, M.D. dba Discovery Diagnostics, Inc. filed the Cross-Complaint against Cross-Defendants Southwest Law Center; Anthony R. Lopez, Jr., and Does 31-100. The Cross-Complaint asserts causes of action for: 

  1. Breach of Contract;

  2. Fraud and Deceit;

  3. Breach of Fiduciary Duty; and

  4. Breach of the Implied Covenant of Good Faith and Fair Dealing. 

On February 24, 2020, Plaintiff filed the Second Amended Complaint for Interpleader (“SAC”).

Defendant Powers (hereinafter “Defendant”) now demurs to the SAC on the ground that it fails to allege facts sufficient to state a cause of action.

Legal Standard

A demurrer for sufficiency tests whether the complaint states a cause of action. Hahn v. Mirda (2007) 147 Cal.App.4th 740, 747. When considering demurrers, courts read the allegations liberally and in context. (Wilson v. Transit Authority of City of Sacramento (1962) 199 Cal.App.2d 716, 720-21.) In a demurrer proceeding, the defects must be apparent on the face of the pleading or via proper judicial notice. (Donabedian v. Mercury Ins. Co. (2004) 116 Cal.App.4th 968, 994.) “A demurrer tests the pleading alone, and not on the evidence or facts alleged.” (E-Fab, Inc. v. Accountants, Inc. Servs. (2007) 153 Cal.App.4th 1308, 1315.) As such, the court assumes the truth of the complaint’s properly pleaded or implied factual allegations. (Id.) However, it does not accept as true deductions, contentions, or conclusions of law or fact. (Stonehouse Homes LLC v. City of Sierra Madre (2008) 167 Cal.App.4th 531, 538.)

Discussion

Defendant Powers now demurs to the SAC on the ground that it fails to allege facts sufficient to state a cause of action.

Complaint in Interpleader

“Interpleader is an equitable proceeding by which an obligor who is a mere stakeholder may compel conflicting claimants to money or property to interplead and litigate the claims among themselves instead of separately against the obligor. . . . After admitting liability and depositing the money or property with the court, the obligor is discharged from liability and freed from the necessity of participating in the litigation between the claimants.” [Citation.] Under section 386, subdivision (b), any person or entity “against whom double or multiple claims are made, or may be made, by two or more persons which are such that they may give rise to double or multiple liability, may bring an action against the claimants to compel them to interplead and litigate their several claims.”

“The true test of suitability for interpleader is the stakeholder's disavowal of interest in the property sought to be interpleaded, coupled with the perceived ability of the court to resolve the entire controversy as to entitlement to that property without need for the stakeholder to be a party to the suit. ‘“[I]f the relations of the parties are such that the court's decision would determine the responsibility of the [interpleader plaintiff], he is for the purposes and within the scope of the code section authorizing interpleader a mere stake-holder.”’ [Citations.]” [Citation.]

“‘The purpose of interpleader is to prevent a multiplicity of suits and double vexation. [Citation.] “The right to the remedy by interpleader is founded, however, not on the consideration that a [person] may be subjected to double liability, but on the fact that he is threatened with double vexation in respect to one liability.” [Citation.]’ [Citation.] ‘In an interpleader action, the court initially determines the right of the plaintiff to interplead the funds; if that right is sustained, an interlocutory decree is entered which requires the defendants to interplead and litigate their claims to the funds.’ [Citation.] Then, in the second phase of an interpleader proceeding, the trial court also has ‘the power under [Code of Civil Procedure] section 386 to adjudicate the issues raised by the interpleader action including: the alleged existence of conflicting claims regarding the interpleaded funds; plaintiffs' alleged position as a disinterested mere stakeholder; and ultimately the disposition of the interpleaded funds after deducting plaintiffs' attorney fees.’ [Citation.]” [Citation.]” (Southern California Gas Co. v. Flannery (2014) 232 Cal.App.4th 477, 486–487.)

Case law is clear that in order to establish the existence of an attorney lien, determine the lien amount, and enforce it, an attorney must bring a separate, independent action. (Southern California Gas Co. v. Flannery (2016) 5 Cal.App.5th 476, 494 (citing Carroll v. Interstate Brands Corp. (2002) 99 Cal.App.4th 1168, 1173).)

Defendant demurs to the SAC arguing that Plaintiff fails to state a cause of action for interpleader. Defendant asserts that here, as in the FAC and original complaint, Plaintiff claims that more than 50% of the fund should be its. Defendant contends that such a claim is the antithesis of what an interpleader complaint is. Defendant argues that Plaintiff has failed to even try to correct any of the deficiencies pointed out by the Court in ruling on the demurrers to the First Amended Complaint (“FAC”).

Defendant asserts that here, Plaintiff adds nothing about the nature of the claims or the nature of the relationship between the four parties to the action. Defendant contends that the SAC only provides that one defendant was involved in an accident and that a claim was settled. Defendant notes that the Court previously ruled: “There are no facts alleged as to the relationship of Defendants Accident Center and Discovery Diagnostics to the interpleader funds. (FAC, 16.) Plaintiff simply alleged that they have made conflicting demands to the settlement proceeds. (Ibid.) This is insufficient to allege a claim for interpleader.” (February 4, 2020 Minute Order.)

Defendant further argues that the Court noted a deficiency regarding Plaintiff’s claimed attorney lien and the SAC is devoid of even an assertion of an attorney lien. Defendant asserts that given the effort the Court made to make clear what was required, and the fact that Plaintiff failed to respond and seek to include any basis for the claimed attorney lien, the instant complaint is not just insufficient, it is frivolous.

In opposition, Plaintiff argues that pursuant to a written retainer agreement between it and Defendant Miramontes, Plaintiff was to receive forty percent of all gross amounts received by settlement or judgment. Plaintiff asserts that Miramontes has never indicated an objection to the terms of the written retainer or to Plaintiff’s entitled to compensation to be provided to it. Plaintiff contends that it claims no interest in the $3,998.00 in disputed funds except for attorney’s fees, court costs, and other costs associated with the instant interpleader action. Plaintiff further argues that attorney liens have priority over more recent lines, medical bills, and healthcare lienholder bills.

Plaintiff finally asserts that it has properly brought an interpleader action pursuant to Code of Civil Procedure section 386 and State Bar of California Formal Opinion No. 1988-101.

The Court finds that Plaintiff has failed to allege facts sufficient to state a cause of action for interpleader. As held by the authorities above, and as previously noted by the Court in its February 4, 2020 Minute Order, an interpleader action requires that the interpleader be a disinterested stakeholder. Here, Plaintiff alleges that it currently has in its possession $9,000.00, of which it desires to deposit only $3,998.00 of with the Court. (SAC ¶ 5, 8.) Because Plaintiff is not a disinterested party, but instead claims a right to part of the funds, Plaintiff has not stated a cause of action for interpleader.

Moreover, as previously stated by the Court:

To the extent Plaintiff wishes to allege the existence and priority of its attorney lien, facts in support thereof must be fully alleged. Case law is clear that in order to establish the existence of the attorney lien, determine the lien amount, and enforce it, Plaintiff must bring a separate, independent action. (Southern California Gas Co. v. Flannery (2016) 5 Cal.App.5th 476, 494 (citing Carroll v. Interstate Brands Corp. (2002) 99 Cal.App.4th 1168, 1173).) There is no authority that allows Plaintiff to self-determine the validity and amount of the attorney lien, thereby finding it enforceable. These are issues that must be adjudicated.

(February 4, 2020 Minute Order.)

Finally, while Plaintiff relies on State Bar of California Formal Opinion No. 1988-101 in arguing that the instant interpleader action is proper, the Formal Opinion clearly states: “This opinion is issued by the Standing Committee on Professional Responsibility and Conduct of the State Bar of California. It is advisory only. It is not binding upon the courts, the State Bar of California, its Board of Governors, any persons or tribunals charged with regulatory responsibilities, or any member of the State Bar.” Accordingly, Plaintiff’s reliance on the Formal Opinion is misplaced.

The Court previously made clear that the instant action in interpleader was improper. Accordingly, Defendant’s demurrer is SUSTAINED.

Conclusion

Defendant’s demurrer is SUSTAINED. Plaintiff has not presented any factual argument as to how Plaintiff would correct the deficiencies noted by the Court. Plaintiff must appear at the hearing and answer why this case should not be sustained without leave to amend.  

Defendant to give notice.

MOTION TO STRIKE IS DENIED.

Background

On June 26, 2019, Plaintiff Southwest Law Center filed the instant Complaint for Interpleader against Defendants Lucero Miramontes; Accident Center; Daniel Powers, M.D. dba Discovery Diagnostics, Inc. (erroneously sued as Discovery Diagnostics, Inc.); and Does 1 through 30.

On October 15, 2019, Defendant Daniel Powers, M.D. dba Discovery Diagnostics, Inc. (hereinafter “Cross-Complainant”) filed the Cross-Complaint against Cross-Defendants Southwest Law Center; Anthony R. Lopez, Jr., and Does 31-100. The Cross-Complaint asserts causes of action for: 

  1. Breach of Contract;

  2. Fraud and Deceit;

  3. Breach of Fiduciary Duty; and

  4. Breach of the Implied Covenant of Good Faith and Fair Dealing.

On February 24, 2020, Plaintiff filed the Second Amended Complaint for Interpleader (“SAC”).

Plaintiff and Cross-Defendant Southwest Law Center (hereinafter “Cross-Defendant”) now moves to strike allegations in the Cross-Complaint related to punitive damages. 

Legal Standard 

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 of Civ. Proc., § 435, subd. (b)(1); Cal. Rules of Court, Rule 3.1322(b).) The court may, upon a motion or at any time in its discretion and upon terms it deems proper: (1) strike out any irrelevant, false, or improper matter inserted in any pleading; or (2) strike out all or any part of any pleading not drawn or filed in conformity with the laws of California, a court rule, or an order of the court. (Code of Civ. Proc., § 436, subds. (a)-(b); Stafford v. Shultz (1954) 42 Cal.2d 767, 782 [“Matter in a pleading which is not essential to the claim is surplusage; probative facts are surplusage and may be stricken out or disregarded”].)

Punitive damages may be imposed where it is proven by clear and convincing evidence that the defendant has been guilty of oppression, fraud, or malice. (Civ. Code, § 3294, subd. (a).) “Malice” is conduct intended by the defendant to cause injury to the plaintiff or despicable conduct which is carried on with a willful and conscious disregard of the rights or safety of others. (Civ. Code, § 3294, subd. (c)(1).) Despicable conduct is “conduct which is so vile, base, contemptible, miserable, wretched or loathsome that it would be looked down upon and despised by ordinary decent people. Such conduct has been described as ‘having the character of outrage frequently associated with crime.’” (Tomaselli v. Transamerica Ins. Co. (1994) 25 Cal.App.4th 1269, 1287.) “Fraud” means 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).) “‘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.]” (Lackner v. North (2006) 135 Cal.App.4th 1188, 1210.) 

A motion to strike punitive damages is properly granted where a plaintiff does not state a prima facie claim for punitive damages, including allegations that defendant is guilty of oppression, fraud or malice. (Turman v. Turning Point of Cent. California, Inc. (2010) 191 Cal.App.4th 53, 63.) “Simple negligence cannot support an award of punitive damages. [Citations.]” (Jackson v. Johnson (1992) 5 Cal.App.4th 1350, 1354–1355.)

Discussion 

Cross-Defendant moves to strike allegations in the Cross-Complaint related to punitive damages. Cross-Defendant asserts that the Cross-Complaint is devoid of any facts sufficient to allege that Cross-Defendant is guilty of oppression, fraud, or malice. Moreover, as to the cause of action for breach of the implied covenant of good faith and fair dealing, Cross-Defendant contends that punitive damages are not recoverable because such a cause of action is essentially based in contract.

In opposition, Cross-Complainant argues that he has sufficiently alleged a claim for punitive damages, as he has adequately pled his causes of action for fraud and deceit, breach of fiduciary duty, and breach of the implied covenant of good faith and fair dealing.

The Court finds that Cross-Complainant has alleged facts sufficient to state a prima facie claim for punitive damages, including allegations that Cross-Defendant is guilty of oppression, fraud, or malice. Contrary to Cross-Defendant’s arguments, Cross-Complainant has alleged causes of action for fraud and deceit, breach of fiduciary duty, and breach of the implied covenant of good faith and fair dealing with the requisite specificity. The Cross-Complaint sufficiently alleges that Cross-Complainant reposed confidence in the integrity of Cross-Defendant, Cross-Defendant voluntarily accepted or assumed to accept the confidence, Cross-Defendant made express promises that it would pay the amount of outstanding services rendered by Cross-Complainant upon resolution of the matter and receipt of funds, and Cross-Defendant took advantage of Cross-Complainant’s interest without Cross-Complainant’s knowledge or consent by wrongfully failing to pay what was due to Cross-Complainant and misappropriating funds that were due and owing to Cross-Complainant, all with the intent to deceive and defraud Cross-Complainant. (Cross-Complaint ¶ 10-45; Pierce v. Lyman (1991) 1 Cal.App.4th 1093, 1101-1102.) Accordingly, Cross-Complainant has stated a prima facie case for punitive damages, including that Cross-Defendant is guilty of fraud.

Moreover, as to Cross-Defendant’s arguments regarding the ability of Cross-Complainant to recover punitive damages associated with its breach of the implied covenant of good faith and fair dealing, the California Supreme Court has held that punitive damages may be recovered for a breach of the implied covenant of good faith and fair dealing so long as the statutory prerequisites for punitive damages are fulfilled. (Egan v. Mutual of Omaha Ins. Co. (1979) 24 Cal.3d 809, 819-823.) As noted above, Cross-Complainant has stated a prima facie case for punitive damages, including that Cross-Defendant is guilty of fraud.

Based on the foregoing, Cross-Defendant’s motion to strike punitive damages is DENIED.

Conclusion

Cross-Defendant’s motion to strike punitive damages is DENIED.

Moving party to give notice.

The parties are strongly encouraged to attend all scheduled hearings virtually or by audio. Effective July 20, 2020, all matters will be scheduled virtually and/or with audio through the Court’s LACourtConnect technology. The parties are strongly encouraged to use LACourtConnect for all their matters. All social distancing protocols will be observed at the Courthouse and in the courtrooms.

Case Number: 19STLC06143    Hearing Date: August 12, 2020    Dept: 26

Southwest Law Center v. Miramontes, et al.

MOTION TO STRIKE

(CCP §§ 435, 436)

TENTATIVE RULING:

Plaintiff Southwest Law Center’s Motion to Strike is PLACED OFF CALENDAR. THIS CASE IS RECLASSIFIED AS AN UNLIMITED CIVIL CASE AND TRANSFERRED TO THE RECLASSIFICATION/TRANSFER DESK FOR COLLECTION OF FEES AND REASSIGNMENT OF THE CASE TO AN INDEPENDENT CALENDAR COURT. CROSS-COMPLAINANT TO PAY THE RECLASSIFICATION FEE WITHIN TEN (10) DAYS’ NOTICE OF THIS ORDER.

ANALYSIS:

On June 26, 2019, Plaintiff Southwest Law Center, a professional corporation, aka Southwest Legal Group (“Cross-Defendant”) filed the instant action for interpleader against Defendants Lucero Miramontes, Accident Center, and Discovery Diagnostics, Inc. On October 15, 2019, Defendant Discovery Diagnostics, Inc. (“Cross-Complainant”) filed a Cross-Complaint for (1) breach of contract; and (2) fraud and deceit. The Cross-Complaint seeks monetary damages of $58,476, as well as declaratory and injunctive relief. (Cross-Compl., Prayer for Damages.)

Discussion

Cross-Defendant Southwest Law Center moves to strike the request for punitive damages in the Cross-Complaint. The Court, however, must first address the assignment of this action to a court of limited jurisdiction. In its opposition to the Motion to Strike, Cross-Complainant includes a single footnote contending that the action is improperly classified due to its “inability to navigate properly the Court's efiling portal.” (Opp., p. 2, n. 1.) The Court points out that reclassification of this action could have been accomplished upon the filing of the Cross-Complaint had Cross-Complainant followed the instruction of Code of Civil Procedure section 403.030 by indicating on the face of the Cross-Complaint that this was an unlimited action and concurrently paying the reclassification fee. Neither of these steps having been followed, however, this case proceeded in the limited jurisdiction court for the past ten months without any objection from Cross-Complainant.

Nevertheless, under Code of Civil Procedure section 403.040, subdivision (a), the Court may reclassify an action at any time. The Court, therefore, reclassifies the instant action based on the relief sought in the Cross-Complaint, which exceeds that permitted in a court of limited jurisdiction. (Code Civ. Proc., §§ 85-86.) Cross-Defendant makes no argument that this case should remain in the limited jurisdiction court.

THE HEARING ON THE MOTION TO STRIKE IS PLACED OFF CALENDAR. THIS CASE IS RECLASSIFIED AS AN UNLIMITED CIVIL CASE AND TRANSFERRED TO THE RECLASSIFICATION/TRANSFER DESK FOR COLLECTION OF FEES AND REASSIGNMENT OF THE CASE TO AN INDEPENDENT CALENDAR COURT. CROSS-COMPLAINANT TO PAY THE RECLASSIFICATION FEE WITHIN TEN (10) DAYS’ NOTICE OF THIS ORDER.

Case Number: 19STLC06143    Hearing Date: February 04, 2020    Dept: 26

Southwest Law Center v. Miramontes, et al

DEMURRER

(CCP §§ 430.31, et seq.)

TENTATIVE RULING:

Defendant Daniel Powers, M.D., Inc. dba v. Discovery Diagnostics, Inc.’s Demurrer to the First Amended Complaint is SUSTAINED WITH 20 DAYS’ LEAVE TO AMEND.

ANALYSIS:

On June 26, 2019, Plaintiff Southwest Law Center, a professional corporation, aka Southwest Legal Group (“Plaintiff”) filed the instant action for interpleader against Defendants Lucero Miramontes, Accident Center, and Discovery Diagnostics, Inc. On October 15, 2019, Plaintiff filed a First Amended Complaint for the same cause of action against the same Defendants. On December 13, 2019, Defendants filed the instant Demurrer to the First Amended Complaint. Defendant Daniel Powers, M.D., Inc. dba v. Discovery Diagnostics, Inc. filed an opposition on January 21, 2020 and Plaintiff replied on January 27, 2020.

Discussion

The Court finds that the Demurrer is accompanied by a meet and confer declaration as required by Code of Civil Procedure section 430.41. (Demurrer, Goldstein Decl., ¶¶3-5.) The First Amended Complaint alleges a single cause of action for interpleader. Specifically, the First Amended Complaint alleges that this matter arises out of a slip and fall accident involving Defendant Miramontes at Oracle Arena in Oakland, California. (FAC, ¶5.) Following settlement of Defendant Miramontes’ claim by Oracle Arena’s insurer for $9,000.00, conflicting claims to the settlement proceeds were made by each Defendant. (Id. at ¶¶5-7.) Defendant Accident Center makes a claim in the amount of $9,050.00 and Defendant Discovery Diagnostics makes a claim in the amount of $4,250.00. (Id. at ¶6.) Plaintiff alleges that it is willing to deliver the net settlement funds after deduction of attorney’s fees and costs to the party legally entitled to those funds. (Id. at ¶8.) It further alleges that the net settlement funds after deduction of reasonable attorney’s fees and costs are $3,998.00. (Ibid.)

In demurring to the Complaint, Defendant Discovery Diagnostics contends that the First Amended Complaint fails to allege facts sufficient to state a cause of action. (Citing Code Civ. Proc., § 430.10, subds. (e).) In order to allege a cause of action for interpleader, Plaintiff must allege it has no interest in the funds. (Code Civ. Proc., § 386; State Farm Fire & Casualty Co. v. Pietak (2001) 90 Cal.App.4th 600, 614.) The demurrer argues that in seeking to deposit only a portion of the settlement funds with the Court, Plaintiff has alleged an interest in the remainder of the settlement funds it plans to withdraw for attorney’s fees and costs. Therefore, Defendant Discovery Diagnostics argues that Plaintiff is not merely a disinterested stakeholder, but an entity with a claim to the interpleader funds.

First, in order to allege an interpleader claim, Plaintiff must allege facts showing a reasonable probability of double vexation, or a valid threat of double vexation. (Westamerica Bank v. City of Berkeley (2011) 201 Cal.App.4th 598, 607-608.) Here, the First Amended Complaint does not allege facts showing a reasonable probability of double vexation. There are no facts alleged as to the relationship of Defendants Accident Center, and Discovery Diagnostics to the interpleader funds. (FAC, ¶6.) Plaintiff simply alleges that they have made conflicting demands to the settlement proceeds. (Ibid.) This is insufficient to allege a claim for interpleader. Without allegations regarding the basis of Defendants’ claims to the settlement proceeds, the Court cannot determine whether there is a reasonable probability of double vexation.

Second, while the total settlement proceeds are $9,000.00 Plaintiff claims it will only deposit the net settlement after deduction of its attorney’s fees and costs. Plaintiff, therefore, claims an interest in the settlement proceeds based on its attorney’s fees and costs. In opposition to the Demurrer, Plaintiff argues that an attorney lien has priority over all other liens, including medical liens. But there is nothing the First Amended Complaint to show that the basis of Defendant Discovery Diagnostic’s claim is a medical lien. Because the basis of Defendant Discovery Diagnostic’s claim is not alleged in the First Amended Complaint, this argument in opposition to the Demurrer improperly relies on facts outside of the pleading.

To the extent Plaintiff wishes to allege the existence and priority of its attorney lien, facts in support thereof must be fully alleged. Case law is clear that in order to establish the existence of the attorney lien, determine the lien amount, and enforce it, Plaintiff must bring a separate, independent action. (Southern California Gas Co. v. Flannery (2016) 5 Cal.App.5th 476, 494 (citing Carroll v. Interstate Brands Corp. (2002) 99 Cal.App.4th 1168, 1173).) There is no authority that allows Plaintiff to self-determine the validity and amount of the attorney lien, thereby finding it enforceable. These are issues that must be adjudicated.

Finally, Plaintiff argues that partial interpleader is allowed under the statute. The portion of the statute to which Plaintiff cites, however, pertains only to defendants: “A defendant, against whom an action is pending upon a contract, or for specific personal property, may, at any time before answer . .  . may file a verified cross-complaint in interpleader, admitting that he has no interest in such amount or such property claimed, or in a portion of such amount or such property . . . .” (Code Civ. Proc., § 386, subd. (a).) The case on which Plaintiff relies also pertains to a defendant insofar as it holds that partial interpleader is appropriate “where the obligor admits some liability but makes a partial claim or asserts a partial interest.” (City of Morgan Hill v. Brown (1999) 71 Cal.App.4th 1114, 1123.) It does not make sense for a plaintiff to “admit some liability” nor does the First Amended Complaint allege that Plaintiff admits liability as to a part of the interpleader funds and that it is asserting a partial interest in those funds.

Based on the foregoing, the demurrer to the First Amended Complaint is sustained with leave to amend.

Conclusion

Defendant Daniel Powers, M.D., Inc. dba v. Discovery Diagnostics, Inc.’s Demurrer to the First Amended Complaint is sustained with 20 days’ leave to amend.

Moving party to give notice.

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