Hek vs. La Mirada Post Acute LLC

Fourth, Plaintiffs argue that under the UCC § 9-210, Defendants are estopped from collecting against a property when it fails to respond to a request for an authenticated accounting. As discussed above, the UCC does not apply to the instruments at issue and thus this claim fails.

Fifth, Plaintiffs argue that The CWABS 2006-24 Trust was created through securities fraud. Plaintiffs rely on allegations of fact outside of the SAC and provides not authority demonstrating how these new allegations support Plaintiffs’ existing claims.

Sixth, Plaintiffs argue that The Barredas executed a lawful setoff against the alleged debt. However, there are no allegations of any setoff in the SAC.

In sum, none of the arguments raised by Plaintiffs in their opposition are sufficient to cure the defects in Plaintiffs’ claims.

Moving defendant is ordered to give notice of this ruling.

10 30-2026-01555500 DEMURRER TO COMPLAINT Hek vs. La Mirada Post Acute LLC Defendants La Mirada Post Acute LLC, Sun Meridian Management Services LLC, Sun Mar Management Services, Frank D. Johnson and David Johnson’s (collectively, “Defendants”) Demurrer to Plaintiff Humphrey Van Hek’s (“Plaintiff”) Complaint is OVERRULED. IT IS ORDERED THAT Defendants must file and serve their answer to Plaintiff’s Complaint within twenty (20) days of this ruling.

As a threshold matter, the court declines to rule on arguments that Defendants raise for the first time in their reply brief as Plaintiff has had no opportunity to respond to them: • Defendants argue that the subject Admission Agreement for the facility cannot be the basis of any claim because the form is mandated by law. (Cal. Health & Safety Code § 1599.61.) • Defendants argue that the facts regarding the staffing at the facility were not concealed from Plaintiff or the class because it was reported to the State. • Defendants argue that there is no allegation that Sun Mar, or the Johnsons acquired any money belonging to Plaintiff and the class so as to justify restitution for the unfair competition claim.

Furthermore, even if the court were to consider these arguments, they would not change the court’s decision to overrule Defendants’ demurrer.

Finally, the court notes that Defendants’ grounds for demurrer identified in their notice are inconsistent with the arguments made in Defendants’ Memorandum of Points & Authorities. Defendants are admonished to comply with the applicable court rules and California Rules of Civil Procedure in all future filings. (Cal. R. Ct., R. 3.1110(a) [“A notice of motion must state in the opening paragraph the nature of the order being sought and the grounds for issuance of the order.”].)

I. Entire Complaint

First, Defendants demur to the entire complaint on the grounds that Plaintiff fails to allege facts to support a claim of alter ego liability against all Defendants.

In the Complaint, Plaintiff alleges that “Defendant LA MIRADA POST ACUTE LLC . . . reports its principal place of business . . . as 3050 Saturn Street, Brea, California, 92821 . . . (hereinafter referred to as the “FACILITY”),” and that it is “in the business of providing long-term custodial care as the licensee of a 24-hour skilled nursing facility doing business as Sunny Hills Post Acute, and were subject to the requirements of federal and state law regarding the operation of skilled nursing facilities operating in the State of California.” (Compl. ¶ 3.)

Plaintiff asserts the following alter ego allegations as to the other Defendants: • DEFENDANT FRANK D. JOHNSON and DAVID JOHNSON . . . are the only members and managers of SUN MERIDIAN MANAGEMENT SERVICES LLC and LA MIRADA POST ACUTE LLC and control all actions thereof and ratified all of the conduct alleged herein; and/or performed all the action alleged herein and/or directed all of the action alleged herein. (Compl. ¶ 4.) • DEFENDANT FRANK D. JOHNSON is one of only two members and managers of SUN MAR MANAGEMENT SERVICES and controls all actions thereof and ratified all of the conduct alleged herein; and/or performed all the action alleged herein and/or directed all of the action alleged herein. (Id. ¶ 5.)

• Defendants SUN MERIDIAN MANAGEMENT SERVICES LLC . . . SUN MAR MANAGEMENT SERVICES; FRANK D. JOHNSON; DAVID JOHNSON . . . (hereinafter the “MANAGEMENT DEFENDANTS”) . . . were at all relevant times the FACILITY’S owners, operators, parent company, and/or management company of the FACILITY and actively participated and controlled the business of the FACILITY and thus provided long- term professional and custodial care as a 24-hour skilled nursing facility. (Id. ¶ 6.) • The MANAGEMENT DEFENDANTS and the FACILITY are “alter egos” of one another and form a “Single Enterprise” . . . (Compl. ¶ 11.) • The FACILITY and the MANAGEMENT DEFENDANTS operated in such a way as to make their individual identities indistinguishable, and are therefore, the mere alter-egos of one another.

There was a unity of interest between the FACILITY and the MANAGEMENT DEFENDANTS such that a failure to recognize the alter ego relationship between them would lead to an inequitable result. (Id. ¶ 13.) • At all relevant times, the FACILITY and the MANAGEMENT DEFENDANTS and each of their tortious acts and omissions, as alleged herein, were done in concert with one another in furtherance of their common design and agreement to accomplish a particular result, namely maximizing profits for DEFENDANTS’ individual directors, officers, and managers from the operation of the FACILITY by underfunding and understaffing the FACILITY.

Moreover, the DEFENDANTS aided and abetted each other in accomplishing the acts and omissions alleged herein. (See Restatement (Second) of Torts §876 (1979)). (Id. ¶ 14.) • The MANAGEMENT DEFENDANTS controlled the FACILITY to such a degree that it was a “mere instrumentality” of the MANAGEMENT DEFENDANTS used for an improper purpose. (Id. ¶ 15.) • Evidence for this reality exists in the exchange of directional documents and reports shared amongst the DEFENDANTS as to issues including staffing, census, interaction of the FACILITY with the State of California’s Department of Public Health, and regulatory compliance which were utilized by the MANAGEMENT DEFENDANTS to make operational decisions as the true owners, operators and managers of the FACILITY. (Id. ¶ 16.)

• Because the funds that were improperly siphoned to the MANAGEMENT DEFENDANTS for phantom services. . . should have instead gone to pay for labor costs to ensure that the FACILITY was sufficiently staffed to meet the needs of the residents, failing to hold DEFENDANTS liable under an alter ego theory would lead to an inequitable result. (Id. ¶ 18.) • At all times relevant hereto LA MIRADA POST ACUTE LLC; SUN MERIDIAN MANAGEMENT SERVICES LLC; and SUN MAR MANAGEMENT SERVICES had multiple common managers and members according to information they submitted to the California Secretary of State under penalty of perjury.

For example, FRANK D. JOHNSON and DAVID JOHNSON are the sole manager/members of both LA MIRADA POST ACUTE LLC and SUN MERIDIAN MANAGEMENT SERVICES LLC. In addition, FRANK D. JOHNSON is a manager and member of SUN MAR MANAGEMENT SERVICES. (Id. ¶ 19.) • At all times relevant hereto LA MIRADA POST ACUTE LLC; SUN MERIDIAN MANAGEMENT SERVICES LLC; SUN MAR MANAGEMENT SERVICES; FRANK D. JOHNSON and DAVID JOHNSON all share the same principal address and same mailing address, namely 3050 Saturn Street #201, Brea, CA 92821. (Id. ¶ 20.) • At all times relevant hereto FRANK D.

JOHNSON and DAVID JOHNSON each owned a 50% equity interest in LA MIRADA POST ACUTE LLC according to submissions by the Defendants to the California Department of Public Health under penalty of perjury. Upon information and belief, at all times relevant hereto FRANK D. JOHNSON and DAVID JOHNSON each owned a 50% equity interest in SUN MERIDIAN MANAGEMENT SERVICES LLC. (Id. ¶ 21.) • In doing the wrongful acts and omissions alleged herein, LA MIRADA POST ACUTE LLC; the MANAGEMENT DEFENDANTS and DOES 1-250: (1) commingled funds and other assets; (2) failed to segregate funds of the separate entities, and the unauthorized diversion of corporate funds or assets to other than corporate uses; (3) treated the assets of each corporation as their own; (4) held out that they are individually liable for the debts of each corporation; (5) failed to maintain minutes or adequate corporate records; (6) had sole ownership of all of the stock in a corporation by one individual or the members of a family; (7) failed to adequately capitalize the corporations; (8) used the corporations as a mere shell, instrumentality or conduit for a single venture or the business of an individual or another corporation; (9) disregarded legal formalities and the failure to maintain arm’s length relationships among related entities; (10) diverted of assets from a corporation by or to a stockholder or other person or entity, to the detriment of creditors, or the manipulation of assets and liabilities between entities so as to concentrate the assets in one and the liabilities in another; (11) the contracting with another with intent to avoid performance by use of a corporate entity as a shield against personal liability, or the use of each corporation as a subterfuge of illegal transactions.

And thus LA MIRADA POST ACUTE LLC; SUN MERIDIAN MANAGEMENT SERVICES LLC; SUN MAR MANAGEMENT SERVICES; FRANK D. JOHNSON and DAVID JOHNSON; and DOES 1-250 acted as alter egos of one another. (Id. ¶ 22.) • In doing the wrongful acts and omissions alleged herein, LA MIRADA POST ACUTE LLC; SUN MERIDIAN MANAGEMENT SERVICES LLC; SUN MAR MANAGEMENT SERVICES; FRANK D. JOHNSON and DAVID JOHNSON; and DOES 1-250: (1) participated in a common venture or in a similar or functionally reciprocal business (e.g., one corporation builds houses upon land owned by the other); (2) had identical equitable ownership; (3) had common directors, officers and employees; (4) had the same business location, telephone numbers and e-mail systems; (5) pooling of assets and revenues, or use of one corporation's financial resources to pay or guaranty the other's obligations (especially if the other corporation is undercapitalized); and (6) the corporations tend to benefit jointly from transactions entered into by one of them.

And thus, LA MIRADA POST ACUTE LLC; SUN MERIDIAN MANAGEMENT SERVICES LLC; SUN MAR MANAGEMENT SERVICES; FRANK D. JOHNSON and DAVID JOHNSON and DOES 1-250 acted as a joint enterprise with one another. (Id. ¶ 23.)

“Normally the corporation is an insulator from liability on claims of creditors.” (Greenspan v. LADT, LLC (2010) 191 Cal. App. 4th 486, 510.) “The alter ego doctrine arises when a plaintiff comes into court claiming that an opposing party is using the corporate form unjustly and in derogation of the plaintiff's interests[.]” (Id.) The alter ego doctrine has two requirements:

“(1) that there be such unity of interest and ownership that the separate personalities of the corporation and the individual no longer exist and (2) that, if the acts are treated as those of the corporation alone, an inequitable result will follow.” (Id. at 511.) “The essence of the alter ego doctrine is that justice be done,” and “[l]iability is imposed to reach an equitable result.” (Id.) “[T]he corporate form will be disregarded only in narrowly defined circumstances and only when the ends of justice so require.” (Id.) “[I]t would be unjust to permit those who control companies to treat them as a single or unitary enterprise and then assert their corporate separateness in order to commit frauds and other misdeeds with impunity.” (Id. at 512.)

The alter ego doctrine should apply when the court has “determined that though there are two or more personalities, there is but one enterprise; and that this enterprise has been so handled that it should respond, as a whole, for the debts of certain component elements of it.” (Id.) Whether the alter ego doctrine should apply is “primarily a question of fact.” (Id.) Courts have explained that the alter ego determination is based on a variety of factors: “The alter ego test encompasses a host of factors: ‘[1] [c]ommingling of funds and other assets, failure to segregate funds of the separate entities, and the unauthorized diversion of corporate funds or assets to other than corporate uses ...; [2] the treatment by an individual of the assets of the corporation as his own ...; [3] the failure to obtain authority to issue stock or to subscribe to or issue the same ...; [4] the holding out by an individual that he is personally liable for the debts of the corporation ...; the failure to maintain minutes or adequate corporate records, and the confusion of the records of the separate entities ...; [5] the identical equitable ownership in the two entities; the identification of the equitable owners thereof with the domination and control of the two entities; identification of the directors and officers of the two entities in the responsible supervision and management; sole ownership of all of the stock in a corporation by one individual or the members of a family ...; [6] the use of the same office or business location; the employment of the same employees and/or attorney ...; [7] the failure to adequately capitalize a corporation; the total absence of corporate assets, and undercapitalization ...; [8] the use of a corporation as a mere shell, instrumentality or conduit for a single venture or the business of an individual or another corporation ...; [9] the concealment and misrepresentation of the identity of the responsible ownership, management and financial interest, or concealment of personal business activities ...; [10] the disregard of legal formalities and the failure to maintain arm's length relationships among related entities ...; [11] the use of the corporate entity to procure labor, services or merchandise for another person or entity ...; [12] the diversion of assets from a corporation by or to a stockholder or other person or entity, to the detriment of creditors, or the manipulation of assets and liabilities between entities so as to concentrate the assets in one and the liabilities in another ...; [13] the contracting with another with intent to avoid performance by use of a corporate entity as a shield against personal liability, or the use of a corporation as a subterfuge of illegal transactions ...; [14] and the formation and use of a corporation to transfer to it the existing liability of another person or entity.” (Id. at 512-513.) “This long list of factors is not exhaustive.” (Id. at 513.)

Further, “[n]o single factor is determinative, and instead a court must examine all the circumstances to determine whether to apply the doctrine[.]” (Id.)

The court finds that the above allegations are more than sufficient to state a claim for alter ego liability. The Complaint states facts suggesting a unity of interest among the Defendants and states facts showing that an inequitable result will follow if the alter ego doctrine is not applied based on the allegation that funds were allegedly improperly siphoned from the facility to the management defendants. To the extent that Defendants argue that their business relationships consist of only lawful conduct and that there is no unity of interest among Defendants, that is a dispute of fact that should not be decided at the pleading stage.

Further, as Plaintiff points out, alter ego liability is not required to establish each Defendant’s liability under the Consumer Legal Remedies Act (“CLRA”), or the derivative Unfair Competition Law (“UCL”) based on violation of the CLRA. Thus, Plaintiff does not need to adequately plead alter ego liability to maintain those claims against Defendants.

Defendants also object to the entire Complaint on the grounds of uncertainty because Plaintiff alleges facts as to Defendants as a group, rather than identifying each Defendant individually for each allegation and specifying each Defendant’s involvement in the alleged misconduct. The court finds that Plaintiff has adequately pled his claims as to all Defendants, collectively and as alter egos of each other. To the extent each Defendant challenges the merits of the allegations and each of their roles and liability, those are issues of fact which can be further clarified through discovery. “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,” especially as to facts “presumptively within [the other party’s] knowledge.” (Khoury v.

Maly's of California, Inc. (1993) 14 Cal. App. 4th 612, 616.)

Based on the foregoing, the court OVERRULES Defendants’ demurrer as to the entire complaint.

II. First Cause of Action (Violation of Resident Rights pursuant to Health & Safety Code § 1430(b))

Defendants demur to the First Cause of Action for Violation of Resident Rights on the grounds that only one entity—La Mirada Post Acute LLC—bears liability under Health and Safety Code section 1430(B) because it is the only licensee among the named defendants.

“[A] licensee who commits a class ‘A’ or ‘B’ violation may be enjoined from permitting the violation to continue or may be sued for civil damages within a court of competent jurisdiction.” (Cal. Health & Safety Code § 1430(a).) “A current or former resident or patient, or the legal representative, personal representative, or successor in interest of a current or former resident or patient, of a skilled nursing facility . . . may bring a civil action against the licensee of a facility who violates any rights of the resident or patient as set forth in Section 72527 or 73523 of Title 22 of the California Code of Regulations, or any other right provided for by federal or state law or regulation.” (Cal.

Health & Safety Code § 1430(b)(1).) “The licensee shall be liable for the acts of the licensee's employees.” (Id.) “Licensee” means the holder of a license . . . for a long-term health care facility.” (Cal. Health & Safety Code § 1418(d).)

However, “[a]lter ego is an equitable doctrine that also extends a corporation's liability on a cause of action to another corporation or individual when the doctrine's requirements are met.” (Brown Bark III, L.P. v. Haver (2013) 219 Cal. App. 4th 809, 823.) As the court finds that Plaintiff has adequately alleged grounds for applying the alter ego doctrine, Plaintiff has also adequately alleged this cause of action as to all defendants, including the non-licensee management defendants.

The court OVERRULES Defendants’ demurrer as to the First Cause of Action.

III. Second Cause of Action (Violation of the CLRA)

Defendants demur to the Second Cause of Action for violation of the CLRA on the grounds that the claim is not pled with reasonable particularity.

“The unfair methods of competition and unfair or deceptive acts or practices listed in this subdivision undertaken by any person in a transaction intended to result or that results in the sale or lease of goods or services to any consumer are unlawful: . . . Representing that goods or services have sponsorship, approval, characteristics, ingredients, uses, benefits, or quantities that they do not have or that a person has a sponsorship, approval, status, affiliation, or connection that the person does not have. . .

Representing that goods or services are of a particular standard, quality, or grade, or that goods are of a particular style or model, if they are of another . . . Advertising goods or services with intent not to sell them as advertised. . . . Representing that a transaction confers or involves rights, remedies, or obligations that it does not have or involve, or that are prohibited by law.” (Cal. Civ. Code § 1770(a).) “Any consumer who suffers any damage as a result of the use or employment by any person of a method, act, or practice declared to be unlawful by Section 1770 may bring an action against that person to . . .” (Cal.

Civ. Code § 1780.)

“A plaintiff alleging [a statutory violation] . . . must state with reasonable particularity the facts supporting the statutory elements of the violation.” (Khoury v. Maly's of California, Inc. (1993) 14 Cal. App. 4th 612, 619.) A demurrer is properly sustained when the “complaint identifies no particular section of the statutory scheme which was violated and fails to describe with any reasonable particularity the facts supporting violation.” (Id.) “[C]auses of action under the CLRA and UCL must be stated with reasonable particularity, which is a more lenient pleading standard than is applied to common law fraud claims,” which requires “fraud to be pled specifically, which necessitates pleading facts which show how, when, where, to whom and by what means the representations were tendered.” (Gutierrez v. Carmax Auto Superstores California (2018) 19 Cal. App. 5th 1234, 1261.)

In the Second Cause of Action, Plaintiff alleges that “the contractual Admission Agreement arrangement with each resident . . . explicitly stated by the DEFENDANTS to include the obligation, and representation as to the standard of care to be provided, that the FACILITY would ensure the rights afforded to all residents of skilled nursing facilities under Health & Safety Code §1599.1(a) and 22 C.C.R. §72527(a)(25), most specifically the right to live in a FACILITY that employs ‘an adequate number of qualified personnel to carry out all of the functions of the facility’ as mandated by Title 22 of the California Code of Regulations §72329.1(a) as to ‘Direct Caregivers.’” (Compl. ¶ 59.)

Plaintiff also alleged in the Complaint that “DEFENDANTS actively and intentionally concealed from Plaintiff and class members that DEFENDANTS chronically understaffed the FACILITY.” (Id. ¶ 31.) Plaintiff alleges that the representations by Defendants “were false and known to be false when made,” and that “[t]hese representations by DEFENDANTS were intended to induce and lure elderly and infirm residents (and their representatives) into agreeing to be admitted to the FACILITY based on false and misleading representations.” (Id. ¶¶ 60, 62.)

Plaintiff contends that these misrepresentations violated Civil Code § 1770(a)(5), (7), (9), and (14). (Compl. ¶ 64.) Plaintiff alleges that he and others similarly situated “suffered economic loss in the form of unearned payments to the DEFENDANTS” for substandard care. (Id. ¶ 69.) Plaintiff also alleges that Defendants made misrepresentations as to compliance with the law, as the facility’s timekeeping records for nurses failed to take into account rest breaks (Compl. ¶ 46), and Plaintiffs allege that “DEFENDANTS artificially and fraudulently inflate the reported nursing staff ratios by unlawfully and fraudulently including the hours of employees not providing direct nursing care, including but not limited to administrative, supervisory, and/or maintenance employees who do not provide direct patient care.” (Compl. ¶ 43.)

Plaintiff identifies the specific practices that violated the CLRA, identifies which statutes applied to the alleged misconduct, alleges that the misrepresentations induced Plaintiff and others similarly situated to become residents of the facility and make payments to Defendants, and alleges that he and others similarly situated suffered economic loss. (Compl. ¶¶ 59-69.) Accordingly, the court finds that the Complaint states the Second Cause of Action with reasonable particularity.

Defendants also contend that Plaintiff has not pled adequate facts showing Defendants’ systematic failure to meet the objective hours of NHPPD and the Title 22 regulatory shift ratios. However, this is a factual dispute that should not be decided at the demurrer stage.

Based on the foregoing, the court OVERRULES the demurrer as to the Second Cause of Action.

IV. Third Cause of Action (UCL)

Defendants demur to the derivative Third Cause of Action (UCL) on the grounds that the underlying Health & Safety Code and CLRA claims fail. However, as the court overruled the demurrer as to these two causes of action, the court also OVERRULES the demurrer to the derivative Third Cause of Action.

Alternatively, Defendants argue that the UCL claim does not adequately plead a restitution theory, because a UCL claim for restitution allegedly cannot be made when individualized proof is required for each class member. However, Defendants provide no authority to support this argument.

Lost money or property, i.e. economic injury, to establish standing for a UCL claim, is established when Plaintiff or class members “(1) surrender in a transaction more, or acquire in a transaction less, than he or she otherwise would have; (2) have a present or future property interest diminished; (3) be deprived of money or property to which he or she has a cognizable claim; or (4) be required to enter into a transaction, costing money or property, that would otherwise have been unnecessary.” (Kwikset Corp. v.

Superior Ct. (2011) 51 Cal. 4th 310, 323.) As stated above, Plaintiff has alleged that he and others similarly situated paid more than they should have to be residents at the facility based on misrepresentations about the quality of care and staffing that would be provided at the facility. Accordingly, Plaintiff has alleged sufficient injury to plead restitution, which only requires that the court be able “to restore to any person in interest any money or property, real or personal, which may have been acquired by means of [] unfair competition.” (Cal.

Bus. & Prof. Code § 17203.)

To the extent Defendants dispute Plaintiff and class members’ ownership interest in the money paid to Defendants, that is a dispute of fact that should not be decided at the pleading stage. The court OVERRULES the demurrer to the Third Cause of Action as to this alternative ground.

V. Class Allegations

Defendants also demur to Plaintiff’s class allegations on the ground that the harm suffered by each of the 3,000 class members would require individualized proof. Plaintiff argues that if the facility as a whole is understaffed, every resident’s rights have been violated as a matter of law, and no individualized proof is required.

“The decision whether a case is suitable to proceed as a class action ordinarily is made on a motion for class certification.” (Bridgeford v. Pac. Health Corp. (2012) 202 Cal. App. 4th 1034, 1041.) “A court may decide the question earlier by sustaining a demurrer to the class action allegations of a complaint only if it concludes as a matter of law that, assuming the truth of the factual allegations in the complaint, there is no reasonable possibility that the requirements for class certification will be satisfied.” (Id. at 1041-1042.)

The court finds that deciding the propriety of class allegations at the pleading stage is not warranted. It is premature for the court to decide whether Plaintiff can demonstrate commonality, typicality, manageability and other class suitability factors to support class treatment. Defendant have not shown that there is no reasonable possibility that the requirements can be satisfied. Thus, the court OVERRULES the demurrer as to Plaintiff’s class allegations.

VI. Frank Johnson and David Johnson

Defendants argue that the Complaint fails to state facts to support individual liability for Frank Johnson and David Johnson. However, as discussed above as to the alter ego allegations, Plaintiff has adequately alleged the roles of these individuals and alleged facts against them that connect them to the misrepresentations and facility management issues underlying the claims in this action. Whether Plaintiff’s allegations are true is a factual dispute not to be decided at the demurrer stage. Thus, the court OVERRULES the demurrer as to this ground.

VII. Injunctive Relief

Defendants ask for the court to abstain from granting injunctive relief on the grounds that it would require interference with a complex economic policy best handled by the legislature or an administrative agency. The court declines to reach this issue as it was not properly included in the Notice of the Demurrer and as it is not the proper subject of a demurrer.

MOTION TO STRIKE

Defendants’ Motion to Strike Portions of Plaintiff’s Complaint is GRANTED IN PART and DENIED IN PART.

I. Punitive Damages

Defendants ask that the court strike allegations related to Plaintiff’s claim for punitive damages (Compl. ¶ 70, and Prayer for Relief ¶ 6) on the grounds that there are insufficient facts to demonstrate malice, oppression or fraud.

A plaintiff may seek punitive damages only “where it is proven by clear and convincing evidence that the defendant has been guilty of oppression, fraud, or malice.” (Cal. Civ. Code § 3294(a).) “Malice” means “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.” (Cal. Civ. Code § 3294(c)(1).) “Oppression” means “despicable conduct that subjects a person to cruel and unjust hardship in conscious disregard of that person's rights.” (Cal.

Civ. Code § 3294(c)(2).) “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.” (Cal. Civ. Code § 3294(c)(1).) “Despicable conduct” is conduct that is “so vile, base, contemptible, miserable, wretched or loathsome that it would be looked down upon and despised by ordinary decent people.” (Lackner v. North (2006) 135 Cal.

App. 4th 1188, 1210.)

“In order to survive a motion to strike an allegation of punitive damages, the ultimate facts showing an entitlement to such relief must be pled by a plaintiff.” (Clauson v. Superior Court (1998) 67 Cal. App. 4th 1253, 1255 [internal citations omitted].) “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.” (Id.)

Plaintiff alleges the following in the Complaint: • Before, during, and after the admissions processes of Plaintiff and each class member, the DEFENDANTS actively and intentionally concealed from Plaintiff and class members that at all times relevant hereto the FACILITY did not employ “an adequate number of “Direct Caregivers,” as the term “Direct Caregivers” is defined 22 Code of Regulations §72038, to carry out all of the functions of the facility” in violation of Health & Safety Code §1599.1(a) (as expressly incorporated by Title 22 C.C.R. §72527(a)(25)) as mandated by Title 22 of the California Code of Regulations §72329.1(a). (Compl. ¶ 29.) • Plaintiff alleges that these misrepresentations “were intended to deceive Plaintiff and members of the class into believing that the FACILITY were properly operated to induce Plaintiff and class members into becoming and/or remaining residents of the FACILITY.

Plaintiff and members of the class, all in infirm health, elderly, and/or in need of skilled nursing care and members of one of the most vulnerable segments of our society, were unsophisticated and unknowledgeable in the operation of skilled nursing facility in the State of California and had no knowledge of the facts concealed by DEFENDANTS and could not have discovered those concealed facts due to, among other things, their extremely vulnerable status.” (Compl. ¶ 30.) • These representations by DEFENDANTS were intended to induce and lure elderly and infirm residents (and their representatives) into agreeing to be admitted to the FACILITY based on false and misleading representations without disclosing that DEFENDANTS cannot and do not provide the represented level and quality of care to residents.

Before, during, and after the admissions processes of Plaintiff and each class member, the DEFENDANTS actively and intentionally concealed from Plaintiff and class members, and/or each’s legal representative, that DEFENDANTS have a long history of being serial violators of skilled nursing industry laws. (Compl. ¶ 60.) • Before, during, and after the admissions processes of Plaintiff and each class member, the DEFENDANTS actively and intentionally concealed from Plaintiff and class members that DEFENDANTS chronically understaffed the FACILITY with an inadequate number of “Direct Caregivers” to carry out the function of the FACILITY as more fully alleged herein, and in so doing and as a result thereof, the DEFENDANTS have violated the rights afforded to all residents of skilled nursing facilities under Health & Safety Code §1599.1(a) and 22 Code of Regulations §72527(a)(25) as mandated by Title 22 of the California Code of Regulations §72329.1(a). (Compl. ¶ 31.) • Plaintiff also alleges that “DEFENDANTS artificially and fraudulently inflate the reported nursing staff ratios by unlawfully and fraudulently including the hours of employees not providing direct nursing care, including but not limited to administrative, supervisory, and/or maintenance employees who do not provide direct patient care.” (Compl. ¶ 43.) • Plaintiff alleges fraudulent reporting by Defendants because “DEFENDANTS’ own time-keeping records which do not take into account rest breaks required by Labor Code §226.7 and 8 California Code of Regulations §§ 11010-11150, ¶ 12 and §11160, ¶ 11.” (Compl. ¶ 45.) • Plaintiff alleges that Defendants acted to “maximiz[e] profits for DEFENDANTS’ individual directors, officers, and managers from the operation of the FACILITY by underfunding and understaffing the FACILITY despite the mandates of law in violation of PLAINTIFF’S and the class’s resident’s rights.” (Compl. ¶ 53.)

The court finds that these allegations are sufficient to state a claim for punitive damages, and any dispute as to whether Defendants’ conduct amounts to oppression, fraud or malice is for the trier of fact and should not be decided at the pleading stage. Thus, the court DENIES the Motion to Strike as to the punitive damages allegations in ¶ 70 of the Complaint, and Prayer for Relief ¶ 6.

II. Health & Safety Code § 1430(b) Limits Damages to $500 Per Lawsuit

Defendants argue that Health & Safety Code § 1430(b) limits damages to $500 per violation, but does not permit recovery of any penalties. Accordingly, Defendants argue that the Prayer seeking relief for “statutory damages and penalties pursuant to Health & Safety Code § 1430(b)” is improper and must be stricken from the Complaint. (Prayer for Relief ¶ 9 [emphasis added].) Plaintiff fails to address this in opposition or provide any basis for penalties under Health & Safety Code § 1430(b). Thus, the court GRANTS the Motion to Strike as to the phrase “and penalties” from Prayer for Relief ¶ 9.

Defendants also argue that these statutory damages can only be obtained against the licensee of the facility. However, as the Complaint only states a prayer “For statutory damages and penalties pursuant to Health & Safety Code §1430(b),” generally, the court cannot strike this Prayer for Relief as it is undisputed that Plaintiff is able to obtain such statutory damages against at least Defendant La Mirada Post Acute LLC, the licensee of the facility. The court DENIES the Motion to Strike as to the entirety of Prayer for Relief ¶ 9.

III. Treble Damages

Defendants seek to strike Prayer for Relief ¶ 8 which asks for treble damages, arguing that the request is not tied to any predicate allegation or cause of action.

In cases involving unfair or deceptive practices against senior citizens, disabled persons, or veterans, a trier of fact may award treble damages when “the purpose or effect of which is to punish or deter, and the amount of the fine, penalty, or other remedy is subject to the trier of fact's discretion[.]” (Cal. Civ. Code § 3345(b).) The treble damages may be based on: (1) Whether the defendant knew or should have known that their conduct was directed to one or more senior citizens, disabled persons, or veterans. (2) Whether the defendant's conduct caused one or more senior citizens, disabled persons, or veterans to suffer: loss or encumbrance of a primary residence, principal employment, or source of income; substantial loss of property set aside for retirement, or for personal or family care and maintenance; or substantial loss of payments received under a pension or retirement plan or a government benefits program, or assets essential to the health or welfare of the senior citizen, disabled person, or veteran. (3) Whether one or more senior citizens, disabled persons, or veterans are substantially more vulnerable than other members of the public to the defendant's conduct because of age, poor health or infirmity, impaired understanding, restricted mobility, or disability, and actually suffered substantial physical, emotional, or economic damage resulting from the defendant's conduct. (Cal.

Civ. Code § 3345(b)(1)-(3).) Defendants argue that neither the statutory damages under Cal. Health & Safety Code § 1430(b) or restitution under the UCL is intended to punish defendants, and thus cannot be subject to treble damages.

Plaintiff does not dispute this, but argues that treble damages are available under the CLRA and the derivative UCL claim based on violations of the CLRA. (Cal. Civ. Code § 1780 [permitting recovery of punitive damages, and any other relief that the court deems proper, with an additional award for a consumer who is a senior citizen or a disabled person].) As there is a basis under the CLRA for punitive damages that may be subject to trebling, the court DENIES the Motion to Strike as to Prayer for Relief ¶ 8.

IV. Punitive Damages Under Code § 1780

Defendants argue that Paragraphs 4 through 7 for the Prayer for Relief is only available under Civil Code § 1780, and asks that it be stricken to the extent Plaintiff seeks the damages under the Health & Safety Code § 1430(b) or the UCL. However, Plaintiff already made it clear the Prayers for Relief is only as to the claim under Civil Code § 1780: 4. For actual damages in a total amount to exceed one thousand dollars pursuant to Civil Code §1780(a)(1); 5. For restitution of Plaintiff and class member property pursuant to Civil Code §1780(a)(3); 6. For punitive damages pursuant to Civil Code § 1780(a)(4) and as otherwise allowed by law; 7. For civil penalties for “senior citizens” and “disabled persons” in the amount of $5,000 for each Plaintiff and class member pursuant to Civil Code §1780(b);

Thus, the court DENIES the Motion to Strike as to Prayers for Relief, Paragraphs 4 through 7.

V. Injunctive Relief

Defendants seek an order striking the request for injunctive relief on the grounds that it is vague, overbroad, and that court supervision is inappropriate. Defendants ask that the court judicially abstain from granting an injunction.

The court finds that it is premature for the court to decide the propriety of the scope of the injunction requested in the Complaint, and that the issue is better decided after the pleadings have settled and the parties can address the merits of Plaintiff’s claims. Although the court recognizes that plaintiff’s requested injunction is potentially too broad and sweeping for the court to issue, the court DENIES Defendants’ Motion to Strike as to the Prayer for Relief ¶ 2, WITHOUT PREJUDICE to the court’s ability to review the propriety of the injunctive relief requested by Plaintiff after the pleading stage.

Defendants are ordered to give notice of this ruling to Plaintiff.

11 30-2026-01549189 DENIED AS MOOT Anguiano vs. State Farm General Insurance Company

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