Maniben Corporation v. State Farm General Insurance Company

The court will provide Cano with an opportunity to secure the "bridge loan" from First Security Mortgage and orders Gonzalez to cooperate with the appraisal process. As such, the court will continue the instant motion. In the event that Cano cannot secure the "bridge loan", the court is inclined to grant the motion and proceed with the sale of the Subject Property. IV. CONCLUSION Plaintiff Jose D. Gonzalez's Motion to Enforce Settlement is CONTINUED.

Insurance Company's Motion to Strike Portions of Plaintiff Maniben Corporation's Complaint is DENIED. I. BACKGROUND On April 7, 2025, Plaintiff Maniben Corporation ("Plaintiff") filed a complaint against Defendant State Farm General Insurance Company ("Defendant") alleging causes of action for: 1. Breach of Contract; and 2. Breach of The Implied Covenant of Good Faith and Fair Dealing. On July 17, 2026, Defendant filed this Motion to Strike. On August 25, 2026, Plaintiff filed an opposition. On August 31, 2026, Defendant filed a reply.

II. LEGAL STANDARD Pursuant to Code of Civil Procedure section 436, "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. (b) 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., Sec. 436.) The grounds for a motion to strike must "appear on the face of the challenged pleading or from any matter of which the court is required to take judicial notice." (Code Civ.

Proc., Sec. 437.) III. DISCUSSION Defendant moves to strike the request for punitive damages arguing that Plaintiff fails to allege facts of despicable conduct sufficient to establish malice beyond conclusory allegations. (Motion, at p. 3.) Punitive damages may be awarded in an action for the breach of an obligation not arising from contract upon clear and convincing evidence that a defendant has been guilty of oppression, fraud, or malice. (Civ. Code, Sec. 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 Sec. 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 Sec. 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 Sec. 3294, subd. (c)(3).) The complaint alleges that Plaintiff purchased an insurance policy from Defendant for a property located at 1533 Colorado Boulevard, Los Angeles, CA 90041 ("Subject Property"). (Complaint, P. 5.) On September 18, 2023, an action was filed against Plaintiff titled 1525 Colorado, LLC v. Maniben Corp. et al., Case No. 23STCV22497 ("Underlying Action"). (Id., P. 13.) Plaintiff reported the Underlying Action to its insurance broker who notified Defendant. (Id., P. 18.)

On August 14, 2024, Defendant acknowledged the potential for coverage of the claims asserted against Plaintiff but issued a reservation of rights letter ("ROR Letter") to Plaintiff. (Id., P. 20.) The complaint alleges that the purported bases identified in the ROR Letter were inapplicable, pretextual, and asserted to manufacture a coverage dispute where none reasonably existed, thereby creating a conflict of interest requiring independent counsel and raised by Defendant to deprive Plaintiff of its benefits under the insurance policy. (Ibid.)

Due to the reservation of rights, Plaintiff requested independent counsel as Defendant was obligated to provide and fully fund independent counsel of Plaintiffs choosing. (Id., P.P. 23-24.) The complaint alleges that Defendant wrongfully refused to provide independent counsel and instead attempted to control the defense through counsel of its own choosing, despite the existence of a clear and disqualifying conflict of interest. (Id., P. 25.) Subsequently, during mediation of the Underlying Action, Defendant allegedly unreasonably and in bad faith refused to settle within policy limits of $1,000,000.00 despite a substantial likelihood of an excess judgment, and instead authorized only $40,000.00, an amount grossly disproportionate to Plaintiffs potential exposure and the settlement value of the case. (Id., P. 29.)

Ultimately, the parties resolved the Underlying action in exchange for a payment of $5,265,000.00 from Plaintiff. (Id., P. 33.) The court finds that Plaintiff sufficiently alleges fact to support a request for punitive damages. "'[A]n insurer's bad faith may not only breach the implied covenant of good faith and fair dealing but also can be treated for tort purposes as a basis for exemplary damages where it occurs in a context of malice, fraud, or oppression. [Citation.]'" (Fleming v. Safeco Ins.

Co. (1984) 160 Cal. App. 3d 31, 44.) A claim of punitive damages requires allegations of¿ultimate facts¿of the defendant's oppression, fraud, or malice. (Spinks v. Equity Residential Briarwood Apartments ¿(2009) 171 Cal.App.4th 1004, 1055, citing¿ Cyrus v.¿Haveson ¿(1976) 65 Cal.App.3d 306, 316-317; Civ. Code Sec. 3294, subd. (a).) Plaintiff alleges that Defendant engaged in a pattern and practice to handle claims

designed to minimize its financial exposure at the expense of its insured and that Defendant intentionally, maliciously, oppressively and conveniently failed to properly investigate the loss in a manner in which it would have determined that the claims in the Underlying Action were covered under the policy. (Complaint, P.P. 37, 40.) Plaintiff further alleges that Defendant was intended to compel Plaintiff to abandon its claim and that Defendant's representatives, in bad faith, unlawfully, and in a manner which breached the terms of the policy, did everything in their power not to extend coverage for the claim. (Id., P. 42.)

Plaintiff also alleges that Defendant's conduct in denying coverage for the Claim was fraudulent, malicious and oppressive, in breaches of the policy and in disregard for their duties under the law. (Id., P. 43.) For pleading purposes, these allegations offer sufficient ultimate facts reflecting that Defendant acted with malice, oppression, and/or fraud. The allegations also sufficiently ratification of Defendant sufficient to comply with Civil Code section 3294(b). Accordingly, the motion is denied.

IV. CONCLUSION Defendant State Farm General Insurance Company's Motion to Strike Portions of Plaintiff Maniben Corporation's Complaint is DENIED. | Home -->)" -->