WHITE VS PERRIS INVESTMENT GROUP, INC.

Searle & Co. v. Sup. Ct. (1975) 49 Cal.App.2d 22, 29; Smith v. Superior Court (1992) 10 Cal.App.4th 1033, 1041-1042.)

As defined in the statute, malice is “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,” while 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(c)(1) and (2).) Thus, punitive damages may be recovered for a non-intentional tort where a plaintiff pleads and proves that a defendant acted with “conscious disregard of the rights and safety of others.” (Pfeifer v.

John Crane, Inc. (2013) 220 Cal.App.4th 1270, 1299 [quoting Gawara v. United States Brass Corp. (1998) 63 Cal.App.4th 1341, 1361; see also J. R. Norton Co. v. General Teamsters, Warehousemen & Helpers Union (1989) 208 Cal.App.3d 430, 444 [“Evidence establishing ‘conscious disregard of another's rights’ is evidence indicating that the defendant was aware of the probable consequences of his or her acts and willfully and deliberately failed to avoid those consequences”].)

Significantly, too, when punitive damages are sought against a corporation, it must be shown that there was authorization, ratification, advance knowledge, malice, etc., on the part of an officer, director or managing agent of the corporation. (Civ. Code, § 3294(b).) “The managing agent must be someone who exercises substantial discretionary authority over decisions that ultimately determine corporate policy.” (White v. Ultramar (1999) 21 Cal. 4th 563, 573.) Liability is limited to those in the leadership group. (Cruz v. Homebase (2000) 83 Cal. App. 4th 160, 168.)

Here, the only claims against Defendants are for negligence, which cannot support a claim for punitive damages. Negligence, even if gross or reckless, cannot justify punitive damages. (Krusi v. Bear, Stearns & Co. (1983) 144 Cal.App.3d 664, 679.) However, punitive damages are recoverable where the defendant was aware of the probable dangerous consequences of his conduct, and that he willfully and deliberately failed to avoid those consequences. (Taylor v. Superior Court (1979) 24 Cal.3d 890.)

Here, Plaintiffs have added an “exemplary damages allegations” section contained at paragraphs 13-21 and incorporated into each cause of action. They allege that managing agents “approved and required a race-start procedure that released a second wave of riders across a live main track through an on-track intersection, at race speed, knowing this created a high-probability head-on/crossing collision hazard.” (FAC, ¶ 14.) Plaintiffs allege that “riders and other users complained directly to Defendants’ management and on-site supervisors” about three specific problems: (1) the starting line-up and intersection forced riders into conflicting paths; (2) two-wave releases were launched without visual clearance of rider positions; and (3) starter/flagger communication and training were inadequate. (FAC, ¶ 15.)

These complaints “put Defendants’ managing agents on actual notice that the procedure posed an extreme and obvious risk of collision and serious injury, yet no corrective action was taken.” (Id.)

On the day of the incident, Defendants “despite actual knowledge that the first wave of riders was still actively traversing the main track at race speed, made the affirmative decision to release a second wave directly across the main track at the track's intersection, without any visual clearance, radio confirmation, or red-flag hold, making a high-speed collision not only foreseeable but virtually inevitable.” (FAC, ¶ 12.) The FAC further alleges that “Defendants’ managing agents chose to continue using the dangerous intersection and two-wave start without adding trained personnel or instituting safe-release protocols, as part of a cost-saving decision prioritizing reduced staffing/training expense and faster event throughput over rider safety.” (FAC, ¶ 16.)

Plaintiffs also allege managing agents “ratified the conduct by ignoring repeated complaints, refusing to implement readily available safety measures (e.g., relocating the start, eliminating the crossing conflict, or requiring visual clearance by trained staff), and continuing the policy despite known near-misses and warnings.” (FAC, ¶ 18.)

Accepting these allegations as true and construing them liberally in Plaintiffs' favor, the FAC alleges more than gross negligence. The combination of (1) actual knowledge of high-probability danger from specific prior complaints; (2) deliberate continuation of the dangerous procedure; (3) profit-over-safety motivation; (4) readily available alternative safety measures; and (5) affirmative decision on the day of incident to release riders without visual clearance despite knowledge that riders were still on the track, states a claim that exceeds gross negligence and enters the zone of conscious disregard sufficient to allege a claim for punitive damages at the pleading stage. (Peterson v. Superior Court (1982) 31 Cal.3d 147; Taylor v. Superior Court (1979) 24 Cal.3d 890.)

Defendants’ argument that the conduct alleged amounts to operational lapses – timing, communication, staffing – not deliberate despicable acts appears to have some merit. The distinction between premises liability negligence and despicable conduct may ultimately prove decisive at later stages of litigation. However, at the pleading stage, Plaintiffs have pleaded sufficient specific factual allegations.

Defendants also argue Plaintiffs’ allegations lack specificity regarding the identity and authority of managing agents to support the claim for punitive damages against corporate entities. The FAC alleges that “owners, officers, directors, and those with substantial discretionary authority over race operations, safety policies, staffing/training, and track design/configuration, were managing agents within the meaning of Civil Code 3294(b) because they dictated corporate policy for the SUBJECT PREMISES and made final decisions that governed day-to-day safety operations.” (FAC, ¶ 21.)

The FAC alleges these individuals “exercised substantial discretionary authority over safety policies, race procedures, staffing/training, and track design/configuration.” (FAC, ¶ 14.) These are policy-level decisions that “ultimately determine corporate policy” under White v. Ultramar, Inc. (1999) 21 Cal.4th 563. The FAC pleads Doe defendants for managing agents “to be amended when ascertained” in discovery. (FAC, ¶ 18.)

The allegations of corporate authorization/ratification are set forth in conclusory terms, it is a general canon of pleading that less specificity is required where the facts lie more in the knowledge of the defendant. (Committee On Children’s Television, Inc. v. General Foods Corp. (1983) 35 Cal.3d 197, 217.) Pleading in the language of the statute is not objectionable when sufficient facts are alleged; nor is it proper to strike punitive damages simply because the averments of the complaint are mostly conclusory and subject to being stricken. (See Perkins v. Superior Court (1981) 117 Cal.App.3d 1, 6-7.) Plaintiffs’ allegations are sufficient at the pleading stage to support the demand for punitive damages against Defendants.

The motion to strike the punitive damages allegations and demand is denied.

If a timely request for oral argument is made by no later than 4:30 p.m. on June 10, 2026, oral argument will be heard on June 11, 2026 at 10:00 a.m. (not 8:30 a.m.).