everest campus california inc s notice of motion and motion to strike

Cal. Super. - 1st Dist.August 6, 2021

21878.1 1 MOTION TO STRIKE PORTIONS OF PLAINTIFFS’ FIRST AMENDED COMPLAINT 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 1100 El Centro Street So. Pasadena, CA 91030 Phone (626) 243-1100 Fax (626) 243-1111 Brian K. Stewart, Esq. (State Bar No. 126412) Adam A. Ainslie, Esq. (State Bar No. 311427) COLLINS COLLINS MUIR + STEWART LLP 1100 El Centro Street South Pasadena, CA 91030 (626) 243-1100 - FAX (626) 243-1111 Attorneys for Defendant, EVEREST CAMPUS CALIFORNIA, INC. SUPERIOR COURT OF THE STATE OF CALIFORNIA COUNTY OF SAN FRANCISCO RICHARD BURTON, an individual; ANDREW CLIFTON, an individual; KAITLIN KIRKPATRICK, an individual; and KIMBERLY KIRKPATRICK, an individual, Plaintiffs, vs. EVEREST CAMPUS CALIFORNIA, INC., a Delaware corporation; and DOES 1-20 inclusive, Defendants. ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) ) CASE NO. CGC19580946 [Assigned to Judge Garret Wong, Room 610] EVEREST CAMPUS CALIFORNIA, INC.’S NOTICE OF MOTION AND MOTION TO STRIKE PORTIONS OF PLAINTIFFS’ FIRST AMENDED COMPLAINT [Filed concurrently with Notice of Demurrer and Demurrer; Request for Judicial Notice and Declaration of Adam A. Ainslie] DATE: September 22, 2020 TIME: 9:30 a.m. DEPT.: 302 Complaint Filed: 11/21/19 Remand Received: 07/27/20 Trial Date: None TO ALL PARTIES AND THEIR ATTORNEYS OF RECORD HEREIN: PLEASE TAKE NOTICE that on September 22, 2020 at 9:30 a.m. or as soon thereafter the matter may be heard in Department 302 of the above-entitled Court located at 400 McAllister St, San Francisco, California 94102, Defendant EVEREST CAMPUS CALIFORNIA, INC. (“Everest”) will and hereby does, pursuant to Code of Civil Procedure sections 435, 436 and 437, move to strike ELECTRONICALLY F I L E D Superior Court of California, County of San Francisco 08/26/2020 Clerk of the Court BY: EDNALEEN ALEGRE Deputy Clerk 21878.1 2 MOTION TO STRIKE PORTIONS OF PLAINTIFFS’ FIRST AMENDED COMPLAINT 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 1100 El Centro Street So. Pasadena, CA 91030 Phone (626) 243-1100 Fax (626) 243-1111 portions of the First Amended Complaint of Plaintiffs RICHARD BURTON, ANDREW CLIFTON, KAITLIN KIRKPATRICK, and KIMBERLY KIRKPATRICK (collectively ‘Plaintiffs”). This motion seeks to strike the following portions from Plaintiffs’ First Amended Complaint: 1. Page 2, paragraph 8, lines 17-19: “The Everest/Peak Campus group of companies manages and leases out over twelve thousand (12,000) housing units to over forty-eight thousand (47,000) tenants in over sixty-five (65) large, multi-unit buildings across the United States.” Grounds: Irrelevant, the allegation is not essential to the statement of a claim. 2. Page 4, paragraph 24, lines 9-11: “Defendants intentionally concealed from Plaintiffs the nature and type of the investigative consumer reports they would procure from Plaintiffs and the date the reports would be procured.” Grounds: Irrelevant, the allegation is not pertinent to nor supported by an otherwise sufficient claim; False, the allegation is contradicted by judicial admissions within the complaint. 3. Page 4, paragraph 28, lines 18-20: “Defendants did not notify any Plaintiff in writing that an investigative consumer report would be made regarding his or her character, general reputation, personal characteristics, and/or mode of living.” Grounds: False, the allegation is contradicted by judicial admissions within the complaint. 4. Page 5, paragraph 37, line 22: “did not provide a consent form or disclosure,” Grounds: False, the allegation is contradicted by judicial admissions within the complaint. 5. Page 7, paragraph 49, lines 8-9: “The Investigative Consumer Reporting Agencies Act (“ICRAA”) was passed in 1975 and last amended in 1998.” Grounds: False, the allegation is contradicted by judicial matters of which the Court must take judicial notice. 6. Page 7, paragraph 49, lines 10-13: “Defendants are sophisticated, large companies. The Everest/Peak Campus family of companies in California manage over twelve thousand (12,000) units of housing and is landlord to over forty-seven thousand (47,000) people.” 21878.1 3 MOTION TO STRIKE PORTIONS OF PLAINTIFFS’ FIRST AMENDED COMPLAINT 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 1100 El Centro Street So. Pasadena, CA 91030 Phone (626) 243-1100 Fax (626) 243-1111 Grounds: Irrelevant, the allegation is not essential to the statement of a claim. 7. Page 7, paragraph 51, lines 21-22: “Defendants’ conduct was grossly negligent and/or willful; therefore Plaintiffs are each also entitled to punitive damages in an amount according to proof.” Grounds: Irrelevant, the demand for judgment requesting relief not supported by the allegations of the complaint. 8. Pages 7-9, paragraph 53 inclusive of sub-paragraphs a-j, lines 26-27, 1-28, 1-8 (duplicated on pages 9-11, paragraph 60, inclusive of sub-paragraphs a-j, lines 27-28, 1-28, 1-8; duplicated in prayer for relief pages 12-13, sub-paragraphs 8a-8j, lines 18-28, 1-25): “Plaintiffs are each also entitled to permanent injunctive and declaratory relief to the following effect: a. That Defendants are prohibited from engaging in the violations and other misconduct referred to above; b. That Defendants shall comply with ICRAA to the extent possible with respect to the investigative consumer reports already procured about each Plaintiff; c. That Defendants must deliver, within three days, copies of all investigative consumer reports to the individuals on whom they were prepared, which shall contain the name, address, and telephone number of the person or entity who issued the report and how to contact that person or entity; d. That Defendants shall provide the consumer a means by which the consumer may indicate on a written disclosure or consent form, by means of a box to check, that the consumer wishes to receive a copy of any report that is prepared, and, if the consumer wishes to receive a copy of the report, shall send a copy of the report (which shall bear the name, address, and contact information of the Reporting Agency) to the consumer within three business days of the date that the report is provided to Defendants; e. That prior to procuring any investigative consumer report, Defendants shall agree to provide a copy of the report to the subject of the Report; f. That prior to procuring any investigative consumer report, Defendants shall certify to the Reporting Agency that within three days of the request for the Report, Defendants will provide the consumer a means by which the consumer may indicate on a written disclosure or consent form, by means of a box to check, that the consumer wishes to receive a copy of any report that is prepared, and, if the consumer wishes to receive a copy of the report, shall send a copy of the report (which 21878.1 4 MOTION TO STRIKE PORTIONS OF PLAINTIFFS’ FIRST AMENDED COMPLAINT 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 1100 El Centro Street So. Pasadena, CA 91030 Phone (626) 243-1100 Fax (626) 243-1111 shall bear the name, address, and contact information of the Reporting Agency) to the consumer within three business days of the date that the report is provided to Defendants; That prior to procuring any investigative consumer report, Defendants shall certify to the Reporting Agency that it agrees to provide a copy of the Report to the consumer; h. The Defendants shall, not later than three days after the date on which they first request an Investigative Consumer Report on a person, notify the consumer in a writing, which shall include a copy or summary of Civil Code Section 1786.22 and the name and address of the Reporting Agency, that an Investigative Consumer Report will be made regarding the consumer’s character, general reputation, personal characteristics, and mode of living; i. That Defendants must deliver, within three days, copies of all investigative consumer reports to the individuals on whom they were prepared; j. That Defendants are prohibited from retaliating against any Plaintiff for the filing of this lawsuit.” Grounds: Irrelevant, the demand for judgment requesting relief not supported by the allegations of the complaint. 9. Page 9, paragraph 59, lines 20-26: “Plaintiffs bring this action in order to enforce one or more important rights affecting the public interest. The injunction and cessation of Defendants’ wrongful conduct will result in a significant benefit, both pecuniary and nonpecuniary, to the general public, or at least a large class of persons. In the interests of justice, attorney fees should be paid upon recovery by Plaintiffs, or any of them, in this case. The necessity and financial burden of private enforcement of the rights asserted herein make an award of attorney fees appropriate as provided for in Code of Civil Procedure Section 1021.5.” Grounds: Irrelevant, the demand for judgment requesting relief not supported by the allegations of the complaint. 10. Page 12, prayer paragraph 1, lines 3-4: “For general damages according to proof, on each cause of action for which such damages are available;” Grounds: Irrelevant, the demand for judgment requesting relief not supported by the allegations of the complaint. 11. Page 12, prayer paragraph 2, lines 4-6: “For compensatory damages according to 21878.1 5 MOTION TO STRIKE PORTIONS OF PLAINTIFFS’ FIRST AMENDED COMPLAINT 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 1100 El Centro Street So. Pasadena, CA 91030 Phone (626) 243-1100 Fax (626) 243-1111 proof, on each cause of action for which such damages are available;” Grounds: Irrelevant, the demand for judgment requesting relief not supported by the allegations of the complaint. 12. Page 12, prayer paragraph 4, line 10: “For punitive damages according to proof;” Grounds: Irrelevant, the demand for judgment requesting relief not supported by the allegations of the complaint. 13. Page 12, prayer paragraph 8, lines 14-17: “For a permanent injunction barring Defendant from engaging in the unlawful conduct described herein and barring Defendant from future violations of ICRAA with respect to each Plaintiff, and requiring Defendant to comply with ICRAA to the extent possible with respect to the reports they have already procured, providing:” Grounds: Irrelevant, the demand for judgment requesting relief not supported by the allegations of the complaint. This motion is based on this notice, the accompanying memorandum of points and authorities, the declarations and exhibits thereto concurrently filed herewith, any other papers on file herein, any matter of which the Court must or may take judicial notice, the argument of counsel at time of hearing, and upon such additional material as the Court may consider at the hearing on this matter. DATED: August 26, 2020 COLLINS COLLINS MUIR + STEWART LLP By: ________________________________ BRIAN K. STEWART Attorneys for Defendant, EVEREST CAMPUS CALIFORNIA, INC. 21878.1 1 MOTION TO STRIKE PORTIONS OF PLAINTIFFS’ FIRST AMENDED COMPLAINT 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 1100 El Centro Street So. Pasadena, CA 91030 Phone (626) 243-1100 Fax (626) 243-1111 MEMORANDUM OF POINTS AND AUTHORITIES I. INTRODUCTION Plaintiffs’ First Amended Complaint contains numerous irrelevant, false, and improper matters. This include claims for relief that are not warranted under existing law such as injunctions for alleged past violations of the Investigative Consumer Reporting Agency Act and claims for relief not warranted under the alleged facts such as punitive damages where there are no actual damages and the lone allegation in support is that Everest Campus is a large company. As a result, this Court should strike these matters from the First Amended Complaint. II. FACTUAL BACKGROUND As alleged in Plaintiffs’ First Amended Complaint, in early 2019, Plaintiffs, each of them, inquired with Everest Campus about renting apartments at the building known as the Post on Nord (student apartments near California State University Chico). FAC, at ¶ 14. Plaintiffs were directed to complete applications which indicated that “Everest would procure certain information on applicants’ character, general reputation, personal characteristics, and/or mode of living, including information involving payment history, rental history, personal history, and criminal history.” FAC, at ¶ 15. “The application purported to include an authorization” for Everest Campus to obtain this information. FAC, at ¶ 15. Plaintiffs each completed and submitted applications for housing and/or to be a guarantor for a housing applicant to Everest Campus. FAC, at ¶¶ 14-17. Plaintiffs Andrew Clifton, Richard Burton, and Kaitlin Kirkpatrick allege Everest Campus granted them each an apartment within the building in question and Plaintiff Kimberly Kirkpatrick alleges Everest Campus approved her as a guarantor on Plaintiff Kaitlin Kirkpatrick’s lease. FAC, at ¶¶ 21-23. Plaintiffs contend Everest Campus is a property management company who failed to comply with the Investigative Consumer Report Agency Act (“ICRAA”), specifically Civil Code section 1786.16, subdivision (a)(3), (a)(4), (a)(5), and (b)(1). The purported non-compliance is that Everest Campus did not: • notify plaintiffs that a report had been procured [(a)(3)]; • provide the names and address of the investigative consumer reporting agency 21878.1 2 MOTION TO STRIKE PORTIONS OF PLAINTIFFS’ FIRST AMENDED COMPLAINT 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 1100 El Centro Street So. Pasadena, CA 91030 Phone (626) 243-1100 Fax (626) 243-1111 [(a)(3)]; • provide a summary of the provisions of section 1786.22 [(a)(3)]; • certify to the investigative consumer reporting agency that the applicable disclosures to the consumer were made and that Everest will comply with subdivision (b) [(a)(4)]; • agree to provide a copy of any report prepared [(a)(5)]; • include a box to check for the consumer to indicate they wish to receive a copy of any report that is prepared [(b)(1)]; and • provide a consent form or disclosure form [(b)(1)]. FAC, at ¶¶ 25-31, 37, 39, 41, 43, and 45. Plaintiffs pray for actual damages, statutory penalties under the ICRAA, punitive damages under the ICRAA, declaratory relief under the ICRAA, injunctive relief under the ICRAA and Unfair Competition Law (“UCL”), restitution under the UCL, attorney’s fees under the UCL. FAC, at ¶¶ 46, 47, 51, 52, 53, 58, 59, 60, 65. To support the claim for punitive damages Plaintiffs allege that the ICRAA was passed in 1975, that Everest was aware of the ICRAA prior to requesting the investigative consumer reports on Plaintiffs, and that Everest is part of a “family of companies” that manages “over twelve thousand (12,000) units of housing and is landlord to over forty-seven thousand (47,000) people.” FAC, at ¶¶ 32, 33, 34, 49, 50, 51. III. THE COURT MAY STRIKE ANY IRRELEVANT, FALSE OR IMPROPER MATTER Code of Civil Procedure section 436 provides the Court with authority to strike out any “irrelevant, false, or improper matter asserted in any pleading.” Code Civ. Proc. § 436, subd. (a). “Irrelevant” matters subject to a motion to strike include: (i) an allegation that is not essential to the statement of a claim or defense; (ii) an allegation that is neither pertinent to nor supported by an otherwise sufficient claim or defense; and (iii) a demand for judgment requesting relief not supported by the allegations of the complaint. Code Civ. Proc. §§ 431.10, subds. (b)-(c). As with the standard for a demurrer, when reviewing a pleading, the court does not “assume the truth of contentions, deductions or conclusions of law.” Aubry v. Tri-City Hospital Dist. (1992) 2 Cal.4th 962, 967. 21878.1 3 MOTION TO STRIKE PORTIONS OF PLAINTIFFS’ FIRST AMENDED COMPLAINT 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 1100 El Centro Street So. Pasadena, CA 91030 Phone (626) 243-1100 Fax (626) 243-1111 A motion to strike is a widely accepted procedure to challenge portions of causes of actions seeking punitive damages. PH II, Inc., v. Superior Court (1995) 33 Cal.App.4th 1680, 1683. A motion to strike is the preferred method for testing the adequacies of the punitive damage allegations. Grieves v. Superior Court (1984) 157 Cal.App.3d 159, 163-64. It can be used to attack the entire pleading, or any part thereof, even single words or phrases. Warren v. Atchison, Topeka & Santa Fe Ry. Co. (1971) 19 Cal.App.3d 24, 40. IV. PLAINTIFFS’ FIRST AMENDED COMPLAINT CONTAINS IRRELEVANT, FALSE AND IMPROPER MATTERS THAT SHOULD BE STRICKEN A. Plaintiffs’ Improper Claims For Damages Should Be Stricken 1. California’s Investigative Consumer Reporting Agency Act does not authorize injunctive relief The Court should strike Plaintiffs’ request for an injunction under the ICRAA as such request is improper and not authorized by the statute. In order to survive a motion to strike, a plaintiff must plead the ultimate facts showing entitlement to relief. Clauson v. Superior Court (1998) 67 Cal.App.4th 1253, 1255. Notably, the remedies section of the ICRAA only lists actual damages, a statutory penalty, attorneys’ fees and costs (if successful in enforcing liability), and punitive damages (if the court determines the violation was grossly negligent or willful) as the available remedy for a violation of the ICRAA. See Civ. Code § 1786.50, subds. (a)-(b). The ICRAA does not provide an injunction as an available remedy. See Poinsignon v. Imperva, Inc. (N.D. Cal. Apr. 9, 2018) No. 17-CV-05653-EMC, 2018 WL 1709942, at *4 (dismissing an injunctive relief claim under the ICRAA as not authorized by statute). Accordingly, the request for an injunction under the ICRAA must be stricken. 2. Declaratory relief is not proper as it only concerns a past alleged wrong Plaintiff’s claim for declaratory relief is improper because it only concerns a past wrong. “Declaratory relief operates prospectively, serving to set controversies at rest. If there is a controversy that calls for a declaration of rights, it is no objection that past wrongs are also to be redressed; but there is no basis for declaratory relief where only past wrongs are involved. Hence, where there is an accrued cause of action for an actual breach of contract or other wrongful act, declaratory relief may 21878.1 4 MOTION TO STRIKE PORTIONS OF PLAINTIFFS’ FIRST AMENDED COMPLAINT 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 1100 El Centro Street So. Pasadena, CA 91030 Phone (626) 243-1100 Fax (626) 243-1111 be denied.” Osseous Techs. of Am., Inc. v. DiscoveryOrtho Partners LLC (2010) 191 Cal.App.4th 357, 366 (quoting 5 Witkin, Cal. Procedure (5th ed.2008) Pleading, § 869, at 284); see Brownfield v. Daniel Freeman Marina Hosp. (1989) 208 Cal.App.3d 405, 410 (finding right of action for damages precludes declaratory relief). Indeed, where “it appears that the rights of the complaining party have crystallized into a cause of action for past wrongs that a money judgment will fully resolve the dispute, and that no continuing relationship exists to justify a declaration of future rights” dismissal of a request for declaratory relief is proper. Cardellini v. Casey (1996) 181 Cal.App.3d 389, 396 (internal quotation and citation omitted). Here, Plaintiffs are seeking actual damages, a statutory penalty, and punitive damages all relating to the same alleged violation of the ICRAA. Because Plaintiffs have brought a cause of action for damages, the only conduct at issue is an alleged past harm, and there is no reasonable likelihood that these Plaintiffs will be subject to future investigative reports by Everest Campus as they have already been granted apartments (and Everest no longer manages the property in question), declaratory relief is improper. 3. Plaintiffs’ alleged facts demonstrate that punitive damages are not proper Punitive damages are disfavored in the law and are only allowed in the clearest of cases. See Rosner v. Sears, Roebuck & Co. (1980) 110 Cal.App.3d 740, 750. The pleading rules require a plaintiff to allege the requisite elements of a punitive damages claim in more than “conclusionary terms.” Cyrus v. Haveson (1976) 65 Cal.App.3d 306, 317; see also Grieves, supra, 157 Cal.App.3d at 166 (“Not only must there be circumstances of oppression, fraud or malice, but facts must be alleged in the pleading to support such a claim”). While typical Civil Code section 3294 is the provision for awarding punitive damages, the ICRAA itself contains a provision that allows punitive damages to be recovered in the discretion of the Court if the Court determines that the violation was “grossly negligent or willful.” See Civ. Code 1786.50, subd. (b). “Gross negligence” long has been defined in California and other jurisdictions as either a “want of even scant care” or “an extreme departure from the ordinary standard of conduct.” Eastburn v. Regional Fire Protection Authority (2003) 31 Cal.4th 1175, 1185-86. “[W]illful misconduct involves a more positive intent actually to harm another or to do an act with a positive, 21878.1 5 MOTION TO STRIKE PORTIONS OF PLAINTIFFS’ FIRST AMENDED COMPLAINT 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 1100 El Centro Street So. Pasadena, CA 91030 Phone (626) 243-1100 Fax (626) 243-1111 active, and absolute disregard of its consequences.” Meek v. Fowler (1935) 3 Cal.2d 420, 425. The California Supreme Court has unequivocally declared that in “California, as at common law, actual damages are an absolute predicate for an award of exemplary or punitive damages. Kizer v. Cnty. of San Mateo (1991) 53 Cal.3d 139, 147 (citations omitted); see Civ. Code § 1786.50, subd. (b) (punitive damages recoverable only “in addition” to the actual damages suffered). “It is settled law in California that punitive damages cannot be awarded unless actual damages are suffered.” Werschkull v. United Cal. Bank (1978) 85 Cal.App.3d 981, 1002. Even in the rare cases allowing a plaintiff to recover punitive damages in the absence of compensatory damages, the plaintiff still must have suffered some underlying actual damage. Carr v. Progressive Casualty Ins. Co. (1984) 152 Cal.App.3d 881, 892. Even nominal damages, which can be used to support an award of punitive damages, require actual injury. Kizer, supra, 53 Cal.3d at 147. Here, a reasonable reading of the complaint makes clear that Plaintiffs have not suffered any actual damage. Plaintiffs Andrew Clifton, Richard Burton, and Kaitlin Kirkpatrick allege Everest Campus granted them each an apartment within the building in question and Plaintiff Kimberly Kirkpatrick alleges Everest Campus approved her as a guarantor on Plaintiff Kaitlin Kirkpatrick’s lease. FAC, at ¶¶ 21-23. They allege that the rental application indicated Everest Campus would procedure certain background information on each Plaintiff-which they claim is the type of information commonly verified by investigative consumer reports-and they admit in discovery that they would have submitted applications to Everest Campus regardless of whether an investigative consumer report would have been prepared. See FAC, at ¶¶ 15-16; Ainslie Decl., at ¶ 8, Ex. F at No. 10. There are no factual allegations in the complaint that support the imposition of punitive damages because Everest Campus’ conduct did not cause any actual harm to Plaintiffs. Furthermore, Plaintiffs’ lone allegation in support of claiming punitive is that Everest Campus is a large company that was aware of the ICRAA prior to requesting reports for each Plaintiff. This is woefully insufficient to establish that Everest Campus’ conduct was so egregious that punitive damages should be assessed as punishment. By this logic, Plaintiffs are specifically asking this Court to treat Everest Campus differently under the law, claiming that Everest Campus should be punished above-and-beyond ordinary damages, merely because it’s a large company. If this were sufficient, 21878.1 6 MOTION TO STRIKE PORTIONS OF PLAINTIFFS’ FIRST AMENDED COMPLAINT 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 1100 El Centro Street So. Pasadena, CA 91030 Phone (626) 243-1100 Fax (626) 243-1111 nearly any allegation of noncompliance with the ICRAA could rise to the level of punitive damages because obtaining an investigative consumer report almost always involves a corporate defendant and an individual plaintiff. Plaintiffs must be required to set forth the circumstances in sufficient detail that makes Everest Campus’ conduct “grossly negligent” or “willful.” Accordingly, the request for punitive damages should be stricken. 4. California’s Unfair Competition Law does not authorize injunctive relief for only past harms that have no threat of future harm The general rule in California, which is equally applicable to Business and Professions Code section 17200 cases, is that “injunctive relief will be denied if, at the time of the order or judgment, there is no reasonable probability that the past acts complained of will recur, i.e., where the defendant voluntarily discontinues the wrongful conduct.” Cal. Serv. Station & Auto. Repair Ass’n v. Union Oil Co. of Cal. (1991) 232 Cal.App.3d 44, 57. The courts had applied this rule to section 17200 cases, denying injunctive relief where the conduct has been discontinued. See Midpeninsula Citizens for Fair Housing v. Westwood Investors (1990) 221 Cal.App.3d 1377. Although the 1992 amendment extended the scope of liability under the UCL to past acts, it did not dispense with the rule that, to get an injunction, plaintiff must still show that there still exists a threat that the allegedly wrongful act will continue. See Madrid v. Perot Systems Corp. (2005) 130 Cal.App.4th 440, 462-65 (analyzing the effect of the 1992 amendment and concluding that the “current UCL has not altered the nature of injunctive relief, which requires a threat that the misconduct to be enjoined is likely to be repeated in the future.”). In Madrid, a plaintiff brought a class action under the UCL on behalf of California electricity consumers, alleging that defendants engaged in UCL violations for their role as consultant in advising the State in restructuring California’s energy market. In that case, the alleged misconduct involved the deregulation of the California energy market and occurred in the past. The Court found that because the complaint’s factual allegations did not allege a continuing threat of such misconduct the plaintiff failed to present a viable claim for injunctive relief. In this case, Plaintiffs have not made any factual allegations that indicate there is a continuing 21878.1 7 MOTION TO STRIKE PORTIONS OF PLAINTIFFS’ FIRST AMENDED COMPLAINT 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 1100 El Centro Street So. Pasadena, CA 91030 Phone (626) 243-1100 Fax (626) 243-1111 threat of Everest Campus’ alleged misconduct. There are no allegations that Plaintiffs will be subject to another investigative consumer report. This is especially true because Everest Campus no longer manages this property. 5. California’s Unfair Competition Law does not authorize attorney’s fees and the facts as allege do not demonstrate an entitlement to fees under Code of Civil Procedure section 1021.5 The UCL does not provide for attorney fees, and relief is generally limited to injunctive relief and restitution. Cel-Tech Comm., Inc. v. Los Angeles Cellular Tel. Co. (1999) 20 Cal.4th 163, 179; Davis v. Ford Motor Credit Co. LLC (2009) 179 Cal.App.4th 581, 600. In any attempt to circumvent this rule, Plaintiffs seeks attorney’s fees under Code of Civil Procedure section 1021.5. However, “Section 1021.5 was not designed as a method for rewarding litigants motivated by their own pecuniary interests who only coincidentally protect the public interest.” Satrap v. Pacific Gas and Electric Co. (1996) 42 Cal.App.4th 72, 78. Where primary effect of lawsuit is to advance or vindicate plaintiff’s personal economic interests, award of fees under California private attorney general action provision is improper, even if some incidental public benefit derives from the suit. Flannery v. California Highway Patrol (1998) 61 Cal.App.4th 629, 635. A section 1021.5 request for attorney fees may be denied where the potential recovery of damages creates sufficient financial incentive to bring the lawsuit. See Satrap, supra, 42 cal.App.4th at 78. The “Legislature did not intend to authorize an award of fees under section 1021.5 in every lawsuit enforcing a constitutional or statutory right.” Flannery, supra, 61 Cal.App.4th at 635. Moreover, a trial court can properly deny public interest attorney fees to private plaintiffs who prevail in UCL actions for violations of statutes where the violations were miniscule and harmed no one because no significant public benefit in conferred. Baxter v. Salutary Sportsclubs, Inc. (2004) 122 Cal.App.4th 941, 946. The court in Baxter, for example, affirmed an order denying attorney fees to a plaintiff who had successfully sued a health club to require trivial changes in its membership contracts, both because the suit had conferred no benefit on the public and because the litigation did not appear to have been necessary. Id. Concerning the suit’s necessity, the court found “no evidence that [the plaintiff had] notified [the defendant] of the deficiencies in its contracts, or demanded their 21878.1 8 MOTION TO STRIKE PORTIONS OF PLAINTIFFS’ FIRST AMENDED COMPLAINT 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 1100 El Centro Street So. Pasadena, CA 91030 Phone (626) 243-1100 Fax (626) 243-1111 correction, before filing this action. Since [the defendant] corrected those minor deficiencies shortly after the suit was filed, it appears the litigation and the consequent attorney fees were largely, if not entirely, unnecessary.” Id. at 946-47. The Baxter court concluded the opinion by stating that the UCL “in combination with section 1021.5,” is not “a license to bounty-hunt for niggling statutory violations that neither harm nor threaten to harm anyone, especially when there is no showing that the offending party refuses to correct the violations after they have been brought to its attention.” Id. at 948. Here, while Plaintiffs’ claim that this lawsuit is of public importance that will result in a significant benefit to the general public or a large class of persons, the factual allegations belie this contention. These Plaintiffs suffered no actual damage and there is no risk of a future damage. Plaintiffs admit that there was no negative information to be disclosed in a background report. On top of this, if Plaintiffs are correct in their assertion for statutory penalties, they could potentially be awarded $160,000. This is certainly a personal financial incentive for them to bring suit. The Court can properly strike this improper request for attorney’s fees as they are not warranted under existing law. 6. Plaintiffs’ alleged facts demonstrate that general or compensatory damages are not proper Just as Plaintiffs have not shown they are entitled to punitive damages or an injunction, they have also failed to allege any facts that they have suffered actual damages for which they are entitled to compensation. Because Plaintiffs have admitted that they were given the apartments and approved as a guarantor, there is no reasonable indication that they could have suffered an actual damage as a result of Everest Campus’ purported unlawful conduct. As a result, the Court should strike this request from the complaint. B. Plaintiffs’ False Assertions Should Be Stricken Under the Code of Civil Procedure, the Court may strike any false matter asserted in a pleading. See Code Civ. Proc. § 436. Besides Everest Campus’ denial of allegations there are several allegations which are either objectively false or contradicted by other allegations thus rendering them false. 21878.1 9 MOTION TO STRIKE PORTIONS OF PLAINTIFFS’ FIRST AMENDED COMPLAINT 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 1100 El Centro Street So. Pasadena, CA 91030 Phone (626) 243-1100 Fax (626) 243-1111 1. Allegations that Everest Campus intentional concealed the nature of the report, that Plaintiffs were not told a report would be made, that there was no consent or disclosure that a report would be made are contradicted by other allegations thereby making them false Plaintiffs alleged that the rental application Everest Campus directed them to complete “indicated that Defendant Everest would procure certain information on applicants’ character, general reputation, personal characteristics, and/or mode of living, including information involving payment history, rental history, personal history, and criminal history.” FAC, at ¶ 15. Plaintiffs also alleged that the “application purported to include an authorization” for Everest to obtain this information. FAC, at ¶ 15. Despite these judicial admissions, Plaintiffs still go on to allege that Everest Campus “intentionally concealed from Plaintiffs the nature and type of investigative consumer reports” it would procure (FAC, at ¶ 24), that Everest Campus “did not notify any Plaintiff in writing that an investigative consumer report would be made regarding his or her character, general reputation, personal characteristics, and/or mode of living” (FAC, at ¶ 28), and that Everest Campus “did not provide a consent form or disclosure” (FAC, at ¶ 37). These allegations plainly contradict the judicial admissions that the application advised of the type of report that would be procured and included an authorization (which could also be called a consent form). As such, this Court should strike these false matters from the complaint. 2. The ICRAA was not last amended in 1998 Plaintiffs allege that the ICRAA was passed in 1975 and last amended in 1998. FAC, at ¶ 49. Presumably this allegation was made for some sort of “notice” argument that the law has remained unchanged for 22 years to support the notion that Everest Campus was either grossly negligent or willful in violating the ICRAA. Civil Code section 1786.16 which is the gravamen of Plaintiffs’ complaint, was added by Stats.1975, c. 1272, p. 3380, § 1. It was amended by Stats.1976, c. 1150, p. 5210, § 3; Stats.1982, c. 1127, p. 4067, § 9; Stats.1998, c. 988 (S.B.1454), § 5; Stats.2001, c. 354 (A.B.655), § 10; Stats.2002, c. 1030 (A.B.1068), § 3, eff. Sept. 28, 2002; Stats.2010, c. 481 (S.B.909), § 1, eff. Jan 1, 2011. Thus, there have been amendments in 2001, 2002, and 2010. Because this 21878.1 10 MOTION TO STRIKE PORTIONS OF PLAINTIFFS’ FIRST AMENDED COMPLAINT 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 1100 El Centro Street So. Pasadena, CA 91030 Phone (626) 243-1100 Fax (626) 243-1111 allegation is plainly false it should be stricken from the complaint. C. Plaintiffs’ Immaterial Allegations Should Be Stricken Plaintiffs complaint contains allegations that are not essential to the statement of a claim. The allegations that Everest Campus is a “sophisticated, large” company and as part of a family of companies, it manages “over twelve thousand (12,000) housing units to over forty-eight thousand (47,000) tenants in over sixty-five (65) large, multi-unit buildings across the United States” is wholly irrelevant to the causes of action at hand-whether Everest campus violated the Investigative Consumer Reporting Agency Act. There is nothing in the ICRAA that suggests the size or type of entity involved is am element or factor of a violation. Furthermore, the allegations are immaterial to the extent they are bootstrapping information associated with other separate legal entities such as Peak Campus to Everest Campus. If there is any materiality to these allegations, this Court should require Plaintiffs to amend this allegation to pertain only to Everest Campus and not any other legal entity not before this Court as a defendant to the action. V. CONCLUSION This Court should strike: the improper claims for injunctive relief, declaratory relief and punitive damages under the ICRAA, the improper claims for injunctive relief and attorney’s fees under the UCL, the improper claims for compensatory and general damages, the false claims concerning Everest Campus that are belied by Plaintiffs’ own allegations, the false claim of the ICRAA’s last amendment, and the immaterial allegations concerning Everest Campus’ size and the units the entire Peak Campus family of companies manage. DATED: August 26, 2020 COLLINS COLLINS MUIR + STEWART LLP By: ________________________________ BRIAN K. STEWART Attorneys for Defendant, EVEREST CAMPUS CALIFORNIA, INC. 21878.1 11 MOTION TO STRIKE PORTIONS OF PLAINTIFFS’ FIRST AMENDED COMPLAINT 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 1100 El Centro Street So. Pasadena, CA 91030 Phone (626) 243-1100 Fax (626) 243-1111 PROOF OF SERVICE (CCP §§ 1013(a) and 2015.5; FRCP 5) State of California, ) ) ss. County of Los Angeles. ) I am employed in the County of Los Angeles. I am over the age of 18 and not a party to the within action. My business address is 1100 El Centro Street, South Pasadena, California 91030. On this date, I served the foregoing document described as EVEREST CAMPUS CALIFORNIA, INC.’S NOTICE OF MOTION AND MOTION TO STRIKE PORTIONS OF PLAINTIFFS’ FIRST AMENDED COMPLAINT on the interested parties in this action by placing same in a sealed envelope, addressed as follows: Joseph B. Ollinger, Esq. Law Office of Joseph B. Ollinger PC 3348 Griffith Park Blvd. #22 Los Angeles, CA 90027 (310) 424-0097 josephollinger@gmail.com ATTORNEYS FOR PLAINTIFF KYLER CORREIA; DANIEL RIGNACK AND ROGER RIGNACK (BY MAIL) - I caused such envelope(s) with postage thereon fully prepaid to be placed in the United States mail in South Pasadena, California to be served on the parties as indicated on the attached service list. I am “readily familiar” with the firm’s practice of collection and processing correspondence for mailing. Under that practice, it would be deposited with the U.S. Postal Service on that same day with postage thereon fully prepaid at South Pasadena, California in the ordinary course of business. I am aware that on motion of the party served, service is presumed invalid if postal cancellation date or postage meter date is more than one day after date of deposit for mailing in affidavit. (BY CERTIFIED MAIL) - I caused such envelope(s) with postage thereon fully prepaid via Certified Mail Return Receipt Requested to be placed in the United States Mail in South Pasadena, California. BY EXPRESS MAIL OR ANOTHER METHOD OF DELIVERY PROVIDING FOR OVERNIGHT DELIVERY (BY ELECTRONIC FILING AND/OR SERVICE) - I served a true copy, with all exhibits, electronically on designated recipients listed on the attached Service List. FEDERAL EXPRESS - I caused the envelope to be delivered to an authorized courier or driver authorized to receive documents with delivery fees provided for. (BY FACSIMILE) - I caused the above-described document(s) to be transmitted to the offices of the interested parties at the facsimile number(s) indicated on the attached Service List and the activity report(s) generated by facsimile number (626) 243-1111 indicated all pages were transmitted. (BY PERSONAL SERVICE) - I caused such envelope(s) to be delivered by hand to the office(s) of the addressee(s). Executed on August 26, 2020 at South Pasadena, California. (STATE) - I declare under penalty of perjury under the laws of the State of California that the above is true and correct. (FEDERAL) - I declare that I am employed in the office of a member of the bar of this court at whose direction the service was made. Alicia Gomez agomez@ccmslaw.com