everest campus california inc s reply in support of motion to strike

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

21878.1 1 EVEREST CAMPUS’ REPLY IN SUPPORT OF DEMURRER 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 REPLY IN SUPPORT OF MOTION TO STRIKE PORTIONS OF PLAINTIFFS’ FIRST AMENDED COMPLAINT [Filed concurrently with Reply in Support of Demurrer] DATE: September 22, 2020 TIME: 9:30 a.m. DEPT.: 302 Complaint Filed: 11/21/19 Remand Received: 07/27/20 Trial Date: None Defendant EVEREST CAMPUS CALIFORNIA, INC. (“Everest”) hereby submits its reply in support of its motion to strike portions to the First Amended Complaint of Plaintiffs RICHARD BURTON, ANDREW CLIFTON, KAITLIN KIRKPATRICK, and KIMBERLY KIRKPATRICK (collectively “Plaintiffs”). ELECTRONICALLY F I L E D Superior Court of California, County of San Francisco 09/15/2020 Clerk of the Court BY: YOLANDA TABO-RAMIREZ Deputy Clerk 21878.1 2 EVEREST CAMPUS’ REPLY IN SUPPORT OF MOTION TO STRIKE 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 I. INTRODUCTION Plaintiffs’ opposition fails to address numerous arguments made in Everest Campus’ motion and the arguments that were addressed do not demonstrate that the improper allegations should not be stricken. II. THE IMPROPER AND FALSE ALLEGATIONS AND REQUESTS FOR RELIEF SHOULD BE STRICKEN FROM THE FIRST AMENDED COMPLAINT A. Plaintiffs’ Improper Claims For Damages Should Be Stricken 1. There is no injunctive relief under the ICRAA The Court should strike Plaintiffs’ request for an injunction under the ICRAA as such request is improper and not authorized by the statute. Plaintiffs’ opposition does not even address this point. In fact, the opposition seemingly recognizes that there is no such authority for an injunction under the ICRAA and agrees that it may be stricken (conditioned on it remaining in the UCL claim). See Opp. at 8:14-17. Regardless of the conditional agreement, there is simply no authority for an injunction under the ICRAA. The remedies available for the ICRAA is solely limited to what is listed in Civil Code section 1786.50. 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). 2. Declaratory relief is not proper as it only concerns a past alleged wrong Plaintiffs’ in opposition agree that declaratory relief is not warranted and may be stricken. 3. Plaintiffs’ alleged facts demonstrate that punitive damages are not proper The majority of Plaintiffs’ opposition is spent on the issue of whether punitive damages are recoverable here. The dispute is no whether the ICRAA permits punitive damages, but rather whether the alleged facts in the complaint are sufficient to permit the imposition of punitive damages. Plaintiffs lone support for claiming that punitive damages are a warranted is based on a vague reference that Everest Campus was aware of the ICRAA prior to requesting reports on these Plaintiffs. It is a massive leap in logic to thus conclude because that vague statement that Everest Campus was aware of the ICRAA that the violation must have been grossly negligent or willful. The pleading rules require a plaintiff to allege the requisite elements of a punitive damages claim in more than 21878.1 3 EVEREST CAMPUS’ REPLY IN SUPPORT OF MOTION TO STRIKE 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 “conclusionary terms.” Cyrus v. Haveson (1976) 65 Cal.App.3d 306, 317. Everest Campus registered to do business in California in February 2015. The first time it ever was notified by any sort of noncompliance with the obscure ICRAA was when Peak Campus received the lawsuit Correia, et al. v. Peak Campus California, Inc., et al. (Los Angeles Superior Court Case No. 19STCV24890) filed on July 17, 2019. Moreover, from December 2007 to August 2018, the ICRAA had been declared unconstitutional. Specifically, the ICRAA was unconstitutionally vague as it applied to tenant screening. See Ortiz v. Lyon Management Group, Inc. (2007) 157 Cal.App.4th 604 and Trujillo v. First Am. Registry, Inc. (2007) 157 Cal.App.4th 628. It was not until the recent opinion in Connor v. First Student, Inc. (2018) 5 Cal.5th 1026 did the California Supreme Court overturn Ortiz and Trujillo reversing the unconstitutional declaration. Based on this, Plaintiffs mere allegation that Everest Campus was aware of the ICRAA prior to requesting a report is woefully insufficient to rise to the level of gross negligence or willfulness. Furthermore, Plaintiffs’ claim for punitive damages fail as Plaintiffs have no actual damages as required for the assessment of punitive damages. Plaintiffs seem to think they just need to say the magic words “Plaintiffs have suffered actual damages” in their complaint and that is sufficient. Their only argument is that the authorities relied upon by Everest Campus for the proposition that actual damages are a predicate for punitive damages is that those cases dealt with generic punitive damage statute (Civil Code section 3294). Plaintiffs have offered no logical explanation why the reasoning in those circumstances should not apply to the ICRAA. California’s bar on punitive damages without actual injury is “based on the principle that the defendant must have committed a tortious act, i.e., an actionable wrong causing injury or damage, before punitive damages may be assessed.” Gagnon v. Continental Casualty Co. (1989) 211 Cal.App.3d 1598, 1603. Indeed, it finds itself in the notion that “[e]vil thoughts or acts, barren of result, are not the subject of exemplary damages.” Mother Cobb’s Chicken Turnovers v. Fox (1937) 10 Cal.2d 203, 206. The policy reasons behind this bar apply equally to any and all statues that authorize punitive or exemplary damages. As discussed thoroughly in the demurrer moving and reply papers, Plaintiffs have not and cannot establish any resulting injury from Everest Campus’ alleged actions. This is particularly so when Plaintiff themselves authorized the obtaining of an investigative consumer report. FAC, at ¶ 15. 21878.1 4 EVEREST CAMPUS’ REPLY IN SUPPORT OF MOTION TO STRIKE 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 4. Injunctions under the UCL are only to remedy against future harm Plaintiffs seem not to dispute the proposition that injunctions under the UCL are to address future harm, not past wrongs. The extent of the Plaintiffs’ argument is that that just because Everest Campus claims it ceased doing the illegal conduct does not mean an injunction should not be issued. Plaintiffs rely upon McGill v. Citibank, N.A. (2017) 2 Cal.5th 945, but the case largely supports Everest Campus’ position because the Court plainly stated that “public injunctive relief under the UCL… is relief that has the primary purpose and effect of prohibiting unlawful acts that threaten future injury to the general public. Relief that has the primary purpose or effect of redressing or preventing injury to an individual plaintiff-or to a group of individuals similarly situated to the plaintiff-does not constitute public injunctive relief.” McGill, supra, 2 Cal.5th at 955 (cleaned up; italics added). The Court disagreed with Citibank that injunctive relief was not appropriate because the Court found that the Plaintiff had in fact alleged the conduct was still ongoing. On the contrary here, Plaintiffs know and have acknowledged that Everest Campus does not manage this property anymore. There is no indication that Plaintiffs would be subjected to another investigative consumer report by Everest Campus at this property. Plaintiffs call this argument that Everest Campus no longer manages the property a “distracting non sequitur” when the truth is that is the end-all-be-all to an injunction here. How can the Court order Everest Campus to comply with the ICRAA requirements at a property it does not manage? What is clear is that Plaintiffs are attempting to bootstrap an injunction against Everest Campus as an injunction against the entire Peak Campus family of companies, without any sufficient allegations or evidence. If Plaintiffs’ position is accepted, injunctive relief is inappropriate as it was granted as part of a compromise judgment in the Correria case against Peak Campus California, Inc. 5. Attorneys fees under Code of Civil Procedure section 1021.5 are not proper Plaintiffs acknowledge that the UCL does not permit recovering attorney’s fees, but nonetheless attempts to recover such fees through Code of Civil Procedure section 1021.5. Plaintiffs argue that an injunction against Everest Campus will benefit thousands of college students and their guarantors per year. At what schools? At what properties? Everest Campus no longer manages the 21878.1 5 EVEREST CAMPUS’ REPLY IN SUPPORT OF MOTION TO STRIKE 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 property in question. There is no allegation in the complaint about what other properties Everest Campus may manage and what is going on with the tenant screening at those properties. Further, there is no allegation in the complaint that Everest Campus is still using the LeasingDesk software from RealPage which is the source of ICRAA violations. Plaintiffs’ merely repeat in conclusory fashion the elements to attorney’s fees under Code of Civil procedure 1021.5. But conclusory allegations are disregarded. See Aubry v. Tri-City Hospital Dist. (1992) 2 Cal.4th 962, 967. Plaintiffs are alleging entitlement to $160,000 in statutory penalties. 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 v. Pacific Gas and Electric Co. (1996) 42 Cal.App.4th 72, 78. If Plaintiffs are correct in their arguments against Everest Campus, certainly that is sufficient financial incentive demonstrating that the primary purpose is their own personal economic interests. If Plaintiffs were motivated by the safety of the public as they so claim, then why are they not seeking class certification on behalf of those “thousands of college students and their guarantors.” The reason is obvious: the ICRAA does not permit the statutory penalty in class actions. See Civ. Code § 1786.50, subd. (a)(1). 6. Plaintiffs have shown no actual damage thus general and compensatory damages are not proper Plaintiffs have not alleged facts sufficient to show they have suffered any actual injury. Without injuries Plaintiffs are not entitled to pray for recover of general and compensatory damages. The sufficiency of Plaintiffs’ allegations concerning actual injury, or lack thereof, is discussed more thoroughly in the demurrer moving and reply papers. In summary, Plaintiffs allege they applied for apartments, the applications indicated background reports would be obtained, they authorized obtaining such information, and were ultimately approved. Their quibble is the lack of check box on the application to indicate that they wished to receive a copy of the report and the lack of a summary of rights explaining such. But as these Plaintiffs have acknowledged, they would have applied regardless of Everest Campus obtaining investigative consumer reports and there was no criminal or eviction history to even report. / / / 21878.1 6 EVEREST CAMPUS’ REPLY IN SUPPORT OF MOTION TO STRIKE 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 B. Plaintiffs’ False Assertions Should Be Stricken 1. Allegations that of intentional concealment should be stricken as belied by judicial admissions Plaintiffs plainly allege that the “application 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. It also stated that Defendant Everest would procure the same information on applicants’ guarantors. The application purported to include an authorization for Defendants to obtain this information.” FAC, at ¶ 15. Now, in opposition to this motion to strike, Plaintiffs try to back track from these judicial admissions claiming that some of these words (“character,” “general reputation,” “personal characteristics,” or “mode of living”) appear in the application and try to mischaracterize their own allegations as an “vague, overbroad release.” A judicial admission is a party’s unequivocal concession of the truth of a matter, which effectively removes the fact as an issue from the litigation. Gelfo v. Lockheed Martin Corp. (2006) 140 Cal.App.4th 34, 48. The well-recognized concept of judicial admissions was raised in Dang v. Smith (2010) 190 Cal.App.4th 646. In Dang, the court held that “statements in a pleading are always admissible against the pleader to prove the matter asserted-as is any other statement by a party.” Dang, supra, 190 Cal.App.4th at 657 (citation omitted). The court defined judicial admissions as “not merely evidence of the matter stated, but [rather they] operate as a conclusive concession of the truth of that matter, thereby removing it from the issues.” Id. (internal quotations omitted, italics in original). In other words, a pleaded fact is conclusively deemed true as against the pleader.” Id. (italics in original). Facts established by pleadings as judicial admissions are conclusive and may not be contradicted. Id. at 658 (“Because the original allegation is conclusively deemed true, the pleader is not permitted to assert its logical opposite.” (italics in original)). As one court has put it, “a pleader cannot blow hot and cold as to the facts positively stated.” Myers v. Trendwest Resorts, Inc. (2009) 178 Cal.App.4th 735, 746. Based on the judicial admissions in paragraph 15 of the first amended complaint, Plaintiffs cannot claim that the nature of the reports were intentionally concealed. Advising on the type of 21878.1 7 EVEREST CAMPUS’ REPLY IN SUPPORT OF MOTION TO STRIKE 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 information being procured and including an authorization for obtain such information is the direct opposite of intentional concealment. 2. The history of amendments of the ICRAA should be stricken entirely Although Plaintiffs agree that the words “last amended in 1998” should be stricken to say, “amended in 1998”, the entire allegation is still irrelevant and should be stricken entirely. As explained above, the history of ICRAA amendments before Everest Campus began doing business in the state of California has no bearing on whether Everest Campus acted willfully or grossly negligent. Moreover, the ICRAA was unconstitutional in the context of tenant screening from December 2017 to August 2018. These Plaintiffs applied for their apartments with Everest Campus in early 2019. FAC, at ¶ 14. Regardless, the allegation is completely immaterial to the cause of actions at hand. III. CONCLUSION This Court should motion to strike without leave to amend as the existing judicial admissions demonstrate that any amendment would be a sham pleading solely being made to circumvent previous allegations that demonstrate no liability. DATED: September 15, 2020 COLLINS COLLINS MUIR + STEWART LLP By: ________________________________ BRIAN K. STEWART Attorneys for Defendant EVEREST CAMPUS CALIFORNIA, INC. 21878.1 8 EVEREST CAMPUS’ REPLY IN SUPPORT OF MOTION TO STRIKE 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 REPLY IN SUPPORT OF 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: PLEASE SEE ATTACHED SERVICE LIST (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 September 15, 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 21878.1 9 EVEREST CAMPUS’ REPLY IN SUPPORT OF MOTION TO STRIKE 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 Richard Burton et al. vs. Everest Campus California, Inc. et al. Case No.: CGC19580946 CCMS File No. 21878.1 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