1010095355 Merkel Opposition to Motion to Strike First Amended Cross Complaint
1 2 3 4 5 6
JUSTIN H. SANDERS (SBN 211488) [email protected] REGINALD ROBERTS, JR. (SBN 216249) [email protected] SANDERS ROBERTS LLP 355 South Grand Avenue, Suite 2450 Los Angeles, California 90071 Telephone: 213-943-1314 Facsimile: 213-234-4581 Attorneys for Defendant (sued herein as DOE 2) CATHERINE MINI MERKEL
7 8
SUPERIOR COURT OF THE STATE OF CALIFORNIA
9
FOR THE COUNTY OF LOS ANGELES
10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27
JAION LARON CLARK, a Minor, by and ) Case No.: BC451511 through his Guardian ad Litem, SHARNELL ) THOMPSON, ) Judge: Hon. Mary H. Strobel ) ) DEFENDANT CATHERINE MINI Plaintiffs, ) MERKEL’S OPPOSITION TO ) DEFENDANT VENUE MANAGEMENT vs. ) SYSTEM’S MOTION TO STRIKE TOP CAT PRODUCTIONS, INC.; LT ) PORTIONS OF HER FIRST AMENDED ACQUISITION CORP.; THE DERBY CLUB ) CROSS-COMPLAINT aka THE DERBY; RINGLEADERZ ) ENTERTAINMENT; TONY GOWER; ) Date: July 25, 2012 DANA LEONARDI, and DOES 1 to 200, ) Time: 1: 30 PM Inclusive, ) Dept.: 32 ) Defendants. ) Complaint filed: December 16, 2010 Trial Date: None Set CATHERINE MINI MERKEL, ) ) Ms. Merkel, ) [Served Concurrently with Declaration of ) Reginald Roberts, Jr.] vs. ) ) VENUE MANAGEMENT SERVICES, AKA ) VENUE MANAGEMENT SYSTEMS, INC., ) a California Corporation; TOP CAT ) PRODUCTIONS, INC. a California ) Corporation, also doing business as THE ) DERBY CLUB aka THE DERBY; DANA ) LEONARDI, an individual; and ROES 1-50, ) inclusive, ) ) Cross-Defendants. ) ) AND RELATED CROSS-ACTIONS. ) )
28 - 1DEFENDANT CATHERINE MINI MERKEL’S OPPOSITION TO DEFENDANT VENUE MANAGEMENT SYSTEM’S MOTION TO STRIKE PORTIONS OF HER FIRST AMENDED CROSS-COMPLAINT
MEMORANDUM OF POINTS AND AUTHORITIES
1 2 3
I.
INTRODUCTION Plaintiff filed this action following the shooting death of Jeffrey Clark. An unidentified
4
person while inside The Derby nightclub shot Mr. Clark on October 14, 2010. Plaintiff’s
5
Complaint alleges causes of action for negligence, negligent retention, survival and fraudulent
6
conveyance. Nearly three years after filling the Complaint, Plaintiff added Defendant and Cross-
7
Complainant Catherine “Mini” Merkel (“Ms. Merkel”) as a DOE defendant, even though
8
Ms. Merkel was not present when the shooting occurred. Since this time, Ms. Merkel’s
9
employer, Venue Management Systems, Inc. (“VMS”), has refused to defend and indemnify her
10 11
from Plaintiff’s claims. Ms. Merkel was employed by Cross-Defendants VMS, Cross-Defendant Dana Leonardi
12
(“Leonardi”), Cross-Defendant Top Cat Productions, Inc. (“Top Cat”) and Cross-Defendant The
13
Derby Club aka The Derby (“The Derby”) as one of several managers of The Derby.
14
Ms. Merkel was required to complete an application for employment with Cross-Defendant
15
VMS in order to provide or continue to provide management services at The Derby. Cross-
16
Defendant VMS paid Ms. Merkel at all times relevant herein.
17
Ms. Merkel tendered her defense of this matter to Cross-Defendants Top Cat, Leonardi,
18
The Derby, and VMS and each of them have failed to accept or reject the tender and have
19
refused to provide Ms. Merkel with any legal defense against Plaintiff’s allegations.
20
Ms. Merkel filed her First Amended Cross Complaint (“FAXC”) and alleged claims
21
against Cross-Defendant VMS, and others, for: (1) Express Contractual Indemnity; (2) Implied
22
Contractual Indemnity; (3) Equitable Indemnity; (4) Declaratory Relief; and (5) Breach Of
23
Implied Covenant Of Good Faith And Fair Dealing.
24
VMS acted in bad faith, and continues to breach an implied covenant of good faith and
25
fair dealing by failing to defend and indemnify Ms. Merkel. Ms. Merkel is entitled to recover
26
exemplary damages against VMS. In addition, Ms. Merkel has suffered economic damages in
27
the form of attorney’s fees that she must pay in order to defend herself against Plaintiff’s claims.
28
Ms. Merkel may recover these fees from Cross-Defendant VMS as well as damages based in - 2DEFENDANT CATHERINE MINI MERKEL’S OPPOSITION TO DEFENDANT VENUE MANAGEMENT SYSTEM’S MOTION TO STRIKE PORTIONS OF HER FIRST AMENDED CROSS-COMPLAINT
1
tort. This notwithstanding, VMS moved to strike Ms. Merkel’s claims for exemplary damages,
2
attorney’s fees, emotional distress damages and special damages. Ms. Merkel now opposes
3
VMS’s Motion to Strike.
4
II.
ALL MATTERS ALLEGED IN MS. MERKEL’S PLEADING ARE RELEVANT,
5
PROPER AND MUST NOT BE STRICKEN
6
The Court may only strike portions of a pleading that are irrelevant, false, or improper.
7
California Code of Civil Procedure (“CCP”) section 436(a). The Court may not strike from the
8
pleading conclusory allegations where they are supported by other, factual allegations in the
9
complaint. Perkins v. Superior Court (1981) 117 Cal.App.3d 1, 6 (holding that court abused its
10
discretion when granting a motion to strike where petitioner’s complaint provided notice to real
11
party and the other defendants of petitioner’s precise claims against them and adequately pleaded
12
a cause of action for punitive damages.) The stricken language must be read not in isolation, but
13
in the context of the facts alleged in the rest of petitioner’s complaint. Id.
14
In this case, Ms. Merkel pleads sufficient facts, when taken in context, to support all of
15
her damage claims, including her claims for attorney fees and exemplary damages against VMS.
16
Accordingly, Ms. Merkel urges this Court to deny VMS’s Motion to Strike.
17
III.
MS. MERKEL CAN RECOVER PUNITIVE DAMAGES AND OTHER
18
DAMAGES IN TORT AGAINST VMS BASED ON ITS FAILURE TO DEFEND
19
AND INDEMNIFY HER
20
The insurance contract with VMS contains inherently an implied covenant of good faith
21
and fair dealing. “The duty to so act is immanent in the contract whether the company is
22
attending to the claims of third persons against the insured or the claims of the insured itself.”
23
Gruenberg v. Aetna Ins. Co. (1973) 9 Cal.3d 566, 575. In every contract, including policies of
24
insurance, there is an implied covenant of good faith and fair dealing that neither party will do
25
anything which will injure the right of the other to receive the benefits of the agreement. Crisci
26
v. Security Ins. Co. of New Haven, Conn. (1967) 66 Cal.2d 425, 429. VMS’s duty to defend is
27
separate from its duty to indemnify. “The fact that an insurer may ultimately not be liable as the
28
indemnifier of the insured does not establish that it has no duty to defend.” Ohio Casualty Ins. - 3DEFENDANT CATHERINE MINI MERKEL’S OPPOSITION TO DEFENDANT VENUE MANAGEMENT SYSTEM’S MOTION TO STRIKE PORTIONS OF HER FIRST AMENDED CROSS-COMPLAINT
1
Co. v. Hubbard (1984) 162 Cal.App.3d 939, 944. In this case, VMS refuses to defend or
2
indemnify Ms. Merkel, giving rise to her damages claims.
3
The general rule of damages in tort is that the injured party may recover for all detriment
4
caused whether it could have been anticipated or not. Civ. Code § 3333. VMS seeks improperly
5
to limit Ms. Merkel’s damages to contract damages by filing its Motion to Strike. Limiting
6
Ms. Merkel to contract damages for breach of the duty to defend would result in inequitable
7
treatment of Ms. Merkel based upon her financial status. See Campbell v. Superior Court (1996)
8
44 Cal.App.4th 1308, 1320 (reasoning that insured may seek emotional distress and other tort
9
damages based on insurance company’s failure to defend.) In California, mental suffering
10
constitutes an aggravation of damages when it naturally ensues from the act complained of, and
11
in this connection mental suffering includes nervousness, grief, anxiety, worry, shock,
12
humiliation and indignity, as well as physical pain. Crisci v. Security Ins. Co. of New Haven,
13
Conn. (1967) 66 Cal.2d 425, 433.
14
Courts have long recognized that awards of mental distress are not confined to personal
15
injury matters but may be recoverable in cases where insurers breach their duties by failing to
16
defend and indemnify. Id at. 433. “Whenever the terms of a contract relate to matters which
17
concern directly the comfort, happiness, or personal welfare of one of the parties, or the subject
18
matter of which is such as directly to affect or move the affection, self-esteem, or tender feelings
19
of that party, he may recover damages for physical suffering or illness proximately caused by its
20
breach.” Chelini v. Nieri (1948) 32 Cal.2d 480, 482.
21
Here, VMS seeks to strike Ms. Merkel’s claims for damages relating to mental and
22
emotional distress, exemplary damages, general and special damages. However, VMS
23
unreasonably and in bad faith refused to defend and indemnify Ms. Merkel in this action and
24
therefore subjected itself to liability in tort. Gruenberg v. Aetna Ins. Co. (1973) 9 Cal.3d 566,
25
575. Ms. Merkel and her family face financial ruin and live with the mental stress of knowing
26
that protracted litigation, in a case where Ms. Merkel should be defended by VMS, may very
27
well cost the Merkel family everything. Case law supports her right to seek recovery of damages
28
from VMS related to this hardship and suffering. See Campbell v. Superior Court (1996) 44 - 4DEFENDANT CATHERINE MINI MERKEL’S OPPOSITION TO DEFENDANT VENUE MANAGEMENT SYSTEM’S MOTION TO STRIKE PORTIONS OF HER FIRST AMENDED CROSS-COMPLAINT
1
Cal.App.4th 1308, 1320.
2
When read as a whole and taken in context of the claims presented by Ms. Merkel against
3
VMS, the facts plead support recovery of each category of damages pled, including punitive
4
damages. Indeed, Ms. Merkel pleads that VMS by and through its principal, Charles McIntyre,
5
lured Cross-Defendants Leonardi and Top Cat into a contract with the promise of protecting
6
employees working at The Derby from claims such as the lawsuit file by Plaintiff. (FAXC ¶¶ 12,
7
13, 21, 22, 51.) VMS did this with no intention of defending or indemnifying employees such as
8
Ms. Merkel. Now VMS refuses to provide Ms. Merkel with a defense. (FAXC ¶ 14.) These
9
allegations, when taken in context, support the element of fraud needed to support Ms. Merkel’s
10
claim for punitive damages against VMS.
11
Accordingly, the Court must not strike any of these categories of damages from the
12
FAXC. If the Court determines that Ms. Merkel must plead more facts to support each of the
13
damages claims asserted in the FAXC, she requests leave to amend her pleading.
14
IV.
MS. MERKEL CAN RECOVER ATTORNEY’S FEES FROM VMS AS A FORM
15
OF DAMAGES FOR ITS FAILURE TO DEFEND AND INDEMNIFY HER IN
16
THIS ACTION
17
“[W]hen an insurer tortiously withholds benefits, attorney fees reasonably incurred to
18
compel payment of the policy benefits are recoverable as an element of the damages resulting
19
from the tortious conduct … attorney fees are an economic loss proximately caused by the tort
20
and their recovery is not precluded by Code Civ. Proc., § 1021.” Brandt v. Superior Court
21
(1985) 37 Cal.3d 813 (ruling that court erred in striking portion of complaint that called for
22
payment of attorney’s fees by insurer who breached duty of good faith and fair dealing.) Insured
23
parties may recover fees expended to win policy benefits, where there has been tortious conduct
24
by an insurer. California Shoppers, Inc. v. Royal Globe Ins. Co. (1985) 175 Cal.App.3d 1. An
25
insurer’s refusal to defend can support a claim in tort by the insured for breach of the implied
26
covenant of good faith and fair dealing. Campbell v. Superior Court (1996) 44 Cal.App.4th
27
1308, 1319.
28
In this case, Plaintiff alleges in her fifth cause of action that VMS breached its duty of - 5DEFENDANT CATHERINE MINI MERKEL’S OPPOSITION TO DEFENDANT VENUE MANAGEMENT SYSTEM’S MOTION TO STRIKE PORTIONS OF HER FIRST AMENDED CROSS-COMPLAINT
1
good faith and fair dealing. (FAXC ¶¶ 50-52.) Ms. Merkel pleads that Cross-Defendant VMS
2
had both an express and implied contractual duty to defend her from Plaintiff’s claims. (FAXC
3
¶¶ 19-38.) She alleges particular facts supporting her contention that VMS employed her and
4
owes her a duty to defend and indemnify her through the employment relationship, and that
5
Cross-Defendants Leonardi and Top Cat contracted with VMS for the express purpose of
6
obtaining insurance for Ms. Merkel and others. Ms. Merkel alleges further that Cross-Defendant
7
refuses to defend her in this case and will not indemnify her from any liability based on
8
Plaintiff’s claims in spite of the express contractual agreement that requires such
9
indemnification. (FAXC ¶¶ 12, 22, 23, 24, 32-37, 52.)
10
When an insurer fails to defend an insured and the insured incurs attorneys fees and costs
11
to defend itself, that insured may seek to recover those attorney’s fees from the insurance
12
company. Lowell v. Maryland Cas. Co. (1966) 65 Cal.2d 298, 302. By refusing to defend
13
Ms. Merkel and forcing her to incur substantial attorney’s fees, VMS has inflicted emotional
14
distress on Ms. Merkel. Indeed, Ms. Merkel and her family face financial ruin, and the prospect
15
of losing everything as a result of VMS’s decision to withhold coverage in the face of express
16
contractual agreements that obligate VMS to defend and indemnify Ms. Merkel.
17
VMS has compounded Ms. Merkel’s damages by not only refusing to provide her with a
18
legal defense, but by engaging in litigation tactics designed to further increase the financial
19
burden of attorney fees imposed on her and her family with the hope that she will give up her
20
efforts to force coverage by VMS. Surely Ms. Merkel can seek to recover attorney fees under
21
these circumstances. See Brandt v. Superior Court (1985) 37 Cal.3d 813; Lowell v. Maryland
22
Cas. Co. (1966) 65 Cal.2d 298, 302.
23
Therefore, the Court must not strike Ms. Merkel’s request for attorney fees from the
24
FAXC. If the Court determines that Ms. Merkel must plead more facts to support the request for
25
attorney fees, she hereby requests leave to amend her pleading.
26
V.
27 28
CONCLUSION Based on the foregoing, defendant and Cross-Complainant Catherine “Mini” Merkel
requests respectfully that this Court overrule Cross-Defendant VMS’s Motion to Strike portions - 6DEFENDANT CATHERINE MINI MERKEL’S OPPOSITION TO DEFENDANT VENUE MANAGEMENT SYSTEM’S MOTION TO STRIKE PORTIONS OF HER FIRST AMENDED CROSS-COMPLAINT
SERVICE LIST
1 2
Jaion Laron Clark v. Top Cat Prod., etc., et al.; L.A.S.C. Case No. BC451511
3
VIA EMAIL:
4 5 6
Frank C. Luckenbacher, Esq. Attorney for Plaintiff, Jaion Laron Clark LAW OFFICES OF FRANK C. LUCKENBACHER 22048 Sherman Way, Suite 304 Canoga Park, CA 91303-3011 Tel: (818) 932-9000 | Fax: (818) 226-0022
Email: [email protected] Wayne McClean, Esq. LAW OFFICES OF WAYNE MCCLEAN 24025 Park Sorrento, Suite 220 Calabasas, CA 91302-4006 Tel: (818) 225-7007 | Fax: (818) 225-7557 Email: [email protected]
Co-Counsel for Plaintiff Jaion Laron Clark, a minor by and through his Guardian ad Litem, Sharnell Thompson
Lisa Shyer, Esq. Wisotskey, Procter & Shyer 300 Esplanade Drive, Ste 1500 Oxnard, CA 93036 Tel: (805) 278-0920 | Fax: (805) 278-0289 Email: [email protected]
Co-Counsel for Defendant LT Acquisition Corp., dba Louise’s Trattoria
Attorneys for Defendant Venue Management Systems, Inc.
15
Raymond J. Muro, Esq. NELSON GRIFFIN, LLP 800 W. 6th St., Suite 788 Los Angeles, CA 90017
16
Email: [email protected]
7 8 9 10 11 12 13 14
17 18 19 20 21 22 23 24 25 26
Tel:
(213) 833-0155 | Fax: (213) 833-0160
Stanley R. Escalante, Esq. P.K. SCHRIEFFER, LLP 100 North Barranca Ave, Suite 1100 West Covina, California 91791 Tel: (626) 373-2444 | Fax: (626) 974-8403 Email: [email protected]
Cumis Counsel for Venue Management Systems, Inc.
Mark R. Stapke, Esq. Michelman & Robinson, LLP 15760 Ventura Blvd., 5th Floor Encino, California 91436 Tel: (818) 783-5530 | Fax: (818) 783-5507 Email: [email protected]
Attorneys for Defendant Top Cat Productions, Inc.
Mark D. Baute, Esq. SAUTE CROCHETIERE & MALONEY 777 S. Figueroa St., Suite 4900 Los Angeles, CA 90017 Tel: (213) 630-5000 | Fax: (213)683-1225 Email: [email protected]
Attorneys for Defendant Tony Gower
27 28 -2PROOF OF SERVICE
1 2 3 4 5 6 7 8 9 10
Jaion Laron Clark v. Top Cat Prod., etc., et al.; L.A.S.C. Case No. BC451511 Dana Leonardi 15059 Ridgeview Court Chino Rills, CA 91700 Email: [email protected] Tel: (909) 455-2990 Kevin McCluskey, Esq. WATERS, McCLUSKEY & BOEHL 200 N. Sepulveda Blvd., Suite 300 El Segundo, CA 90245 Email: [email protected] Phone: 310-396-3411 | Fax: 310-450-0925
Defendant In Pro Per
Attorneys for Defendant/Cross-Defendant, Adler Realty Investments, Inc.
VIA U.S. MAIL: Christina Y. Morovati, Esq. BRAGG & KULUVA 444 S. Flower Street, Suite 600 Los Angeles, California 90071 Tel: (213) 612-5335 | Fax: (213) 612-5712
Attorneys for Defendant/Cross-Defendant, Adler Realty Investments, Inc.
11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -3PROOF OF SERVICE
JUSTIN H. SANDERS (SBN 211488) [email protected] REGINALD ROBERTS, JR. (SBN 216249) [email protected] SANDERS ROBERTS LLP 355 South Grand Avenue, Suite 2450 Los Angeles, California 90071 Telephone: 213-943-1314 Facsimile: 213-234-4581 Attorneys for Defendant (sued herein as DOE 2) CATHERINE MINI MERKEL
7 8
SUPERIOR COURT OF THE STATE OF CALIFORNIA
9
FOR THE COUNTY OF LOS ANGELES
10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27
JAION LARON CLARK, a Minor, by and ) Case No.: BC451511 through his Guardian ad Litem, SHARNELL ) THOMPSON, ) Judge: Hon. Mary H. Strobel ) ) DEFENDANT CATHERINE MINI Plaintiffs, ) MERKEL’S OPPOSITION TO ) DEFENDANT VENUE MANAGEMENT vs. ) SYSTEM’S MOTION TO STRIKE TOP CAT PRODUCTIONS, INC.; LT ) PORTIONS OF HER FIRST AMENDED ACQUISITION CORP.; THE DERBY CLUB ) CROSS-COMPLAINT aka THE DERBY; RINGLEADERZ ) ENTERTAINMENT; TONY GOWER; ) Date: July 25, 2012 DANA LEONARDI, and DOES 1 to 200, ) Time: 1: 30 PM Inclusive, ) Dept.: 32 ) Defendants. ) Complaint filed: December 16, 2010 Trial Date: None Set CATHERINE MINI MERKEL, ) ) Ms. Merkel, ) [Served Concurrently with Declaration of ) Reginald Roberts, Jr.] vs. ) ) VENUE MANAGEMENT SERVICES, AKA ) VENUE MANAGEMENT SYSTEMS, INC., ) a California Corporation; TOP CAT ) PRODUCTIONS, INC. a California ) Corporation, also doing business as THE ) DERBY CLUB aka THE DERBY; DANA ) LEONARDI, an individual; and ROES 1-50, ) inclusive, ) ) Cross-Defendants. ) ) AND RELATED CROSS-ACTIONS. ) )
28 - 1DEFENDANT CATHERINE MINI MERKEL’S OPPOSITION TO DEFENDANT VENUE MANAGEMENT SYSTEM’S MOTION TO STRIKE PORTIONS OF HER FIRST AMENDED CROSS-COMPLAINT
MEMORANDUM OF POINTS AND AUTHORITIES
1 2 3
I.
INTRODUCTION Plaintiff filed this action following the shooting death of Jeffrey Clark. An unidentified
4
person while inside The Derby nightclub shot Mr. Clark on October 14, 2010. Plaintiff’s
5
Complaint alleges causes of action for negligence, negligent retention, survival and fraudulent
6
conveyance. Nearly three years after filling the Complaint, Plaintiff added Defendant and Cross-
7
Complainant Catherine “Mini” Merkel (“Ms. Merkel”) as a DOE defendant, even though
8
Ms. Merkel was not present when the shooting occurred. Since this time, Ms. Merkel’s
9
employer, Venue Management Systems, Inc. (“VMS”), has refused to defend and indemnify her
10 11
from Plaintiff’s claims. Ms. Merkel was employed by Cross-Defendants VMS, Cross-Defendant Dana Leonardi
12
(“Leonardi”), Cross-Defendant Top Cat Productions, Inc. (“Top Cat”) and Cross-Defendant The
13
Derby Club aka The Derby (“The Derby”) as one of several managers of The Derby.
14
Ms. Merkel was required to complete an application for employment with Cross-Defendant
15
VMS in order to provide or continue to provide management services at The Derby. Cross-
16
Defendant VMS paid Ms. Merkel at all times relevant herein.
17
Ms. Merkel tendered her defense of this matter to Cross-Defendants Top Cat, Leonardi,
18
The Derby, and VMS and each of them have failed to accept or reject the tender and have
19
refused to provide Ms. Merkel with any legal defense against Plaintiff’s allegations.
20
Ms. Merkel filed her First Amended Cross Complaint (“FAXC”) and alleged claims
21
against Cross-Defendant VMS, and others, for: (1) Express Contractual Indemnity; (2) Implied
22
Contractual Indemnity; (3) Equitable Indemnity; (4) Declaratory Relief; and (5) Breach Of
23
Implied Covenant Of Good Faith And Fair Dealing.
24
VMS acted in bad faith, and continues to breach an implied covenant of good faith and
25
fair dealing by failing to defend and indemnify Ms. Merkel. Ms. Merkel is entitled to recover
26
exemplary damages against VMS. In addition, Ms. Merkel has suffered economic damages in
27
the form of attorney’s fees that she must pay in order to defend herself against Plaintiff’s claims.
28
Ms. Merkel may recover these fees from Cross-Defendant VMS as well as damages based in - 2DEFENDANT CATHERINE MINI MERKEL’S OPPOSITION TO DEFENDANT VENUE MANAGEMENT SYSTEM’S MOTION TO STRIKE PORTIONS OF HER FIRST AMENDED CROSS-COMPLAINT
1
tort. This notwithstanding, VMS moved to strike Ms. Merkel’s claims for exemplary damages,
2
attorney’s fees, emotional distress damages and special damages. Ms. Merkel now opposes
3
VMS’s Motion to Strike.
4
II.
ALL MATTERS ALLEGED IN MS. MERKEL’S PLEADING ARE RELEVANT,
5
PROPER AND MUST NOT BE STRICKEN
6
The Court may only strike portions of a pleading that are irrelevant, false, or improper.
7
California Code of Civil Procedure (“CCP”) section 436(a). The Court may not strike from the
8
pleading conclusory allegations where they are supported by other, factual allegations in the
9
complaint. Perkins v. Superior Court (1981) 117 Cal.App.3d 1, 6 (holding that court abused its
10
discretion when granting a motion to strike where petitioner’s complaint provided notice to real
11
party and the other defendants of petitioner’s precise claims against them and adequately pleaded
12
a cause of action for punitive damages.) The stricken language must be read not in isolation, but
13
in the context of the facts alleged in the rest of petitioner’s complaint. Id.
14
In this case, Ms. Merkel pleads sufficient facts, when taken in context, to support all of
15
her damage claims, including her claims for attorney fees and exemplary damages against VMS.
16
Accordingly, Ms. Merkel urges this Court to deny VMS’s Motion to Strike.
17
III.
MS. MERKEL CAN RECOVER PUNITIVE DAMAGES AND OTHER
18
DAMAGES IN TORT AGAINST VMS BASED ON ITS FAILURE TO DEFEND
19
AND INDEMNIFY HER
20
The insurance contract with VMS contains inherently an implied covenant of good faith
21
and fair dealing. “The duty to so act is immanent in the contract whether the company is
22
attending to the claims of third persons against the insured or the claims of the insured itself.”
23
Gruenberg v. Aetna Ins. Co. (1973) 9 Cal.3d 566, 575. In every contract, including policies of
24
insurance, there is an implied covenant of good faith and fair dealing that neither party will do
25
anything which will injure the right of the other to receive the benefits of the agreement. Crisci
26
v. Security Ins. Co. of New Haven, Conn. (1967) 66 Cal.2d 425, 429. VMS’s duty to defend is
27
separate from its duty to indemnify. “The fact that an insurer may ultimately not be liable as the
28
indemnifier of the insured does not establish that it has no duty to defend.” Ohio Casualty Ins. - 3DEFENDANT CATHERINE MINI MERKEL’S OPPOSITION TO DEFENDANT VENUE MANAGEMENT SYSTEM’S MOTION TO STRIKE PORTIONS OF HER FIRST AMENDED CROSS-COMPLAINT
1
Co. v. Hubbard (1984) 162 Cal.App.3d 939, 944. In this case, VMS refuses to defend or
2
indemnify Ms. Merkel, giving rise to her damages claims.
3
The general rule of damages in tort is that the injured party may recover for all detriment
4
caused whether it could have been anticipated or not. Civ. Code § 3333. VMS seeks improperly
5
to limit Ms. Merkel’s damages to contract damages by filing its Motion to Strike. Limiting
6
Ms. Merkel to contract damages for breach of the duty to defend would result in inequitable
7
treatment of Ms. Merkel based upon her financial status. See Campbell v. Superior Court (1996)
8
44 Cal.App.4th 1308, 1320 (reasoning that insured may seek emotional distress and other tort
9
damages based on insurance company’s failure to defend.) In California, mental suffering
10
constitutes an aggravation of damages when it naturally ensues from the act complained of, and
11
in this connection mental suffering includes nervousness, grief, anxiety, worry, shock,
12
humiliation and indignity, as well as physical pain. Crisci v. Security Ins. Co. of New Haven,
13
Conn. (1967) 66 Cal.2d 425, 433.
14
Courts have long recognized that awards of mental distress are not confined to personal
15
injury matters but may be recoverable in cases where insurers breach their duties by failing to
16
defend and indemnify. Id at. 433. “Whenever the terms of a contract relate to matters which
17
concern directly the comfort, happiness, or personal welfare of one of the parties, or the subject
18
matter of which is such as directly to affect or move the affection, self-esteem, or tender feelings
19
of that party, he may recover damages for physical suffering or illness proximately caused by its
20
breach.” Chelini v. Nieri (1948) 32 Cal.2d 480, 482.
21
Here, VMS seeks to strike Ms. Merkel’s claims for damages relating to mental and
22
emotional distress, exemplary damages, general and special damages. However, VMS
23
unreasonably and in bad faith refused to defend and indemnify Ms. Merkel in this action and
24
therefore subjected itself to liability in tort. Gruenberg v. Aetna Ins. Co. (1973) 9 Cal.3d 566,
25
575. Ms. Merkel and her family face financial ruin and live with the mental stress of knowing
26
that protracted litigation, in a case where Ms. Merkel should be defended by VMS, may very
27
well cost the Merkel family everything. Case law supports her right to seek recovery of damages
28
from VMS related to this hardship and suffering. See Campbell v. Superior Court (1996) 44 - 4DEFENDANT CATHERINE MINI MERKEL’S OPPOSITION TO DEFENDANT VENUE MANAGEMENT SYSTEM’S MOTION TO STRIKE PORTIONS OF HER FIRST AMENDED CROSS-COMPLAINT
1
Cal.App.4th 1308, 1320.
2
When read as a whole and taken in context of the claims presented by Ms. Merkel against
3
VMS, the facts plead support recovery of each category of damages pled, including punitive
4
damages. Indeed, Ms. Merkel pleads that VMS by and through its principal, Charles McIntyre,
5
lured Cross-Defendants Leonardi and Top Cat into a contract with the promise of protecting
6
employees working at The Derby from claims such as the lawsuit file by Plaintiff. (FAXC ¶¶ 12,
7
13, 21, 22, 51.) VMS did this with no intention of defending or indemnifying employees such as
8
Ms. Merkel. Now VMS refuses to provide Ms. Merkel with a defense. (FAXC ¶ 14.) These
9
allegations, when taken in context, support the element of fraud needed to support Ms. Merkel’s
10
claim for punitive damages against VMS.
11
Accordingly, the Court must not strike any of these categories of damages from the
12
FAXC. If the Court determines that Ms. Merkel must plead more facts to support each of the
13
damages claims asserted in the FAXC, she requests leave to amend her pleading.
14
IV.
MS. MERKEL CAN RECOVER ATTORNEY’S FEES FROM VMS AS A FORM
15
OF DAMAGES FOR ITS FAILURE TO DEFEND AND INDEMNIFY HER IN
16
THIS ACTION
17
“[W]hen an insurer tortiously withholds benefits, attorney fees reasonably incurred to
18
compel payment of the policy benefits are recoverable as an element of the damages resulting
19
from the tortious conduct … attorney fees are an economic loss proximately caused by the tort
20
and their recovery is not precluded by Code Civ. Proc., § 1021.” Brandt v. Superior Court
21
(1985) 37 Cal.3d 813 (ruling that court erred in striking portion of complaint that called for
22
payment of attorney’s fees by insurer who breached duty of good faith and fair dealing.) Insured
23
parties may recover fees expended to win policy benefits, where there has been tortious conduct
24
by an insurer. California Shoppers, Inc. v. Royal Globe Ins. Co. (1985) 175 Cal.App.3d 1. An
25
insurer’s refusal to defend can support a claim in tort by the insured for breach of the implied
26
covenant of good faith and fair dealing. Campbell v. Superior Court (1996) 44 Cal.App.4th
27
1308, 1319.
28
In this case, Plaintiff alleges in her fifth cause of action that VMS breached its duty of - 5DEFENDANT CATHERINE MINI MERKEL’S OPPOSITION TO DEFENDANT VENUE MANAGEMENT SYSTEM’S MOTION TO STRIKE PORTIONS OF HER FIRST AMENDED CROSS-COMPLAINT
1
good faith and fair dealing. (FAXC ¶¶ 50-52.) Ms. Merkel pleads that Cross-Defendant VMS
2
had both an express and implied contractual duty to defend her from Plaintiff’s claims. (FAXC
3
¶¶ 19-38.) She alleges particular facts supporting her contention that VMS employed her and
4
owes her a duty to defend and indemnify her through the employment relationship, and that
5
Cross-Defendants Leonardi and Top Cat contracted with VMS for the express purpose of
6
obtaining insurance for Ms. Merkel and others. Ms. Merkel alleges further that Cross-Defendant
7
refuses to defend her in this case and will not indemnify her from any liability based on
8
Plaintiff’s claims in spite of the express contractual agreement that requires such
9
indemnification. (FAXC ¶¶ 12, 22, 23, 24, 32-37, 52.)
10
When an insurer fails to defend an insured and the insured incurs attorneys fees and costs
11
to defend itself, that insured may seek to recover those attorney’s fees from the insurance
12
company. Lowell v. Maryland Cas. Co. (1966) 65 Cal.2d 298, 302. By refusing to defend
13
Ms. Merkel and forcing her to incur substantial attorney’s fees, VMS has inflicted emotional
14
distress on Ms. Merkel. Indeed, Ms. Merkel and her family face financial ruin, and the prospect
15
of losing everything as a result of VMS’s decision to withhold coverage in the face of express
16
contractual agreements that obligate VMS to defend and indemnify Ms. Merkel.
17
VMS has compounded Ms. Merkel’s damages by not only refusing to provide her with a
18
legal defense, but by engaging in litigation tactics designed to further increase the financial
19
burden of attorney fees imposed on her and her family with the hope that she will give up her
20
efforts to force coverage by VMS. Surely Ms. Merkel can seek to recover attorney fees under
21
these circumstances. See Brandt v. Superior Court (1985) 37 Cal.3d 813; Lowell v. Maryland
22
Cas. Co. (1966) 65 Cal.2d 298, 302.
23
Therefore, the Court must not strike Ms. Merkel’s request for attorney fees from the
24
FAXC. If the Court determines that Ms. Merkel must plead more facts to support the request for
25
attorney fees, she hereby requests leave to amend her pleading.
26
V.
27 28
CONCLUSION Based on the foregoing, defendant and Cross-Complainant Catherine “Mini” Merkel
requests respectfully that this Court overrule Cross-Defendant VMS’s Motion to Strike portions - 6DEFENDANT CATHERINE MINI MERKEL’S OPPOSITION TO DEFENDANT VENUE MANAGEMENT SYSTEM’S MOTION TO STRIKE PORTIONS OF HER FIRST AMENDED CROSS-COMPLAINT
SERVICE LIST
1 2
Jaion Laron Clark v. Top Cat Prod., etc., et al.; L.A.S.C. Case No. BC451511
3
VIA EMAIL:
4 5 6
Frank C. Luckenbacher, Esq. Attorney for Plaintiff, Jaion Laron Clark LAW OFFICES OF FRANK C. LUCKENBACHER 22048 Sherman Way, Suite 304 Canoga Park, CA 91303-3011 Tel: (818) 932-9000 | Fax: (818) 226-0022
Email: [email protected] Wayne McClean, Esq. LAW OFFICES OF WAYNE MCCLEAN 24025 Park Sorrento, Suite 220 Calabasas, CA 91302-4006 Tel: (818) 225-7007 | Fax: (818) 225-7557 Email: [email protected]
Co-Counsel for Plaintiff Jaion Laron Clark, a minor by and through his Guardian ad Litem, Sharnell Thompson
Lisa Shyer, Esq. Wisotskey, Procter & Shyer 300 Esplanade Drive, Ste 1500 Oxnard, CA 93036 Tel: (805) 278-0920 | Fax: (805) 278-0289 Email: [email protected]
Co-Counsel for Defendant LT Acquisition Corp., dba Louise’s Trattoria
Attorneys for Defendant Venue Management Systems, Inc.
15
Raymond J. Muro, Esq. NELSON GRIFFIN, LLP 800 W. 6th St., Suite 788 Los Angeles, CA 90017
16
Email: [email protected]
7 8 9 10 11 12 13 14
17 18 19 20 21 22 23 24 25 26
Tel:
(213) 833-0155 | Fax: (213) 833-0160
Stanley R. Escalante, Esq. P.K. SCHRIEFFER, LLP 100 North Barranca Ave, Suite 1100 West Covina, California 91791 Tel: (626) 373-2444 | Fax: (626) 974-8403 Email: [email protected]
Cumis Counsel for Venue Management Systems, Inc.
Mark R. Stapke, Esq. Michelman & Robinson, LLP 15760 Ventura Blvd., 5th Floor Encino, California 91436 Tel: (818) 783-5530 | Fax: (818) 783-5507 Email: [email protected]
Attorneys for Defendant Top Cat Productions, Inc.
Mark D. Baute, Esq. SAUTE CROCHETIERE & MALONEY 777 S. Figueroa St., Suite 4900 Los Angeles, CA 90017 Tel: (213) 630-5000 | Fax: (213)683-1225 Email: [email protected]
Attorneys for Defendant Tony Gower
27 28 -2PROOF OF SERVICE
1 2 3 4 5 6 7 8 9 10
Jaion Laron Clark v. Top Cat Prod., etc., et al.; L.A.S.C. Case No. BC451511 Dana Leonardi 15059 Ridgeview Court Chino Rills, CA 91700 Email: [email protected] Tel: (909) 455-2990 Kevin McCluskey, Esq. WATERS, McCLUSKEY & BOEHL 200 N. Sepulveda Blvd., Suite 300 El Segundo, CA 90245 Email: [email protected] Phone: 310-396-3411 | Fax: 310-450-0925
Defendant In Pro Per
Attorneys for Defendant/Cross-Defendant, Adler Realty Investments, Inc.
VIA U.S. MAIL: Christina Y. Morovati, Esq. BRAGG & KULUVA 444 S. Flower Street, Suite 600 Los Angeles, California 90071 Tel: (213) 612-5335 | Fax: (213) 612-5712
Attorneys for Defendant/Cross-Defendant, Adler Realty Investments, Inc.
11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -3PROOF OF SERVICE
