Judge: Armen Tamzarian, Case: 22STCV16079, Date: 2022-12-13 Tentative Ruling

Case Number: 22STCV16079    Hearing Date: December 13, 2022    Dept: 52

Tentative Ruling:

Defendants Southern California Permanente Medical Group, Kaiser Foundation Health Plan, Kaiser Foundation Hospitals, and Linda Gutierrez’s Demurrer and Motion to Strike Portions of First Amended Complaint

Demurrer

Defendant Linda Gutierrez demurs to the entire first amended complaint by plaintiff Jan Harris.  Defendants Southern California Permanente Medical Group, Kaiser Foundation Health Plan, Inc., and Kaiser Foundation Hospitals demur to plaintiff’s second cause of action for fraud.  After defendants filed this demurrer, the parties stipulated to dismiss the action as to defendants Kaiser Foundation Health Plan, Inc. and Kaiser Foundation Hospitals.

A. Defendant Linda Gutierrez

            Plaintiff fails to allege sufficient facts for any cause of action against Gutierrez.  The first amended complaint does not even purport to allege a cause of action against her.  It includes Gutierrez as a named defendant in the caption and has several factual allegations about her.  But plaintiff specifies that each of her six causes of action is alleged “against Defendants Southern California Permanente Medical Group, Kaiser Foundation Health Plan, Inc., Kaiser Foundation Hospitals, and Does 1 to 100, Inclusive.”  (FAC, pp. 9, 11, 13, 15, 16, 17.)  That list of defendants does not include Linda Gutierrez.

Assuming plaintiff’s first amended complaint does purport to allege each cause of action against Gutierrez, it fails to state sufficient facts for any of them.  Plaintiff’s second cause of action for fraud alleges only a misrepresentation by “Labor Relations Representative Joane J. Roberts” (FAC, ¶ 46)—not by Linda Gutierrez.  (As discussed below, the second cause of action also fails for other reasons.)  The first, third, fourth, and fifth causes of action for violations of the Fair Employment and Housing Act and for wrongful termination in violation of public policy, meanwhile, can only be brought against an employer, not an individual supervisor.  (Reno v. Baird (1998) 18 Cal.4th 640, 663-664.)  Finally, the sixth cause of action for whistleblower retaliation under Labor Code § 1102.5 does not allege any conduct by Gutierrez.  (FAC, ¶¶ 73-77.)

B. 2nd Cause of Action: Fraud – Intentional Misrepresentation

Plaintiff fails to allege sufficient facts for this cause of action.  Intentional misrepresentation requires: “(a) misrepresentation; (b) defendant’s knowledge of the statement’s falsity; (c) intent to defraud (i.e., to induce action in reliance on the misrepresentation); (d) justifiable reliance; and (e) resulting damage.”  (Hunter v. Up-Right, Inc. (1993) 6 Cal.4th 1174, 1184.)

 “[F]raud must be pled specifically.”  (Lazar v. Superior Court (1996) 12 Cal.4th 631, 645.)  “ ‘This particularity requirement necessitates pleading facts which show how, when, where, to whom, and by what means the representations were tendered.’ ”  (Ibid.)  “A plaintiff’s burden in asserting a fraud claim against a corporate employer is even greater.  In such a case, the plaintiff must ‘allege the names of the persons who made the allegedly fraudulent representations, their authority to speak, to whom they spoke, what they said or wrote, and when it was said or written.’ ”  (Ibid.) 

Plaintiff fails to specifically allege she suffered any damages resulting from her reliance on a misrepresentation.  Plaintiff must “allege [her] damages were caused by the actions [she] took in reliance on the defendant’s misrepresentations.”  (Beckwith v. Dahl (2012) 205 Cal.App.4th 1039, 1064.)  “If the defrauded plaintiff would have suffered the alleged damage even in the absence of the fraudulent inducement, causation cannot be alleged and a fraud cause of action cannot be sustained.”  (Ibid.)

Plaintiff alleges defendant falsely represented that she “will be reinstated to her previous fulltime status; specifically, to her previous Monday through Friday hours and work schedule.  Reinstatement of seniority, pension and benefit eligibility as of May 20, 2019.”  (FAC, ¶ 46.)  Plaintiff further alleges, “In reliance of these representations, [she] agreed to resolve and withdraw her grievance against Defendants and accepted a small sum for her troubles of $4,500, believing she had been reinstated.”  (FAC, ¶ 49.) 

That is not a specific allegation of damages resulting from the actions she took in reliance.  Rather than suffering some pecuniary loss or other harm, her actions in reliance on the representation resulted in her getting $4,500.  All other damages were caused by either the acts constituting the claims for which she filed that grievance or on defendant’s failure to reinstate her—i.e., the other claims she alleges in this action.  Those damages did not result from plaintiff’s decision to resolve and withdraw her grievance.  She would have suffered those same damages without the alleged fraud.

Furthermore, the second cause of action constitutes an improper attempt to transform employment discrimination claims into fraud.  In an analogous case, the Supreme Court of California stated:

[I]t is difficult to conceive of a wrongful termination case in which a misrepresentation made by the employer to effect termination could ever rise to the level of a separately actionable fraud. In essence, such misrepresentations are merely the means to the end desired by the employer, i.e., termination of employment.  They cannot serve as a predicate for tort damages otherwise unavailable… .   If the termination itself is wrongful, either because it breaches the employment contract or because it violates some well-established public policy articulated in a statute or constitutional provision, then the employee is entitled to recover damages sounding in contract or tort, respectively.  But no independent fraud claim arises from a misrepresentation aimed at termination of employment.

(Hunter v. Up-Right, Inc. (1993) 6 Cal.4th 1174, 1184–1185.)

            The same reasoning applies here.  The alleged misrepresentation was merely the means to resolving plaintiff’s grievance about discrimination and wrongful termination.  If plaintiff would have succeeded in her grievance because she suffered discrimination and wrongful termination, she can recover damages under those theories in this action.  No independent fraud claim arises from this misrepresentation aimed at resolving plaintiff’s grievance with her employer 

That her employer allegedly made false promises to induce plaintiff to resolve her grievance cannot transform her claims underlying that grievance into fraud.  She had already been terminated before she brought the grievance.  The grievance was a way to resolve her claims for discrimination and wrongful termination.  Fraudulently inducing her to resolve those claims cannot result in damages separate from the claims themselves. 

C. Disposition

            The demurrer by former defendants Kaiser Foundation Healthplan, Inc. and Kaiser Foundation Hospitals is moot.

            Defendant Linda Gutierrez’s demurrer to the entire first amended complaint is sustained with 20 days’ leave to amend.

Defendant Southern California Permanente Medical Group’s demurrer to the second cause of action is sustained with 20 days’ leave to amend.

Motion to Strike

Defendants move to strike six portions of the first amended complaint regarding punitive damages.  Courts may strike allegations related to punitive damages where the facts alleged cannot support recovery of punitive damages under Civil Code section 3294.  (Turman v. Turning Point of Central California, Inc. (2010) 191 Cal.App.4th 53, 64.)  Merely conclusory allegations do not suffice.  (Smith v. Superior Court (1992) 10 Cal.App.4th 1033, 1042.)

As discussed above, plaintiff fails to allege sufficient facts for any cause of action against Linda Gutierrez.  She therefore cannot recover punitive damages from her.

For Southern California Permanente Medical Group, plaintiff fails to allege sufficient facts to hold the entity liable for punitive damages.  For a corporate employer to be liable for punitive damages, “the advance knowledge and conscious disregard [of an employee’s unfitness], authorization, ratification or act of oppression, fraud, or malice must be on the part of an officer, director, or managing agent of the corporation.”  (Civ. Code, § 3294(b).)

Plaintiff makes only bare and conclusory allegations.  She alleges, “All actions of all Employer Defendants were taken by their employees, supervisors, executives, officers, and directors, on behalf of the Employer Defendants, who engaged in, authorized, ratified, and approved of the conduct of their employees, including Gutierrez.”  (FAC, ¶ 11.d.)  She also makes a nearly identical allegation that “[a]ll actions of all defendants were taken by employees, supervisors, executives, officers, and directors during employment with all Defendants, were taken on behalf of all defendants, and were engaged in, authorized, ratified, and approved of by all other defendants.”  (FAC, ¶ 11.f.) 

The first amended complaint’s factual allegations assert that Linda Gutierrez engaged in the conduct that constituted discrimination and retaliation.  Plaintiff, however, alleges Gutierrez was “Department Administrator” and her “direct supervisor” (FAC, ¶ 21), not an officer, director, or managing agent of Southern California Permanente Medical Group.   

Disposition

The motion to strike by former defendants Kaiser Foundation Healthplan, Inc. and Kaiser Foundation Hospitals is moot.

 Defendants Southern California Permanente Medical Group and Linda Gutierrez’s motion to strike is granted with 20 days’ leave to amend. 

 The court hereby strikes the following six portions of plaintiff’s first amended complaint:

1.      Page 2, lines 1-5;

2.      Page 12, lines 19-23;

3.      Page 13, lines 4-8;

4.      Page 14, lines 27-28;

5.      Page 17, lines 26-28;

6.      Paragraph 2 of plaintiff’s Prayer, on page 18, line 4.