Judge Barbara M. Scheper, Case 20STCV18357B 2023-01-27 Tentative Ruling

Judge: Barbara M. Scheper, Case: 20STCV18357B, Date: 2023-01-27 Tentative Ruling

Case Number: 20STCV18357B Hearing Date: January 27, 2023 Dept: 30

Dept. 30

Calendar No.

Bankuthy, et. al. vs. Millennium House, Inc., et. al., Case No. 20STCV18357

Tentative Ruling re: Defendants’ Motion for Judgment on the Pleadings

Intervenor Nautilus Insurance Company and Defendants Peter Schuster, Knacio Moore, and Dennis James (collectively, Defendants) move for judgment on the pleadings as to Plaintiffs’ fifth cause of action in the Third Amended Complaint. The motion is granted without leave to amend.

A motion for judgment on the pleadings may be made after the time to demur has expired and an answer has been filed. (Code Civ. Proc., § 438, subd. (f).) A motion by a defendant may be made on the grounds that the complaint or cross-complaint “does not state facts sufficient to constitute a cause of action against that defendant.” (Code Civ. Proc., § 438, subd. (c)(B)(ii).) A motion for judgment on the pleadings has the same function as a general demurrer but is made after the time for demurrer has expired. Except as provided by statute, the rules governing demurrers apply. (Cloud v. Northrop Grumman Corp. (1998) 67 Cal.App.4th 995, 999.)

Like a general demurrer, “ordinarily, a [motion for judgment on the pleadings] does not lie as to a portion of a cause of action, and if any part of a cause of action is properly pleaded, the [motion] will be overruled.” (Fire Ins. Exchange v. Superior Court (2004) 116 Cal.App.4th 446, 452.) In considering a motion for judgment on the pleadings, courts consider whether properly pled factual allegations—assumed to be true and liberally construed—are sufficient to constitute a cause of action. (Stone Street Capital, LLC v. Cal. State Lottery Com’n (2008) 165 Cal.App.4th 109, 116.)

Plaintiffs’ fifth cause of action for Unfair Business Practices (Bus. & Prof. Code § 17204) alleges that Millennium House engages in unlawful business practices harming senior citizens and disabled persons, including Plaintiffs, by not paying payroll taxes, minimum wages, or worker’s compensation insurance for its employees; and by failing to provide minimally habitable conditions for its residents. (TAC ¶¶ 143-144.) Plaintiffs seek “an injunction and order requiring Schuster and Millennium House to cease all operations as a boarding home or sober living house until it can demonstrate that it complies with California employment, housing, and public health laws, and request the appointment of a receiver at Millennium House’s expense to ensure compliance.” (TAC ¶ 146.)

California’s Unfair Competition Law (UCL) prohibits unlawful, unfair, or fraudulent business acts or practices. (Bus. & Prof. Code, § 17200 et seq.) “An ‘unlawful business activity’ includes ‘anything that can properly be called a business practice and that at the same time is forbidden by law.’” (People v. McKale (1979) 25 Cal.3d 626, 632 [quoting Barquis v. Merchants Collection Assn. (1972) 7 Cal.3d 94, 113].) “[R]estitution is the only monetary remedy authorized in a private action brought under the unfair competition law.” (Clark v. Superior Court (2010) 50 Cal.4th 605, 614; Korea Supply Co. v. Lockheed Martin Corp. (2003) 29 Cal.4th 1134, 1148.)

“[I]njunctive relief may fall into two categories: injunctions intended ‘to remedy a public wrong’ and injunctions primarily intended to resolve ‘a conflict between the parties and rectify[ ] individual wrongs’ [Citation]. Injunctions sought under the UCL may fall into either category.” (State of California v. Altus Finance (2005) 36 Cal.4th 1284, 1308.) “[P]ublic 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.” (McGill v. Citibank, N.A. (2017) 2 Cal.5th 945, 955.)

Defendants move for judgment on the pleadings on the basis that Plaintiffs are no longer tenants of Millennium House, and so lack standing to bring an action for injunctive relief under the UCL. The Court agrees that Plaintiffs do not have standing to pursue individual injunctive relief since they no longer reside at Millennium House. Plaintiffs’ argument suggesting that they now want to prosecute this claim on behalf of the public comes far too late. Plaintiffs have not filed a motion seeking to amend the complaint and it appears that any such motion would be without merit and untimely. Plaintiffs’ have alleged that Defendants’ unlawful business practices “harm senior citizens and disabled persons” and “allow[] it to unfairly compete with other businesses and harm consumers. (TAC ¶¶ 143-144.) These allegations demonstrate that Plaintiffs have been aware of the facts that would support a claim for public injunctive relief since the filing of the Third Amended Complaint filed almost two years ago. Moreover, Plaintiffs improperly seek damages of $1,285,000 plus interest pursuant to their UCL cause of action. (TAC p. 62:3.) Plaintiffs may not obtain non-restitution monetary relief under the UCL.