Judge: Carolyn M. Caietti, Case: 37-2022-00003711-CU-OE-CTL, Date: 2023-12-08 Tentative Ruling

SUPERIOR COURT OF CALIFORNIA,

DEPT.:

EVENT DATE:

EVENT TIME:

HALL OF JUSTICE

TENTATIVE RULINGS - December 07, 2023

12/08/2023  10:30:00 AM  C-70 COUNTY OF SAN DIEGO

JUDICIAL OFFICER:Carolyn Caietti

CASE NO.:

CASE CATEGORY:

EVENT TYPE:

CASE TITLE: CASE TYPE:

Civil - Unlimited  Other employment Demurrer / Motion to Strike 37-2022-00003711-CU-OE-CTL DEMASTER VS ENDEAVOR BANK [IMAGED] CAUSAL DOCUMENT/DATE FILED:

Defendant Endeavor Bank's Demurrer to the Second Amended Complaint is SUSTAINED WITH LEAVE TO AMEND (first through fifth causes of action).

Defendant Endeavor Bank's Motion to Strike the Second Amended Complaint is MOOT in light of the ruling on the demurrer.

Demurrer A demurrer can be used only to challenge defects that appear on the face of the pleading under attack; or from matters outside the pleading that are judicially noticeable. (Blank v. Kirwan (1985) 39 Cal.3d 311, 318; Donabedian v. Mercury Ins. Co. (2004) 116 Cal.App.4th 968, 994.) No other extrinsic evidence can be considered (i.e., no 'speaking demurrers'). (Ion Equip. Corp. v. Nelson (1980) 110 Cal.App.3d 868, 881.) The complaint must be liberally construed and given a reasonable interpretation, with a view to substantial justice between the parties. (Amarel v. Connell (1988) 202 Cal.App.3d 137, 140–141; see also, Poseidon Development, Inc. v. Woodland Lane Estates, LLC (2007) 152 Cal.App.4th 1106, 1111-12 [in ruling on demurrers, courts treat as being true 'not only the complaint's material factual allegations, but also facts that may be implied or inferred from those expressly alleged'].) Background The SAC alleges the parties entered into an employment contract by way of an offer letter in April 2018, which included a base salary and an incentive bonus among other benefits. (See, SAC, at Ex. A.) Specifically, the offer letter states, 'Incentive Compensation (Bonus). In addition to your regular base pay, you will be eligible for an annual incentive bonus, if any is awarded, based on criteria established by the Bank's management team. Your incentive plan for 2018 is noted in Schedule A attached.' The performance goals for year 2018 required a $12M goal. (SAC, at ¶ 8 & Ex. A.) In April 2019, Defendant advised Plaintiff his basic performance goals increased from $12M to $26M for the following year. (SAC, at ¶ 14.) The SAC asserts causes of action for: (1) breach of employment contract; (2) breach of implied covenant of good faith and fair dealing; (3) misrepresentation; (4) false promise; (5) constructive discharge; (6) Labor Code § 2802(a) – failure to reimburse expenditures; (7) Labor Code § 202 – Calendar No.: Event ID:  TENTATIVE RULINGS

2990724  42 CASE NUMBER: CASE TITLE:  DEMASTER VS ENDEAVOR BANK [IMAGED]  37-2022-00003711-CU-OE-CTL non-payment of wages; and (8) Labor Code § 203 – waiting time penalty for nonpayment.

Defendant demurrers to the first through fifth causes of action.

First Cause of Action – Breach of Contract The first cause of action fails to state facts sufficient to constitute a breach of contract because there are no facts of breach. (Oasis West Realty, LLC v. Goldman (2011) 51 Cal.4th 811, 821.) Plaintiff alleges Defendant 'breached the employment agreement when it unilaterally, unreasonably, and without notice increased Plaintiff's performance goals in loans and deposits from $12 million dollars to $26 million dollars. Defendant never mentioned this fact during the hiring process or in the employment offer letter.

This omission materially affected Plaintiff's perception of the position and its compensation and served to induce Plaintiff into accepting the offer of employment, which he otherwise would not have accepted, thereby depriving him of the opportunity to pursue other potential employment.' (SAC, at ¶ 26.) But neither the allegations in the SAC, nor the attached offer letter prohibit Defendant from increasing the performance goals for 2019. In fact, the offer letter specifically states, the criteria was established at the discretion of management ('if any is awarded, based on criteria established by the Bank's management team') and incorporates an at-will employment provision (You will be an 'at will employee...'). (Ex. A; see also, Lab. Code, § 2922.) The employer's right to terminate an at-will employee includes the right to insist on prospective changes in the terms of that employment and the employee impliedly accepts such changes in the terms of employment by continuing the employment.

(See, Schachter v. Citigroup, Inc. (2009) 47 Cal.4th 610, 619.) The employment letter also includes an integration clause indicating the offer letter is the complete agreement. (Ibid.) Based on the allegations and what is stated in the offer letter, the facts do not reveal a breach. However, the Court will allow leave to amend. Thus, the demurrer to the first cause of action is SUSTAINED WITH LEAVE TO AMEND.

Second Cause of Action – Breach of the Implied Covenant of Good Faith and Fair Dealing The second cause of action fails to state sufficient facts to constitute a breach of the implied covenant of good faith and fair dealing. The covenant requires neither party do anything to deprive the other of the benefits of the agreement. (Foley v. Interactive Data Corp. (1988) 47 Cal.3d 654, 683-84.) In the employment context, the implied covenant prevents the employer from frustrating the employee's enjoyment of rights provided by the contract. (Kelecheva v. Multivision Cable T.V. Corp. (1993) 18 Cal.App.4th 521, 532-33.) As discussed above, Plaintiff fails to allege he was denied any benefit to which he was entitled to under the contract. Thus, the demurrer to the second cause of action is SUSTAINED WITH LEAVE TO AMEND.

Third Cause of Action – Intentional Misrepresentation The third cause of action fails to state sufficient facts to constitute intentional misrepresentation. The elements of intentional misrepresentation are (1) a misrepresentation, (2) knowledge of falsity, (3) intent to induce reliance, (4) actual and justifiable reliance, and (5) resulting damage. (Aton Center, Inc. v. United Healthcare Ins. Co. (2023) 93 Cal.App.5th 1214, 1245.) Here, the SAC alleges, 'More specifically, Defendant knowingly withheld from [Plaintiff] any information regarding the increase in performance goals by more than double after the first year without an increase in base salary at the time of contracting in order to induce [Plaintiff]'s acceptance of Defendant's employment offer.' As literally stated, Defendant 'withheld' information and no affirmative misrepresentations are alleged. There are no other facts alleged of how Defendant 'misrepresented' the terms of the incentive compensation plan.

Thus, the demurrer to the third cause of action is SUSTAINED WITH LEAVE TO AMEND.

Fourth Cause of Action – False Promise The SAC does not sufficiently state sufficient facts to constitute false promise, which is a promise made without any intention to perform. (Civil Code, §§ 1709, 1710(4) [deceit includes a 'promise, made without Calendar No.: Event ID:  TENTATIVE RULINGS

2990724  42 CASE NUMBER: CASE TITLE:  DEMASTER VS ENDEAVOR BANK [IMAGED]  37-2022-00003711-CU-OE-CTL any intention of performing it']; Beckwith v. Dahl (2012) 205 Cal.App.4th 1039, 1060; see also, CACI 1902 [False Promise – '1. That [name of defendant] made a promise to [name of plaintiff]'].) Here, Plaintiff failed to plead facts showing a promise was made regarding the bonus criteria in 2019.

The SAC alleges, 'More specifically, Defendant expressly wrote into the proposed employment contract that [Plaintiff's] performance goals were $12 million dollars in outstanding loans and deposits. However, Defendant failed to advise [Plaintiff] at the time of contracting of its intention to more than double the performance goals...'. (SAC, at ¶ 49 (emphasis added).) Even in opposition, Plaintiff argues Defendant 'intentionally omitted' information. (Opp., at p. 9:4-5.) In addition, Plaintiff argues without legal authority that the 'omission constituted a false promise.' (Id., at p. 5-6.) There are no facts to show Defendant made a promise to Plaintiff. Thus, the demurrer to the fourth cause of action is SUSTAINED WITH LEAVE TO AMEND.

Fifth Cause of Action – Constructive Discharge The SAC fails to state sufficient facts to constitute a constructive discharge. A constructive discharge occurs when an employee is coerced into resigning, and the resignation was 'not caused by the voluntary action of the employee or by conditions ... beyond the employer's reasonable control.' (Turner v. Anheuser-Busch, Inc. (1994) 7 Cal.4th 1238, 1248.) 'In order to establish a constructive discharge, an employee must plead and prove, by the usual preponderance of the evidence standard, that the employer either intentionally created or knowingly permitted working conditions that were so intolerable or aggravated at the time of the employee's resignation that a reasonable employer would realize that a reasonable person in the employee's position would be compelled to resign. [¶ ] For purposes of this standard, the requisite knowledge or intent must exist on the part of either the employer or those persons who effectively represent the employer, i.e., its officers, directors, managing agents, or supervisory employees.' (Turner, supra, 7 Cal.4th at p. 1251.) 'Even after establishing constructive discharge, an employee must independently prove a breach of contract or tort in connection with employment termination in order to obtain damages for wrongful discharge.' (Ibid.) Here, as discussed above, the SAC does not allege a breach of contract. There are also no facts revealing a tort in connection with the alleged employment termination. In opposition, Plaintiff does not identify with legal authority how the facts regarding his parental leave amount to a tort and acknowledge the cause of action is unrelated to an adverse employment action involving discrimination. (Opp., at p. 10:21-28.) Thus, the demurrer to the fifth cause of action is SUSTAINED WITH LEAVE TO AMEND.

Conclusion For these reasons, the demurrer to the first through fifth causes of action are SUSTAINED WITH LEAVE TO AMEND.

Motion to Strike In light of the ruling on Defendant's demurrer to sustain with leave to amend, the motion to strike is MOOT.

Concluding Orders Plaintiff is ordered to file and serve an amended complaint by December 22, 2023.

If the tentative ruling is confirmed without modification, the minute order will be the Court's final ruling.

Defendant is ordered to serve written notice of the Court's final ruling by December 12, 2023.

The parties are reminded to comply with Department 70's Policies and Procedures and to provide courtesy copies of all motion paperwork.

Calendar No.: Event ID:  TENTATIVE RULINGS

2990724  42