Judge Christian R. Gullon, Case Number: 24PSCV03440, Date: 2025-02-18 Tentative Ruling

Judge: Christian R. Gullon, Case: 24PSCV03440, Date: 2025-02-18 Tentative Ruling

(1) DEMURRER OF DEFENDANTS JPMORGAN CHASE BANK, N.A. AND LAMARR DANIELS TO PLAINTIFFS’ VERIFIED COMPLAINT is SUSTAINED with leave to amend; see meet and confer order in ‘discussion’ section.

(2) DEMURRER OF DEFENDANTS JPMORGAN CHASE BANK, N.A. AND LAMARR DANIELS TO PLAINTIFFS’ VERIFIED COMPLAINT is SUSTAINED with leave to amend; see meet and confer order in ‘discussion’ section.

Plaintiffs Mansure Bishay (“Plaintiff”) and Precision Machine Work, Inc. (“Precision”) allege the following against Defendants LAMARR DANIELS (“Daniels” or “Manager”) and JPMORGAN CHASE BANK, N.A. (the “Chase”): In June 2023, Plaintiff visited Chase’s La Verne office because he intended to make a $800 payment but the amount withdrawn from his account was $23,000, so he wanted to address the issue. A Chase associate called Daniels, who “arrived [] visibly agitated from a prior phone call.” (Complaint ¶15.) Daniels then “confronted Plaintiff Bishay with hostility, unprofessionally and aggressively commanding Plaintiff to ‘sit [his] ass down.’” (¶15.) Plaintiff responded by asserting, “‘[D]o not talk to me like that, what the fuck is wrong with you?’” (¶16.) Daniels then told Plaintiff to “get the fuck out of my bank and don't come back again.” (¶16.) Plaintiff then filed a complaint with the Bank (¶18) and shortly thereafter, Chase closed Plaintiff’s personal and business accounts. (¶19.) Plaintiff alleges that the’Manager treated Plaintiff the way he did because Plaintiff is of Egyptian ethnicity. (¶12.)

On October 14, 2024, Plaintiffs filed suit against Defendants for the following ten causes of action (COAs):

On December 16, 2024, Defendants filed the instant demurrers. (The demurrers are identical.)

First, the opposition fails to meaningfully address any of Defendants’ arguments and, even more importantly, fails to provide one case citation (aside from in the legal standard governing demurrers). (See also Reply p. 5:4-9 [“Plaintiffs’ Opposition fails to respond to the detailed points and authorities cited in the Demurrer and consists entirely of conclusory and irrelevant arguments—indeed, Plaintiffs not only fail to respond to the arguments and cases relied upon by Defendants in the Demurrer, they also fail to cite even a single case in the Opposition aside from boilerplate briefing on the legal standard on a demurrer and a perfunctory request for leave to amend. In short, nothing in Plaintiffs’ Opposition changes the result here.”].)

The court is not bound to develop a party’s argument for them, arguments which are to be supported by authority. (See Cahill v. San Diego Gas & Electric Co. (2011) 194 Cal.App.4th 939, 956; Trinity Risk Management, LLC v. Simplified Labor Staffing Solutions, Inc. (2021) 59 Cal.App.5th 995, 1009; see In re Marriage of Falcone & Fyke (2008) 164 Cal.App.4th 814, 830 [“[t]he absence of cogent legal argument or citation to authority allows this court to treat the contentions as waived.”]; see also Tate v. Canonica (1960) 180 Cal.App.2d 898, 900 [counsel’s duty to the court includes a duty to study and discuss the available authorities].) Therefore, while the court has reviewed Plaintiffs’ opposition, it inherently fails to show that sufficient facts been pled such that the points will not be addressed in this ruling.

Should Defendants need to file a subsequent demurrer, the court orders the following from Plaintiffs’ counsel. Following Defendants’ meet and confer efforts, Plaintiffs’ counsel is to respond to each cause of action separately and is to squarely address each citation and each argument asserted by Defense counsel. Should Plaintiffs’ counsel disagree with any of Defendants’ citations/arguments, Plaintiffs’ counsel is to provide relevant authority explaining otherwise. This correspondence from Plaintiffs’ counsel, which should amount to no less than five pages, should be attached to a subsequent demurrer. Plaintiffs’ counsel’s failure to do so will result in the demurrer being sustained without leave to amend.

Second, as noted by Defendants, corporations such as Precision do not have “ethnicities.” (Demurrer p. 13, fn. 5.) Accordingly, certain COAs are presumed to be brought on behalf of only Plaintiff Bishay and not Precision.

Third, on a related note, to the extent Plaintiffs seek to assert claims for emotional distress on behalf of Precision, those claims also fail as a matter of law because corporations lack standing to assert such claims. (Demurrer p. 21, fn. 7, citing Huntingdon Life Scis., Inc. v. Stop Huntingdon Animal Cruelty USA, Inc. (2005) 129 Cal.App.4th 1228, 1260, disapproved of on other grounds by Cohen v. Super. Ct. (2024) 102 Cal.App.5th; F.D.I.C. v. Hulsey, 22 F.3d 1472, 1489 (10th Cir. 1994) [“Since a corporation lacks the cognizant ability to experience emotions, a corporation cannot suffer emotional distress.”].)

The court now turns to the merits of the demurrer. Defendants demur to the entirety of the complaint on the grounds that the complaint fails to allege facts sufficient to constitute any COA. For reasons to be discussed below, the court agrees with Defendants on all points.

Plaintiffs allege that Chase is vicariously liable because Daniels was acting within the scope of his employment as a Manager. (Complaint ¶25.)

However, as noted in demurrer, vicarious liability is not an independent COA such that without an underlying COA, no vicarious liability can exist. (Demurrer p. 12, citing Dyer v. Northbrook Prop. & Cas. Ins. (1989) 210 Cal.App.3d 1540, 1553.)[2]

Here, as there is no underlying viable COA (e.g., 2^nd COA, infra), this COA fails.

Therefore, the court sustains the demurrer with leave to amend as to the 1^st COA.

2. 2^nd COA for Violation of the Unruh Civil Rights Action (Civil Code sections 51 and 52)

Plaintiffs alleges that Daniels’ statements to Plaintiff “were likely motivated by Plaintiff Bishay’s Egyptian ethnicity, as other bank customers were not subjected to such hostile and discriminatory treatment.” (¶36.)

“[A] plaintiff seeking to establish a case under the Unruh Act must plead and prove intentional discrimination in public accommodations in violation of the terms of the Act.” (Demurrer p. 13, quoting Harris v. Cap. Growth Invs. XIV (1991) 52 Cal. 3d 1142, 1175.) As noted in demurrer (p. 13), the case of Gray v. Superior Court (1986) 181 Cal.App.3d 813, disapproved on other grounds by Guz v. Bechtel Nat’l Inc. (2000) 24 Cal.4th 317, is helpful.[3] In Gray, after 14 months of employment, the plaintiff’s employment report stated that he did not meet major job requirements; the report expanded upon the reasons for the plaintiff’s unsatisfactory ratings. (Id. at p. 818.) Then, the plaintiff was terminated for insubordination. (Ibid.) In his complaint for wrongful termination, the plaintiff’s third alleged basis for wrongful discharge was sexual discrimination. (Id. at pp. 819-820.) The appellate court held that the allegation is without factual support noting that: “Gray's pleading has no specific factual allegations suggesting sexual discrimination. He simply lists [his supervisor’s] actions in failing to cooperate, postponing his annual review, submitting a false report and refusing to allow him to complete his response, and affixes to them a sexual discrimination label.” (Id. at p. 820, emphasis added.)

Similarly, here, Plaintiff “ascribes” the alleged verbal altercation to “discrimination” without any factual support. (Demurrer p. 13.) In fact, the complaint itself does not intentional discrimination because (i) the complaint states that Daniels’ statements were “likely” motivated by Plaintiff’s ethnicity (¶36, emphasis added) and (ii) Daniels’ initial demeanor was the result of a “prior phone call” (¶15).

Therefore, as the complaint pleads no facts as to potential ethnic animus, the demurrer to the 2^nd COA is sustained with leave to amend.

Plaintiffs allege that Defendants violated the Ralph Act by “intimidating and threatening Plaintiff Mansure Bishay with violent and aggressive language…no other customers were treated with such hostility and discrimination.” (¶43.)

Liability under the Ralph Act requires “violence, or intimidation by threat of violence” committed against another person “because of political affiliation, or on account of any characteristic” listed in California Civil Code section 51(b) or (e). (Demurrer p. 14, citing Cal. Civ. Code § 51.7(b)(1).) Thus, “[u]nder the Ralph Act, a plaintiff must establish the defendant threatened or committed violent acts against the plaintiff or their property, and a motivating reason for doing so was a prohibited discriminatory motive, or that the defendant aided, incited, or conspired in the denial of a protected right.” (Demurrer p. 14, quoting Gabrielle A. v. Cnty. of Orange (2017) 10 Cal. App. 5th 1268, 1291, as modified (Apr. 18, 2017).

Here, Defendants argue that Plaintiffs do not allege an intent to injure Plaintiff (or his property) or that Defendants aided, incited, or conspired to deny him of a protected right. (Demurrer p. 15.) Echoing the court in Gabrielle A. (and mindful that the case was on appeal from a summary judgment), the complaint is “heavy on speculation and light on facts.” (Id. at p. 1286.)

Plaintiffs allege that “Defendant Chase negligently supervised and retained its employee, Defendant Lamarr Daniels, who demonstrated unfitness and incompetence in performing his duties as a bank manager.” (¶48.)

A negligent supervision or retention claim requires foreseeability of injury. (Demurrer p. 15, citing Phillips v. TLC Plumbing, Inc. (2009) 172 Cal.App.4th 1133, 1142; D.Z. v. Los Angeles Unified Sch. Dist. (2019) 35 Cal.App.5th 210, 235 (2019).) In particular, “[n]egligence liability will be imposed on an employer [only] if it ‘knew or should have known that hiring [or retaining] the employee created a particular risk or hazard and that particular harm materializes.’” (Phillips, supra, 172 Cal.App.4th at p. 1139, quoting Doe v. Cap. Cities (1996) 50 Cal.App.4th 1038, 1054.)

Here, Plaintiffs allege no facts that Chase had knowledge of Daniels’ purported unfitness when he was hired or any time prior to the 6/29/23 incident. (Demurrer p. 15.)

Therefore, the court sustains the demurrer as to the 4^th COA with leave to amend.

Plaintiffs allege the following: “Defendant Chase breached these contractual agreements by abruptly closing Plaintiff Bishay’s personal and business accounts following the incident on June 29, 2023. This closure was not based on any legitimate grounds related to the management of the accounts or any breach by Plaintiff Bishay. Instead, the closure was a punitive action directly resulting from the discriminatory and hostile conduct of Defendant Lamarr Daniels, as evidenced by the subsequent correspondence from Chase Headquarters.” (¶56.)

In an action for breach of contract, “the terms must be set out verbatim in the body of the complaint or a copy of the written agreement must be attached and incorporated by reference.” (Demurrer p. 16, quoting Harris v. Rudin, Richman & Appel (1999) 74 Cal. App. 4th 299, 307.) Moreover, “a plaintiff must allege the specific provisions in the contract creating the obligation the defendant is said to have breached.” (Young v. Facebook, Inc., 790 F. Supp. 2d 1110, 1117 (N.D. Cal. 2011); In re Ambry Genetics Data Breach Litig., 567 F. Supp. 3d 1130, 1143–44 (C.D. Cal. 2021).)

Here, Plaintiffs do not identify any contractual provision that Chase allegedly breached. (Demurrer p. 16.) But Defendants do ask the court take judicial notice of Chase’s Deposit Account Agreement and Privacy Notice (“Deposit Account Agreement”) effective June 11, 2023, which governs Plaintiffs’ accounts with Chase. The court grants the UNOPPOSED request for judicial notice. (See Fremont Indemnity Co. v. Fremont General Corp. (2007) 148 Cal.App.4th 97, 113 [judicial notice may be taken of the existence of a document and court may consider the facts of said document].)

The agreement expressly provides that Chase has the right to close accounts at its discretion. (RJN Ex. A 24 of 32 of PDF [“Either you or we may close your account . . . at any time for any reason or no reason without prior notice.”], emphasis added.)

Plaintiffs allege that “Defendant Chase breached the implied duty of good faith and fair dealing by abruptly closing Plaintiff Bishay’s personal and business accounts following the incident on June 29, 2023. This closure was not based on any legitimate grounds related to the management of the accounts or any breach by Plaintiff Bishay.” (¶64.)

The covenant is “limited to assuring compliance with the express terms of the contract and cannot be extended to create obligations not contemplated by the contract.” (Demurrer p. 16, quoting Pasadena Live v. City of Pasadena (2004) 114 Cal.App.4^th 1089, 1094.)

Here, as discussed above, the Deposit Account Agreement expressly provides that Chase has the right to close accounts at its discretion. Thus, Plaintiffs cannot impose limits on Chase’s express contractual right through the covenant of good faith and fair dealing. (Demurrer p. 17.)

Plaintiffs allege Defendants violated the UCL because “[t]he closure of Plaintiff’s accounts was not based on any legitimate grounds but was intended to harm Plaintiff financially and disrupt his business.” (¶72.)

The UCL prohibits “any unlawful, unfair or fraudulent business act or practice and unfair, deceptive, untrue or misleading advertising.” (Demurrer p. 17, quoting Cal. Bus. & Prof. Code § 17200.) Of note, relief under the UCL is equitable in nature and limited to injunctive relief and restitution. (See Korea Supply Co. v. Lockheed Martin Corp. (2003) 29 Cal. 4th 1134, 1144.) Accordingly, to state a claim for monetary relief under the UCL, a plaintiff must allege an entitlement to restitution rather than damages.

Here, Plaintiffs expressly seek damages rather than injunctive relief or restitution in connection with their UCL claim. (Demurrer p. 17, citing Complaint ¶¶71, 74 [alleging financial disruption, inconvenience, and damage to business operations and emotional distress].)

Plaintiffs allege that “Defendant Chase breached this duty of care by negligently closing Plaintiff Bishay’s personal and business accounts without conducting proper due diligence.” (¶78.)

Here, Defendants argue that the COA is barred by the economic loss rule and otherwise fails to state a duty. The court will focus on the economic loss rule. The contractual economic loss rule “bar[s] claims in negligence for pure economic losses in deference to a contract between litigating parties.” (Demurrer p. 18, quoting Sheen v. Wells Fargo Bank, N.A. (2022) 12 Cal. 5th 905, 922.) The economic loss rule “prevents the law of contract and the law of tort from dissolving one into the other.” (Robinson Helicopter Co., Inc. v. Dana Corp. (2004) 34 Cal. 4th 979, 988.) Thus, “tort claims for monetary losses between contractual parties are barred by the economic loss rule . . . when they arise from—or are not independent of—the parties’ underlying contracts.” (Sheen, supra, 12 Cal.5th at 923.)

Here, the relationship between Plaintiffs and Chase is contractual as evidenced by the numerous references to the bank account, an account that is governed by the Deposit Account Agreement (i.e., contract).

Plaintiffs allege that Daniels’ conduct was ‘extreme and outrageous.’ (¶83.) (It is alleged that the closure of his bank accounts caused further emotional distress (¶84).)

“A defendant’s conduct is ‘outrageous’ when it is so ‘extreme as to exceed all bounds of that usually tolerated in a civilized community.’” (Demurrer pp. Hughes v. Pair (2009) 46 Cal. 4th 1035, 1050.) There can be no recovery for “mere profanity, obscenity, or abuse, without circumstances of aggravation, or for insults, indignities or threats which are considered to amount to nothing more than mere annoyances. The plaintiff cannot recover merely because of hurt feelings.” (Demurrer p. 20, quoting Yurick v. Super. Ct. (1989) 209 Cal.App.3d 1116, 1128, as modified (May 18, 1989).)

Plaintiff alleges that “Plaintiff Bishay suffered serious emotional distress as a direct result of Defendant Chase’s negligent actions. The hostile and discriminatory treatment by Defendant Daniels caused Plaintiff Bishay to feel shocked, humiliated, and embarrassed. This emotional distress was further compounded when Defendant Chase, without proper investigation or justification, closed Plaintiff Bishay’s personal and business accounts.” (¶92.)

Under California law, “[t]he negligent causing of emotional distress is not an independent tort, but the tort of negligence. The traditional elements of duty, breach of duty, causation, and damages apply.” (Demurrer p. 20, quoting Burgess v. Superior Court (1992) 2 Cal.4th 1064, 1072; Lawson v. Management Activities, Inc. (1999) 69 Cal.App.4th 652, 656.)

Here, as discussed above with respect to the negligent supervision and retention and negligence COAs, Plaintiffs fail to allege facts sufficient to constitute a cause of action against Defendants for negligence.

Therefore, absent an underlying tort, the court sustains the demurrer to the 10^th COA with leave to amend.

Based on the foregoing, as all COAs fail to state sufficient facts to constitute a COA, the demurrer is sustained in its entirety with leave to amend.

[1] There are presumably two demurrers filed, one on behalf of the individual and corporate defendant. As both demurrers are identical, the court will provide a consolidated analysis.

[2] In paragraph 25 of the complaint, Plaintiffs cite to Lisa M. v. Henry Mayo Newhall Memorial Hospital (1995) 12 Cal.4th 291 for their proposition that an employer can be liable for an employee’s willful conduct/tort even though the employer has not authorized the employee to commit crimes or intentional torts. That is partially correct as vicarious liability in such a situation requires a “causal nexus to the employee’s work” or that the tort was otherwise “engendered by the employment.” (Id. at p. 297-298.) Put differently, the tortious conduct must be a “generally foreseeable consequence of the activity.” (Id. at p. 299, citing Rodgers v. Kemper Constr. Co. (1975) 50 Cal.App.3d 608, 618.) Therefore, per Plaintiffs’ own citation, should Plaintiffs seek to hold Chase vicariously liable for Daniels’ conduct, they are to allege facts that his alleged conduct was a “foreseeable consequence” of his work as a bank manager.

[3] Though Defendants argue that the case is instructive, not entirely as the case did not involve an Unruh COA but alleged violations of Government Code section 12490 (unlawful employment practice for employer to refuse to hire or discharge the person based upon protected qualities).