Judge: Cynthia A Freeland, Case: 37-2022-00005817-CU-OE-NC, Date: 2023-08-04 Tentative Ruling

SUPERIOR COURT OF CALIFORNIA,

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SOUTH BUILDING TENTATIVE RULINGS - July 20, 2023

07/21/2023  01:30:00 PM  N-27 COUNTY OF SAN DIEGO

JUDICIAL OFFICER:Cynthia A. Freeland

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Civil - Unlimited  Other employment Discovery Hearing 37-2022-00005817-CU-OE-NC SANDERS VS XPONENTIAL FITNESS INC [IMAGED] CAUSAL DOCUMENT/DATE FILED: Motion for Protective Order, 06/13/2023

Defendants Xponential Fitness Inc., Xponential Fitness LLC, and Club Pilates Franchise LLC (collectively, 'Defendants')'s motion for protective order is denied.

Initially, the court notes that on June 15, 2023, Defendants appeared ex parte seeking an order advancing the hearing on the present motion, which originally was scheduled for November 3, 2023. At the June 15, 2023 hearing, the court granted the ex parte request and directed Defendants to give notice of the new hearing date. To date, Defendants have not filed a proof of service reflecting service of an amended notice of motion. That being said, Plaintiff Carmen Sanders ('Plaintiff') filed a 'reply' to the motion on July 11, 2023, which actually is one day late (see California Code of Civil Procedure ('CCP') § 1005(b)), on which she notes that the hearing is scheduled for July 21, 2023 at 1:30 p.m. Contrary to Defendants' argument, the court does not construe Plaintiff's 'reply' as a 'veiled attempt to file an untimely opposition,' – it is an untimely opposition. However, the court has no proof that Defendants ever served Plaintiff with the amended notice, as they were directed to do at the June 15, 2023 ex parte hearing, and Plaintiff's 'reply' suggests that no such amended notice was served. See Reply to Motion for Protective Order, p. 4, ll. 24-27. Given that Defendants filed a timely response to the 'reply,' in which Defendants addressed both the procedural issues with the 'reply' as well as the substance, the court declines Defendants' request to disregard the 'reply,' and will proceed to the merits.

To the extent that Defendants contend that the May 17, 2023 Amended Notices of Deposition were not properly served, the court must respectfully disagree. While the court understands that Defendants' counsel requested that Plaintiff's counsel include on her service list several attorneys with defense counsel's firm as well as Ms. Black's assistant, Plaintiff's counsel's inadvertent failure to do so does not render service of those amended notices defective, particularly because the amended notices indisputably were served on Ms. Black as well as counsel for CB Pilates, Inc., Christopher Clements, and Brianna Clements. In any event, Plaintiff's counsel has agreed in all future service to include those individuals specified by Ms. Black, inclusive of her assistant.

That said, there appears to have been an issue with a remote deposition link and the timing for a June 6, 2023 deposition that caused, at a minimum, confusion. Indeed, Plaintiff did not appear for the deposition that she noticed for June 6, 2023. For purposes of this ruling, however, the court does not consider the history of the notices themselves to be pertinent to the motion's substance.

Substantively, the right to discovery does not depend on the status of the pleadings. Indeed, a plaintiff may initiate written discovery as early as ten days after the defendant is served with the summons. See Cal. Code Civ. P. § 2030.020(b). Moreover, discovery may be conducted after a court has sustained a Calendar No.: Event ID:  TENTATIVE RULINGS

2986291 CASE NUMBER: CASE TITLE:  SANDERS VS XPONENTIAL FITNESS INC [IMAGED]  37-2022-00005817-CU-OE-NC demurrer with leave to amend even though an amended pleading has not yet been filed. See Budget Finance Plan v. Sup. Ct. (McDowell) (1973) 34 Cal. App. 3d 794, 797. That being said, a court may stay or phase discovery in the interest of justice. See Cal. Code Civ. P. §§ 2017.020 and 2019.020(b). The court exercises its discretion in deciding whether to stay discovery based on the individual circumstances of each case, and the party seeking the protective order bears the burden of showing good cause for the order sought. See Fairmont Ins. Co. v. Superior Court (2000) 22 Cal. 4th 245, 255; Avant! Corp. v. Superior Court (2000) 79 Cal. App. 4th 876, 886. In this case, the court is not persuaded that Defendants have demonstrated the requisite good cause.

The motion for protective order was filed on June 13, 2023, while the Defendants' demurrer to the Second Amended Complaint (the 'SAC') was pending. In support of the motion, Defendants argued that because a successful ruling on the demurrer 'would obviate the need for any discovery, including depositions, in this action as to Defendants, proceeding with expansive discovery while the Court adjudicates the Demurrer would impose a substantial and potentially unnecessary burden on Defendants and would needlessly waste party and judicial resources.' See Defendants' Motion, p. 2, ll.

9-12. Since the motion was filed, however, the court ruled on Defendants' demurrer to the SAC, sustaining the demurrer with leave to amend because: Plaintiff has failed to plead separate allegations against each entity defendant. Instead, she has impermissibly lumped all Defendants together with CB Pilates and the Clements such that every allegation that is relevant to liability is pleaded as to all defendants irrespective of each of their actual roles.

See ROA No. 162, p. 3. Of significance, however, the court noted the following: To start, the court finds that, as a general proposition, the SAC pleads sufficiently specific facts which, accepted as true for purposes of the demurrer, state alter ego, agency, joint employer, aiding and abetting, and conspiracy theories of liability. See Leek v. Cooper (2011) 194 Cal. App. 4th 399, 411; Tomaselli v. Transamerica Ins. Co. (1994) 25 Cal. App. 4th 1269, 1285; Daniels v. Select Portfolio Servicing, Inc. (2016) 246 Cal. App. 4th 1150, 1172; Vernon v. State of Cal. (2004) 116 Cal. App. 4th 114, 124; Martinez v. Combs (2010) 49 Cal. 4th 35, 50; Spencer v. Mowat (2020) 46 Cal. App. 5th 1024, 1036. More specifically, the SAC alleges that Defendants: (1) employed Plaintiff in that they exercised control over Plaintiff's wages, hours or working conditions, and permitted Plaintiff to work; (2) controlled the business enterprises of one or more other defendants; (3) are one and the same because: (a) they have a general right of control over factors such as hiring, direction, supervision, discipline, discharge, and employees' day-to-day behaviors; (b) they do not comply with all requisite corporate formalities for maintaining a legal and separate corporate existence; (c) their business affairs are so mixed and intermingled that they are inextricably intertwined and the recognition of a separate existence would not promote justice; (d) they compelled, coerced, aided, and/or abetted the subject misconduct; and (e) they acted as agents of all other defendants; and (4) are Plaintiff's employers by virtue of a joint enterprise. In addition, the SAC alleges that Defendants: (1) had the same individual acting as their Director of Recruiting, whose job duties included advertising for Defendants' employees by placing online advertising to recruit new employees, screening prospective employees, and interviewing and hiring these employees; (2) retained the right to control the method and manner of how Plaintiff performed her job duties; (3) controlled the employees they recruited and hired by placing them in a single employee training program; and (4) dictated the relevant day-to-day aspect of the workplace through policies and procedures including employee uniforms and a uniform look at all locations. See SAC, ¶¶ 27-34. The foregoing is sufficient to survive the pleading stage.

Ibid., pp. 2-3 (emphasis added). While Defendants indicate in their response to Plaintiff's 'reply' that the now operative Third Amended Complaint suffers from similar deficiencies as those that plagued previously filed pleadings and that another demurrer will be filed, the fact remains that the court has concluded that there are sufficient allegations, once the allegations are appropriately separated as to each Defendant, to sufficiently state causes of action against one or more of Defendants. As such, there is no judicial economy/efficiency served by issuing a protective order staying discovery pending a Calendar No.: Event ID:  TENTATIVE RULINGS

2986291 CASE NUMBER: CASE TITLE:  SANDERS VS XPONENTIAL FITNESS INC [IMAGED]  37-2022-00005817-CU-OE-NC resolution of the anticipated demurrer because this is not a case where it has been shown that Plaintiff will be unable to state a viable cause of action against Defendants.

As if to pivot from the general to the specific, Defendants argue in their reply that Plaintiff fails to justify the necessity of deposing Anthony Geisler. However, notwithstanding the fact that the motion is brought, in part, on Mr. Geisler's behalf, nowhere in the underlying motion did Defendants argue that because of Mr. Geisler's status as a high-level corporate officer who lacks 'superior or unique personal knowledge of the facts at issue' (see Defendants' Reply, p. 3) he should not be deposed. Toward that end, the court construes Defendant's argument regarding the deposition of Mr. Geisler as one advanced for the first time in a reply, which the court necessarily must disregard. See, e.g., Marriage of Khera & Sameer (2012) 206 Cal. App. 4th 1467, 1477 ('Obvious reasons of fairness militate against consideration of an issue raised initially in the reply brief[.]').

CCP § 2023.030 provides, in pertinent part, that the court, after notice to any affected party, person or attorney, and after opportunity for hearing, may impose monetary sanctions for the misuse of discovery, which includes the assertion of an unmeritorious objection to discovery. CCP § 2023.030(a) further provides that '[i]f a monetary sanction is authorized by any provision of this title, the court shall impose that sanction unless it finds that the one subject to the sanction acted with substantial justification or that other circumstances make the imposition of the sanction unjust.' Cal. Code Civ. P. § 2023.030(a).

Plaintiff contends that '[d]ue to the Defendants' refusal to participate in discovery, Plaintiff was forced to file' a reply and, as a result, incurred $3,660 in attorneys' fees, for which Defendants should be sanctioned. See Plaintiff's Reply, p. 10. In this case, however, the court cannot conclude that Defendants' motion was without substantial justification. Faced with pleadings that have not yet been finalized, Defendants' request for a protective order essentially staying discovery pending the court's ruling(s) on any demurrers had a reasonable basis in law. As a result, the court denies Plaintiff's sanctions request.

In light of the foregoing, the court: (1) denies Defendants' motion for protective order, and (2) denies Plaintiff's sanctions request.

This is the tentative ruling for the hearing at 1:30 p.m. on Friday, July 21, 2023. If no party appears at the hearing, this tentative ruling will become the order of the court as of July 21, 2023. If the parties are satisfied with the court's tentative ruling or do not otherwise wish to argue the motion, they are encouraged to give notice to the court and each other of their intention not to appear, though this notice is not required.

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