Judge: Cynthia A Freeland, Case: 37-2022-00005817-CU-OE-NC, Date: 2023-10-27 Tentative Ruling

SUPERIOR COURT OF CALIFORNIA,

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SOUTH BUILDING TENTATIVE RULINGS - October 26, 2023

10/27/2023  01:30:00 PM  N-27 COUNTY OF SAN DIEGO

JUDICIAL OFFICER:Cynthia A. Freeland

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Civil - Unlimited  Other employment Demurrer / Motion to Strike 37-2022-00005817-CU-OE-NC SANDERS VS XPONENTIAL FITNESS INC [IMAGED] CAUSAL DOCUMENT/DATE FILED: Demurrer, 08/11/2023

Defendants Xponential Fitness, Inc., Xponential Fitness, LLC, and Club Pilates Franchise, LLC (collectively, 'Defendants')'s demurrer to Plaintiff Carmen Sanders ('Plaintiff')'s Third Amended Complaint (the 'TAC') is sustained.

A demurrer tests the legal sufficiency of a pleading. See McKell v. Washington Mutual, Inc. (2006) 142 Cal. App. 4th 1457, 1469. When reviewing a demurrer, the court 'give[s] the complaint a reasonable interpretation, reading it as a whole and its parts in their context.' Blank v. Kirwan (1985) 39 Cal. 3d 311, 318. The court 'treats the demurrer as admitting all material facts properly pleaded. The court does not, however, assume the truth of contentions, deductions or conclusions of law.' Durell v. Sharp Healthcare (2010) 183 Cal. App. 4th 1350, 1358. The court's analysis is limited to the complaint, exhibits attached to the complaint and incorporated by reference, and matters properly subject to judicial notice. See Performance Plastering v. Richmond American Homes of California, Inc. (2007) 153 Cal. App. 4th 659, 665; Thorburn v. Department of Corrections (1998) 66 Cal. App. 4th 1284, 1287-1288; Donabedian v. Mercury Ins. Co. (2004) 116 Cal. App. 4th 968, 994. 'A demurrer for uncertainty is strictly construed, even where a complaint is in some respects uncertain, because ambiguities can be clarified under modern discovery procedures.' Khoury v. Maly's of Cal., Inc. (1993) 14 Cal. App. 4th 612, 616. Such demurrers 'are disfavored, and are granted only if the pleading is so incomprehensible that a defendant cannot reasonably respond.' Mahan v. Charles W. Chan Insurance Agency, Inc. (2017) 14 Cal. App. 5th 841, 848.

Defendants demur to each of the fourteen causes of action set forth in the TAC for uncertainty and failure to state facts sufficient to support Plaintiff's agency, joint employer, aiding and abetting, alter ego, and conspiracy theories. However, as the court noted in its: (1) June 30, 2023 order on Defendants' demurrer to the Second Amended Complaint (the 'SAC') (see ROA No. 162), and (2) July 21, 2023 order on Defendants' motion for a protective order (see ROA No. 176), Plaintiff has already pled sufficiently specific facts, which the court must accept as true for purposes of finalizing the pleadings, that could give rise to 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. Defendants nevertheless reassert their prior argument that Plaintiff cannot establish that Defendants were Plaintiff's joint employer or that they cannot be liable under alter ego, agency, aiding and abetting, or conspiracy theories. The court respectfully disagrees. More specifically, the TAC alleges that Defendants: (1) employed Plaintiff in that they exercised control over Plaintiff's wages, hours or working conditions, and permitted and/or Calendar No.: Event ID:  TENTATIVE RULINGS

3019662 CASE NUMBER: CASE TITLE:  SANDERS VS XPONENTIAL FITNESS INC [IMAGED]  37-2022-00005817-CU-OE-NC engaged 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' relevant day-to-day behaviors; (b) Xponential Fitness LLC, as franchisor, stands in an employment or agency relationship with Club Pilates Franchise, LLC, as franchisee; (c) they do not comply with all requisite corporate formalities for maintaining a legal and separate corporate existence; (d) their business affairs are so mixed and intermingled that they are inextricably intertwined and the recognition of a separate existence would not promote justice; (e) they act as mere shells and/or conduits to each other's affairs; (f) they compelled, coerced, and aided and/or abetted the subject misconduct; and (g) they acted as agents of all other defendants; and (4) are Plaintiff's employers by virtue of a joint enterprise. In addition, the TAC alleges that: (1) Xponential Fitness, Inc. and Xponential Fitness, LLC had the same individual acting as Defendants' 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 those employees; (2) Defendants retained the right to control the method and manner of how Plaintiff performed her job duties; (3) Defendants controlled the employees they recruited and hired by placing them in a single employee training program for the benefit of all Defendants; and (4) Xponential Fitness, Inc. and Xponential Fitness, LLC directly controlled employee supervision, discipline, and discharge of the relevant day-to-day aspects of the workplace through policies and procedures including employee uniforms and a uniform look at all locations. See TAC, ¶¶ 31-44. The foregoing is sufficient to survive the pleading stage. The present demurrer does not provide a persuasive basis for the court to revisit its prior rulings. To the extent that Defendants maintain that Plaintiff's alter ego, joint employer, agency, conspiracy, and aiding and abetting theories are vague, ambiguous, and/or uncertain, such ambiguities can be clarified through discovery.

That being said, however, the court agrees with Defendants that Plaintiff has failed to cure the deficiencies the court identified in sustaining the demurrer to the SAC. More specifically, Plaintiff has failed to plead separate allegations against each entity defendant and has instead 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. Plaintiff, in her opposition, points to allegations she has added which she believes further clarifies each defendant's individual liability. The court respectfully disagrees. The court presumes that Plaintiff, in advancing this argument, is referring to ¶¶ 5-10 and 15-17 of the TAC. Toward that end, it is true that those paragraphs adequately allege, at a minimum, the corporate hierarchy of the entity defendants as well as the Clements' roles in the various corporations. However, the TAC remains vague and ambiguous as to the alleged liability specific to each entity defendant.

Accordingly, the court sustains the demurrer with leave to amend as Plaintiff has demonstrated a reasonable possibility that the foregoing deficiencies can be cured by amendment. See Aubry v. Tri-City Hospital Dist. (1992) 2 Cal. 4th 962, 967.

In light of the foregoing, the court sustains the demurrer with leave to amend. Plaintiff shall file and serve a third amended complaint, if she chooses to file such a pleading, within ten (10) days of this hearing.

See Cal. R. Ct. 3.1320(g).

This is the tentative ruling for the hearing at 1:30 p.m. on Friday, October 27, 2023. If no party appears at the hearing, this tentative ruling will become the order of the court as of October 27, 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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